News
tralac’s Daily News Selection
Anthony Carroll: Forging a new era in US-South African relations (Africa Center, Atlantic Council)
This report assesses the potential role of the US in assuring South Africa’s passage through this difficult period, and recommends a new high-level effort to attempt to achieve measurable objectives on four tracks: (i) Trade liberalization: laying the groundwork for a free trade agreement in anticipation of the expiration of the African Growth and Opportunity Act in 2025; (ii) Business-to-Business Relations: focusing on the next generation of American investor interest in South Africa; (iii) Government-to-Government Relations: using “Track 2” diplomacy to reinvigorate formal ties; (iv) University and think tank collaboration: galvanizing joint research and mobilizing support from civil society to change public opinion.
US businesses in Nigeria paid N34.4b tax in 2016 (The Guardian)
A recent Economic Impact Survey of US companies in Nigeria has shown that such business interests have contributed over N34.4 billion to the nation’s tax revenue in 2016, even as the firms have expressed commitments towards deepening their investments in the country. According to the business interests under the aegis of American Business Council, efforts are under way to raise stakes in key sectors of the economy under a favourable regulatory environment. Specifically, the Council noted that US companies generated N1 trillion revenue in 2016, while over N340 million was spent on training as well as over N217 million on corporate social responsibility activities.
Adan Mohamed: Manufacturing the future of Kenya – Africa’s industrial hub (CapitalFM)
The last four years have been about laying the foundation for creating a competitive manufacturing base both on infrastructure/cost front as well as on improving business environment. The time is now to put manufacturing at the centre stage of Kenya’s economic future: For instance, the upcoming Naivasha industrial zone is poised to locate industries at the source of clean geothermal power that is green (clean) and at near 50% less cost than it is currently, a critical efficiency enhancer for large manufacturers as well as provide significant scale to produce in our country for the next 50 years. With the directive by HE the President that the cost of power reduces by 50% from 10pm to 6am, this is a key plank for manufacturers who need to take advantage to make production more cost effective.
Kenya Economic Update: Poised to bounce back? (World Bank)
This report presents a rich menu of policy options tabled in this edition of the Kenya Economic Update, identifying opportunities for the consolidation of the fiscal stance, both from an expenditure and revenue mobilization perspective. This is complimented with specific suggestions of macroeconomic and microeconomic reform measures that could help address the slowdown in credit growth and the broader issue of access to credit. Finally, policy options to climate proof the agriculture sector, to mitigate the worse effects of adverse weather conditions are discussed.
Southern Africa Informal Cross Border Traders’ Conference: update (The Chronicle)
Despite the liquidity challenges facing the Zimbabwean economy, a report that was presented during the Southern Africa Informal Cross Border Traders’ Conference in Bulawayo yesterday, indicates the country is losing much foreign exchange through externalisation by different players. Due to the informal nature of cross border trading, participants drawn from neighbouring SADC states who attended the indaba said governments were losing substantial potential revenue as a result of failure to harness opportunities in that sector. They said urgent steps must be taken by authorities to create a supporting institutional and legal framework to protect and promote growth of the informal sector. Parliamentary Portfolio Committee on Defence, Home Affairs and Security Services chairperson who is also MP for Buhera Central, Mr Ronald Muderedzwa, stressed the need to revise laws to improve lives of the informal cross border traders saying existing legislation was archaic and did not favour the growth of the sector. [Welcome to centre of Africa’s shopping]
Informal cross-border traders in the Zambia-Malawi-Mozambique Growth Triangle: prospects for integrating Southern Africa (GovInn)
Primary data from the fieldwork conducted at various locations in the borderlands is qualitatively and statistically analyzed. ICBTs in these areas include affiliates of traders’ associations and non-affiliates. The contiguous borderlands of the three countries comprise a young population of ICBTs with low incomes who have spent relatively few years in cross-border trade. ICBTs who have been longer in the informal trade business have graduated into formal traders. ICBT activities highlight their contribution to regional integration, from the bottom up. Informal cross-border trade provides employment and livelihoods, placing ICBTs outside extremely poor populations living below $1.25 per day. ICBTs also have innovative informal ways of accessing credit based on personal interactions and shared experiences with suppliers of goods. Legally establishing the growth triangle creates an environment that ICBTs exploit in order to satisfy their economic needs, especially with government facilitation. [The author: Chris Nshimbi]
Campaign to create awareness about challenges faced by women traders in EAC launched (New Times)
The Women and Trade campaign will highlight trade opportunities for women in business in a bid to increase inclusion and equitable access to trade opportunities, the organisation said in a statement. Under the theme, “Empowering women, powering trade”, the campaign will see TMEA engage policy-makers, development partners, business associations and other stakeholders in the region and beyond to create an inclusive and enabling environment for women traders, according to the statement.
Group of WTO members: Time to focus on gender as critical inclusion issue (ICTSD)
A coalition of developed and developing economies is expected to unveil a declaration in Buenos Aires outlining several steps they plan to take over the coming two years towards incorporating a gender lens into their approaches to trade and development policy. The declaration from this WTO member subgroup will be issued outside of the normal negotiating process. However, this set of voluntary commitments could serve to raise the issue’s profile at the global trade body, while the agreed measures could help address long-standing knowledge deficiencies in this policy area, thus paving the way to more concrete actions aimed at facilitating women’s increased participation in trade. Among the members expected to support the declaration are:
Barclays Africa, China Development Bank sign agreement to cooperate on development projects in Africa (CNBC Africa)
Given CDB’s focus on infrastructure finance for roads, railways and dams, Barclays Africa will leverage the MoU to unlock opportunities in order to strengthen its contribution towards Africa’s economic growth and development. Barclays Africa will also extract synergies from the CDB’s focus on inclusive finance to provide capital to SME’s and low income communities. “This MoU represents a long-term commitment by senior leadership at Barclays Africa to strengthen our relationship with the world’s largest development finance institution, which has assets of over US$2-trillion. This partnership will unlock opportunities that are aligned to our Shared Growth approach and could facilitate positive socio-economic impact,” says Barclays Africa’s Corporate and Investment Banking Co-Chief Executive, Temi Ofong.
Piggyback exporting, intermediation, and the distribution of the gains from trade in agricultural markets (VoxDev)
How much of the world price of export crops trickles down to small farmers, who sell through agribusinesses and traders with market power? Kenya typifies the debate over how much of the higher prices received in world markets trickle down to farmers: [The authors: Swati Dhingra, Silvana Tenreyro]
Rising product digitalisation and losing trade competitiveness (UNCTAD)
This paper estimates the shares of different countries in cross-border e-commerce and highlights the losing trade competitiveness of developing countries and LDCs in digital products. It further estimates the impact of WTO permanent moratorium of zero custom duties on Electronic Transmission (ET) products using SMART simulations. The results show that the imports of ET products will rise further in most of the developing countries making them net importers, with adverse implications for tariff revenues. However, the moratorium will not affect the imports of the developed countries but increase their exports.
Green industrial policy and trade: a tool-box (pdf, Partnership for Action on Green Economy, UNIDO)
This tool-box aims to guide policy makers in the use of green industrial policy instruments that can be employed to improve a country’s economic competitiveness while advancing environmental protection and social inclusiveness. In doing so, this tool-box focuses on a sub-set of green industrial policies, namely trade policies that can be harnessed to promote green industries and green industrial policies that are of particular relevance from an international trade perspective. This is important because, firstly, trade is a highly regulated area of international law and policy makers must ensure that their policy choices are aligned with their obligations in global, regional and bilateral frameworks. Secondly, trade has increasingly been recognized by the international community as an important driving force for sustainable development.
Taxes, debt and development: a one-percent rule to raise revenues in Africa (IMF)
While our advice will always be country and context specific, we see potential in many countries of sub-Saharan Africa to raise tax revenues by about 1% of GDP per year over the next five or so years. While this is ambitious, experience in the region and elsewhere shows this is achievable in a sustainable and business-friendly way. Improving domestic capacity for tax and other revenue collection is a target that countries have agreed under the UN’s Sustainable Development Goals (Goal 17). On average non-resource related tax revenues in the region have increased over the last few years, but they remain low by international standards and relative to the region’s significant developmental spending needs. To help address these shortcomings, the IMF, including through its regional technical assistance centers, is working with countries to develop Medium-Term Revenue Strategies. [The authors: Vitor Gaspar, Abebe Aemro Selassie]
India: Foreign trade policy review offers incentives to boost sagging exports (The Wire)
Faced with stagnating export growth, India has decided to offer more incentives to exports from labour-intensive and micro, small and medium enterprises dominated sectors even as it launched initiatives like the use of trade analytics to identify new markets for its products. On Tuesday, commerce minister Suresh Prabhu announced new measures to boost the country’s sagging exports as part of a mid-term review of the existing 2015-2020 trade policy. [Highlights of the mid-term review]
India: Exports rebound needs structural repairs (LiveMint)
Exports have been the biggest under-performer so far this fiscal, the latest GDP figures show. At a mere 1.2% year-on-year in the second quarter - unchanged from the previous quarter -growth in real exports of goods and services was the lowest among demand-side estimates. In nominal terms, merchandise exports between April and October are up 9.4% y-o-y, compared with 0.2% in the corresponding period last fiscal. That’s above the average of -1.3% for the last five fiscals (FY13-FY17), but much below the 22.5% growth seen in the preceding five (FY08-FY12).
India, China brainstorm about trade balance (LiveMint)
India and China on Tuesday brainstormed on bilateral trade and investment including New Delhi’s trade deficit with its neighbour and ways of promoting Chinese investments in India, an official statement from federal policy think tank NITI Aayog said. The third dialogue between NITI Aayog and the Development Research Center of the State Council in Beijing highlights the heft that issues related to economic cooperation and sustainable growth are gaining in relations between the two neighbours that have often traded rhetoric over border issues. “The importance of pursuing balanced and sustainable bilateral trade was noted and opportunities for promoting Chinese investments in the Indian economy were highlighted,” said the statement. India had a trade deficit of over $50 billion with China in 2016-17. [China woos India with ‘mega-scale regional market’ offer]
UNDP Strategic Plan: 2018-2021
This Strategic Plan sets out a vision for the evolution of UNDP over the next four years, responding to a changing development landscape and the evolving needs of our partners. Building on our experience to date, it describes how we will support countries to achieve the 2030 Agenda and the Sustainable Development Goals and related agreements. The plan reinforces our commitment to working in partnership with Governments, civil society and the private sector, as a catalyst and facilitator of support from the United Nations System as mandated by the General Assembly. The Strategic Plan describes how UNDP will better adapt to the range of country contexts in which we work, framed through:
