What to look forward to, policy-wise, at the January 2018 AU Summit – which started today: a series of tweets by AUC Deputy Chairperson @AU_KwesiQuartey

Call for applications: COMESA Secretary General

Call for papers: 2018 Africa meeting of the Econometric Society (12-14 July, Cotonou)

COMESA trade policy updates:

(i) COMESA holds first Digital FTA workshop. Sixteen COMESA Member States participated in a two-day workshop (18-19 January, Mahe) on the Digital Free Trade Area in which they agreed that the concept is about empowering traders to do cross-border trade using ICT as a tool to minimise physical barriers. Director for Information Technology at the COMESA Secretariat, Ms Lanka Dorby, made a presentation on the approved DFTA Action plan, which includes the establishment of the COMESA Online Market. COMESA’s Director of Trade and Customs, Dr Francis Mangeni said “Trade facilitation is a key priority for Africa, and a digital FTA is a practical way of increasing intra-regional trade and creating wealth.”

The COMESA Digital Free Trade Area is defined into three segments, E-Trade, E-Logistics and E-Legislation. The DFTA will require technological and legal innovations in the fields of intellectual property, competition, data privacy and protection, cyber security and a whole range of other innovative laws. Member States sought clarification on who will lead the initiative in the implementation of the COMESA Online Market. The Secretariat informed the workshop that it is the responsibility of the Member States to decide the best approach for implementing the COMESA Online Market for example through a Public Private Partnership or through a government initiative. The Secretariat further informed the workshop that the design, rules and guidelines for implementing the online market will be developed and shared with the Member States. [COMESA: Development of e-certificate of origin on course]

(ii) Digital mobile app working well in pilot phase. The mobile application developed by COMESA Secretariat to capture small scale trade data and enhance e-business, now being piloted in the DRC, Rwanda and Uganda is working well. The mobile application will be used by the Trade Information Desk Officers at border points in the COMESA region to collect informal cross border trade performance data and then transfer the data to the Secretariat. [RCTG Carnet to launch in Djibouti Corridor by March]

Africa’s greatest economic opportunity: trading with itself (WEF)

South Africa is in the unique position of holding membership to several multilateral fora. As we take over the BRICS presidency for 2018 and as the only permanent African member of the G20, it is our responsibility to champion the case for Africa and its agenda by being at the nexus of discussions with our international counterparts. Moreover, Africa’s significance to our own economic future cannot be underestimated. We can reap the rewards of Africa’s tandem approach to growth. South Africa’s track record in doing international business makes it the natural access point into Africa for the rest of the world. But we must have a clear strategy in our approach to Africa to ensure we also become part of the continent’s growth story. South Africa must continue to cultivate its role in facilitating positive changes for Africa as this is where our own long-term economic success lies. [The author, Kingsley Makhubela, is Brand South Africa CEO]

Tanzania: Export trade needs to be revisited and diversified (The Citizen)

According to the Bank of Tanzania’s Economic and Operations Annual Report for 2016/2017 (pdf) released last week, gold accounted for 98% of the country’s exports to Switzerland in 2016, valued at $753m. Also, exports to Switzerland accounted for 16.2% of all the goods which Tanzania sold abroad in 2016. Other major buyers from Tanzania that year included India (14.8%), South Africa (13%), China (7.5%), Kenya (6.6%), DR Congo (6.2%) and Belgium (6.0%).

Zimbabwe trade and investment policy updates:

(i) President seeks to woo lenders by paying loan arrears. Zimbabwe is committed to repaying arrears to external lenders so that it can resume support programs with institutions such as the International Monetary Fund and end years of isolation from global capital markets, said the country’s president. Emmerson Mnangagwa, the 75-year-old who took over as leader of the southern African country in November after the military pressured Robert Mugabe into resigning, said one of his priorities is reintegrating his country into the global financial system. The economy has halved in size since 2000, credit lines from most lenders have been withdrawn and infrastructure has crumbled. [Investors slow to engage Zim]

(ii) Investment guidelines and opportunities. President Emmerson Mnangagwa has launched the Investment Guidelines and Opportunities in Zimbabwe document that sets out the country’s new economic order aimed at improving the well-being of Zimbabweans. The President launched the guidelines at a preparatory meeting for the World Economic Forum meeting to be held in Davos, Switzerland this week. In his foreword to the policy he said the policy also acknowledged Zimbabwe’s historical realities.

Fitch revises Egypt outlook to positive (Ahram)

Fitch Ratings has revised the outlook on Egypt’s long-term foreign currency Issuer Default Rating to positive from stable and affirmed the IDR at B. The revision comes on the back of progress on the government’s commitment to reform in 2017. Egypt embarked on an IMF-backed reform programme in 2016 with the support of a $12bn three-year Extended Fund Facility. “Fiscal consolidation is proceeding, although it will require a multi-year effort to reverse the increase in general government debt/GDP witnessed since the Arab Spring uprisings,” Fitch said in a statement. “We forecast the budget sector deficit to narrow again in fiscal year 2018, to 9.7%” the agency said, adding that it expects Egypt to achieve a primary surplus in fiscal year 2019 for the first time in more than 15 years. Primary surplus refers to government revenues minus expenditure before debt service. [Egypt targeting 8-10 flotations of state firms over 18 months]

Nigeria makes formal request to host African Development Bank’s regional hub (AfDB)

“I will like to put on record Nigeria’s strong desire and demand to host the regional hub of the African Development Bank,” Adeosun said. Noting that the Bank had made Nigeria the first regional member country to host a purpose built and Bank-owned office complex, she said the complex would boost Nigeria’s efforts and plans for regional integration in the West African Region. The improved relationship between the Bank and Nigeria has led to an all-time high portfolio level of about $6bn spread over 73 projects across sectors, she said. The Minister commended the leadership of the Bank for providing a $1bn budget loan support during the period of economic recession, of which $600m had been drawn.

Ouagadougou Declaration (CIPE)

CIPE, along with World Movement for Democracy, the US Chamber of Commerce’s Africa Business Center and the Burkina Faso government jointly launched this initiative the centerpiece of which is increasing the relationship between the private sector, civil society, and policy makers in democratic governance throughout Africa. The importance of this two-day conference was evidenced by the unique participation of three heads of state – Burkina Faso President Roch Marc Christian Kaboré, Mali President Ibrahim Boubacar Keïta, and Niger President Mahamadou Issoufou – along with political leaders from Ghana and the Ivory Coast. The conference included multiple working groups which explored a variety of avenues to create better conditions for economic growth, political stability, and long-term security.

Kenya to host Africa Hotel Investments Forum in October (Xinhua)

Kenya’s Ministry of Tourism will host the 18th edition of Africa Hotel Investments Forum (2-4 October, Nairobi) as the hospitality sector in the country records growth despite political jitters. Kenya hosted the Africa Hotel Investment Forum in 2013 while Rwanda and Ethiopia have hosted the event in subsequent years.

Ethiopia’s hotel industry needs help to encourage tourism (The Conversation Africa)

But, while the hotel industry is growing, the number of available hotel rooms is still the lowest. In terms of room availability, Ethiopia is globally ranked 134 out of 140, compared to Kenya, Uganda and Tanzania at positions 122, 121 and 118 respectively. Ethiopia also only has six internationally branded and managed hotels. This is a very low figure bearing in mind that the average number of tourists per year is nearly 700,000 and these six hotels have a combined total of less than 1,500 rooms. By comparison, Nairobi in neighbouring Kenya already hosts most of the international hotel brands – and expects 13 more to open their doors over the next five years. There are also only three five star hotels in Ethiopia and the majority of the "rated" hotels which guarantee a certain standard of service are situated in the capital, Addis Ababa.

Penny Mordaunt: “We need new ideas to future-proof against Africa’s biggest challenges” (DFID)

Penny Mordaunt has hailed the “incredible power of technology to deliver aid in new ways” on her first official visit to Kenya as International Development Secretary. Ms Mordaunt was also in the country to hear from British businesses about how new technology has helped them tap into the Kenyan market. The UK is the fifth largest exporter of goods to Kenya and trade between the two countries is worth over £1bn annually. Innovative technology, supported by DFID, is helping Kenya build resilience to climate challenges, including drought, and to build a modern economy for the future.

The Inclusive Development Index 2018 (WEF)

The Inclusive Development Index is an annual assessment of 103 countries’ economic performance that measures how countries perform on 11 dimensions of economic progress in addition to GDP. It has 3 pillars; growth and development; inclusion and; intergenerational equity – sustainable stewardship of natural and financial resources. Designed as an alternative to GDP, the Inclusive Development Index reflects more closely the criteria by which people evaluate their countries’ economic progress. Performance is mixed among BRICS economies: the Russian Federation (19) is ahead of China (26), Brazil (37), India (62), and South Africa (69). Although China has ranked first among emerging economies in GDP per capita growth (6.8%) and labour productivity growth (6.7%) since 2012, its overall score is brought down by lacklustre performance on Inclusion. Turkey (16), Mexico (24), Indonesia (36), and the Philippines (38) are among economies which show potential on Intergenerational Equity and Sustainability, but lack progress on Inclusion indicators such as income and wealth inequality.

How to avoid indicator scandals: three ways to fix the Doing Business Index (CGD)

We are not overwhelmed by Romer’s observations. Everyone knows, or should know, that there is a substantial degree of imprecision on all governance or economic-management-related ratings and that even small differences in ratings can sometimes correspond to big rankings differences because of clustering of scores. The biggest differences in rankings for Chile (by Romer’s calculation) are around 10 places, which is not a big deal even for a fixed methodology. If the difference had been say a change from a ranking of 34 to, say, one of 90, we would have been more impressed! The error range for World Bank’s Worldwide Governance Indicators – one of the few to publish error estimates – is revealing. For a mid-level country like Ecuador, the error ranges for the individual indicators in various years correspond to rankings differences of between 20 and 40 countries! However, this latest kerfuffle does present an opportunity to improve the Doing Business index. Here, we pose three fixes to avoid future scandals and improve the index: [The authors: Alan Gelb, Vijaya Ramachandran]

Societal benefits and costs of international investment agreements: a critical review of aspects and available empirical evidence (OECD)

This paper reviews alleged societal benefits and costs of International Investment Agreements (IIAs) as suggested by academia, governments, business and civil society. The paper focuses in particular on the investor protection component of IIAs. The inventory finds that for many claims about the positive or negative impact of IIAs, little robust evidence has been generated to date. The paper highlights methodological challenges and suggests areas where further study would be required to draw firmer conclusions.

Today’s Quick Links: Ecobank: Nigeria Q1 2018 Economic Strategic Report (pdf) SDGs Centre for Africa establishes West African sub-regional centre Rwanda launches virtual Centre of Excellence Kenya AGOA aims doubling 2016 exports value to US by 2025 ASPI Trade Forum Issue Paper: US bilateralism and Asia-Pacific economic integration