tralac’s Daily News Selection
tralac weekly e-Newsletter: Competition policy as an instrument for economic transformation
India invites 50 nations for trade talks: seeks roadmap for WTO dialogue
tralac’s Gerhard Erasmus: When African trade arrangements incorporate WTO disciplines without all member states being WTO members
This tralac Trade Brief takes a look at a feature of African trade arrangements which has given rise to little discussion or concern. The legal instruments underpinning African trade arrangements often incorporate or refer to WTO disciplines (and those of other multilateral bodies) as part of the obligations undertaken by their Member States. This is a feature of most of the Regional Economic Communities. However, in some instances, not all the members have joined the WTO. Examples of African states which are not WTO members are Algeria, Comoros, Equatorial Guinea, Ethiopia, Libya, Sao Tome and Principe, Somalia, Sudan, South Sudan and the Sahrawi Arab Democratic Republic.
Shadow economies around the world: what did we learn over the last 20 years? (IMF)
We undertake an extended discussion of the latest developments about the existing and new estimation methods of the shadow economy. New results on the shadow economy for 158 countries all over the world are presented over 1991 to 2015. Strengths and weaknesses of these methods are assessed and a critical comparison and evaluation of the methods is carried out. The average size of the shadow economy of the 158 countries over 1991 to 2015 is 31.9%. The largest ones are Zimbabwe with 60.6%, and Bolivia with 62.3% of GDP. The lowest ones are Austria with 8.9%, and Switzerland with 7.2%. [Table 18, p.50: Summary statistics of the shadow economy of 158 countries over the period 1991 to 2015]
The two organisations will aim to provide a platform for interested stakeholders from all sectors of society to exchange ideas, showcase successful experiences and improve understanding of how trade can more effectively help bring about inclusive and sustainable development, in line with the Sustainable Development Goals. In this way, the initiative is intended to serve as a springboard for stakeholders around the world to seize the trade, investment and job opportunities resulting from the emerging shift towards more sustainable modes of production and consumption. A high-level event in Geneva later in the year will bring together leaders from the public and private sectors to kick-start this work.
Pathways for Prosperity’s official launch: how can emerging technologies benefit the poorest?
Melinda Gates (co-chair of the Bill & Melinda Gates Foundation), Minister Sri Mulyani Indrawati (minister of finance of Indonesia), and Strive Masiyiwa (founder and executive chairman of Econet), joined forces today to launch Pathways for Prosperity: Commission on Technology and Inclusive Development. The commission will bring together a diverse range of leaders from government, business and academia to provide evidence and analysis, as well as concrete policy recommendations, to help developing countries’ governments navigate this rapidly evolving landscape. The Blavatnik School’s Stefan Dercon, former chief economist of the UK Department for International Development, and Benno Ndulu, former governor of the Central Bank of Tanzania, will lead the commission as its academic directors. [Quartz Africa backgrounder]
Great Lakes Regional Strategic Framework Pillar 2: economic integration, cross border trade, and food and nutrition security (GLRSF)
Extract from the concept note (pdf): Unlike most of Africa’s sub-regions, the GLR suffers cyclical violence that finds its roots mainly in extreme poverty and political conflict. The region has been insecure largely because its constituent units are enmeshed in protracted violent conflicts that spilled over borders, and served as a major impediment to socioeconomic development. International initiatives have attempted to re-establish stability in individual states while also working to support multilateral approaches for regional problem solving. So far these initiatives have yielded very little success. It has become clear that the destiny of the region depends on the quality of efforts of both local and international actors to resurrect functional institutions of political, social and economic governance, regional integration in the sub-region and the commitment to deal with youth unemployment. To break these cycles of violence would require a new holistic approach, which tackles the underlying causes of the conflicts. This new approach entails action at the national, regional and international levels to address legitimate concerns and interests of all the stakeholders in the region. [GLRSF management board meeting: UNCTAD update]
Mauritius-India: Four pillars of the CECPA examined as 3rd round of talks close (GoM)
The Director of Trade Policy, Ministry of Foreign Affairs, Regional Integration and International Trade, Mr N. Boodhoo, underlined that the CECPA will open market access and commercial exchanges for Mauritius and India. Additionally, both delegations examined the prospect of using Mauritius as a hub for Indian companies to reach out to the African continent and of enhancing economic cooperation. Mr Boodhoo highlighted that this third round of discussions was fruitful, particularly with regards to the elaboration of a Joint Study Report, which will be finalised shortly. The next meeting is expected to be held in March 2018 in New Delhi. [Bunkering sector can become an economic pillar for Mauritius, says Minister Gungah]
Britain’s StanChart bails out Zim govt (Zimbabwe Independent)
The Zimbabwean government has committed to paying the $1,2bn arrears to the World Bank by April this year, as the first step towards unlocking fresh funding from multilateral institutions, but still faces a number of hurdles, including a credibility test, before accessing much-needed funds, the Zimbabwe Independent has learnt. The development comes at a time Harare is re-engaging British multinational bank Standard Chartered Plc and other institutions to help raise $1,8bn to clear arrears to international financial institutions for the country to secure $2bn in fresh funding. The clearance of arrears could also result in possible debt treatment by the Paris Club and non-Paris Club bilateral creditors through an IMF financing programme. Officials close to the Lima Plan told the Independent that Zimbabwe will likely present its programme of action at the IMF and World Bank Spring Meetings in Washington, 20-22 April.
Ethiopia: Staff Report for the 2017 Article IV Consultation (IMF)
Growth is expected to stay high in 2017/18, at 8.5 percent, supported by continued recovery from droughts and export expansion as new manufacturing facilities and infrastructure come online – offsetting the potentially dampening impact of restrictive macroeconomic policies. Over the medium term, growth is expected to remain around 8 percent, supported by sustained expansion in exports and investment. The authorities’ policies envisaged under the second Growth and Transformation Plan (GTP II) are expected to underpin domestic private sector development and FDI. The GTP II also envisages allocating significant resources to poverty alleviation and the social safety net, while efforts to strengthen financial inclusion are underway.
Kenya: Govt to raise local revenue to 25% to curb external borrowing (The Star)
Kenya will increase domestic resource mobilisation efforts from 19 to 25% of GDP in the next five years in order to cut on its high public debt. Speaking during the launch of Africa Foresight report compiled by Brookings, African Economic Research Consortium and Kenya Institute for Public Policy Research and Analysis at a Nairobi hotel yesterday, National Treasury cabinet secretary Henry Rotich said the government is going to adopt blended financing to cut external loans. “We are going to intensify domestic revenue collection, seal illicit financial flow gaps and develop investment products for the diaspora population as part of blended finance strategy to minimize reliance on borrowing.” He revealed that the state is in plans to tap into the informal sector to increase its tax bracket.
Kenya: Inter-county trade barriers killing hopes of cheap unga (HIVISASA)
Inter-county trade barriers are ruling out the hopes for cheap flour as numerous levies are passed on to consumers, millers have said. According to millers, counties are charging Sh64 for every bag of maize passing through their jurisdiction hence increasing pressure on the price of the staple. Mombasa-based millers are the worst hit as maize pass through many counties before getting to the port city for milling. Millers said they are working with the Kenya Association of Manufacturers and counties to eliminate the barriers.
China’s rice exports to Africa surge (Reuters)
That rapid growth in sales to African nations is expected to continue in 2018, as buyers there increasingly turn to China as stockpiles are almost depleted in rival supplier Thailand. China in 2017 sold just over 781,000 tonnes of rice to almost 40 African countries including Ivory Coast and Senegal, up from around 74,000 tonnes the year before, data from the General Administration of Customs showed. That accounted for nearly 70% of China’s total shipments of the commodity, versus 19% in 2016. West Africa’s Ivory Coast overtook South Korea to become the top destination for China’s rice in 2017, with total purchases of 309,200 tonnes.
He said the recorded value of trade, which sometimes reaches $200m annually, could be an understated figure because many goods from India reach Namibia through third countries and vice versa “For example, Namibian rough diamonds arrive in India indirectly and do not get reflected in the bilateral trade figures. The full potential of trade and business ties between our two countries is still to be tapped. There are significant complementarities in the economies of India and Namibia. There is great demand in India for mineral resources with which Namibia is richly endowed.” As part of efforts to expand economic and commercial relations between the two nations, ONGC Videsh Ltd, an Indian company, has made a large investment in Namibia by acquiring a 15% stake in an oil block in Namibia’s offshore – Block 2012A – last year. “This was OVL’s second investment in Namibia. Earlier in 2017, OVL had acquired 30% stake in Namibia’s EPL 37, covering three offshore blocks,” Tuhin noted. India annually sponsors 150 fully-paid scholarships, both long-term and short-term, for training of Namibians in diverse fields.
Pivoting to enhance India’s services exports (Livemint)
Both of India’s key demand areas (mode 1 and mode 4) are unlikely to see any positive momentum in the near future. It’s time to shift gear and focus on mode 2 where enhancing efficiency and boosting services exports depend primarily on domestic measures and not on removing restrictive measures by foreign countries. The fact that reforms in all of these sectors will help national employment goals and benefit domestic consumers as well is, of course, icing on the cake. [The authors, Rajeev Kher and Pralok Gupta are, respectively, a distinguished fellow at RIS and associate professor at the Centre for WTO Studies, IIFT, New Delhi]
Angola-Brazil: President of Angola announces Brazilian funding for infrastructure projects (Macauhub)
Brazil will soon resume lines of credit to Angola, with the priority of covering the sectors of “large public works,” Angolan President João Lourenço said in Davos after a meeting with his Brazilian counterpart Michel Temer. The financing, in undisclosed amounts, as previously will be provided by the National Bank for Economic and Social Development of Brazil, according to the Portugal Digital website. Lourenço pointed out, among the priority projects, infrastructure in the construction, energy and water sectors, mainly hydroelectric dams.
Africa’s top oil producer is learning to ignore crude prices, Nigeria’s Finance Minister Kemi Adeosun said. “We’ve gotten to a point where we don’t care,” whether prices will be sustained at the level that they have recently risen to, Adeosun said during an interview in her office in the capital, Abuja. “We’ve been able to balance our budget at $45-$46 per barrel and we’ve got to learn to live comfortably at that level.” [Govt’s revenue drive’ll put pressure on industrialists – MAN]
Ghana: Government to offer tax incentives to 1D1F investors (GhanaWeb)
Deputy Minister of Trade and Industry, Carlos Ahenkorah has said the government is preparing a bill to parliament that will offer tax incentives to investors interested in the ‘One District One Factory’ programme. He said the bill currently awaiting cabinet’s approval is expected to encourage to take advantage of the programme and to draw more investments into the economy. [EPA to boost Ghana’s exports to EU – Ambassador]
The report, entitled More than numbers: how migration data can deliver real-life benefits (pdf) illuminates how investing in migration data can bring huge economic, social and humanitarian benefits. Providing detailed calculations of benefits across a range of policy areas in both developed and developing countries, the report demonstrates clear examples of how better data can help manage migration more effectively. The report also provides guidance to countries interested in realising these benefits and suggests ways in which they could develop their own strategies to improve data on migration.
Today’s Quick Links:
WEF White Paper: The future time for a protein portfolio to meet tomorrow’s demand
PIIE analysis of US tyre tariffs: saving few jobs at high cost
Ajit Ranade: Why not zero-rate India’s exports?