Building capacity to help Africa trade better

tralac’s Daily News Selection


tralac’s Daily News Selection

tralac’s Daily News Selection
Photo credit: World Bank

Updates on African trade policy processes from Amb. Albert Muchanga (AU Commissioner for Trade and Industry): The 8th CFTA Negotiating Forum to be held in Abuja next week will be followed by the African Union Ministers of Trade meeting in Niamey (1-2 December). Trade facilitation is a key lever for boosting intra-african trade: in this connection, I call on you to ensure that the draft Trade Facilitation Strategy is formulated and approved next year.

Profiled commentaries in the latest tralac e-Newsletter: Elisha Tshuma provides an update on recent import control measures introduced by Zimbabwe while Gerhard Erasmus discusses trade-related dispute settlement in the RECs and the role of private parties

Note: UNCTAD’s 2017 Least Developed Countries Report will be published next Wednesday

African Ministers call for action to combat tax evasion in Africa: Yaounde Declaration (OECD)

On the margins of the 10th Global Forum meeting on Transparency and Exchange of Information for Tax Purposes held in Yaoundé, Cameroon Finance Minister Alamine Ousmane Mey, led a discussion with Ministers, high level representatives and officials from Africa on tax fraud and avoidance. They agreed on a call to tackle illicit financial flows through international tax cooperation. As a result, recognising the recent so called “Paradise Papers”, they have relaunched African political support for more tax transparency and agreed on the Yaounde Declaration to: Extract (pdf): Note that while progress has been made in Africa, many countries still do not fully benefit from the new transparent tax environment: only 27 African countries are participating in exchange of information on request, only five African countries are committed to automatic exchange of financial accounts information, and a large number of African countries continue to have a small EOI network, gaps in their domestic legislation and administrative capacity constraints that hamper efforts to tackle international tax evasion. Consider that tackling illicit financial flows in Africa through improved tax cooperation and transparency would be enhanced if carried out at the continental level under the auspices of the African Union with the support of all development partners and international and regional organisations. Undertake an initiative by the AU to begin a high level discussion on tax cooperation and illicit financial flows and their link to domestic resource mobilisation. Encourage African countries with the support of the Global Forum Secretariat to explore with the AU, UNECA, RECs and the AfDB a collaboration aimed at boosting African countries’ efforts towards implementing the international EOI standards and using EOI tools to improve their domestic resource mobilisation.

John Mbu: African nations are powering up the business rankings: what lessons can we learn from them? (WEF)

The first and most important lesson is that to achieve major reforms, political will is key. Nigeria’s PEBEC had clear objectives and was headed by the vice-president, who for certain parts of the year was the acting president. The PEBEC launched two 60-day action plans in April and September 2017. And in May 2017, the government issued an executive order aimed at promoting transparency in the business environment. The governments of Rwanda, Morocco, Botswana and Kenya also champion business reforms at a very high level. Second, the quality of institutions is critical. Africa’s top performers have very high Country Policy and Institutional Assessment and Ibrahim governance index scores. Botswana, Namibia, Rwanda, Seychelles, Tanzania, Mauritius all score very well in the above indices. In fact, if anything, the results indicate that there is a strong correlation between the CPIA, Ibrahim index and the Doing Business indicators. Third, the top performers are those that market themselves well. Between the 28 May and 15 July 2016, Kenya hosted the presidents and prime ministers of South Korea, Turkey, Ethiopia, Israel and India for bilateral visits. [The author is an economist, Office of the Senior Vice-President, AfDB]

South Africa: 11th WTO MC Business position (dti / Agbiz)

In preparation for the WTO MC, Minister Davies hosted a consultative meeting with the constituencies of NEDLAC. Dr John Purchase, CEO of Agbiz, and the Convenor for Business in the Trade and Industry Chamber of NEDLAC, presented the position of Business. Generally, there was considerable consensus between the constituencies - Government, Business and Labour - on most of the major agenda items of the upcoming 11th WTO MC. Extract: In terms of the proposed transparency on export restrictions, South Africa should support any steps to greater transparency in the management of export restrictions. Business is concerned that the proposed agreement on stockholdings for food security purposes may hold certain risks and implications for South Africa. We need to first understand these risks and long term implications before Business can support the proposed agreement. Special and Differential Treatment for developing countries and LDCs should be a determinant of MC11 outcome. The same goes for the Special Safeguard Mechanism (SSM) provided to developing countries, to provide buffer against import surges and low priced imports. The implication of supporting the SSM to South Africa’s exports requires further consideration and analysis before South Africa should provide unqualified support to this inclusion. While it may be premature to introduce new items, such as e-commerce and investment, into the WTO negotiations, and these could divert the focus of the meetings from the existing developmental agenda, it is also essential that the South Africa government, with its social partners, address these developments as a matter of urgency, and as decided at the recent Nedlac TIC Strategic Session. While the readiness of the developing countries to engage in negotiations in areas like e-commerce remains questionable, we need to understand that these developments are natural developments in business innovation and sophistication, and that many of our trading partners are not going to wait for developing countries and LDC’s.

David Primack: Enhancing access for LDC services to the UK post-Brexit (Commonwealth)

The cornerstone of any UK preferential services regime (and as part of an enhanced effort to support LDC services trade more generally) should be the establishment of an LDC import facilitation mechanism (along the lines of CBI17). This has often been referred to in the waiver discussions as an LDC ‘Services Help Desk’. Such a mechanism could serve to enhance the relationship between the UK government, the UK business community and LDC service providers. It could also serve as an intake point for the kind of information needed to fine tune existing and/or design future preferences. It could also serve as an essential conduit for informing and improving the UK’s Aid for Trade in the services realm. Such a help desk should be user-friendly and easily accessible (online and by phone) and provide straightforward information (i.e. structured with the needs of LDC providers in mind).

Overview of developments in the international trading environment: annual report by the Director-General (WTO)

Key findings: WTO Members applied 108 new trade-restrictive measures during the review period from mid-October 2016 to mid-October 2017, including new or increased tariffs, customs procedures, quantitative restrictions and local content measures. This equates to an average of nine measures per month compared to fifteen in the previous period. WTO Members also implemented 128 measures aimed at facilitating trade, including eliminated or reduced tariffs and simplified customs procedures. At almost 11 trade-facilitating measures per month, this remains significantly lower than the monthly average of 18 recorded in the previous annual overview report. WTO Members continue to implement more trade-facilitating than trade-restrictive measures, a trend observed over the past four years. It is noteworthy that the estimated trade coverage of import-facilitating measures ($169bn) is more than two times larger than that of import-restricting measures ($79bn).

Rwanda to issue visa on arrival for all visitors (New Times)

As part of the recent Cabinet resolution, travellers from across the world will from 1 January 2018, receive a 30-day visa upon arrival following the establishment of a new visa regime. The move, which is set to increase Rwanda’s openness and accessibility to the rest of the world, is part of a new visa regime. According to a brief by the directorate general of Immigration and Emigration, Rwanda will also, with immediate effect, grant a free 90 day visa on reciprocal basis to the following countries: Benin, Central African Republic, Chad, Ghana, Guinea, Indonesia, Haiti, Senegal, Seychelles and Sao Tome and Principe. This is in addition to DR Congo, EAC partner states, Mauritius, Philippines, and Singapore.

Tanzania: Mineral loopholes for tightening (Daily News)

The Minister for Works, Transport and Communication, Prof Makame Mbarawa, yesterday, tabled the National Shipping Agencies Bill of 2017 which, among others, will form a national shipping agent that will deal with clearing and forwarding of mineral concentrates and government trophies. He said that once the shipping agent is formed all deals of mineral concentrates, government trophies, shipment of all mineral concentrates, its products, petroleum, weapons, live animals and government trophies will not be done by private clearing and forwarding agents as is the case at present. Moreover, under the proposed bill, NASAC will play double role of a regulator and an operator, something that was hotly opposed by majority of parliamentarians as it will be against the free and fair trade practices.

Zimbabwe: 15% platinum export tax deadline set to be moved (The Herald)

Government is considering postponing the January 2018 deadline for effecting a 15% tax on raw platinum exports to an indefinite date, an official from the Mines and Mining Development ministry has revealed. The move is informed by the fact that mining companies are still setting up smelters and refineries. The January 2018 deadline was initially proposed by platinum mining companies in 2015 when they pleaded to be allowed time to import their smelters and refineries to value add the raw platinum locally. However, given the current foreign currency shortages in the country; which makes it difficult to import the necessary equipment needed to process the commodity locally, platinum producers have once again pleaded with the ministry to extend the deadline. Director of the Metallurgy Department in the Mines and Mining Development Ministry, Valentine Vera, reportedly said the request has been tabled before the Parliament, adding that the ministry will advise once the issue is finalised.

South African economy resurgent on consumer demand, exports (BRICS Post)

The recent data point to a resurgent South African economy after it exited a technical recession in the second quarter. Bulk exports surged by 30.7%year-on-year (y/y) to a new record of 16.7 million metric tonnes (Mt) in October after a 5.1% y/y gain in the first nine months of this year and a 2.% drop in 2016. The October 2017 tonnage eclipsed the previous record of 16.4 Mt set in January 2015 and was set despite a severe storm that disrupted port operations in the main port of Durban. Inventory replenishment and surging net exports were supposed to be the drivers of economic growth this year, but it now seems as if domestic households, which account for some 60% of economic activity, are joining the party as well. In both August and September, real retail sales grew by 5.4% y/y, which was the highest y/y increase since May 2013.

East Africa: New deal to connect regional SMEs to global markets (New Times)

The East African Business Council has signed an agreement with the World SME Forum to support and enhance African SMEs’ integration into global markets. The World SME Forum is a private sector-led initiative that supports the overall growth and impact of small and medium enterprises globally. EABC executive director Lilian Awinja said the project will be part of a larger EABC initiative to support growth of SMEs in the region “with a specific focus on women and youth in business.” The World SME Forum will work with the EABC to extend the scope of its activities and programmes to the African continent and partnering with leading chambers and SME associations in the region.

South Africa: Ownership of JSE-listed companies (National Treasury)

This report presents data on the ownership of South African companies listed on the JSE and proposes an Ownership Monitor for tracking trends in the composition of ownership over time. Listed companies are typically expected to have diverse ownership - characterised by a large number of relatively small shareholdings - although many will also have one or more strategic shareholders with a significant influence in the company. This assessment focuses on four aspects of ownership, reflecting the policy priorities noted above: Foreign ownership; Ownership through South African institutional investors, including retirement funds, long-term; insurance companies, collective investment schemes and investment managers; Major shareholdings, i.e., significant stakes in the company by one or more shareholders; Black (BEE) ownership.

Today’s Quick Links:

South Africa’s Davis Tax Committee: Distinguish between profit shifting and illicit financial flows

Zimbabwe: Govt to set up informal business task force

Kenya Airways says political turbulence is hitting intra-Africa trade

World Bank to conduct sustainability analysis for Tanzania’s debt

Tanzania: Causes of Sh6tr budget hole cited

Gilbert Saggia: The future of African ports

Chubb to sell 100% of its SA stake ahead of controversial new security laws

China ‘hellbent on $18tn economy, Paul Keating warns


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