tralac’s Daily News Selection
Today is Africa Industrialization Day:
Panel discussions will take place in Vienna and New York, organized by UNIDO. Download the concept note (pdf). António Guterres: “This year’s Africa Industrialization Day highlights the links between industrial development and Africa’s moves towards establishing a Continental Free Trade Area. These are mutually supportive endeavours.”
AfDB reiterates the need to accelerate Africa’s development: comments by Pierre Guislain (VP for Private Sector, Infrastructure and Industrialization)
Today, in Addis: External peer review meeting on the draft Economic Report on Africa 2018. The theme: Development thinking and practice in Africa – ECA’s contributions
The 2017 Ibrahim Index of African Governance was published earlier today.
Updates, commentaries on CFTA, TFTA issues:
(i) The CFTA Negotiating Forum convened today in Abuja for a week-long session
(ii) @rsezibera: Africa should quickly conclude a free trade area agreement, CFTA. If we don’t trade with each other, we will trade one another.
(iii) @olu_fasan: The CFTA negotiations are too fixated on protecting domestic markets and so-called sensitive products and sectors. That’s misguided. Africa needs deep, not shallow, economic integration - a real single market!
(iv) COMESA’s Sindiso Ngwenya has assumed the chairmanship of the Tripartite EAC-COMESA-SADC. He succeeds the EAC’s Liberat Mfumukeko. Speaking on the challenge of funding, Mr Ngwenya informed the meeting that the AfDB has provided some financial resources to support efforts aimed at creating awareness on the importance of the Tripartite FTA Agreement and the need to have it ratified by Tripartite Member/Partner States that have signed it in order for it to enter into force. The incoming Chair said the COMESA-EAC-SADC Tripartite is in dire need of financial resources to support proceeding with Phase II work as the budgetary support from cooperating partners that supported Phase I work has been exhausted.
Underway, in Johannesburg: Regional Economic Communities Transport Coordination Committee
Francis Mangeni: Why a protectionist deal won’t boost intra-Africa trade (Business Daily)
What this means for negotiations is that the core trade provisions can aim to achieve a vastly open Continental FTA, but these must be complemented not by flexibilities that set up numerous exceptions, high tariffs and protected markets, but rather those that seek to directly build and grow domestic industries especially SMEs by addressing their capacity and management constraints. A multi-sectoral high-level development committee can therefore be set up to continuously and holistically address such development challenges. Membership of the committee can be drawn from government, academia, grassroots organisations, private sector and development partners. The composition for each session can be dynamic depending on issues for consideration. [The author is COMESA’s director for Trade, Customs and Monetary Affairs]
Ministerial on Trade, Security, and Governance in Africa: remarks by Secretary of State, Rex W. Tillerson
We’re going to begin today’s proceedings with a discussion on ways we can work together to expand trade and investment, and grow economic opportunities that benefit the people of Africa and the American people. Trade and investment between the United States and African countries is growing. U.S. exports to Sub-Saharan Africa grew from $17bn in 2010 to more than $25bn in 2014. And last year, the US direct investment in Africa grew to $57.5bn – the highest level to date. This administration seeks to refocus our economic relationship squarely on trade and investment – to encourage policies that increase openness and competition within Africa. A more economically vibrant and competitive Africa will grow the middle class, increase standards of living, and make the entire continent more prosperous.
Donald Yamamoto, Acting Assistant Secretary of State for African Affairs: ‘We’re looking at Africa in 2050’ (DW)
But right now we are looking at Africa in the future in 2050, 2100 and you see a 2.2 billion to 2.4 billion population. You have 70 percent under 30 but then the question is: are we preparing our policies to work with not only the African Union, but our African partner countries to address unemployment issues? You know education, health care, and giving opportunities to the youth. Because that in itself is really an important, critical issue. So how many jobs are we going to create every month to address that population in that area? And 25 percent of the world’s labor force is going to be African. Just looking at the data points is really mind boggling. This is going to be the most populous continent and the largest consumer. And if that’s the case then we need to be prepared to look at what the challenges are. How do we partner up with Africa?
US International Trade Commission study on African trade and investment: update
The USITC will hold a public hearing in connection with the investigation on 23 January 2018. Requests to appear at the hearing should be filed no later than 5:15 pm on 9 January 2018. The USITC also welcomes written submissions for the record. Written submissions should be submitted at the earliest practical date, but no later than 5:15 pm on 6 February 2018. All written submissions, except for confidential business information, will be available for public inspection.
US-Sub-Saharan Africa trade data, extracted from USITC’s shifts in US merchandise trade report, September 2017. Profiled tables: US total exports, general imports, and merchandise trade balance, by major industry/commodity sectors, 2012-16; Leading changes in U.S. exports and imports, 2012-16
Kenya: Ambitious project rolled out to increase exports by 20% (Business Daily)
Kenya has crafted a new strategy to revitalise exports that have stagnated for some time. The National Export Development and Promotion Strategy aims to grow exports by 20% by 2022. The ambitious plan targets six items for accelerated development via a public-private working group. While unveiling the plan this week, Trade Principal Secretary Chris Kiptoo said safeguarding Kenya’s exports, with a keen eye on opening up new markets for processed products, underpins the new strategy. The principal secretary said Kenya has identified six sectors that will be prioritized including livestock and livestock products, agriculture, fisheries, manufactured products and handicrafts. Export Promotion Council chief executive Peter Biwott said Kenya should nurture incentives for both local and foreign direct investments as a way of promoting value addition, which will directly increase exports and create jobs. “More economic zones should be created across counties where investors set up shop targeting regional and foreign markets. This will not only create jobs but will nurture technology transfer, especially for large scale industrial operations in agro-processing sectors,” he said. According to the new strategy, the six identified sectors will see private players work with the government to streamline the value chain, with trade exhibitions held in target markets to promote business-to-business linkages. [Download: pdf National Export Development and Promotion Strategy for Kenya 2017-2022 (5.52 MB) ]
Rwanda: Businesses upbeat over new visa regime (New Times)
Conference organisers who spoke to The New Times said that among the major determining factors that influence conference hosting include accessibility of a country. With most major international forums having foreign delegations of about 500 people and above, the visa process can be a deal breaker. For most events organisers who have been involved across Africa, the process could take months and often locks out a section of delegates especially in instances where there is no embassy in the delegates’ country. Matthew Weihs, the managing director of Bench Events, a global firm that has brought the Africa Hotel Investment summit in Rwanda for two years in a row, said that the development is likely to increase the number of summits hosted in the country. RwandAir deputy chief executive for corporate affairs, Yvonne Makolo, told The New Times that the national carrier is upbeat on the development as it is likely to increase their clientele.
Somalia: AfDB Country Brief 2017-2020 (pdf, AfDB)
Regional integration: Despite its strategic geographical location in the Horn of Africa, Somalia has had limited participation in regional economic activities. This is a consequence of the more than two decades of civil war and subsequent state collapse. Nonetheless, the FGS hopes that regional integration can assist the country in achieving its goals of ensuring sustainable, pro-poor economic growth, poverty reduction, and stability. Active participation in regional integration will enable Somalia to benefit from its opportunity of having the longest coastline in Africa. In particular, its strategic geographical location as the bridge and/or corridor between the Horn of Africa region and the Middle East, Asia and Europe, has the potential to transform Somalia into a logistics hub and free trade area for exports from and imports to the region (specifically Kenya, Ethiopia and South Sudan). In this context, regional integration potential benefits to the country would, among others, include increased physical access to markets, an enhanced trade environment, and improved business competitiveness. Currently, Somalia’s main regional trading partners include Ethiopia and Kenya, which respectively account for about 34% and 9% of its imports. However, the country’s exports to the region are very low. Thus, the need to develop potential trade corridors (e.g. Mogadishu-Baidoa-Dolow-Nairobi), and improve customs and border management to facilitate trade and increase revenues, is becoming increasingly important and urgent.
Eritrea: AfDB’s Interim Country Strategy Paper 2017-2019 (pdf, AfDB)
Regional integration: The Government considers regional integration to be an important strategy for promoting its economic development agenda. Consequently, it belongs to various regional trading blocs, which include the COMESA, the Community of Sahel-Saharan States (CEN-SAD), and the Inter-Governmental Authority on Development. However, relations between the Eritrean and Ethiopian governments have remained strained, a state that has and continues to hamper a more rapid and faster integration of the country into regional and international trade institutions and communities. Consequently, Eritrea currently has little interregional trade with COMESA member countries. This prevents the country from benefiting from the opportunities of its strategic location on the Red Sea as a hub of transit trade through its ports of Massawa and Assab. According to the 2016 CPIA, the infrastructure and regional integration of Eritrea is only 2.1 against an average score of 3.2 for Africa as a whole. The Government’s goal of making Massawa and Assab active and vibrant ports will enable the country to reduce transaction costs and boost its regional integration and trade.
South Africa: Davis Tax Committee reports
The following final reports are now available for viewing on the DTC’s website: (i) Funding of tertiary education in South Africa; (ii) Financing a National Health Insurance for South Africa; (iii) Second and final report on base erosion and profit shifting (replaces first report); (iv) Second and final report on hard-rock mining (replaces first report); (v) Oil and gas report coupled with an IMF report on the same topic for the DTC; (vi) Tax Administration.
Behind Magufuli, Museveni deals (The Independent)
If President Yoweri Museveni has a best buddy amongst his East African counterparts, it might as well be Tanzania’s John Pombe Magufuli. When they are not sharing a hearty laugh at an African Union meeting in Addis Ababa, they are holding hands while walking as was the case during Magufuli’s recently concluded 3-day visit to Uganda. This wasn’t all. Quite uncharacteristic of him, Museveni hailed Magufuli for fighting corruption. Magufuli, on the other hand, has equated Museveni to Tanzania’s former iconic president, Julius Nyerere. And some of his ministers are echoing the same. Magufuli was in Uganda for the first time this year exactly three months after Museveni was in Tanzania. President Museveni has been in Tanzania three times - in February, May and August - this year. Apart from the closeness the two presidents have exhibited publicly, they are also closing mega deals that are upsetting old alliances in the region.
Today’s Quick Links
Namibia’s Minister of Industrialisation, Trade and SME Development, Immanuel Ngatjizeko: Trade barriers limit continental market integration