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tralac’s Daily News Selection

tralac’s Daily News Selection
Photo credit: AU-UN IST | Stuart Price

16 Nov 2017

Postponed: The EAC announced today that the 1st EAC Joint Heads of State Retreat on Health and Infrastructure, scheduled for 28-29 November in Kampala, has been postponed.

Underway, in London: @APPG_TOP hearings in the House of Lords for the Inquiry into the potential of the Commonwealth to help developing countries trade out of poverty. tralac’s Trudi Hartzenberg is one of the commissioners: background to the hearings

Diarise: Single African Air Transport Market ministerial working group (5-8 December, Addis Ababa). Concept note (pdf): The meeting will address the following issues: Progress report on implementation of the Activity Road Map for establishment of the Single African Air Transport Market especially on the budgeted activities of 2017 including: final validation of the policy, institutional and regulatory instruments for the Yamoussoukro Decision and the Single African Air Transport Market; and the development of a continental air transport infrastructure master plan. Related: concept note for the launch of the Single African Air Transport Market (25-28 January 2018, Addis Ababa)

Boost for pharmaceuticals as EAC mulls single regulator (The Standard)

The single regulator is expected to cut time and costs of evaluations and approvals of medicines and medical devices, allowing drug firms to access the 160 million-strong EAC market with ease. A secretariat within EAC’s department of Medicines and Food Safety will coordinate the joint activities in preparation for a single medicine and food safety agency. This is expected from 2018. The proposed agency is modelled on the European Medicines Agency which regulates certain medicines for 28 EU countries with a combined population of 510 million. Since 2015, national drug regulators of EAC, except Burundi and South Sudan have been implementing joint drug evaluation and market authorisation procedures, including joint inspections of drug manufacturing sites. Under the joint evaluations, firms seeking to introduce new medicines to the region, still have to submit applications and pay fees to all countries individually. The proposed creation of a single regulatory agency seeks to eliminate duplication that so that applications are made to one institution only.

Ecobank Group reveals three key emerging trends for Africa (Myjoy)

The 2017 version of Ecobank Research’s Fixed Income, Currency and Commodities (FICC) Guidebook, provides expert knowledge and analysis on African markets for investors and businesses. Indicating a positive outlook for the continent, three key trends are forecast to take hold during the next 12 months. The firstindicates an economic rebound in sub Saharan Africa driven by a recovery in the region’s economic heavyweights, Nigeria and South Africa, and ongoing growth in the top performers, Ethiopia, Côte d’Ivoire and (more recently) Ghana. Growth will be driven by a rise in oil production (notably in Ghana, Republic of Congo, Nigeria and Angola), strengthening infrastructure investment across West and East Africa, and improved weather conditions which bode well for crops. Strengthening economic activity, plus a moderate improvement in oil and mineral prices, will help narrow the current account deficit, but pressure on SSA currencies will remain.

The second emerging trend points to West Africa’s gas sector becoming a hive of activity in 2018 from Senegal to Angola, with the development of gas pipelines, floating liquefied natural gas (FLNG) platforms and major gas field projects. Governments in the Gulf of Guinea and across West Africa have ramped up efforts to secure gas supply in order to boost domestic power generation and diversify their revenues away from crude oil. Deregulating the gas market and allowing market-driven gas prices will be key to unlocking further gas infrastructure investment across the region. The third trend suggests fintech innovation in Africa picking up speed in 2018 buoyed by a new generation of Africans who are ‘digital natives’. The proliferation of tech hubs across Africa (notably in South Africa, Kenya, Rwanda, Nigeria, Ghana and Côte d’Ivoire) will nurture the next wave of African start-ups and help connect them with investors. [African banks must ‘adapt or die’ as emerging fintechs]

Mauritius: Faltering exports to widen current account deficit (BMI, ProShare)

Mauritius will see further weakness in exports for the remainder of 2017, due to low demand amongst its key trading partners, increasing the country’s current account deficit. However, we expect that this expansion will be temporary as growth begins to recover in Mauritius’s key export markets from 2018. Imports have been rising partially on the back of ongoing construction projects, but will likely begin to stabilise as poor economic growth will begin to dampen demand for consumer goods imports. Slowing investment into the ocean economy – following the changes to Mauritius’ double tax treaty with India – will see the financial account surplus narrow over our shortterm outlook, although fixed investment will remain stable. Although these dynamics are likely to weigh on the country’s stock of foreign reserves, this is unlikely to undermine the stability of country’s external position, especially as pressure begins to decline from 2018.

Sudan-Uganda HoS communique (GoU)

During the visit, a Business Forum which brought together the Sudanese Business Delegation and their Ugandan counterparts was held. The Forum discussed opportunities for trade and investment particularly in agriculture, agro-processing, manufacturing, pharmaceuticals and commodities especially coffee and tea. The Heads of State agreed to convene a Joint Investment Conference in Khartoum, on dates to be confirmed, to showcase trade and investment opportunities in both countries with participation of the private sector from the Sudan, Uganda and Arab countries.

Zimbabwe: Exporters surrender $1,2bn to RBZ (Financial Gazette)

Exporters from different sectors have surrendered $1,2bn to the Reserve Bank of Zimbabwe between January and September, 30% of their $4bn foreign currency earnings over the period. In return for their foreign currency, the RBZ credits exporters’ local accounts using real time gross settlement system. RBZ deputy director for international banking and portfolio management Ernest Matiza, told The Financial Gazette that this is the money the central bank was now using for critical imports such as fuel, and electricity.

Tanzania: Govt clears way for Bagamoyo project (Daily News)

The government has officially submitted its letter of approval for the Bagamoyo Special Economic Zone venture to China Merchants Port, agreeing and accepting the investor’s comprehensive project proposal. The Tanzania Ambassador to China, Mr Mbelwa Kairuki, submitted, on behalf of the government, the letter from the Prime Minister’s Office to China Merchants Port Managing Director, Bai Jingtao, on 10 November. China Merchants Port will work with Oman partners to promote the Bagamoyo Special Economic Zone project. [Chinese urban planners helping small African cities transition into major metropolises]

USAID chief announces scale up of trade facilitation alliance (Devex)

The Global Alliance for Trade Facilitation, an initiative aimed at helping countries reduce import barriers, will scale from four to 20 countries, US Agency for International Development Administrator Mark Green announced Tuesday. “We believe that private enterprise is the only sustainable way to lift lives, to build communities, and so we’re dedicated to working to find ways to ease the barriers for businesses to participate,” Green told a crowd of business leaders at the U.S. Chamber of Commerce Foundation’s Corporate Citizenship Conference.

The value of ISO 20022 standards in the evolving FinTech landscape: new SWIFT discussion paper

New technologies have been proliferating in the last decade and are already transforming conventional banking systems as FinTechs and banks are working together to co-create the financial landscape of tomorrow. However FinTech innovation comes in different shapes and sizes and without the adoption of common standards, the use of divergent technologies could lead to inefficient and ineffective fragmentation. SWIFT, the Registration Authority for ISO 20022, is working closely with the industry globally to standardise messaging and best practices. This new discussion paper captured the opinions on the use of the standard in the context of established technologies such as RTGS and CSD systems, as well as new technological innovations such as contactless and mobile protocols, DLT and APIs. ISO 20022 offers a number of benefits for FinTech innovation, the discussion paper states:

FDI spillovers and high-growth firms in developing countries (World Bank)

The paper also evaluates spillovers stemming from MNCs with different motivations to invest in developing countries. Employing a survey of around 71,000 firms across 50 sectors in 122 developing countries, the paper shows that high-growth firms internalize spillovers through both avenues and that contractual linkages are the most powerful transmission channel. FDI embedded in global value chains generates larger spillovers to high-growth domestic firms than investment that seeks to serve the host economy. There is no evidence that natural resource-seeking FDI generates spillovers. The results have important implications for policy design, as public funding in developing countries is often directed to support programs that seek to connect domestic suppliers with MNCs.

Taxing telecommunications in developing countries (IMF)

Developing countries apply numerous sector-specific taxes to telecommunications, whose buoyant revenues and formal enterprises provide a convenient “tax handle”. This paper explores whether there is an economic rationale for sector-specific taxes on telecommunications and, if so, what form they should take to balance the competing goals of promoting connectivity and mobilizing revenues.

Today’s Quick Links:

Towards an IGAD Protocol on Free Movement of Persons: consultative workshop

IGAD, Partners launch Regional Land Governance Dialogue Platform

IMF: The slowdown in global trade: a symptom of a weak recovery

SME finance gap: assessment of the shortfalls and opportunities in financing micro, small, and medium enterprises in emerging markets

World Bank: SME finance

Senegal - Social Protection public expenditure review 2010-2015: Summary and key recommendations, Vol. 2: Analytical report