Building capacity to help Africa trade better

tralac’s Daily News Selection


tralac’s Daily News Selection

tralac’s Daily News Selection
Photo credit: Simon Dawson | Bloomberg

Featured statement, WTO DG Roberto Azevêdo: “In light of recent announcements on trade policy measures, it is clear that we now see a much higher and real risk of triggering an escalation of trade barriers across the globe. We cannot ignore this risk and I urge all parties to consider and reflect on this situation very carefully. Once we start down this path, it will be very difficult to reverse direction. An eye for an eye will leave us all blind and the world in deep recession. We must make every effort to avoid the fall of the first dominoes. There is still time.”

Featured tweet, @SongweVera: ECA is facilitating US investors of securities and pension fund managers with a total of $137bn in a meeting Dakar to discuss partnerships with funds from Nigeria, Ghana, South Africa, Gabon, Senegal. My message: We need to harmonize pension legislation in Africa.

The East African Legislative Assembly resumed its sitting in Arusha yesterday. The Third Meeting of the First Session of the 4th Assembly will continue until 23 March. The report of on-spot assessment of the Northern and Central Corridors is one of the agenda items.

Related EAC trade policy events: (i) In Mombasa: EAC Single Customs Territory Monitoring and Evaluation meeting; (ii) In Nairobi: Meeting of the taskforce to develop Bills for institutions of the EAMU

Prof Benno Ndulu: The conduct of monetary policy in East Africa in a changing policy environment (CBK)

Debt sustainability challenges – are we borrowing too much? (i) Based on DSA carried out for each of the East African member countries External debt and Total public debt are broadly within the acceptable int’l thresholds and EAC limit of PV of debt at 50%; (ii) None is currently already at risk of distress; (iii) Nevertheless recent build up has been rapid with higher cost and shorter maturities as non-concessional borrowing increased faster than debt stock; (iv) PV of Kenya’s total public debt ratio to GDP has approached the 50% mark (although there are disputes for discount rate for domestic debt) and could breach the threshold for sustainable debt.

Prof Yemi Osinbajo: The Lagos-Kano Partnership (GoN)

I have taken this quick historical digression to demonstrate that any serious planning of local and international commerce in Nigeria must take the Lagos-Kano connection seriously, especially its catalytic role for commerce across the country. This is why the Governors of Lagos and Kano State deserve our commendation for this landmark gathering. This summit for the first time, brings together two of Nigeria’s most demographically significant States and its major centers of commerce, with a combined share of 37% of our National GDP, to explore opportunities for leveraging their individual and combined economic potentials for the benefit of their citizens and the entire country. As salespeople will say, this is truly a buy-one-get-one-free opportunity for investors, policy makers and all who have a stake in the economic future of Nigeria.

It is not out of place to say that, by virtue of their commercial and demographic importance, where Lagos and Kano go, so Nigeria follows. The clout of the two cities extends well beyond the borders of Nigeria, Lagos is arguably the most important coastal city in all of Africa, just as Kano has historically served as a major crossroads on the trans-Saharan trade route that stretches into the Mediterranean and has lasted more than a thousand years in doing so. With the opening up of national borders across West Africa and even the entire continent, there will be even more room for both cities to assert themselves economically; to seize rapidly emerging opportunities, to ride on the waves of investment and innovation to become truly globally competitive, and to show the way to the rest of Nigeria. [Lagos, Kano sign MoU for economic partnership, investment]

Address delivered yesterday by the President of the Nigeria’s Senate, Dr Abubakur Bukola Saraki, to the Parliament of Ghana

Nigeria: Border smugglers hindering Nigerians from enjoying cheap petrol (ThisDay)

The Nigerian National Petroleum Corporation says Nigerians are being denied the benefits of the government’s insistence on keeping the pump price of petrol at N145 per litres across service stations in country by the unwholesome activities of cross border smugglers of petroleum products. NNPC’s Group Managing Director, Dr Maikanti Baru explained that because of the low price of petrol in Nigeria as compared to prices per litre within West African countries around her, smugglers are taking advantage of this to divert loaded tankers of products from their destinations in-country to service stations at border towns to supply to countries like Niger, Ghana, and Benin Republic, amongst others. He specifically laid the blame of smuggling on independent petroleum marketers, adding that such diversion and cross-border smuggling impacted efficient supply and distribution of products in Nigeria. He noted that while Nigeria sold petrol at N145 per litre, Ghana sold at N311, Togo – N308, Benin Republic – N292.8, Niger – 367, Chad – 326.35, and Cameroon at N400 per litre.

Borderline: Women in cross-border trade (UNCTAD)

UNCTAD travelled to Malawi, Tanzania and Zambia to hear from nearly 200 women who eke out a subsistence living on the borderline – between countries, between legal and illegal trading, and often between providing for their households or not. As most women cross-border traders are breadwinners, empowering them has a beneficial impact on their communities and on the prospects of coming generations. “The purpose of the project is to see, on the one hand, the challenges that women face when they cross the border but also to look at what are the impediments that make their businesses very small with very little ‘value addition’,” UNCTAD’s director of trade and gender Simonetta Zarrilli said. UNCTAD found that women like Jane have limited knowledge of customs rules and trade regimes but are at the same time forced to earn money this way for the good of their families. Across many countries in sub-Saharan Africa it is estimated that women make up about 70-80% of informal cross-border traders.

The challenges of regional integration, trade facilitation and gender equity for Africa: recommendations for policy action (pdf, SAIIA)

At a policy level, it is important for women’s organisations as well as international partners such as UNCTAD and UNECA to apply pressure on governments to broaden the collection of ex-ante and ex-post gender disaggregated data. Regional economic communities should also develop regional frameworks and standards for gender benchmarking to measure this data. Gender should be included in FTA and value chain analyses, and ultimately in FTA provisions. To improve the effectiveness of these policies, governments should allocate budget for gender sensitive training in ministries.

Lesotho: Selected Issues report on macro-financial linkages (IMF)

This paper provides further background on the macro-financial sector analysis that informed Lesotho’s 2017 Article IV consultation. Lesotho’s financial sector is small, concentrated, and lacks financial inclusion, although mobile banking services and financial cooperatives offer some encouraging potential. Exposure to developments in South Africa, and dependence on revenues from SACU, are Lesotho’s most important vulnerabilities.

Ethiopia: Second International Agro-Industry Investment Forum (UNIDO)

The President of Ethiopia, Mulatu Teshome, has encouraged the international business community and development partners “not to miss the boat” when it comes to investing in one of Africa’s fastest growing economies, setting the tone at the opening of Ethiopia’s Second International Agro-Industry Investment Forum (AIFE 2018, 5-8 March). Organized by UNIDO and the Government of Ethiopia, AIFE 2018 (pdf) aims to mobilize private investment in light manufacturing, with a particular focus on sectors with high growth potential, namely agro-processing, textiles and garments, and leather. In Ethiopia, around 80% of the country’s population depends on agriculture for their livelihoods.

Two business networking side events are being organized during the Forum focusing on strengthening business partnerships with the Chinese and Italian business sectors, respectively. Several agreements are to be signed on the sidelines of the event. UNIDO and the Chinese Academy of Agricultural Mechanization Sciences are signing a MoU to promote agro-industry development and technology transfer, including in PCP countries. The Government of Ethiopia is also signing an agreement with the China Africa Trade Investment Association and with three of its member companies to facilitate Chinese investment in Ethiopia, as well as a MoU with Buhler Limited, the Ethiopian Millers’ Association and the African Milling School. [Ethiopia-UAE technical committee meeting highlights economic cooperation]

East African governments dangle tax breaks, economic zones to Volkswagen, General Motors, Hyundai (The East African)

Auto makers, who is the fairest of us all? This is the question whose answer informs the region’s policies crafted to attract and retain vehicle manufacturers. Rwanda seems to have started off as the favourite, followed closely by Uganda with both countries reeling off numerous incentives. [Related: East Africa’s motor assembly sector raring to fire on all cylinders again]

Rwanda: Startups to benefit as govt eases access to Export Growth Fund (New Times)

The existing criteria were prohibitive especially for startups, which, experts argue, need the most support. One such criteria is the requirement for businesses to have previously exported 40% of their products in order to qualify for financing. The move to review the Export Growth Fund is one of the 13 resolutions reached during the 15th National Leadership Retreat (Umwiherero), that ended last week.

Official preview of Secretary Tillerson’s Africa tour (US State Department)

The other issues aside too, though, is China builds things. We don’t construct. And so in that regard China can play a helpful role. The other issue, too, is that China has some really good ideas on development in developing areas, such as how to do better healthcare, how to do water production. So those are things that are good. Also China did a good favor for us in Sudan, providing an engineer battalion to provide assistance to the UN operations there. So when you look at China, it’s a very complex relationship. We have a lot of areas and issues that we’re in conflict, but the issue comes in is that we’re trying to find the areas where we can build some type of support and cooperation that will be to the betterment of Africa. But one area that’s not to the betterment is these loan rates, which is terrible. So we’ve looked at countries, and we’re doing data dumping. Some – a lot of countries in Southern Africa and parts of the east and west are having anywhere from 50% to in one case 200% of GDP debt. And 80% and 50% are probably Chinese loans, and that’s really not acceptable, and that’s an area that we really need to address and focus on. [Deborah Brautigam: Secretary Tillerson heads to Africa: and China is (a?) (the?) focus; Tomorrow in Washington: Foreign Affairs sub-committee hearing on China in Africa: the new colonialism?

Q&A: How digitally connecting a continent could transform Africa (Devex)

Speaking to Devex at Barcelona’s Mobile World Congress, Jean Philbert Nsengimana, special adviser at Smart Africa and Rwanda ICT minister from 2011 to 2017, discussed what these initiatives will mean for the continent’s digital transformation. He also offered insights into opportunities opening up for prospective financial and technical partners in the ICT space. Extract: However, as we connect our physical infrastructure, it becomes clear to everyone that the next logical step is to engage in the bulk purchase of bandwidth and even to start running some shared applications. Creating this single digital market is the overall mission of Smart Africa. In parallel, our alliance member Liquid Telecom is accelerating the deployment of land internet connections between major African cities — Africa Digital Corridor — and it is connecting Cape to Cairo via the Red Sea — Liquid Sea. [South Atlantic undersea cable in Brazil signals new chapter in Africa and America’s telecoms]

Africa, IT hub: Cameroonian startup launches drones for global market (Japan Times)

Talking fast and dreaming big, William Elong shows off the first “made in Cameroon” drone at his sixth-floor workshop in downtown Douala, minutes from the economic capital’s Atlantic seafront. The 25-year-old, known as a high-flyer after being named one of Forbes’ most promising young Africans under 30, is enthusing about his new unmanned aerial drones and keen to promote his company and Africa as a place where IT and new tech can flourish. We must “get out of the Afro-centric vision of business” to “understand that when one has a global vision, worldwide, this includes Africa,” Elong said in a discussion of future technologies. Elong has no degree in IT or robotics but studied strategy and competitive intelligence in France, becoming the youngest-ever graduate from Paris’ Economic Warfare School. Elong’s firm, Will & Brothers, is represented in Ivory Coast and plans to open offices in France and the United States, but he stresses the development of artificial intelligence is his primary goal.

Today’s Quick Links:

South Africa: Statistics South Africa posts GDP, 4th Quarter 2017 report

Tanzania: New private sector policy in pipeline says government

Zimbabwe joins neighbours in banning South Africa meat over listeria

Trump extends targeted Zimbabwe sanctions

Local demand cuts Uganda’s exports

Africa’s mounting thirst for foreign direct investment

African SMEs to benefit from $74m guarantee facility

IMF: Economic fluctuations in Sub-Saharan Africa


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