Building capacity to help Africa trade better

tralac’s Daily News Selection


tralac’s Daily News Selection

tralac’s Daily News Selection
Photo credit: Joseph Maynard

Nigeria and the AfCFTA: five updates

(i) Nigeria to bid for location of AfCFTA headquarters. The Federal Executive Council has resolved to bid for the location of the headquarters of the Continental Free Trade Area. Minister of Industry, Trade and investment, Dr. Okechukwu Enelamah, said the decision to bid for the headquarters of CFTA was predicated on the notable leading roles Nigeria had played in the negotiation process, pointing out that it was the belief of FEC that it was better to be a leader by being the host nation than being a mere follower. He further said FEC gave approval for the ministry along with relevant ministries, departments and agencies to proceed to the next stage of the negotiation.

(ii) Key details and benefits of Africa Continental Free Trade Area. Yesterday, the Federal Executive Council approved that Nigeria should sign the framework agreement for the establishment of the AfCFTA during the Extraordinary Meeting of AU Heads of State and Government to be held on 21 March, in Kigali, Rwanda. Here is what you need to know on AfCFTA (extracts):

(a) Eliminate barriers against Nigeria’s products and provide a Dispute Settlement Mechanism for stopping the hostile and discriminatory treatment directed against Nigerian natural and corporate business persons in other African countries; (b) Establish rules-based trade governance in intra-African trade to invoke trade remedies, such as safeguards, anti-dumping, and countervailing duties against unfair trade practices, including dumping, trans-shipment of concealed origin of products; (c) Support the industrial policy of Nigeria through the negotiated and agreed “Exclusion and Sensitive category lists” to provide space for Nigeria’s infant industries; (d) Stimulate, specifically, an estimated 8.18% increase in Nigeria’s total exports, with a small structural shift in Nigeria’s economy towards manufacturing and services. This is expected to lead to a total increase in Nigerian economic welfare by 0.62% – equivalent to around US$2.9 billion in 2018 terms. Changes would result from tariff reduction, ease of doing business and, trade facilitation.

(iii) @snkaringi: These Nigeria gains from #AfCFTA [point d above] are consistent with @ECA_OFFICIAL simulation results which show that up to two-thirds of the more than 52% additional trade due to #AfCFTA will be value added.

(iv) Between leveraging continental platform and strengthening local market. Dr Adeola Omitowoju, an international trade consultant, said that since the Nigerian government cannot control what happens in other African countries, the possibility of goods manufactured in parts of Europe and Asia being taken to some African countries to be repackaged and moved to Nigeria cannot be ruled out. “Should that happen, not only are we going to lose revenue from tariff, the local manufacturing companies are going to be adversely affected. The idea of having an African market is very good but I am not convinced that Nigeria is ready for it. So, we would be short-changed if we go into it now.” Mr Chibuzor Nwachukwu, Chief Executive Officer of Graceway Investment Limited, noted that given the level of infrastructural development in the country, the government should protect the local manufacturing companies from stiff competition so as to preserve them.

(v) Nigeria airline operators caution government against signing proposed Free Trade Treaty for Africa. The airline operators, under the aegis of Airline Operators of Nigeria (AON), are wary of alleged haste by the Federal Government in signing the treaty without first allowing experts, investors, industrialists and operators to review the comparative gains and implications of such treaty. Chairman of AON, Captain Nogie Meggison, who spoke with journalists in Lagos, said without due diligence “that puts Nigeria first”, the free trade initiative would go the way of the Single African Air Transport Market recently signed with 22 African countries “without plans on how it will benefit Nigeria.”

On AfCFTA’s legal scrubbing, this @Rwanda_Justice update: The 2nd Extra-ordinary session of the specialised Technical Committee on Justice and Legal Affairs (Ministerial meeting) aims at legally scrubbing the legal instruments establishing the African Continental Free Trade and Protocols on Trade, Services and Dispute Settlement. [Remarks by Minister Busingye Johnston]

REC updates: IGAD launches the mid-term review of its 2016-20 strategy; Effective financial governance in ECOWAS monetary zone: conference summary; ECOWAS calls for the continued support of the United States of America towards regional integration; ECOWAS signs MOU with China for the construction of new ECOWAS Commission headquarters; The structure of the SADC Secretariat after last year’s reorganisation: see page 9, Inside SADC (pdf)

Ethiopia: National Green Export Review of Ethiopia’s leather, sesame seeds sectors (UNCTAD)

This report (pdf), utilising UNCTAD’s Green Product Space methodology, reviews global trends in the leather and sesame sectors, their role to the national economy, and Ethiopia’s export policy framework, performance, and competitiveness in these sectors. In addition, the report also presents SWOT analysis that indicates remaining challenges and barriers that constrain performance in these sectors.

Nigeria: Boosting rice production through increased mechanisation (PwC)

Nigeria’s mechanisation has remained low at 0.3 hp/ha, relative to 2.6hp/ha in India and 8 hp/ha in China. The number of agricultural tractors is estimated around 22,000, relative to 1 million and 2.5 million in China and India respectively. Low income, limited access to affordable financing and the lack of technical skills have limited the adoption of mechanisation across the rice value chain. We estimate that increasing the mechanisation rate in Nigeria from 0.3hp/ha to 0.8hp/ha in the next 5 years, can double rice production to 7.2 million tonnes. To achieve this, we estimate that Nigeria will need to at least triple its current stock of machinery over the same period. In addition to raising production, adequately increasing mechanisation has the capacity to raise yields, increase labour productivity, reduce post-harvest losses, increase income generated by farmers and deepen import substitution.

What impact will trade agreements have on global food markets? (Devex)

Phil Pardey, the director of the International Science and Technology Practice and Policy Center at the University of Minnesota, spoke about this topic at last month’s 2018 Australasia Agricultural and Resource Economic Society conference in Adelaide. Speaking to Devex after the conference, he explained how the future of food security is likely to be shaped by private business objectives. According to Pardey, the largest challenges for agriculture and food security in regions such as East and sub-Saharan Africa are around research and logistics. “Sixty percent of the crop land in sub-Saharan Africa is seven hours away from a market of just 25,000 people...on the crappiest roads you can think of. You could liberalize all the trade policies that you like, but these people can’t even engage within countries.”

Trade deals must work for rural women say participants at key UN session (UNCTAD)

Concerns about non-transparent trade negotiating processes were shared by Marie Clarke Walker, Secretary-Treasurer of the Canadian Labour Congress. She said that labour unions and civil society organizations were invited to the table when trade negotiations were already advanced, and it is often very difficult for them to make a meaningful contribution. “What could a new, fair trade model look like?” she asked, suggesting that if trade agreements were transparently negotiated, the public would know what was at stake and governments in turn would be accountable to their citizens. Trade agreements have the potential to be empowering if they are structured in a way that complements human and labour rights, she said, highlighting noticeable progress in some recent deals. For example, Canada and Mercosur, the South American trade bloc, were negotiating a trade agreement that is intended to include a trade and gender chapter.

Africa ready for digital, Museveni tells customs experts (WCO / URA)

President Yoweri Museveni has stressed that the African continent that lacked unity in the past, has now woken up after the industrial revolution and will not miss out on the digital revolution. “One of the weaknesses was lack of unity among Africans and as a result, Africa missed out on the industrial revolution except the Iron Age. Now Africa has woken up; we are going to the industrial and digital revolution. I want to assure you that Africa will not miss out again. It is going to be part of the global trade on equal terms,” he stressed. President Museveni made the remarks while opening the 4th WCO Global Authorised Economic Operator conference at the Kampala Serena Hotel on Wednesday. [Conference programme (pdf)]

Adapting industrial policies to a digital world (UNCTAD)

The meeting (19-20 March, Geneva) will focus on adapting industrial policies to a digital world for economic diversification and structural transformation. It will address the issues underscored in subparagraphs 38 (a), 76 (a) and 76 (b) of the Nairobi Maafikiano. The meeting will discuss, in particular, how the diffusion of digital technologies shifts traditional boundaries of individual industries and those between industry and services. Extract from UNCTAD secretariat meeting note (pdf):

South-South digital cooperation is urgently required in order to build the competitiveness of the developing world in manufacturing through digital industrial policies. Each country is responsible for building its information and communications technology infrastructure, yet progress in building digital infrastructure is complex and needs to be supported by regional digital cooperation. This can be an additional element in ongoing regional integration processes, in particular in Africa. The first step towards digital cooperation is to build a data economy within a region, from which countries in the region can benefit with regard to the use of big data and the development of artificial intelligence to manufacture digital and/or digitalized products. To build a regional data economy, countries need to have similar national regulations on the ownership and sharing of data and on protecting personal data. A regional strategy on the ownership of data can provide substantial support for national digital industrialization policies. [Women’s Commission debates gender and ICT issues]

Cross-border remittances and money transfers conference 2018: profiled presentation

Barry Cooper’s presentation (pdf) highlighted the scale of remittance inflows into SSA and especially intra-SSA and the importance of these flows in capital-scarce markets. It looked at the cost drivers keeping SA as the most expensive remittance corridor in the world which include inefficient national payment systems, persistently high demand for over-the-counter (OTC) remittance services despite technological advances, as well as the high level of informality in the sector. It concluded with steps on how to start overcoming these cost drivers to enable low-cost and inclusive formal flows into and within the region.

Making Every Drop Count: High-Level Panel on Water outcome document (UN)

We call on all national leaders to initiate and guide a national water reform process (pdf) and for others in leadership roles to support these efforts. National action will also benefit from international cooperation. Trans-boundary and regional cooperation, as described earlier in this report, is vital for the 40% of the people of the world living in river basins which cross national borders. In addition, we encourage the launch of new cooperative initiatives in areas of critical importance to the new water agenda, such as: a global leadership coalition on valuing water; a water scarcity initiative, and an Africa water investment program. [HLP on Water www]

Kenya marks Tanzania border afresh amid persistent row (Business Daily)

The Kenyan government has kicked off an exercise to re-affirm its territorial border with neighbouring Tanzania by replacing dilapidated and missing beacons and developing a vista along the common border. Kenya shares a 769km border with Tanzania covering Narok, Kajiado, Migori, Taita-Taveta and Kwale regions in the South. It was drawn in 1884 by the colonialists. The Kenya International borders secretary, Juster Nkoroi said the joint exercise between the two countries would start on March 22 and would cover 238km in the first phase along the Narok and Migori borders.

Today’s Quick Links:

Namibia strikes N$190m Peugeot assembly plant deal for Walvis Bay

Ghana: MTN’s revenue jumps by 23.3%, as daily revenue hits GHC9.3bn

India medical firm lists Kenya in Sh1bn Africa expansion plan

Understanding the informal economy in African cities: recent evidence from Greater Kampala

NANTS workshop: Small-scale farmers’ challenges, priorities

JETRO’s FY2017 survey on the international operations of Japanese firms: summary of results

WEF: How big and open data can transform Latin America


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