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tralac’s Daily News Selection

tralac’s Daily News Selection

12 Feb 2018

Starting today, in Tunis: AfDB workshop on staple crop processing zones in Africa

Building on the analyses and findings of a Bank-led study on a sample of 10 African countries, the seminar aims at drawing lessons and good practices from various African experiences in designing and operating staple crop processing zones. In particular, the seminar will help in the development of national master plans for the agro-industrial sector. It should facilitate the conclusion of South-South cooperation agreements based on knowledge sharing, export and adaptation of good practices. [Concept note, pdf]

United States International Trade Commission: post-hearing submissions on recent developments on US trade and investment with Sub-Saharan Africa. African submissions: South Africa’s Department of Trade and Industry, South African poultry producers, ESQUAL Mauritius. American submissions: American Sugar Alliance, Robert Kirk (IDG LLC), US Pork Producers, US Footwear Importers, US Wheat Producers (1), (2)

Featured tweets, @Trade_Kenya: For more than two decades, EAC States have wrestled with NTB’s, reducing them from 39 to 6. The EAC Secretariat has now been tasked to find out, in quantitative terms, the impact of NTB’s on trade in the EAC block. The Extra-Ordinary Council on Trade, Industry, Finance and Investment wants EAC Secretariat to dig out the extent which national policy actions, local content requirements and domestic taxes distort trade in the EAC. [Latest EAC Gazette]

Kenya: Manufacturing priority agenda 2018 pdf, (KAM)

Extracts: (i) 3.6 Contribution to exports. An estimated 18% of Kenyan manufactured goods are exported of which 6.1% exported to the EAC and 12% to the rest of world. Kenya’s export products are overwhelmingly primary in nature with tea alone constituting about 25% of total value of exports (Table 3.1). Other than being primary in nature, Kenyan exports are also low in technology component. Some of the manufactured exports include food products, on-metallic mineral products, chemical and chemical products, metals, pharmaceutical and botanical products, textiles and apparels. According to KNBS 2017 data, food and beverage, the largest manufacturing sub-sector, dominated the category of export accounting for 45.2% of total domestic exports in 2016 while industrial supplies (non-food) accounted for 27%. (ii) 3.7 Export markets. Kenya’s export markets are relatively concentrated and in need of diversification. Ten countries accounted for 61% exports in 2016. Five out of the top ten markets; and seven out of top twenty markets in 2016 are in Africa (Figure 3.7). Over 70% of Kenya’s total exports are destined to 12 countries globally. Kenya’s exports share in the global market remains dismal at 0.03% of total global trade. Kenya has been experiencing declines and market losses in key traditional markets.

South Africa: Large and medium manufacturing firms in eThekwini – constraints to growth and employment generation (PSPPD)

Extract (pdf): The export orientation of firms is important for many reasons but includes the fact that firms report both, a lack of insufficient demand and the need to grow exports as important element of labour expansion. CEOs/MDs are consistent on this and when specifically asked what they would specifically need to increase their workforce by 10%, sustained increase in demand is frequently listed: 84% of firms reported on it. Given moreover, that as shown in Figure 3, 58% of establishments report needing more export capacity in order to grow their workforce, the demand would need to emanate not only from the domestic but also from the export markets. The importance of demand for firms is not new but exports now play a stronger role than before for employment growth. Generally, and as is expected from the literature, the firms that are exporting are the larger firms (around twice as large on average than non-exporters). Focusing on export data however revealed that a relatively small share of production and sales is exported – 17% and 20% respectively for firms that provided the relevant information. Moreover, most exporting firms export to SADC countries. Besides that region, firms only have a small share of their exports destined to other markets. Table 2 illustrates this. There is clear scope to expand exports outside the SADC region. [Synthesis report prepared by Myriam Velia, Glen Robbins]

Shanta Devarajan: Wrong criticisms of Doing Business (World Bank)

While I welcome criticism and comments on the Doing Business report - or any other data and research product of the World Bank, for that matter - I find Justin Sandefur’s and Divyanshi Wadhwa’s recent blog posts on DB in Chile and India neither enlightening nor useful.

Triggering the trade transition: the G20’s role in reconciling rules for trade and climate change (ICTSD)

There is an inescapable nexus between trade and climate change. Trade activities affect the climate. Climate measures affect trade. Economically, environmentally, and legally under international law, the two are intertwined. Yet this essential realisation is not yet reflected in the agendas of either the WTO or the United Nations Framework Convention on Climate Change. Extract (pdf): During the presidency of Argentina, the G20 should initiate actions to prevent this legal collision between trade and climate change and, moreover, to move the WTO and the UNFCCC towards more affirmative actions to reimagine trade rules to support increased trade while also furthering the fight against climate change. These G20 actions should point towards a WTO waiver to help facilitate and further national and international climate actions. Topics of the needed reimagining of WTO rules through the adoption of a climate waiver and through other actions could include border tax adjustments, carbon markets and climate clubs, environmental goods and services, disciplines on fossil fuel subsides, renewable energy and other green subsidies, and a sustainable energy trade agreement. [The author: James Bacchus]

Catherine Grant Makokera, Faith Tigere: Sustainable development in Africa and the role of the G-20 (Tutwa)

Storm clouds in Geneva: The building crisis over the WTO dispute settlement system

Strengthening civil society in developing countries? Development aid and Norwegian organisations (CMI)

More than 250 Norwegian organisations have received support from Norad’s civil society grant in the 2006–2016 evaluation period. The evaluation assessed Norwegian civil society support to Ethiopia, Nepal and Uganda – three of the main recipients of civil society support. More than 60 Norwegian organisations have received funding from this grant for support to local organisations in these three countries. In addition, there is significant financial support from other funding sources in the Norwegian aid budget. A significant share of Norwegian aid to these three countries is channelled through Norwegian and other NGOs – 47% in Ethiopia, 30% in Nepal and 33% in the case of Uganda. The purpose of the evaluation is to provide Norad and the Norwegian Ministry of Foreign Affairs with information that can be used to improve future efforts to strengthening civil society in developing countries. The objectives are to assess and document effects of Norwegian aid through Norwegian civil society organisations and their local partners. This includes the effects of using Norwegian civil society organisations as intermediaries. The evaluation covered the 2006-2016 period. Data was collected from interviews with nearly 500 persons, a survey among staff of Norwegian organisations and project documents from selected partnerships together with an extensive review of scholarly studies and evaluation reports. [The author: Elling N. Tjønneland]

Norwegian aid to food security, nutrition and agriculture (CMI)

The report discusses constraints on agricultural growth, both external constraints, such as roads and other infrastructure, institutional constraints that may reflect market failures, and more immediate constraints such as lack of modern seeds, fertilizers and irrigation. At all levels underlying market failures are identified, and relevant policy interventions are discussed. [The author: Magnus Hatlebakk]

The International Finance Corporation’s approach to engaging clients for increased development impact (World Bank)

This IEG evaluation assesses how the IFC has implemented its strategic approach to client engagement since the early 2000s, and its effects on IFC’s clients and the development impact of its operations.

Patrick Bond: New evidence of Africa’s systematic looting, from an increasingly schizophrenic World Bank (CADTM)

Britain to add Naira to list of accepted trade currencies (ThisDay)

Britain’s Export Finance Agency will add the Naira to its list of “pre-approved currencies”, allowing it to provide financing for transactions with Nigerian businesses denominated in the local currency. The Naira will become one of three West African currencies that UK Export Finance has pre-approved for its programme of funding transactions that promote trade with Britain, it said.

Nigeria: N550bn credit available to support SMEs (Premium Times)

The Nigerian Export-Import Bank, NEXIM, on Tuesday asked export-oriented small and medium entrepreneurs in the Southeast and Delta States to take advantage of its credit facilities to expand their potentials. The bank said the SMEs in the region could access the N500bn Export Stimulation Facility, and the N50bn Export Development Fund it manages to boost their businesses, create more jobs, and contribute to the country’s foreign exchange revenue earnings. The Federal Government made the credit facilities available to NEXIM Bank last December for lending to SMEs at interest rate not exceeding 9%. The funds were designed to redress the declining export credit to SMEs and reposition the non-oil sector to boost its contribution to the country’s revenue generation and economic development.

South Africa: Cape merger to create agriculture powerhouse (Business Day)

A new agribusiness powerhouse is heading for listing on the JSE after proposals by Western Cape-based Overberg Agri and Acorn Agri to merge. Overberg chairman Douw de Kock said the proposed merger would drive growth by creating synergy between the assets and business models of both companies. “The combined business will hold an attractive blend of local and export-orientated busin-esses with exposure to export earnings, which hedges shareholders against rand devaluation and local economic and political challenges,” he said.

Western Cape exports of cherries show tremendous potential (GCIS)

The Western Cape Government has to date invested R6.916m in the development of alternative crops such as berries, cherries, fynbos, pomegranates, and honeybush. These are smaller, export-oriented crops with high market-value, and greater potential for job creation. Total exports of the fruit in 2012 were valued at R2.6m, and reached R28.18min 2016. South Africa’s export market share, while still small, has quadrupled from 0.019% in 2012 to 0.080% in 2016. The primary market for locally produced cherries is the United Kingdom, with Hong Kong, the Netherlands and Malaysia forming the remainder of the top four export markets. [UK’s Department for International Trade and Wesgro sign new cooperation agreement]

Kenya: Governors oppose Mombasa’s bid to charge tax at tea auction (The Star)

Governors from tea growing areas yesterday termed the move to tax tea at the Mombasa auction unconstitutional and an extra burden. Mombasa county issued a circular on January 12 reintroducing Sh32 per packet of tea cess, introduced for the first time in 2014 but was suspended. This was about about Sh12,000 per lorry. Kericho Governor Paul Chepkwony said tea farmers are already suffering from rising cost of production, uncertainties of climate change and disharmonised collection of cess. “The introduction of tea cess in the Mombasa tea auction centre at the rate of Sh32 per pack is unlawful,” he said. “Cess can only be from the point of production. If you do not produce the goods, you have no right to tax them,” he said, adding that if all counties were to tax all the goods on transit, it would be a big burden to Kenyans.

SADC looks to tourism to boost regional economic growth (Southern Times)

SADC member states have agreed to fast-track the review of the Protocol on Tourism Development as part of efforts to boost economic growth in the region. A joint meeting of SADC ministers responsible for Environment and Natural Resources, Fisheries and Aquaculture and Tourism held in South Africa recently emphasised the protocol’s importance to the economies of member states and its interconnectedness with other sectors. Only the DRC, Malawi and Seychelles voted against the review being brought forward.

Today’s Quick Links:

IMF to review Kenya’s debt, deficit reduction measures

Tanzania: Cotton production to quadruple this season

Billions needed to revive Kenya’s coffee industry

Rwanda: Horticulture exporters eye new markets in Europe

Jacob Zuma, South Africa’s $50bn burden?

China’s cobalt conundrum in DR Congo

African Forest Landscape Restoration Initiative: NEPAD resource

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