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tralac’s Daily News Selection

tralac’s Daily News Selection
Photo credit: Xinhua

23 Jan 2018

Reminder: The USITC hearing, US trade and investment with Sub-Saharan Africa: recent developments, is scheduled to take place today in Washington.

The Gambia’s Trade Policy Review started today at the WTO: access the documentation

The World Economic Forum Annual Meeting started today: Live Blog. Profiled WEF reports: (i) Towards a reskilling revolution (ii) Eight futures of work: scenarios and their implications (iii) The new production workforce: responding to shifting labour demands (iii) Global Future Council on International Trade and Investment: strategic brief on misconceptions around trade balances

World Economic Outlook: January update (IMF, pdf)

The growth pickup in Sub-Saharan Africa (from 2.7% in 2017 to 3.3% in 2018 and 3.5% in 2019) is broadly as anticipated in the fall, with a modest upgrade to the growth forecast for Nigeria but more subdued growth prospects in South Africa, where growth is now expected to remain below 1% in 2018-19, as increased political uncertainty weighs on confidence and investment. [IMF’s Maurice Obstfeld: The current economic sweet spot is not the “new normal”]

UNCTAD Investment Trends Monitor: global FDI slipped in 2017

Global flows of FDI fell by 16% in 2017 to an estimated $1.52 trillion, down from a revised $1.81 trillion in 2016, according to the latest UNCTAD Global Investment Trends Monitor (pdf). FDI to developing economies remained stable, at an estimated $653 billion, 2% more than the previous year. Flows rose marginally in developing Asia and Latin America and the Caribbean, and remained flat in Africa. Developing Asia regained its position as the largest FDI recipient region in the world, followed by the European Union and North America. “The decline of global FDI flows is in stark contrast to other macroeconomic variables, such as GDP and trade growth, which saw substantial improvements in 2017,” James Zhan, Director of UNCTAD’s Investment Division said. “Upward synchronization of the trends in 2018 is probable, but risks are abundant.”

World Employment and Social Outlook: Trends 2018 (ILO)

The World Employment and Social Outlook: Trends 2018, a flagship report by the ILO, examines employment and social trends for the world as a whole and for each region, and analyses structural transformation and implications for future job quality. The projected fall in the 2018 global unemployment rate would also mark a turnaround after three years of rises, and would remain essentially unchanged in 2019, according to the report. However, with a growing number of people entering the labour market to seek employment, the total number of unemployed is expected to remain above 192 million in 2018, and that number would likely grow by 1.3 million in 2019. Extract from the executive summary (pdf):

The world continues to experience diverse trends in employment outcomes. Developed countries are expected to enter their sixth consecutive year of decreasing unemployment rates, falling to 5.5% in 2018, the lowest rate since 2007. Yet many countries continue to report high rates of labour underutilization, with large shares of discouraged workers and growing incidence of involuntary part-time employment. By contrast, emerging countries have experienced a significant increase in unemployment rates between 2014 and 2017, driven by major economic downturns, in part due to the commodity price slump in many large economies, such as Brazil and the Russian Federation. The year 2018 marks a turning point, as the unemployment rate is expected to fall to 5.5% (from 5.6% in 2017), which would translate into an increase in the number of unemployed in emerging countries of around 0.4m in 2018 and 1.2m in 2019.

Mauritius-India: CECPA to provide platform to address any barriers in trade (GoM)

The third round on the resumption of discussions between Mauritius and India on the Comprehensive Economic Cooperation and Partnership Agreement was launched yesterday in Mauritius. Both India and Mauritius are willing to finalise a Joint Study Report which will set the basis and the parameters for the negotiations and enable the start of negotiations on two different chapters - trade in goods and trade in services. The CECPA has four pillars which form the basis of negotiations, namely trade in goods, trade in services, investment and economic cooperation. The work agenda comprises: consultations on Trade in Goods and Services including sub working groups on sanitary-phytosanitary measures; technical barriers to trade and rules of origin as well as the way forward.

Mauritius largest source of FDI in India, says RBI (Economic Times)

Mauritius was the largest source of foreign investment in India, followed by the US and the UK, according to a census by the Reserve Bank. Singapore and Japan were the next two sources of FDI, said the Census on Foreign Liabilities and Assets of Indian Direct Investment Companies 2016-17, released by RBI today. “Mauritius was the largest source of FDI in India (21.8% share at market value) followed by the USA, the UK, Singapore and Japan whereas Singapore (19.7%) was the major ODI destination, followed by the Netherlands, Mauritius, and the USA,” the census said (see (Tables 5 and 6). Extract: The manufacturing sector accounted for nearly half of the total FDI at market prices; ‘information and communication services’ and ‘financial and insurance activities’ were the other major sectors that attracted FDI ( see Tables 7 and 8). Total sales, including exports, of foreign subsidiaries in India increased by 18.7% during 2016-17 whereas their purchases, including imports, increased by 20.1% (see Tables 10A and 10B).

JSC Russian Export Centre joins Afreximbank as shareholder

The shareholding, which became effective on 29 December 2017, followed discussions between the Bank and Russian officials during which the two sides explored ways of cooperating to take advantage of the numerous opportunities for trade and development between Russia and the African continent. With the new partnership, the two entities have already started working actively on joint projects in a number of African countries, focusing mainly on mining and transport infrastructure. REC is owned by the State Corporation Bank for Development and Foreign Economic Affairs (Vnesheconombank [VEB]).

Kenya: Mombasa set to get Dubai-like free port (Business Daily)

The 1,000-acre Mombasa re-export gateway will initially handle 100,000 vehicles annually, Treasury secretary Henry Rotich estimates in a draft Budget Policy Statement released on Friday. The state-owned facility is tipped as one of the flagship projects that the government is banking on to raise the 2018 export earnings by 10% and 20% annually by 2022. “We intend to strengthen trade facilitation programme,” Mr Rotich says in the draft BPS. The Mombasa FTZ is conceived to serve the landlocked states under Comesa. All the vehicles on transit will be moved directly from Kilindini seaport to the FTZ from where they can be evacuated by railway or roads to the final destination. Mr Rotich says 500 motor vehicle inspectors will be trained this year and stationed at the facility to ease clearance. That means the vehicle owners will no longer have to incur demurrage charges faced by home-bound imports that have to undergo lengthy clearance including obtaining number plates. BPS Pointers: (i) Section 2.2 “The Big Four” Economic Plan. “The Big Four” Plan of the Government for the FY 2018/19 and over the medium term are discussed as follows: Supporting Value Addition and Raising the Share of Manufacturing Sector to GDP to 15% by 2022 (see page 25). (ii) Section 2.3 Enablers for the “The Big Four” Economic Plan (see page 35).

Is open skies the magic wand that will drive African airlines’ competitiveness? (New Times)

Experts indicate that at the moment, airlines that are best positioned to dominate African skies are often based in Europe or the Middle East, urging countries in Africa to support and embrace the open-skies policy being pushed by the African Union. “An open skies policy would help modernise the air travel industry in Africa, and provide an incentive to airlines from the continent and elsewhere to fly more freely, helping to boost the demand, increase frequencies, and help turn key cities like Kigali into aviation hubs,” he says. But Macheras says that there needs to be a priority for African carriers if they are to compete with global airline giants. “Africa has the potential to grow various aviation hubs. However, airlines also need to create more partnerships with airlines that do domestic air transport to ensure seamless connections to secondary cities. Such partnerships can help make the entire air travel process ‘easier’ and, therefore, more attractive for passengers flying to, from and around the continent,” he adds. [NEPAD: The Single African Air Transport Market ( pdf Brochure (1.95 MB) ), African Union Commission gears up to launch highly-anticipated Single African Sky, Nigeria restates commitment to single African air transport market]

Nigeria: FG hires consultants to probe minerals sector’s revenue leakages (Punch)

The Federal Government on Monday inaugurated 100 consultants to probe revenue leakages in the mines and minerals sector of the economy between 2012 and 2017 in an exercise titled: ‘Revenue Optimisation and Verification Project’. The minister said the Revenue Optimisation and Verification Project would seek to confirm the adequacy of royalty remittances made by the various operators in the mining industry. He stated that the consultants were mandated to collect and analyse data from 2012 to 2017 in the course of their work, thus giving the government an opportunity to demand and receive accruals due to it from the referenced period.

Assessment of food security early warning systems for East and Southern Africa (World Bank)

The risk of the El Niño-induced food insecurity in southern Africa in 2016; the recent risk of famine in northern Kenya, Somalia, Ethiopia, and South Sudan; and the recent outbreak of the fall armyworm in East and Southern Africa all demonstrate that responses are still largely reactive than proactive. Inadequate early warning systems, coupled with limited investment and weak institutional and technical capacity, are implicated in contributing to food insecurity–related emergencies in ESA. Yet over the years, strong evidence has emerged on the benefits of investing in EWSs. In Ethiopia, investing in a drought EWS, which would reduce livelihood losses and dependence on assistance, has a benefit-cost ratio of between 3:1 and 6:1. Similarly, the BCR of improving national hydro-meteorological services in developing countries ranges from 4:1 to 36:1. Extract: The performance and capacity of EWSs at the Regional Economic Cooperation level and at sample member states were assessed. The study drew lessons from the ASEAN region, particularly in relation to EWS policies, investments, and technical capacities. Because the assessment attempted to be as comprehensive as possible, it was essential to also draw lessons from programs and projects being piloted on EWSs, including those being implemented by the World Bank in Malawi, Zambia, Zimbabwe, Kenya, Somalia, Tanzania, and Mozambique. Although progress has been made, there are challenges that recur across the Regional Economic Communities and member states, and these challenges fall into three main categories:

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