Building capacity to help Africa trade better

tralac’s Daily News Selection


tralac’s Daily News Selection

tralac’s Daily News Selection
Photo credit: Vigen Sargsyan | World Bank

African trade policy events to diarise:

(i) With the Extraordinary AU Summit scheduled for the signing of the CFTA now taking place in Kigali, tralac’s Annual Conference will take place in Kigali (22-23 March)

(ii) The 4th WCO Global AEO Conference will take place in Kampala (14-16 March)

(iii) The Commonwealth Africa Summit 2018 will take place in London (12-15 March)

(iv) Afreximbank’s 2018 Annual Meetings will take place in Abuja (9-14 July)

Mozambique: Nacala Corridor and Port Performance Assessment Report (SPEED+)

The objective of the Nacala Corridor and Port Performance Assessment is to report on transport, logistics, and production bottlenecks along the Nacala Corridor, and provide recommendations for improvement of the corridor that could lead to development of the region’s economy. The study provides analysis of the Port of Nacala, the Nacala Special Exports Terminal (TEEN), railway and road networks, and nodes (inland terminals, weighbridges, etc.) and storage facilities, with an emphasis on transport and logistics services bottlenecks. Extracts (pdf):

A recent study by JICA has shown that the cost of transporting cargo from the port of Nacala to Blantyre in Malawi is 78% less expensive than bringing cargo to/from Beira, 40% less expensive than to/from Dar es Salaam and 39% less expensive than to/from Durban. This clearly illustrates that the Nacala Corridor railway is the most cost-effective option for Malawi based shippers.

Road-related transport costs in Mozambique can be six times higher than in Malawi and should be addressed. Road node costs are significant. For example, when traveling from Beira to Blantyre, road users will pay $132 in road user fees in Malawi and an estimated $370 in road user and weighbridge fees in Mozambique. Traveling the Nacala corridor to Blantyre road user fees are estimated at $64 in Malawi and over $400 in Mozambique. Traveling from Nacala to Lichinga, road users noted informal checkpoint fees and charges including 1,500–2,000 MT at a non-functional weighbridge on the Cuamba-Lichinga road, 2,500 MT at the weighbridge near Nacala, and 2000–3000 MT for bribes at various checkpoints along the corridor

The main production-related and value chain bottlenecks are characterized by low, inefficient production, and lack of seamless supply chain functioning. Inadequate use of inputs and agricultural growing techniques; deficiency of consolidation centers near production points, so as to reduce the number of middle men and post-harvest loss; and lack of adequate storage facilities. Another finding pointed to lack of sufficient coordination between regional governments on transport, infrastructure and trade facilitation policies. Provided that the influence area of the Nacala Corridor covers three countries, harmonization of those policies would be an important factor in increasing regional trade.

The potential economic impacts for Mozambique are large: $28m on costs savings and 30,000 new jobs. In 2020, by shifting 535,000 tons of exports onto the Nacala Corridor railway system and removing the direct and indirect costs associated with the compulsory use of TEEN, it is estimated that $28m in costs savings can be achieved. If these savings are directed into investment, an additional 116,000 tons of export product will be generated, creating a further 30,000 jobs, either as employment or livelihood opportunities, and an additional $17min income, at an average per worker/smallholder producer of $580 per year. Malawi may also benefit by 2020, receiving $4.2m in cost savings and the creation of 12,390 jobs.

EALA commences oversight tours of Northern, Central corridors (EALA)

Fresh from the 2nd Meeting of the 1st Session of the Assembly that concluded in Kampala last week, regional legislators have hit the road on mission to assess progress on the institutions, installations and facilities of the bloc. The on-spot assessment, by two groups, commenced yesterday (Monday) and will conclude on23 February. The first group, led by Hon Mathias Kasamba, is touring the Northern Corridor while the second group, led by Hon Wanjiku Muhia, will tour the Central Corridor.

Dar now plans higher learning on transportation (Daily News)

Tanzania will soon establish a university of transportation, courtesy of $62m grant (about 138.2bn/-) from the government of China. The Tanzania government had requested the Chinese for a grant with which to construct the university, whose details are expected to be revealed next week, according to reliable government sources. The Chinese Ambassador in Tanzania, Ms Wang Ke, made the revelations in Dar es Salaam yesterday shortly after she delivered a special message to President John Magufuli from Chinese President Xi Jinping. At present, Tanzania has the National Institute of Transport, a public higher learning institution which was established in 1975 as a training wing of the then National Transport Corporation.

Trade facilitation and paperless trade implementation (UNECE)

According to the report, the average rate of implementation of trade facilitation measures including in paperless trade for UNECE member States is about 69%, which is 7 percentage points higher than in the 2015 survey. The global average stands at about 60% in 2017. Most of the advanced economies have a rate of above 75% while most of the transition economies in Central Asia and Eastern Europe have an implementation rate of below 60%. This survey included a new set of measures, which attempted to gauge if trade facilitation reforms are inclusive, or not. These were trade facilitation for small and medium-sized enterprises, agriculture, and women in trade. A limited analysis of the data received shows moderate implementation (above 60%) for measures related to agriculture and SMEs but very low (17%) implementation related to women in trade, which warrants greater efforts from countries.

An interview with the EABC’s CEO, Lilian Awinja: Harmonise tax regime to attract more foreign investors into the region (New Times)

South Africa: Doing Business in Africa handbook (dti)

The booklet Doing Business in Africa (pdf) is a publication of the dti, developed in consultation with Government and the private sector to facilitate South African business across the continent by increasing awareness of the Government’s offerings. There is a general perception that South African companies go it alone, without a “team SA” approach. This booklet aims to provide the connections that will allow a coherent approach between private sector players and the South African Government. [KZN trade delegation to jet off to Zambia]

Tanzania among Africa’s top safe havens for dirty money (IPPMedia)

Tanzania has some of the most attractive secrecy policies in the world that make it one of the leading safe havens for dirty money in Africa, the recently released Financial Secrecy Index by the Tax Justice Network has revealed. Tanzania is ranked 75th in the FSI 2018 report polling a financial secrecy score of 73.4%, the fifth highest in Africa, which is above the marks of most countries in the world that are in the top 10 dirty money blacklist. However, TJN says the country’s 0.1% share of the global market for offshore financial services makes it a tiny player in the illicit industry compared to other secrecy jurisdictions. In Africa, Kenya tops the list of countries whose economic systems most contribute to global financial secrecy, a measure that TJN says encourages crimes such as money laundering and tax evasion. Its score of 8% is the sixth highest in the world after Vanuatu, Bahamas, Paraguay, Maldives and Bolivia which scored 88.6, 84.5, 84.3, 81.1 and 80.3 respectively.

Kenya: China takes up lion’s share of debt spend (Business Daily)

Beijing gobbled up nearly half of cash Nairobi spent on external debt repayment in three months ended September 2017, hinting at the cost of loans China has been injecting into the country’s infrastructure development. The Treasury spent Sh12.72 billion on servicing loans from China in the July-September period its statistics show, accounting for 48.26% of what the country used on servicing foreign debt. The amount paid to Nairobi’s largest bilateral lender represented 70.69% of the Sh17.99 billion total repayments to bilateral creditors in that period, Treasury data indicates. Repayments to China were second to World Bank Group’s International Development Association, the country’s largest multilateral lender, which got Sh3.906 billion, while commercial banks were paid a cumulative Sh3.120 billion. [Adan Mohamed: Plan to make Nairobi more attractive to global firms]

East Africa arrivals lift Kenya’s tourism under open travel (Business Daily)

Visitor arrivals into Kenya from East Africa have grown substantially in the past three years, official data shows, partly signalling the benefits of an open visa scheme for the region. Kenya last year recorded a combined arrival of 95,845 visitors from Uganda, Tanzania and Rwanda, up from 80,841 in 2016. In 2015, some 58,032 visitors arrived from these countries. “Uganda topped the list of Kenya’s top source markets in Africa, growing by 20.6% to 61,542 arrivals,” Kenya’s Tourism ministry said in its sector performance report for 2017. Arrivals from Tanzania also grew by an impressive 21.8% last year to 21,110, compared to 2016. Visitors from Rwanda increased to 12,193 in 2017 from 11,658 the previous year.

Structural change in west Africa: a tale of gain and loss (World Bank)

In a nutshell, the paper seeks to address the following main questions: What were the overriding trends underlying output, employment, and labor productivity in BBC? How do these trends compare with those of Asian economies (both when they were at BBC’s stages of economic development and during their respective growth spurts) and SSA comparators? What has been the pace and nature of structural change in BBC and what similarities and differences would stand out from comparisons with Asian and SSA benchmark countries? How much of productivity growth and overall economic growth in the three West African counties can be traced to structural change and within-sector productivity gains/losses? Has structural change been growth-enhancing (with labor moving from low- to high-productivity sectors) or growth-reducing? Has structural change been driven by static or dynamic reallocation effects? What are the relative contributions of demographic changes and employment rate to per capita growth?

G20 seeks greater collaboration with Africa (UNECA)

“We are here to listen and learn about what you consider as relevant for Africa and the African Union at the G20,” said Ambassador Pedro Villagra Delgado, Argentina’s Sherpa for the G20. ECA’s Chief Economist and Deputy Executive Secretary, Abdalla Hamdock, described G20’s effort to reach out to African countries as “a step in the right direction.” He highlighted trade and regional integration; illicit financial flows; climate change; technology; natural resources for development; macroeconomic policy; and migration as some of Africa’s priority areas where collaboration with the G20 will be helpful.

Beijing Declaration on cross-border e-commerce (WCO)

The First Global Cross-Border E-Commerce Conference, co-hosted by the WCO and the General Administration of China Customs has concluded in Beijing. Over 2,000 high-level policy and decision makers, as well as operational experts, from Customs administrations, other government agencies, e-commerce operators, international organizations, regional economic communities, civil society, academia and other stakeholders from over 125 countries deliberated on various aspects of cross-border e-commerce. The conference emphasized the need for an international standard, and supported the expeditious development of the WCO Framework of Standards on Cross-Border E-Commerce, the first guiding document on how the world Customs community and relevant border agencies can better regulate and provide enhanced facilitation to cross-border e-commerce. At the end of Conference, a Beijing Declaration, summarizing the discussions and outlining the future way forward, was adopted. [ICC update: E-commerce can make trade more inclusive, but greater coordination is needed]

Anabel Gonzalez: Brexit, the US, China and the future of global trade (WEF)

Some years ago, the distinguished economist Richard Baldwin said: “Regional trade liberalisation sweeps the globe like wildfire”. He was right. Preferential trade agreements (PTAs) increased from 20 in 1990 to close to 300 today, and have become a key feature of the international trade policy landscape. Every country in the world is party to at least one PTA, with Mongolia the last to join the pack when it signed a deal with Japan in 2016. But Brexit, the US withdrawal from the Trans-Pacific Partnership, and the renegotiation of the North American Free Trade Agreement have been a major shock for the world trade system. What will the outcome of this shock be? Are we in for a recess, retreat or revamp of regional trade integration?

Today’s Quick Links:

‘Every harvest of SA abalone could be its last’

UNIDO: Virtual reality training in Southern Africa

DHL has grown tremendously in Africa

Uganda: Monetary Policy Statement for February 2018 (pdf)

IGAD holds Somalia national consultative workshop on free movement of persons

OECD’s Economic Outlook for Southeast Asia, China and India: fostering growth through digitalisation


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