tralac’s Daily News Selection
tralac’s weekly e-Newsletter is posted. Featured content: (i) Preparing for Buenos Aires: can the WTO deliver on Nairobi promises?; (ii) tralac-KAM AGOA awareness workshops
An AMOT meeting today, tomorrow in Niamey: CFTA negotiations intensify as deadline looms (UNECA)
ATPC’s David Luke: “The objective of these meetings is to conclude the outstanding issues of the Modalities for Tariff Liberalization that were adopted at the 3rd Meeting of the AU Ministers of Trade in June 2017; and to consider the draft Texts of the CFTA Agreement, its Protocols and its Annexes and Appendices. He expressed optimism about the December deadline for the establishment of the CFTA, stating “Given the momentum behind the negotiations thus far, we are confident that there will be the essential substance of an agreement to come out of the ministerial meeting in Niamey.” He cautioned, however, that some technical work will be needed during the first half of 2018 to finalize tariff schedules and rules of origin arrangements. Mr Luke added that “ECA is advocating for implementation of the agreement to begin early in 2018 on the basis of the level of ambition of tariff liberalization that has been agreed and with interim rules of origin pending the finalization of the outstanding technical issues.”
William Davis: The African Growth and Opportunity Act and the African CFTA (AJIL)
In any case, if and when Africa negotiates a free trade agreement with the United States, it will be in the interest of both sides to avoid, as far as possible, replicating the particularly cumbersome process that the European Union has followed in negotiating Economic Partnership Agreements with African states and regional groups. Those negotiations have already taken over a decade and most African countries have declined to sign the agreements for a variety of reasons, not least because these agreements have failed to fully incorporate Africa’s development concerns. It will be important for both Africa and the United States to take into account that the United States is no longer Africa’s most important export market, having fallen to fourth behind China, the European Union, and India. This means that the trade-off for Africa between retaining full access to the US market, on the one hand, and ensuring that strategic “infant industries” are protected from competition from American firms, on the other, will have shifted towards the latter compared to the past. Indeed, deepening integration between Africa and its Southern partners, particularly from Asia and the Middle East, shows the greatest potential to support Africa’s much needed diversification and structural transformation, which will be essential to support more inclusive and job-rich growth on the continent.
5th African Union-European Union Summit: tralac resource box. Remarks by President Paul Kagame: The institutional reform of the African Union, currently underway, aims to make our organisation more focused, effective, and financially sustainable. As such, the reform decision expresses the collective determination of African leaders to accelerate progress toward the African Union’s founding ambitions. I would like to emphasise two points as we begin our summit. [Remarks by President Kenyatta, COTU’s Francis Atwoli]
Zambia: October 2017’s trade deficit reduces (CSO)
Zambia’s trade deficit reduced by 58.4%, from K2,125.6m recorded in September to K885.2m in October 2017. The reduction in the deficit is mainly on account of a 25.2% increase in the volume of copper exported, from 60,896.3 metric tonnes to 76,250.3 metric tonnes, and its corresponding revenue as copper accounts for the largest weight in the export profile. Metal export earnings increased by 40.6%, from K3,675.2m in September 2017 to K5,168.3m in October 2017. The overall contribution of metals and their products to the total export earnings between October and September 2017 averaged 70.5% Non-traditional exports (NTEs), however decreased by 5.8%, from K1,866.4m in September 2017 to K1,757.3m in October 2017. The share of NTEs recorded an average of 29.6% in revenue earnings between October and September 2017.
South Africa’s trade surplus increased to R4.56bn in October 2017 from an upwardly revised R4.48bn surplus in September, and above market expectations of a R1.00bn deficit. Exports increased 2.2% and imports went up 2.3%. Considering the January to October period, exports increased 6.6% and imports decreased 0.2%, shifting the country’s trade balance into a R51.62bn surplus from a R9.9bn gap in the same period of 2016. [Downloads: Full SARS release, NKC Africa infographic]
In this edition of our Proshare Confidential report we carried out an in-depth study of the Nigerian external economy in order to understand the reverberating effect of the export and import dynamics of Nigeria. The bitter spill of 2015 taught an important lesson, that when external injections (exports) wean they automatically force the trio of government revenue, spending and consumption to readjust to the new reality. Thus, identifying the nature of Nigeria’s external economy has become important especially in relation to: How diverse are our imports? And, the ratio of Nigeria’s total import to GDP as an open economy? By doing this, it allows us either validate the long held perception that Nigeria is truly a neither import dependent nation or not. The conclusion arrived at provides the needed hindsight on the nation’s external leakages and how best to curb it.
Rwanda: Govt urges manufacturers to tap into Made-in-Rwanda (New Times)
Vincent Munyeshyaka, the trade and industry minister, said there is need for more value addition to boost consumption of locally-made products. Munyeshyaka said government is counting on locally-made products not only to reduce import bills but also boost exports. “It is very important if Rwanda is to achieve sustainable economic development but also grow its exports to an annual average of 28% as prescribed under the second Economic Development and Poverty Reduction Strategy blue print,” he said. “We will continue working on strategies that will help bring down the cost of production to make you more competitive,” Munyeshaka told producers.
ECOWAS Finance Ministers validate draft integration instruments relating to the consolidation of Regional Customs Union (ECOWAS)
The Finance Ministers’ meeting recommended that the ECOWAS and West African Economic and Monetary Union Commissions improve their information exchanges for better complementarity, synergy and harmonization. The ministers also recommended that the ECOWAS Commission should provide technical support for strengthening the capacity of the supervisory authorities in relation with other regional institutions, such as Inter-Governmental Action Group against Money Laundering in West Africa, to help fight smuggling of tobacco and other products that hinders the application of excise duties on tobacco. The Finance Ministers validated the principle of setting up a track and trace system for tobacco products but deferred its adoption. The validation however came with an invitation to the ECOWAS Commission to take another look at the issue of infant Milk and the harmonization of cereals and their seeds.
Mozambique: New impetus for the implementation of the Trade Facilitation Reform Agenda (SPEED+)
The Council of Ministers approved, on 28 November 2017, the Decree that establishes the National Trade Facilitation Committee. The purpose of the NTFC is to coordinate, supervise and monitor the implementation of the WTO Trade Facilitation Agreement which entered into force in February 2017.
Mozambique: Companies, banks sign $2.7bn contracts for Nacala Corridor (Club of Mozambique)
In the long-term financing agreement formalised yesterday, the Japan Bank for International Cooperation supplies about $1bn, with a similar amount raised by a consortium of Japanese banks in a loan guaranteed by Nippon Export and Investment Insurance. The South African Export Credit Agency similarly guarantees a $400m loan from ABSA, Investec, Rand Merchant and Standard Bank of South Africa, while the African Development Bank has a US$300 million share. Repayment is expected over 14 years according to a tariff related to the coal and general cargo transportation services provided by the tariff corridor introduced in April after the conclusion of the capital transaction between Vale and Mitsui and subsequent reconsolidation of the corridor. The Nacala corridor, in operation since 2016, is a $4.5bn investment that brings together Brazilian multinational Vale, the Japanese conglomerate Mitsui and the Mozambican public railroad company CFM.
Today’s Quick Links:
Financiers Conference: Zambia, Tanzania and Kenya seek funds to finish $1.2b Regional Power Interconnector
Batoka Gorge hydro electric scheme: Zambezi River in Zambia and Zimbabwe
OECD: Documents for the conference Co-operation between competition agencies and regulators in the financial sector - 10 years on from the financial crisis
South Africa: Co-operation between competition agencies and regulators in the financial sector (pdf, OECD)
World Social Protection Report 2017-2019: four billion people have no social security protection
The impact of free trade agreements on the procurement behaviour of Japanese firms’ overseas affiliates