Building capacity to help Africa trade better

tralac’s Daily News Selection


tralac’s Daily News Selection

tralac’s Daily News Selection
Photo credit: African Exponent

Implications for Africa’s policy makers? China plans to set up a new international development cooperation agency ”as a key means of major-country diplomacy, enhance strategic planning and coordination of foreign aid”

African Development Bank’s Economic Outlook shows decline in regional economies (AfDB)

The AfDB has expanded its flagship publication, the African Economic Outlook, with five regional reports. The regional economic studies were released yesterday. “By offering regional approaches for the first time, we want to leverage the Bank’s expertise and give more depth of analysis and relevance to this publication,” said Celestin Monga, Chief Economist and Vice President of the AfDB’s Economic Governance and Knowledge Management. “The integration of specific reports for each region reflects the importance the Bank’s focus on the regional dimensions of development and inclusive growth in Africa,” said Mohamed El Azizi, Director General of the North Africa Region. Profiled regional report:

East Africa (pdf), with thirteen countries, recorded the continent’s best economic performance with a GDP growth rate of 5.9% in 2017 −a rate much higher than the growth recorded by the other regions of the continent, and above the continental average of 3.6%. The good performance of the East African sub region is stimulated by six countries: Ethiopia, Tanzania, Djibouti, Rwanda, Seychelles and Kenya. The outlook remains positive for 2018 and 2019, with growth expected to continue, reaching 5.9% in 2018 and 6.2% in 2019. [The regional reports can be downloaded from here]

Botswana-UAE Business Forum: UAE, Botswana officials in talks to boost trade ties (Gulf News)

During the UAE-Botswana Business Forum taking place in Dubai on Monday, officials from the UAE said there is “huge potential” to extend the scope of bilateral trade as the Emirates aims to capitalise on high-growth economies. “[Most of] the trade now is on precious stones and mainly, diamonds, but if we introduce the potential to diversify our trade in goods between the two countries, I think we can double the trade figures easily,” said Abdullah Al Saleh, undersecretary of foreign trade and industry at the UAE’s Ministry of Economy. Non-oil trade between Dubai and Botswana specifically exceeded $1bn (Dh3.67 billion) in the first nine months of 2017, and was dominated by trade of precious and semi-precious metals. “The trade balance now is in favour of Botswana because of the diamonds exports to the UAE, but if we diversify trade, I’m sure there are a lot of opportunities of our industries to export to Botswana,” he said. [Dubai presents itself as re-export hub for Botswana diamonds]

Nigeria-Tunisia Business Forum: Strengthen bilateral relations in trade, economic, technology (Vanguard)

Nigeria’s Minister of Foreign Affairs, Geoffrey Onyeama: “We appreciate the impressive development that had taken place in Tunisia which had really catapulted the country to the level mid income country. In all categories Tunisia is showing itself to be a leading country in the world today in the ICT, medical and agriculture among others, it has a made tremendous stride. That is why we are particularly happy in strengthening the bilateral relations between the two countries.” Tunisia’s Minister of Foreign Affairs, Mr Khemaise Jhinaoui, said the discussions would identify new area of common interest mainly in investment, science and technology. He said the agreement to be signed later would enhance the relationship between the two countries especially in the area of business and technology. He noted with the concern that the relations between Nigeria and Tunisia were still below expectation.

Nigeria: NLC cautions government against signing Africa continental free trade agreement (The Guardian)

The Africa Continental Free Trade Agreement would lead to massive job losses, closure of businesses and incapacitate local technological advancement, the Nigeria Labour Congress has said. NLC’s president, Ayuba Wabba, said the Nigerian local business community and organised labour have not been consulted even when the government directed the promoters of the agreement to do so. [Capital Economics: A note of caution on African economies; Todd M Johnson: Looking skyward towards African economic integration]

Rwanda can be a $20bn economy by 2025 (new Times)

Rwanda is at an interesting juncture. Over the last 12 years, it improved its Ease of Doing Business rank by 98 places – the highest globally, which resulted in strong FDI inflows in recent years. At the same time, the young median age of its population demands sustained growth in jobs and income which makes expanding the economy’s size a necessity. So if Rwanda wants to grow its GDP from the current $9bn to $20bn by 2025, to what extent should it focus on each growth-driver to realize this target? This is what we explore here. [The author, Sourajit Aiyer, is an author and financial services professional, and researches for South Asia Fast Track]

Ghana: Cashew in-shell exports rake in $981m (GEPA)

Ghana achieved a significant feat in the global exportation of cashew in-shell: it emerged as the number one exporter of cashew in–shell for 2016 (pdf), with total export value of $981m, representing 43.8% of total global exports of cashew in-shell. Other global exporters of cashew in-shell in 2016 include La Cote d’Ivoire ($340m); Tanzania ($333m); Guinea Bissau ($209m); Burkina Faso ($105m); Indonesia ($100m). Major market destinations for Ghana’s cashew in 2016 include Vietnam ($533m) and India ($445m). [Related GEPA analysis: exports of cashew kernels to the US, pdf; Ghana may struggle to repay $1.3bn cocoa loan]

South Africa: Structural transformation, competition and economic power - the need for better policies (Econ 3x3)

The entry and success of new competitors are crucial. We propose a positive agenda for competition policy, regulation and related policy areas that includes the following: [The authors,Pamela Mondliwa and Simon Roberts, are attached to CCRED]

Kenya: Kinyua now orders State contractors to use SGR (Business Daily)

Head of Public Service Joseph Kinyua said in a 7 March circular that “all cargo imported and/or exported by government agencies, including cargo for projects undertaken by third parties, must be moved on SGR.” Movement of any cargo between Mombasa and Nairobi by any other means shall require written consent from the Transport Principal Secretary, Mr Kinyua says. Kenya’s railway freight traffic has over the years been on a steady decline, plunging 9.3% in 2016 to 1.429 million tonnes from 1.575 million tonnes in 2015. The decline happened even as total cargo arriving at the Mombasa port grew significantly, hitting a high of 10.9% in 2017 to 30.35 million tonnes. Container traffic rose from 98,586 twenty-foot equivalent units (TEUs) handled in 2016 to 1.190 million TEUs in 2017.

Simon Allison: Port deal underscores Djibouti’s reliance on Ethiopia (ISS)

Therefore Somaliland too is becoming an attractive investment destination on the coast of the Horn of Africa – and Ethiopia, in acquiring its Berbera stake, clearly agrees. What does this mean for Djibouti? Will Ethiopia incentivise local freight traffic to run through the port in which it retains a financial interest? Or is there enough cargo to go around?

Zimbabwe: Digesting ramifications of Kazungula Rail Road Project (The Herald)

Zimbabwe must put its house in order as a matter of urgency. We must urgently attend to our inefficiencies. Let us speed up the dualisation of the Beitbridge-Chirundu Highway for traffic flowing into Zambia, DRC and Tanzania. It is also important to dualise the Harare-Nyamapanda Highway for traffic heading for Malawi. Let us dare to dream of a railway line from Beitbridge to Chirundu. The talk on the dualisation of the Beitbridge-Chirundu road has taken too long and it is time action begins on the ground. Knowing our great potential by virtue of our geographical location within Sadc, our brothers and sisters are not sleeping. They are upgrading their infrastructure and this was confirmed by the Zambian Housing and Infrastructure Development Minister Ronald Chitotela on Saturday at a Press conference in Kasane. He said Zambia was constructing new roads linking it with many other countries in the Southern African Development Community region and beyond as Lusaka was opening up for business. This certainly is call to action for authorities in Harare. The time for cross-border verbal diarrhoea is over. Lastly, Zimbabwe must address system deficiencies at ports of entry like Beitbridge, Forbes Border and Chirundu.

Morocco-IMF updates:

(i) 2017 Article IV Consultation report: Growth has recovered and should reach 4.4% in 2017, although non-agricultural activity remains subdued. Inflation is low and well-anchored. The fiscal deficit is expected to decline to 3.5% in 2017 and public debt is sustainable. The current account deficit is projected to decline moderately and international reserves are at a comfortable level. Job creation has improved, but social tensions have increased in 2017, and much remains to be done to reduce structural unemployment, especially for the young, and to promote higher and more inclusive growth.

(ii) Selected Issues report: Morocco would benefit from a comprehensive and well explained tax reform strategy aiming to reduce inequality and boost growth. For this, a recommended tax reform package should combine several key components: aligning the reduced VAT rate on manufacturing goods and services to the standard VAT rate; reducing tax exemptions; raising property tax; and lowering corporate tax rates. At the same time, the targeting of social programs should be strengthened. Such a reform approach would protect the most vulnerable and help broaden the tax base, remove tax distortions, and better share the tax burden.

Over the last decade, productivity gains within the agricultural sector accounted for the bulk of aggregate productivity growth in Morocco, while about one third of the gains came from labor reallocation from low to higher-productivity sectors (structural transformation). Our analysis shows that higher structural transformation would significantly boost productivity. To facilitate labor reallocation and structural change, Morocco needs to improve its business climate, governance, access to finance, and education, and reduce its labor market rigidities. [(iii) Third review under the arrangement under the Precautionary and Liquidity Line]

AU STC on transport, transcontinental and interregional infrastructures, energy and tourism: profiled papers (21-23 March, AU)

(i) Africa Clean Energy Corridor / West Africa Clean Energy Corridor: National and regional planning to fully consider cost-effective renewable power options (pdf). Africa Clean Energy Corridor: Development of least-cost System Planning Test models to support planning for long-term power generation expansion plans (over the next 20 – 40 years) in continental Eastern and Southern African countries. These models also allow policy makers to assess least-cost investment options in light of a specific policy goal, such as a renewable energy penetration target, import independence, affordability or CO2 targets, in order to assess investments in international transmission lines for renewable energy deployment. The tools have been made available and regional training seminars were held, with the attendance of more than 50 energy planners in total. Ongoing work has also been initiated to incorporate the zoning results into regional planning in Eastern and Southern Africa power pools.

(ii) Technical paper on Grand Inga hydropower project: implementation challenges (pdf). It is important to mention that political stability of the DRC over the next decades would be an essential prerequisite to enable Grand Inga project completion, sustain the INGA 3 operation and the development of the other phases of the Grand Inga project and related power transmission corridors. The speedy completion of all technical studies including positive conclusions of the ESIA studies as well as the negotiations with partner countries committed to purchase the additional power generated by the Inga 3 new concept project would not delay nor hamper the development of the project. Finally, the capacity of DRC Government to mobilize its own contribution to this project would be encouraging.

(iii) The African Union Bioenergy Development in Africa Programme (pdf): Harmonize Regional Bioenergy frameworks and policy guidelines taking into consideration lessons learnt from the mainstreaming of Framework. The RECs should have their approach, tailored to region’s distinct situations. The ECOWAS region has developed its own bioenergy strategy a few years ago. Other regions of Africa should have their own regionally-tailored framework and strategy that are harmonized with the continental bioenergy framework and policy guidelines. Enhance the capacity of the regional organizations to mainstream bioenergy in their regions.

Better coordination of all renewable energy programmes, and it is important that the implementation of the “Bioenergy Development in Africa” should be done within the overall African strategy aimed at increasing the share of renewables in Africa. This is will be achieved through cooperation with the Regional Economic Communities and other Institutions and Initiatives. The AUC and partners will continue to advocate for strong political will and co-operation amongst Member States in the area of bioenergy development in Africa. This will ensure that bioenergy is prioritized like other sources of energy.

Today’s Quick Links:

Wharton: Is the trade resurgence sustainable?

World Conference on Tobacco or Health closes in Cape Town: Finance Ministers urged to prioritise funding for anti-tobacco initiatives

South African Airways to scale back in bid to break even in three years

Tanzania imports 44 tonnes of fruits from Egyptian suppliers

Zambia exports confiscated logs in controversial timber ban

OECD Sahel and West Africa Club: Gender inequality in West African social institutions

UN Women’s Commission session opens: summary of Day 1 inputs

Growing united: Upgrading Europe’s convergence machine


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