tralac’s Daily News Selection
Underway in Nairobi: Review and Validation Meeting for the EAC Draft Regional Framework
US Trade and Investment with Sub-Saharan Africa: download evidence at yesterday’s hearing by Stephen Lande (Manchester Trade), Florizelle Liser (Corporate Council on Africa), Lawrence Lieberman (Boston Agrex), Ambassador Mninwa J. Mahlangu (Embassy of South Africa), Dédé Ahoéfa Ekoue (Embassy of Togo)
Davos 2018 updates:
(i) Day 2 Live feed
(ii) WEF reports: (i) Harnessing the Fourth Industrial Revolution for life on land (ii) Innovation with a purpose: the role of technology innovation in accelerating food systems transformation (iii) The known traveller: unlocking the potential of digital identity for secure and seamless travel
(iii) Tech revolution will see ‘serious winners and losers’: SA’s Rob Davies. There will be “serious winners and losers” as a result of the Fourth Industrial Revolution and South Africa needs to be properly prepared and positioned to reap the benefits, or be saddled with the negative consequences. This was according to Trade and Industry Minister Dr Rob Davies who said that emerging technologies have the capacity to benefit humanity in all sorts of ways, “reducing low-skilled back-breaking useless toil and replacing it with something more satisfying”. But Davies, who is part of the South African delegation in Davos for the WEF, warned that “in a world with inequalities, this requires high levels of technological literacy. “We could be facing serious winners and losers and people are saying we don’t know yet. We don’t know yet what the job implications are going to be. Lower skilled people are going to find it more difficult to get jobs, small businesses may find it easier to enter markets because the technology required may require less sunken capital to get into a line of activity.”
(iv) Rwanda showcases drone technology at WEF 2018. Speaking at the forum, Rwanda’s Minster for ICT Jean de Dieu Rurangirwa, said that Rwanda is aiming at nurturing the drone industry and put in place infrastructure and policy framework to accelerate its adoption. “Building on the success of Zipline’s blood delivery technology, we are working to nurture a drone industry. As we look to the future, we will continue to put in place the infrastructure and policy frameworks that accelerate the adoption of emerging technologies to transform people’s lives,” he said. Murat Sonmez, Head of the Center for the Fourth Industrial Revolution, said that Rwanda’s leadership in co-designing policy frameworks around drone use could be a model for other countries that want to accelerate adoption of the technology. “Rwanda is one of the first countries to partner with the Forum in this space. The Government of Rwanda’s leadership in co-designing agile policy frameworks around the use of drones, could be a model for other countries that want to accelerate adoption of this game-changing technology,” he added. [Rwanda could become a model for drone regulation]
(v) Nigeria’s manufacturing sector ready for international investors – Osinbajo. The Buhari administration working with the private sector, is determined to boost the Nigerian manufacturing sector and will be engaging with international partners and friendly nations to realize that goal, according to Vice President Yemi Osinbajo. According to a statement by his spokesman, Laolu Akande ,Prof. Osinbajo was speaking yesterday at the ongoing World Economic Forum in Davos, while meeting with a delegation of the Japan External Trade Organization, led by Mr Hiroyuki Ishige, the organization’s Chairman and CEO. “Nigeria and Japan should be doing more, far more based on the existing long relationship and trade between both countries,” the Vice President stated while noting that this would be to the mutual benefits of both countries.
President Museveni: State of EAC Address
The President, who was addressing the 2nd Sitting of the 1st Session of the 4th Assembly, reiterated that the region stood to gain much more as a unified front. “This integration is not about the leaders but the people who produce wealth”, he said. “Why do we talk about hunger while in Uganda, for example, we have a huge crop of maize – about 5 million tonnes capable of sufficiently meeting our needs?” the President pondered. “We need a situation where all producers in the Partner States are able to freely sell their produce. I have in the past for example contributed to the prosperity of Kenyan farmers in Mbarara where I purchased their (Kenya Co-operative Creameries) milk. This is the kind of thing I am talking about”, he added.
President Museveni also called for the region to effect better use of the existing common natural resources for its own prosperity citing Lake Victoria as a case in point. “This among other resources should be managed on an East African basis and we have the ability to manage the resources collectively - so such may save us in future for East Africa’s destiny”, the President remarked. The President cited the EPA talks with the EU as key adding that negotiating as a unified EAC bloc was instrumental. “The likes of China India, EU and Russia are large – and powerful. Our strength lies in bargaining ‘collectively’. I am duly hopeful – we shall.”
Egypt and the IMF:
(i) 2017 Article IV Consultation. Revisiting the legacy of Egypt’s development model: Capitalizing on its initial successes, the reform agenda needs to be broadened. A dynamic private sector and market-driven resource allocation were essential preconditions for the growth transformations enjoyed by emerging economies over the past five decades. It requires a reorientation of the state to focus on the provision of a stable macroeconomic environment and the efficient delivery of public goods. This needs to be complemented with reforms that improve the business environment and promote private sector development. A limited set of reforms has high potential to alleviate the key bottlenecks to growth in a relatively short time. These include: a modernized regulatory framework to create a level playing field for all; enhanced competition in input and product markets; greater trade integration and the removal of non-tariff barriers; improved access to finance and land; strengthened governance, transparency, and accountability of SOEs; and labor market reforms.
(ii) Selected Issues report. The private sector in Egypt has been less dynamic than in peer countries: Egypt’s private sector is relatively small compared to other EMs. Firms’ entry density (as measured by the number of newly registered limited liability firms per 10000 working-age people) has been low. Based on World Bank (2015), it was about 1 against 24 on average across other countries. Associated with relatively low exit rates, Egypt’s firms’ turnover has been low compared to peers in the past. Few Egyptian firms export: Only about 5% of Egyptian firms are exporters (EBRD (2017)). Total exports of goods and services to GDP ratio averaged 15% since 2000 against 42% in MENAP EMs and 27% in other EMs. Manufacturing exports account for about 53% of total goods exports in 2015 against 38% in 2000. However, according to the African Development Bank, Egypt’s manufacturing exports are less sophisticated than those of EM peers and they remain concentrated in a few products. Services exports are dominated by tourism which has been severely affected in the last few years.
Shedding light on electricity utilities in the Middle East and North Africa: insights from a performance diagnostic (World Bank)
The electricity sector in the Middle East and North Africa is in the grip of an apparent paradox. Although the region is home to the world’s largest oil and gas reserves and has been able to maintain electricity access rates of close to 100%in most of its economies, it may not be able to cater to the future electricity needs of its fast-growing population and their business activities. Primary energy demand is expected to rise at an annual rate of 1.9% through 2035, requiring a significant increase in generating capacity. Investments have not been rising fast enough to meet that requirement.
Nigeria: Most substandard goods to Africa not from China, says envoy (Vanguard)
China says most substandard goods that come into Africa are not from it, as widely claimed. Deputy Chinese Ambassador, Mr Lin Jing told newsmen in Abuja that the Chinese government had taken measures to clamp down on businesses involved in producing substandard products in that country. “We do not offer this kind of substandard products but it happens and we know that it has not only happened with manufacturers in China. This also happened with factories in other south eastern Asian countries because there are lots of factories that can supply products at a very low price because the labour cost is much lower than it is in China. I am saying that lots of factories could be established in other countries and in my personal experience, lots of substandard products are not being shipped from China.” The envoy also said that discussions held with the Chinese community in Nigeria had shown that the “Chinese business circle has not been directly involved in transporting all these substandard products”.
Indonesia set to deepen trade relations with Africa (Leadership)
As part of its efforts to increase business cooperation with Africa, Indonesia has decided to host African countries on a two-day “Indonesia-Africa forum” billed to take place on 10 – 11 April, 2018 in Bali Nusa Dua Convention Centre, Nusa Dua, Bali, Indonesia. [Statement by foreign minister Retno LP Marsudi]
Nigeria: Income tax (country-by-country reporting) regulations 2018 (Deloitte)
The Regulations are part of the implementation plans under Action 13 of OECD’s Base Erosion and Profit Shifting project. This is also a follow-up to Nigeria’s signing of the Multilateral Competent Authority Agreement for the automatic exchange of Country-by-Country reports in January 2016, which was subsequently ratified by the Federal Executive Council in August 2016. The CbCR Regulations provide guidance to multinational enterprises on their reporting obligations to Federal Inland Revenue Service in relation to their group income, taxes paid, and other indicators of their group economic activity. These information will enable FIRS perform high-level transfer pricing risk assessment as well as evaluate other BEPS related risks. [Federal Government issues revised guidelines for export expansion grant scheme]
China and Russia have failed to embrace the market-oriented economic policies championed by the WTO and are not living up to certain key commitments they made when they joined the WTO, the US Trade Representative said in annual reports released today on each country’s compliance with WTO rules. The reports, delivered to Congress, are required by law and assess China’s and Russia’s implementation of their respective WTO commitments. China became a member of the WTO in 2001 and Russia joined the WTO in 2012. Selected highlights of the 2017 annual report on China’s WTO compliance:
The international trade committee of the European Parliament endorsed the political agreement reached between the Commission, the Council and the European Parliament on 5 December 2017 on the modernisation of the EU’s trade defence instruments. Trade Commissioner Cecilia Malmström said: “Today’s resoundingly positive vote means that the EU is one step closer to having the necessary tools to tackle unfair trading practices quickly and effectively. Together with the recently-agreed changes to our anti-dumping methodology, the EU’s toolbox of trade defence instruments will be even better suited to deal with global challenges. I now look forward to the speedy adoption of this decision by plenary of the European Parliament. The EU stands for open and rules-based trade, but we must ensure that others do not take advantage of our openness. The EU stands ready to defend its industry and workers from unfair competition.”
The Trans-Pacific Partnership trade pact, which had been on life support since Donald Trump’s withdrawal of the US a year ago, has finally been resuscitated. The 11 remaining countries are expected to sign an amended agreement on 8 March in Chile, Australia’s trade minister, Steve Ciobo, has confirmed.
Today’s Quick Links:
IMF Working paper on economic convergence in the Euro Area: coming together or drifting apart?