tralac’s Daily News Selection
tralac’s Weekly e-Newsletter is posted: SADC Tribunal saga continues before the South African courts
Featured tweets: (i) @AdanMohamedCS: The are now 54 Japanese companies in Kenya as of Jan 2018, increasing from 30 companies in December 2014. Some leading investors include Toyata Tshusho, Isuzu Motors, Honda Motors, Nissin Foods, Yamaha Assembling among many others. (ii) @GileadTeri: Tanzania imports 40 million pairs of shoes every year. Domestic production is between 2-4 million.
The Second Ministerial Review Conference of Africa-Turkey Partnership takes place next week in Istanbul
South Africa: Standard Bank launches branch dedicated to Chinese business community (Xinhua)
South Africa’s leading commercial Bank, Standard Bank Group, on Thursday launched its first branch dedicated to service the Chinese business community in Africa. Speaking at the launch, Chinese Consul General in Johannesburg Ruan Ping said the bank’s “first Mandarin Banking Branch in South Africa” bears witness to the vital role the private sector plays towards strengthening China-South Africa relations. George Lo, Executive Head of Africa China Banking at Standard Bank, said establishing the branch is part of the bank’s strategy in recognizing the commercial value of Chinese doing business in South Africa and Africa at large, and facilitating regional trade. The full-service dedicated branch was opened at an event at Crown Mines in Johannesburg. “This is another step in the bank’s ongoing commitment to deepen and grow the Africa-China investment and trade corridor. We chose this area, because it’s where many entrepreneurs and businessmen from neighbouring countries obtain their supplies from Chinese wholesalers,” George Lo added.
Over a decade of spectacular growth, demand for smart phones has created a new global tech cycle that last year produced a new smart phone for every fifth person on earth. This has created a complex and evolving supply chain across Asia, changing the export and growth performance of several countries. While our recent analysis of Chinese smart phone exports suggests that the global market may be saturated, demand for other electronics continues to support rising semiconductor production in Asia. Smart phones have become a key metric of global trade. In 2016, global smart phone sales reached almost 1.5 billion units. Smart phones have become the main computing platform for many people around the world, supplanting personal computers. As the figure shows, demand for smart phones has surged while sales of PCs have declined. [The authors: Benjamin Carton, Joannes Mongardini, Yiqun Li]
FDI and supply chains in horticulture: diversifying exports and reducing poverty in Africa, Latin America, and other developing economies (CGD)
Prior research on foreign investment and supply chains in emerging markets has focused almost exclusively on the creation of international networks in manufacturing and assembly. This paper extends that research, looking beyond manufacturing into supply chain creation in horticulture - in particular, vegetables, fruits, and flowers, raw, packaged, processed - in Africa, Latin America, and other developing regions. How have some developing countries managed to break into the ranks of horticultural exporters, while others have not? What are the obstacles to entering international supply chains for horticultural exports? How can emerging market economies maximize positive impacts on rural employment, on gender employment, and on externalities for local communities? The paper concludes with an investigation of policy implications for developing country governments, for the World Bank and regional financial institutions, and for other providers of external assistance. [The author: Theodore H. Moran]
Zimbabwe: 2018 Monetary Policy Statement (BoZ)
Performance and Impact of the Export Incentive Scheme: In order to ensure that Zimbabwean exports are competitive under the auspices of a dollarized economy, the Bank established the $200m and $300m export incentive facilities which are monetised by bond notes. Since its inception in 2016, the export incentive scheme has enhanced competitiveness of Zimbabwe’s exports and this has significantly contributed to the growth of exports which grew by 36% from $2.8bn in 2016 to $3.8bn in 2017. Table 1 shows the cumulative export incentive and bond notes disbursed, and export receipts generated since inception of the export incentive scheme in May 2016.
Regional Payments Developments: The Central Bank is committed to regional payment system initiatives and has encouraged banks and other payment service providers to utilise the SADC Integrated Regional Electronic Settlement System (SIRESS) platform to settle regional cross-border transactions. Since the implementation of SIRESS in July 2013, the number of local banks participating on SIRESS has risen to 15 whilst transactional values have also increased as shown in Figure 5.
Merchandise Trade Developments: Over the period January to November 2017, total merchandise trade (exports and imports) stood at $8,408.5m, representing a 15.8% increase from $7,262.5m recorded over the corresponding period in 2016. The increase was on account of increases in merchandise exports and imports of 36.8% and 4.5%, respectively. Consequently, for the period under review, the country’s trade deficit narrowed from $2,181.6m in 2016 to $1,456.7m in 2017. A narrowed trade deficit reduces pressure on foreign exchange reserves.
Zimbabwe-Mozambique Machipanda border: bureaucracy tests truckers’ patience (Club of Mozambique)
Hundreds of trucks are stuck in queues for days waiting to cross the Machipanda border in Manica on their way to or from neighbouring Zimbabwe, leaving drivers vulnerable to criminal gangs and their nerves stretched to breaking point. Excessive bureaucracy in Zimbabwean customs clearance is allegedly to blame. According to information provided by the Mozambican customs authorities to the Commander-in-Chief of Police, Bernardino Rafael, a truck is processed every five minutes on the Mozambican side of the border, but on the Zimbabwean side the same procedure takes between thirty to forty minutes. Due to this slowness in customs clearance, the line of waiting trucks is four to five kilometres long, threatening the safety of drivers who are forced to wait long hours for clearance.
Kenya: Government defends forced use of SGR (Business Daily)
The government has defended a directive to transport all imports coming in through Mombasa port via standard gauge railway to Nairobi’s inland container depot. Kenya Railways managing director, Atanas Maina, confirmed the order but says it was reached through consultation with other players including Container Freight Terminal owners. He also denied that the move to ferry cargo to Nairobi will interfere with CFS’s work. “All we are doing is shifting a point of cargo handling and not writing off the whole role that CFSs play. There are roles to play in Nairobi. ICD cannot handle the 28 million tonnes. There is still a lot of opportunities for them to do business,” said Mr Maina on Wednesday, adding that there would be no job losses in Mombasa.
Ghana: GUTA cautions government over new levies and taxes (Ghana News Agency)
Dr Joseph Obeng, the National President of the Ghana Union of Traders Associations, has asked government not to introduce any new levies and taxes that would take them out of business. Currently, he said, the trading community was overburdened with 16 levies and taxes, which cumulatively took between 50 and 55% of their importing capital. Dr Obeng expressed the Association’s unhappiness over government’s intention to introduce a Cargo Tracking Note at the country’s entry point as another levy on importers to shore up government’s revenue. Dr Obeng also observed that government had started implementing the African Union levy, which the trading community were already displeased about it, because they expected government to take monies from the ECOWAS levy for that purpose. “We’re not happy with the AU levy because not all the African countries are collecting it and so why should Ghana rush in implementing it. In fact, government should be fair with importers because the Common External Tariffs, which government introduced some years ago has raised the levies importers’ are paying and we’re gradually falling out of the ECOWAS market.”
Global mining firms sue Kenya for $3.2bn compensation (The East African)
Trade Principal Secretary Chris Kiptoo says Kenya is actively involved in about 10 suits before a Dubai-based disputes tribunal. “There are ongoing cases at ICSID with claims amounting to Ksh334 billion. We have seen how vague language in investment treaties can result in massive payouts. Kenya has developed a model investment treaty and an investment agreements policy with clear rules and responsibilities,” said Mr Kiptoo at the 11th Annual Forum of Developing Country Investment Negotiators in Nairobi.
International Centre for Settlement of Investment Disputes: 2017 caseload (ICSID)
The International Centre for Settlement of Investment Disputes registered a record 53 cases in 2017 under its trademark ICSID Convention Rules and Regulations and Additional Facility Rules. The 2017 figure, published in the latest edition of ICSID Caseload – Statistics (pdf), represents a slight uptick from preceding years: 48 cases were registered in 2016 and 52 in 2015. ICSID has registered an average of 39 new cases each year over the last decade. ICSID also provides administrative support for investor-State arbitrations under the UNCITRAL rules and other ad hoc dispute settlement provisions. In 2017, 8 cases were administered under UNCITRAL rules and another 5 under ad hoc provisions.
The largest share of newly registered cases involved States from Eastern Europe and Central Asia (36%), followed by the Middle East and North Africa (15%), Sub-Saharan Africa (15%), and South America (13%). In 2017, 15% of new cases involved the financial sector. Cases involving energy and extractives also remained prominent. Of the arbitrations that concluded in 2017, 78% were decided by a tribunal, and the remainder were settled or otherwise discontinued.
Government regulatory space in the shadow of BITs: the case of Tanzania’s natural resource regulatory reform
Playing with financial fire: a South Perspective on the international financial system
The three-day meeting started yesterday with the session of senior officials, to be followed today by the session of Permanent/Principal Secretaries/Undersecretaries. The meeting concludes tomorrow with the Session of Ministers or Cabinet Secretaries. Agenda items include: deliberation on the long standing Non-Tariff Barriers to trade; consideration of the two pons of ad valorem of 35% and specific duty rate of tariffs for used clothing under AGOA Out of Cycle Review; consideration of the update on EU-EAC Market Access Upgrade Project; consideration of the EAC Trade and Investment Report 2016, adoption of the One Stop Border Posts Manual. [Related: @Trade_Kenya: Declining intra-trade within EAC block, from $55bn in 2015 to $45bn in 2017, dominated Extra-Ordinary Council on Trade, Industry, Finance and Investment as partner States ponder on resolving long standing Non Tariff Barriers]
EAC organs grapple with acute shortage of skilled staff (The East African)
A shortage of professional staff at the EAC Secretariat and its organs will feature on the agenda of the upcoming summit in Kampala. The registrar of the East African Court of Justice said this week that the EAC’s judicial arm is one of the key organs affected. “The entire spectrum of the EAC is facing a shortage of staff. It is among the matters to be discussed at the summit,” said Yufnalis Okubo, the EACJ registrar. Mr Okubo said Monday that the Arusha-based court has a skeleton staff of only 28 out of nearly 300 professionals needed.
The UK, through DfID, has pledged an additional GBP 2.4m in seed funding to the International Trade Centre’s Supporting Indian Trade and Investment for Africa (SITA) project. The funding will enable new spin-off initiatives and expand some existing activities within the SITA project. ITA enhances South-South trade and investment cooperation between India and five East African countries (Ethiopia, Kenya, Rwanda, Uganda and United Republic of Tanzania), and across several priority sectors: pulses, spices, sunflower oil, coffee, information technology, leather and textiles and apparel.
Today’s Quick Links:
South Africa: Trade and Industry’s myopic proposals can harm economy