News
tralac’s Daily News Selection
How Kenya’s famous roses almost missed Valentines Day – a stimulating twitter thread, by @MatinaStevis, of her Wall Street Journal article posted yesterday:
“First things first: for those of you who didn’t know (ie most?) Kenya is a global flower powerhouse. Fourth biggest exporter in the world of cut blooms – third in roses, by value. See some great graphs in our story.”
African Integrated High Speed Railway Network: NEPAD retreat to review technical and financial proposals (12-16 February, Johannesburg)
ODI workshop: How ‘smart’ trade policy can help Africa industrialise (22 February, London)
UNCTAD workshop: Supporting the shift towards sustainable freight transport in the Northern Corridor (2 March, Mombasa)
Profiled article (from the latest Bridges Africa edition What way forward for Africa at the WTO?): Judith Fessehaie: How can the CFTA help Africa respond to its economic transformation imperative? Services and e-commerce contribute a rising share of trade in value added. However, not all services are created equal. Research by ICTSD finds that the most important contribution to structural transformation and the SDGs comes from backbone services, namely infrastructural services. Africa’s exports of goods-related services such as freight and forwarding and aftermarket services have recorded a 9% per year growth between 2011 and 2016. Although this is good news, because the latter are closely associated to production and exports, other services exports have fallen during the same period. African value added producers need faster-growing backbone services. While services liberalisation can play an important role in unleashing the development potential of the services sector, complementing it with pro-competitive domestic regulations is essential in order to lower prices, increase product quality and variety, promote new entry, and widen access. At the technical level, this may require the CFTA negotiators to move beyond their confidence zone with regards to trade in services, for example with a negative list approach, and competition. African policy-makers could consider a complementary approach by combining services liberalisation with regulatory convergence (if possible), investment, and capacity building in services sectors that are essential for industrial development.
Dakar conference on factoring: Afreximbank urges use of factoring to expand regional value chains (Afreximbank)
Ms Kanayo Awani, managing director of Afreximbank’s Intra-African Trade Initiative, said on Wednesday at the opening of the two-day regional conference on factoring that, in spite of the potential upside, Africa’s SMEs continued to face difficulties in accessing finance. Ms Awani, who is also Chairperson of FCI’s Africa Chapter, noted that in other regions, such enterprises accounted for the largest shares of trade finance transactions concluded through factoring, noting that in Europe, for instance, factoring represented 10.4% of GDP at 1.5 trillion Euros. Ms Awani said Africa only accounted for 1% of global factoring transactions adding that the low volumes of factoring in Africa was largely attributable to lack of information and awareness. Peter Mulroy, Secretary General of FCI, said that despite the low factoring level in Africa, the continent had achieved important milestones that could help develop it further in the years to come. [Downloads available]
Three East Africa states in US crosshairs over mitumba ban (Business Daily)
East African nations that are en-route to stopping importation of used clothes may soon pay a price for it following the US State Department’s announcement that Washington will impose trade penalties in retaliation to what they see as a blockage of free trade. Harry Sullivan, the acting head of the economic and regional affairs unit in the department’s Africa Bureau, said Rwanda, Tanzania and Uganda have until next week’s meeting of their leaders to reverse the decision or face the penalties. “I believe the results of the meeting next week will determine how we proceed,” Mr Sullivan said in a conference call with reporters. “While we understand the East African Community’s desire to build a domestic textile sector, we firmly believe the EAC ban on imports of used clothing will not achieve that.” [Full text of the State Department briefing]
Katrin Kuhlmann commentary on US-African trade: creating common ground amidst policy uncertainty?
Kenya: Cargo scanners give KRA Sh131m more daily at the ports (Business Daily)
Commissioner-general John Njiraini also attributed the growth in daily revenue flows at the Customs to “benchmarking of cargo values to address undervaluation” and “stricter application of cargo auction processes”. “Customs recorded overall growth of 7.7%, with non-oil collections, which account for about 70% of revenue growing at 8.1%,” Mr Njiraini, whose second three-year expires on March 3, said in a statement. “Customs performance, however, continued to be adversely impacted by sluggish import growth with container volumes in H (first half) recording marginal growth of 2.8% compared to growth of 4.9% in H1 of FY (financial year) 2016-17 (which ended last June).” The Scanner Integration Project, which connects all readers at border entry points to a command centre at Time Tower, has been largely funded by the Chinese government.
Malawi now seeks to import natural gas from Tanzania (IPPMedia)
Tanzania’s Minister for Energy, Medard Kalemani, said in Dar es Salaam yesterday after a meeting with a high-profile Malawian delegation led by his ministerial counterpart that the government was ready to consider the request in the name of maintaining good relations with the neighbouring country. Kalemani said the two countries are also set to discuss collective efforts towards developing the Songwe River Basin for different uses of mutual benefit to both nations, including power generation. The Malawian delegation was led by the country’s Minister for Natural Resources, Energy and Minerals, Aggrey Masi, and also included Malawi’s Minister of Industries, Trade and Tourism, Henry Mussa. Masi said his country is in need of reliable electricity and has been struggling to address this challenge.
Malawi: IMF discussions, statement
Malawi is recovering from two years of drought. Economic growth in the range of 3-5% is expected in 2018, followed by a rise to 6-7% over the medium term. Growth will be supported by enhanced infrastructure investment and social services as well as an improved business environment, which will boost confidence and unlock the economy’s potential for higher, more broad-based, and resilient growth and employment. Inflation at end-2018 is expected to reach 9% before gradually converging to around 5% over the medium term.
Republic of the Congo launches its iGuide to highlight investment opportunities (UNECA)
The iGuide for the Republic of the Congo is the first in a series supported by the UNECA. The IPS is also concluding work with local officials on the iGuides for Malawi, Nigeria and Zambia. These three online platforms are expected to be launched in the first quarter of the year 2018. The project was initiated at the request of the Republic of the Congo through the Investment Promotion Agency (API) of the Republic of the Congo. Information on the platform is grouped in seven chapters around the themes of business set-up, labour, production factors, land, taxes, investor rights and growth sectors and opportunities.
Zimbabwe, Botswana strike diamonds deal (The Herald)
Zimbabwe is on the brink of clinching a deal with Botswana to start processing its diamonds at the world renowned Diamond Trading Company. Speaking during a tour of DTC in Gaborone yesterday, President Mnangagwa said talks were at an advanced stage for the two countries to seal the agreement. He said the arrangement is part of a broader policy to come up with a diamond policy for Zimbabwe. ”In Zimbabwe, yes we have diamonds, but we do not really have a diamond policy. We are now crafting the policy, discussing with Botswana, Namibia and Angola to assist us in formulating a diamond policy for Zimbabwe. But currently, there is discussion between my Minister of Mines and the young man here (Botswana’s Minister of Mines) so that we bring our diamonds from Zimbabwe to be processed here,” he said. [Zimbabwe: Pre-clearance of commercial cargo now mandatory]
Justin Sandefur: The World Bank’s misleading defense of the Doing Business Index (CGD)
Last week, CGD published a response to our analysis by Shanta Devarajan, senior director for Development Economics at the World Bank, and also a member of CGD’s Advisory Group. He concluded that our analysis was “neither enlightening nor useful.” Read it for yourself, but my quick summary of Shanta’s reply is: (i) Rankings are relative, so yes they change due to others’ actions; (ii) The methodological changes are purposeful improvements, not flaws; (iii) India has genuinely reformed. I accept all three points. Nevertheless, Shanta’s response - cleverly titled “Wrong Criticisms of Doing Business” - does not actually say we’re wrong. It doesn’t address the core substantive flaws in Doing Business discussed in our first post or, in my view, rebut the core technical claim we made: that changes over time in Doing Business rankings rely on apples to oranges comparisons, and that using a consistent methodology shows much smaller changes in the ranking for both Chile and India over time. [Related: CSIS debate (22 February) Fifteen years of Doing Business: opportunities for future directions]
IFAD member states call for increased focus on poorest in rural areas
The 41st Governing Council of the International Fund for Agricultural Development concluded yesterday with a call from leaders to build stronger institutions and to improve capacity in rural areas to overcome fragility. A growing number of people around the world, approximately 1.6 billion, are living in fragile situations. During the two-day annual event, IFAD Member State representatives discussed how rural areas are increasingly affected and shaped by global issues such as climate change, conflict, weak institutions, emerging technologies and limited natural resources.
For example, kicking off the final day of the meeting, Olusegun Obasanjo, the former President of Nigeria, talked about the growing threat posed by climate change. “For us in Africa climate change is no longer an abstract concept, it is our reality,” he said. As an example, he pointed to the current crisis in Cape Town, South Africa where the water supply in a city of about four million people is predicted to run dry by June. ”If drought can affect such a city, one can only imagine the impact of drought on the rural areas. Frequent and extreme weather events continue to have negative effects on rural livelihoods, especially in Africa where agriculture is the mainstay of rural economies.” [Event documentation, J.J. Messner: Defining and measuring state fragility]
Without firm action on gender equality, women’s empowerment, world may miss development targets (UN)
“This is an urgent signal for action, and the report recommends the directions to follow,” Phumzile Mlambo-Ngcuka, the Executive Director of UN Women, said on the launch of the new report, Turning promises into action: Gender Equality in the 2030 Agenda for Sustainable Development. Turning promises into action makes in-depth case studies in the Colombia, Nigeria, Pakistan, South Africa, United States and Uruguay, looking at what is necessary to achieve the 2030 Agenda. Focusing on unpaid care work and ending violence against women, the comprehensive report examines all 17 SDGs and how deeply intertwined the different dimensions of well-being and deprivation are in impacting the lives of women and girls.
Tax and the UN Sustainable Development Goals (ICC)
The ICC has released a position paper on tax and the UN SDGs to mark the First Global Conference of the Platform for Collaboration on Tax, which began yesterday in New York. A key misconception, detailed in the ICC paper, is that development could be entirely funded by ‘cracking down’ on tax practices such as base erosion and profit shifting, which ICC is working with other partners to address. Rather, the most important source of revenue for funding the SDGs is economic growth, and here tax policy can play a pivotal role. Here are five Global Goals where effective tax policies can facilitate economic growth and fuel progress towards sustainable development:
