tralac’s Daily News Selection
AfCFTA updates ahead of next week’s Kigali summit:
(i) tralac’s Ashly Hope: Trade in services and the AfCFTA – no service is an island. The creation of the Continental Free Trade Area is an opportunity to shift the mindset that a liberalised sector takes away the right to regulate, and rather appreciate that well-regulated integrated services sectors on the continent can improve services for consumers, and contribute to development. Pro-competitive services market regulation will always be a worthwhile goal for member states – regardless of levels of liberalisation.
(ii) UNECA Kigali seminar: An opportunity to boost Africa’s economic transformation. Jamie MacLeod, a fellow in the ECA’s African Trade Policy Centre, says by removing tariffs the AfCFTA can increase intra-African trade by 52%, and that by additionally reducing non-tariff barriers it could double this trade. According to MacLeod, however, there are further challenges ahead in bringing about the AfCFTA, with significant implementation issues faced by Member States. First, they must complete the AfCFTA Implementation Roadmap, including preparing schedules of commitments in goods and services. They must also ratify the agreement domestically. Speed is of the essence in business, and this should be done rapidly. The Roadmap should then be complemented by implementing the AFCFTA’s “sister policy”, the Boosting Intra-African Trade Action Plan, in particular through policies to increase productive capacities, improve regional infrastructure and payment systems. National AfCFTA strategies should also be developed to identify and fully utilize the opportunities of the agreement.
(iii) Rwanda’s trade and industry minister: Africa to benefit from Continental Free Trade Area, challenges remain. Rwanda’s Minister of Trade and Industry, Vincent Munyeshyaka said that before the AfCFTA enters into force, AU member states will need to ratify it after it is signed. It could be a challenge to fast track the ratification process and transformational changes brought by the AfCFTA may face resistance, he said. Munyeshyaka explained that there is a need to promote investment along with the AfCFTA, as investment may not follow its creation. The creation of the AfCFTA should be followed by industrialization and infrastructure policies across Africa, which could also pose a challenge to the operation of the free trade area.
(iv) CFTA will transform Africa – Kagame. “What I am seeing is that Africans really want it and the fears they have are outweighed by the benefits. They are huge and we are forging ahead.”
(v) Abuja Chamber commends federal government’s decision. Mr Adetokunbo Kayode, President of Abuja Chamber of Commerce and Industry, said the chamber will do everything it can to ensure that Nigerian businesses take full advantage of the opportunities that are being created by virtue of the AfCFTA. Kayode added that the chamber would work with the government to ensure proper monitoring and evaluation of the implementation of the agreement.
(vi) @AdanMohamedCS: Kenya looks forward to the upcoming ratification of the Continental Free Trade Area that will drastically open up Africa for trade. Locally, we have also begun to remove work permit barriers for investors to further enable business.
(vii) @HannaTetteh: Assuming that we also deal with the major trade facilitation challenges in the continent. It’s great that the CFTA will finally come into being (albeit 7 years since trade ministers recommended same to the AU in Accra in 2011) but now implementation has to be prioritised.
African e-commerce: Pan-African ‘trust mark’ to be launched (Fin24)
Due to the importance of establishing trust in digital trade in Africa, Ecommerce Forum Africa plans to launch what it calls a pan-African ecommerce “trust mark”. Dylan Piatti, the senior chief of staff: consumer, retail and manufacturing at Deloitte, said the EFA is already talking to a number of African countries about establishing a “pan-African ecommerce trust mark”. Legal experts are on board to help with the process. [Song Wei: Training, e-commerce can unlock growth in Africa]
Afreximbank, South Africa’s ECIC sign MOU: pledge $1bn to expand trade between South Africa and other African nations (Afreximbank)
Under the terms of the MOU, signed in Cairo on Monday, Afreximbank and ECIC will jointly implement a South Africa-Africa Trade and Investment Promotion Programme . Kutoane Kutoane, ECIC CEO, said joining Afreximbank as a shareholder had made it possible for South Africa to widen its access to other African markets. Beyond ECIC’s mandate to increase the volumes of South African exports, the institution was committed to contributing to the Africa’s industrialization in an inclusive manner. “We realise that one of the best ways to enhance our exporting capabilities as a country is by intensifying mutually beneficial trade with the rest of the continent,” said Mr Kutoane. [Zimbabwe: AfDB extends $25m trade finance loan facility]
In an ornate room in Democratic Republic of Congo’s presidential palace last week, some of global mining’s most powerful men faced off against government officials over proposed changes to the country’s mining code. Facing the officials, including President Joseph Kabila, the executives at times threatened to pursue arbitration or close mines if the government went ahead with changes including royalty increases, according to one of the president’s top advisers, Barnabe Kikaya bin Karubi, who attended the meeting. But there was no mistaking the sense of defeat as executives from Glencore, Randgold, Ivanhoe and other firms descended the red carpeted stairs after six hours to accept before the media a mining code that hikes taxes and removes exemptions for cobalt and other minerals.
West African bourse seeks to charm SA (Business Day)
The Bourse Régionale des Valeurs Mobilières (BRVM), a West African regional stock exchange, is on a charm offensive, holding its first investor roadshow in SA this week, positioning itself as a blueprint for regional integration amid a project to link stock exchanges on the continent. South African investors held about 3%-4% of shares in companies listed on the BRVM, the most of any African country outside of the eight countries that shared the exchange, CEO Edoh Kossi Amenounve said in Johannesburg on Wednesday. The stock exchange is shared by Benin, Burkina Faso, Guinea Bissau, Mali, Niger, Senegal, Togo and Ivory Coast, where it is headquartered.
Namibia and SACU: Namibia must fine-tune national strategy – Schlettwein (The Namibian)
Finance minister Calle Schlettwein says Namibia needs to fine-tune its national strategy to realise increasing value shares within SACU. In a speech read on his behalf at a stakeholders’ meeting of Sacu representatives in Windhoek on Monday, Schlettwein explained that key strategic intervention areas entail developing and strengthening national bodies for effective trade policy setting and implementation. He said other areas include leveraging regional value chains in industries such as agribusiness, transport, tourism and services. SACU is currently reviewing its trade facilitation programme. This process is expected to be completed and ready for implementation after June 2019.
The sovereign debt/GDP ratio has nearly doubled since 2014 which has reinforced the already strong bank-sovereign link. The rapid rise in housing prices and household debt, banks’ large exposure to mortgages, and banks reliance on wholesale funding are sources of concern. A major decline in real estate prices would adversely affect bank capital and profitability. Economic and financial shocks from South Africa are directly transmitted through the common currency and integrated financial markets.
LDC graduation: four countries tipped to graduate from ranks of poorest (UNCTAD)
With increasing national earning power as well as access to better health care and education, four countries - Bhutan, Kiribati, São Tomé and Principe and Solomon Islands - will be recommended for graduation from the list of 47 least developed countries, UN Committee for Development Policy has said. “This is a historic occasion,” CDP Chair Jose Antonio Ocampo said. “In the 47 years since the start of the category, only five countries have previously left the list.” He added that two more countries, Vanuatu and Angola, are scheduled for graduation in 2020 and 2021. Bangladesh, the Lao People’s Democratic Republic and Myanmar met the graduation criteria for the first time but would need to meet the criteria for a second time at the next triennial review in 2021 to become eligible to be considered for graduation.
Today’s Quick Links:
OECD’s latest Interim Economic Outlook: stronger world economy, but tensions are rising
OECD’s Working Party on International Trade in Goods and Trade in Services Statistics: documents prepared for 21-23 March meeting include Asymmetries in trade data: diving deeper into UK bilateral trade data (pdf); Understanding asymmetries between BEA’s and partner countries’ trade statistics (pdf); Microdata time series 2012-2016 International Trade in Services (pdf)
DP World announces strong financial results for 12 months ending 31 December 2017 (pdf)
ASEAN-Australia Special Summit: preview
Joint statement: Establishment of Vietnam-Australia strategic partnership
EU-Mercosur negotiations: report from the latest negotiation round (pdf)