tralac’s Daily News Selection
On the CFTA’s scope: Ambassador Chiedu Osakwe highlighted the fact that historically, the CFTA would be the largest trade agreement in terms of members and potential since the coming into force of the WTO Agreement in 1995.
Featured infographic, @Yann_Sefacil: 70% of container trade flows to Eastern/Southern Africa are concentrated on Mid East-Asia routes. Intra-Africa cabotage weights few percent only.
Concluding today, in Livingstone: The PMAESA meeting targets land-linked countries as key facilitators of trade, investments in the development of the maritime sector in East and Southern Africa. Addressing delegates, PMAESA Chairperson and CEO of the Namibian Ports Authority, Mr Gerson Bisey Uirab, described land-linked countries as part of the architecture of the maritime sector which must be fully integrated. “The maritime sector offers several opportunities and a future that can support the transformation of African economies. However, this demands that the region develops a comprehensive view of what the maritime sector could be and what it could offer.” The DBSA’s Mr Davies Pwele revealed that the DBSA will soon sign a MoU with PMAESA to become the preferred financier for the development of port infrastructure in Eastern and Southern Africa.
Starting today, in Nairobi: 2nd ESA Regional Research Conference on the impact and implication of the Trade Facilitation Agreement and the WCO Mercator Programme to the ESA region. The conference will cover the following topics: Impacts of the WTO Trade Facilitation Agreement; Data analysis for effective border management; Best practices in digital customs; E-commerce as a driver for economic growth; Securing and facilitating trade in East and Southern Africa, and regional integration, addressing levels of intra-regional trade in East and Southern Africa. [For twitter updates: @KESRA_KRA, #2ndESAConference]
Today in Lusaka: Training on Zambia’s export and investment potential, using ITC’s Export Potential Map
African Trade Information Portals: updates
(i) Harnessing transparent trade information for effective trade facilitation in the EAC: Nairobi workshop. The workshop (which concluded yesterday in Nairobi) provided a forum for EAC member states to share current status, challenges and achievements on the implementation of Trade Information Portals. The workshop will further formulate a regional Trade Facilitation Index and measurable targets for the online publication and simplification of trade procedures. The workshop was organised by the EAC Secretariat, in collaboration with TMEA and UNCTAD.
(ii) Information for Trade in Kenya web portal launches: Principal Secretary, State Department of Trade, Dr. Chris Kiptoo noted that the InfoTradeKenya platform was complimentary to the Kenya Trade Portal which was launched in October 2017. The latter, he clarified, is aimed at promoting Kenyan suppliers to the international market by linking them to global traders. On the other hand, the InfoTrade Kenya portal was intended to increase access to information on international trade procedures and regulations, cut back unwarranted penalties resulting from documentation errors and enhance trade efficiency. Dr. Kiptoo said that the two portals will be integrated in order to offer seamless information to traders.
Trading up: the benefits of exporting for small firms (IGC)
SMEs employ a large proportion of the labour force in developing countries. Compared to large firms, however, few SMEs export – direct exports represent just 3% of total SME manufacturing sales, compared to 14% for large enterprises. Recent research has found that exporting provides important gains for small firms. An innovative project in Egypt found that exporting raised rug firms’ profits by 26%, with similarly dramatic rises in productivity. By learning new skills from intermediaries and foreign buyers, exporting firms increased the quality of their products as well as their efficiency. Demonstrating the importance of this process of “learning by exporting” and the resulting increases in profitability makes the case for increases in trade finance and better policies to facilitate trade for SMEs.
Extract (pdf): The barriers small firms must overcome to begin trading internationally are often so high as to be prohibitive. Any firm looking to start exporting must first find foreign buyers to sell to, know how to create a successful trading relationship, and understand what regulations to comply with. Atkin et al. enabled SMEs to export by matching them directly with buyers. The costs of matching buyers and sellers are commonly referred to as “matching frictions”. They constitute up to half of total trade costs. For small firms, it could be an even higher share. Therefore, supporting small firms in their efforts to find buyers by reducing such costs is a key goal for governments and export promotion agencies. There are several reasons why these costs can be high, and why they may particularly affect smaller firms. A number of actions can be taken by policymakers to lower them: [The authors: David Atkin, Amanda Jinhage]
Alibaba Business School and UNCTAD have brought together 24 Africa-based entrepreneurs to participate in the inaugural eFounders Initiative. The eFounders Initiative is the first step to fulfilling the commitment Alibaba founder and executive chairman Jack Ma made as UNCTAD special adviser for young entrepreneurs and small business to help empower 1,000 entrepreneurs in developing countries over the next five years. The young e-commerce pioneers travelled from seven African countries to attend the programme at Alibaba’s global headquarters in Hangzhou and learn from China’s experience in building an e-commerce ecosystem. The two-week intensive course included capacity-building in e-commerce, from inventory management and rural commerce to logistics and mobile payment systems, as well as how to use data to best capture consumer preferences. ”In the future, we will need more than the G20 and the B20 to create the kind of inclusive development the world needs,” Mr. Ma said.
Tananzia: Value of digital money services increase by 78trn/- in four years (IPPMedia)
The value of transactions in the national digital payment system at the end of 2016 soared to almost 119trn/-, which was about three times more the electronic payments made in 2012. During the four year period, the value of the digital money services increased tremendously by nearly 78trn/-. New data from the Directorate of Banking Supervision (pdf) at the central bank show that the transactions increased by about 189% from 40.95trn/- in 2012 to 118.61trn/- last year. In 2015, the value of electronic payments made in the country amounted to about 88.88trn/-.
Ruling PF Bwana Mkubwa Member of Parliament in Ndola, Dr Jonas Chanda, says Zambia needs a strong national trade policy which protects Zambia’s interests first centred around free and fair trade with other countries. Dr Chanda said this will enable the country to be competitive with its trading partners. Speaking in Parliament on Wednesday evening in support of the 2018 budget vote for the Ministry of Commerce, Dr Chanda said it was high time Zambia developed a very assertive National Trade Policy so that the country is not turned into a dumping ground for cheap imports from its main trading partners like South Africa, China and others. Dr Chanda stated that the total bilateral trade between Zambia and South Africa in 2016 was $3.8bn, with the balance tilted in favour of South Africa with a trade imbalance of over $2bn. Dr Chanda said the current situation where 95% of Zambia’s exports to China was unfinished copper products was not good for the economy since the country was not exporting value added goods to China. “In fact China has created an industry of copper refineries, smelters and other value-adding industry around copper and other minerals, exporting back finished products to Zambia at a much higher price.”
Even during the current economic downturn, where debt was permitted to exceed our self-imposed ceiling, Namibia’s debt, as a ratio to GDP at 42% remains lower than the SADC benchmark of 60%. In addition to this, the Namibian economy continues to be vibrant with economic growth projected to pick up in line with the global economic recovery. Our external position, at 5 month of import coverage, is strong; price pressures are well contained; there is ample liquidity and subscriptions to Government bonds have been well received, showing that Namibia remains credit worthy. Going forward, we will ensure the economy is managed in a responsible manner, by remaining far from IMF bailouts and ensuring the limited resources we have at our disposal, are spent in an inclusive, pro-poor and pro-growth manner.
The impact of infrastructure shocks on agricultural markets: evidence from the Zambezi river in Mozambique (UNU-WIDER)
The aim of this paper was to add to the literature on the impact of infrastructure investments on economic performance in developing countries. We noted that poor provision of road infrastructure can significantly increase costs to firms and make potential market opportunities unprofitable. Investment in transport infrastructure is widely seen as crucial to overcoming natural barriers and mitigating connectivity problems, in turn enhancing market integration. For this purpose, we used a quasi-natural experiment based on the construction of a new bridge across the Zambezi river that connected markets in Mozambique.
Tanzania: Country results brief 2017 (pdf, AfDB)
This Tanzania Country Results Brief demonstrates the Bank’s recent progress in moving the country toward its goal of reaching middle-income status by 2025. It also highlights the Bank’s responsiveness to Tanzania’s needs, in moving closer to the field and providing the best value for money. Today the Bank has a Tanzania portfolio of 21 operations valued at $1.8 billion, which builds on the record of development results it has achieved in Tanzania since 2006. [Twaweza report on Tanzanians’ experiences and views of corruption]
As trade talks in Geneva enter the final stretch, WTO negotiators have tabled new proposals on agriculture for the Buenos Aires ministerial that begins in just over two weeks. They have also put forward suggestions for a work programme to deal with unresolved topics after the conference takes place. A new paper from Mexico has put forward proposals for a limit on trade-distorting farm support, while Norway and Singapore have tabled a draft ministerial decision on public stockholding for food security purposes. These two subject areas have dominated the WTO’s agricultural talks in recent years, including this one. Two other proposals seek to spell out in more detail how WTO members would continue negotiations after Buenos Aires on topics that are not seen as top of the agenda for the ministerial. While some negotiators told Bridges that they were not optimistic about the prospects for achieving an outcome on agricultural trade issues at the ministerial, others said they believed that progress was possible if ministers could reach agreement on a “package” of measures to adopt at the conference. [US blocks work on WTO ministerial statement ahead of meeting]
Effective efforts in trade, investment and innovation can provide the conditions to end poverty within a generation. In full consultation with public and private partners, UNIDO designs and implements holistic interventions that are tailored to specific country needs. The interventions actively identify and combine complementary services from across six strategic thematic areas: [Six downloads available]