Building capacity to help Africa trade better

tralac’s Daily News Selection


tralac’s Daily News Selection

tralac’s Daily News Selection
Photo credit: kayzersosie | Imgur

African trade policy events starting today:

In Abidjan: Africa CEO forum; In Nairobi: Regional meeting on SPS collaboration, leasing and coordination in Eastern and Southern Africa; In Arusha: EAC workshop to present the outputs of the ACP-EU Tradecom II project

In Pretoria: SADC Council of Ministers’ meeting underway (SAnews.gov.za)

The Southern African Development Community (SADC) Council of Ministers’ two-day meeting kicked off in Tshwane this morning with a call for increased focus on industrialisation. With increased industrialisation, the regional bloc is set to diversify economies and expand value chains in the zone. “Industrialisation remains a core pre-requisite for prosperity in the region and has to be achieved through a strong partnership with the private sector,” International Relations and Cooperation Minister Lindiwe Sisulu said.

Diarise: 5th Africa Think Tanks Summit (5-7 April, Accra). A highlight will be the launch of the book: Creation, management and sustainability of Think Tanks in Africa

AfCFTA special feature following last week’s Kigali summit

Indication of legal instruments signed at the 10th Extraordinary Session of the Assembly on the launch of the AFCFTA: AfCFTA consolidated text, Kigali Declaration, Free Movement Protocol (pdf)

Post-AfCFTA negotiations slated for May – AU official (New Times)

Negotiating teams from countries that last week signed the CFTA deal will spend the first 10 days of May in Addis Ababa to iron out outstanding issues before the final implementation phase. According to the CFTA transition implementation programme seen by The New Times, the Addis meeting, which will be the 11th of its kind, will look at the implementation and practical application of the tariff liberalisation modality on the designation of sensitive products and the exclusion list. The teams will also look into the implementation and practical application of services modality on choice of priority sectors and the next steps. Before that, the month of April is dedicated to stakeholder consultation with regard to CFTA where the business community will be sensitised on the benefits of the CFTA as they also coordinate the ratification of the agreement. [A New Times interview with Stephen Karingi (UNECA’s Director for Capacity Development): CFTA implementation will rely heavily on regional blocs]

ECA reveals a tool to monitor the progress of AfCFTA. ATPC coordinator David Luke stressed that the AfCFTA Country Business Index is a tool for listening to business on the actual effect the AfCFTA has on the business environment and challenges countries to make improvements. “It will be based on periodic surveys of the private sector at different levels, from informal cross border traders to corporates. This will be complemented with additional analysis of public data, including tariff schedules and trade volumes.” The AfCFTA Country Business Index tool will benchmark countries in four areas: AfCFTA implementation; ease of trade; trade for development, the SDGs and Agenda 2063; and AfCFTA Impact.

Niger’s President Mahamadou Issoufou said he was honoured to have been entrusted with the role of “champion for the AfCFTA” and was grateful to the AU team that helped bring it about. He called for the minimum ratification of the treaty – 22 out of the AU’s 55 members – within less than a year.

Dr Kituyi added that leaders had to “put their back into African integration”. “The people who were angry with globalization are not only in the industrialized North where they are losing jobs,” Dr. Kituyi said referring to developed countries. “There’s a lot of people who are angry about trade in Africa, it’s just that they don’t have a voice,” he said. “As we create voices for them, we had better address their concerns before they become politically too angry. If you are committed to a genuine African integration, you must put your back into priority African initiatives.”

A commentary by UNCTAD’s Dr Mukhisa Kituyi. Importantly, most of the criticism aimed at international trade today has been limited (for the moment) to developed countries. Many developing countries remain supportive of international trade. In addition, China’s One Belt One Road Initiative, the continued interest in many countries to finalise a Trans-Pacific Partnership, and the efforts of African countries to launch a Continental Free Trade Area in 2018 are just some examples that show that trade remains at the core of many development strategies. There also remains large potential for deeper economic integration within South Asia, Latin America and especially within sub-Saharan Africa. One important question is not whether these initiatives will deliver benefits, as they surely will, but to what extent the benefits will be shared. The SDGs provide a valuable benchmark against which we should weigh these trade integration efforts. Global efforts to achieve the goals are driving a shift from a mindset based on competition to one more focused on solidarity and sustainability.

UNECA’s Vera Songwe said Africa “will not remain untouched” by the “rising tide of protectionism and anti-globalization” in the developed world, said Ms Songwe, stating that the US – for example – recently announced increases in steel and aluminum tariffs, which will impact Africa given that the continent currently exports around $800m in affected steel and aluminum products to the US. The Executive Secretary also noted that the US has threatened to revoke AGOA preferences for several East African countries, affecting around $450m, of countries the sub-region do not reverse an industrialization plan to reduce imported second-hand clothing. These, along with Britain’s decision in 2016 to leave the EU, come as a blow to the confidence in regional integration processes, she said, adding that “the AfCFTA can help Africa weather these challenges.”

Afreximbank’s Dr Benedict Oramah announced that, as part of the Intra-African trade Strategy, Afreximbank had opened credit lines amounting to $800m to 55 banks across Africa in order to facilitate the confirmation of letters of credit in support of intra-African trade. The Bank’s goal was to extend such lines to at least 500 banks in all African countries by 2021 in order to significantly reduce the cost of intra-African trade finance and to counter the constraints posed by country risks. The President added that the inaugural Intra-African Trade Fair, which the Bank was organizing in collaboration with the African Union (11-17 December, Cairo) would attract more than 1,000 exhibitors and bring in some 70,000 visitors.

AfCFTA Business Forum: President Paul Kagame (Chairperson of the African Union) In summary – Raise our ambition. Ratify. Reform. Increasing intra-African trade, however, does not mean doing less business with the rest of the world. On the contrary, as we trade more among ourselves, African firms will become bigger, more specialised, and more competitive internationally. Let’s also be realistic. We cannot take the Continental Free Trade Area for granted. After it is signed, there will still be challenges. Any concerns or technical issues that remain should be addressed fairly, but also expeditiously. Work on some additional protocols and annexes will also continue. Once again, the full engagement of the private sector will be absolutely essential. Allow me to outline three of the tasks before us.

AfCFTA Questions & Answers: Extract (pdf). To fully utilize the opportunities of AfCFTA, each State Party is recommended to develop an AfCFTA Strategy – complementary to the broader trade policy of each respective State Party – that identifies for that particular country the key trade opportunities, current constraints, and steps required to take full advantage of the continental African market. Key features may include: [La Zone de libre-échange continentale africaine: Questions et réponses, pdf]

Profiled AfCFTA summit inputs: The Gambia’s President Adama Barrow; AfDB President Akinwumi A. Adesina; Egypt’s Minister of Trade and Industry Tarek Kabil; Seychelles’ Vice President Vincent Meriton; South Africa’s President Cyril Ramaphosa: Free movement protocol good for SA; Ramaphosa calls for single African currency

Nigeria: Our grouse about free trade pacts, by OPS, NLC, others (Nigeria Today)

MAN President Dr Frank Jacobs: “The government should, as matter of urgency, convene a special meeting of the relevant stakeholders, including experts on trade policy, to consider tariff lines rates along the line of efficiency, sectoral and sub-sectoral preferences that would be most beneficial to Nigerian businesses under the AfCFTA dispensation. It will also reconsider the national position on EPA vis-a-vis the AfCFTA, especially on tariff lines of products on the sensitive/exclusion list, with a view to ensuring that the EU-EPA is not reintroduced through the AfCFTA’s back door. Review presentations and prepare a detailed submission for the Government on ways and means of participating in the AfCFTA in a manner that our national interest and that of the budding manufacturing sector are effectively protected.”

South Africa and the #AfCFTA: Unions want details from Ramaphosa on Africa free trade plan, warn of job losses (Fin24)

Matthew Parks, parliamentary officer of the Congress of South African Trade Unions said SA unions share Nigerian labour concerns that African states with weak import controls will be used by countries outside of Africa to “dump” cheap imports and destroy local industries. “We know what happened to the textile industry in the 1990’s (and) the poultry industry,” Parks told Fin24. He added that there are already problems within SACU – made up of Botswana, Lesotho, Namibia, South Africa and Swaziland – where he claims Chinese companies set up “false warehouses” in Lesotho and bring their products into South Africa. “It’s fantastic on paper...but a free trade area could destroy the economy overnight and would further de-industrialise the country.”

India to negotiate an FTA with the AfCFTA – Suresh Prabhu (CII)

Complimenting the African nations on successfully concluding the AfCFTA, Mr. Suresh Prabhu, Minister for Commerce and Industry, stated that India would negotiate a FTA with the AfCFTA which will be unique in nature and will be beneficial to Africa needs. The Minister was addressing the Inaugural Session of the 13th CII – Exim Bank Conclave on India – Africa Project Partnership in New Delhi. The Government was seeking to set up a new India – Africa Development Fund which would seek to synergise the Lines of Credit as well as other export promotion and development programmes to bring about a more holistic development of the continent.

Zambia needs more time to study the AfCFTA – President Lungu

Writing on his Facebook page, President Lungu said Foreign Affairs Minister Joseph Malanji, signed the African Free Trade Area Declaration and not the Agreement because negotiations on some of the protocols of the agreement proposed by Zambia were still on-going. “Zambia had negotiated the protocol on Goods, and Services and the dispute settlement mechanism. The remaining protocols that included Protocol on Trade competition, protocol on Investment and the intellectual property were yet to be negotiated,” President Lungu said. Meanwhile, Commerce, Trade and Industry Minister, Christopher Yaluma, said in the same statement that Zambia would not sign the protocol on the free movement of people as the country was not ready for it.

In other African trade news:

(i) East African Business Council 20th anniversary celebrations: Beyond East Africa, moving from aspiration to action. Kenya’s Minister for EAC and Northern Corridor Development, Peter Munya, said the region faced a challenge in the implementation of agreed protocols. “National laws need to be aligned to regional protocols. Partner States also need to push for law reforms back home. The other alternative is to pass overarching laws at the regional level to replace existing legislation. This has been done with success in the European Union.” Hon. Munya called for a review of the Common External Tariff and efforts to make the EAC Single Customs Territory work better, adding that the Community may need to establish a regional institution to make this possible. EABC Chairman Jim Kabeho emphasized the importance of local content especially in huge infrastructure projects being undertaken by governments in the region.

(ii) ECOWAS single currency 2020 take-off not feasible (New Telegraph). Against the background of last Wednesday’s signing of the AfCFTA agreement by 44 countries, emerging and frontier markets focused investment bank, Renaissance Capital, has said that the plan by ECOWAS to have a single currency by 2020 is, “not credible.” In a research note by its Global Chief Economist and head of macro-strategy unit, Charles Robertson, obtained by New Telegraph, the firm said it supports Nigeria’s position that a single currency for the sub region is ill-advised at this time. The firm stated: “Despite the leaders of ECOWAS declaring last month that they will push ahead with a single currency by 2020, we think this is not credible. Nigeria’s critique that a single currency is unwise at this time is valid. We think an East African single currency by 2024 is also unlikely.”

(iii) South Africa to ratify SADC Protocol on Finance and Investment amendment (GCIS). Cabinet approved that the Agreement Amending Annex 1 (Co-operation on Investment) of the SADC Protocol on Finance and Investment be tabled in Parliament for ratification. The purpose of the FIP is to harmonize financial and investment policies of Members States, so that they are consistent with the objectives of SADC. This will ensure that any changes to financial and investment policies in one Member State does not necessitate undesirable adjustments in other Member States. The aim of the Amendments are to preserve the right of governments to regulate in the public interest and to balance the rights and obligations of investors and Governments.

(iv) DP World wins 30-year concession for Congo deepwater port amid Africa expansion push (The National). The Nasdaq-listed global ports operator will manage and develop the greenfield Port of Banana in a joint venture with the government of DR Congo, with the option of a 20-year extension, it said in an emailed statement. DP World will get a 70% stake and the DRC government keeps a 30% holding in the project. Construction will start this year and finish in two years. The Congo project extends DP World’s ambitous push to expand in Africa. Congo has long sought to develop a port along its 37-kilometer coast to handle bigger vessels than those that can reach its existing shallow water ports along the Congo river. The country’s existing ports at Matadi and Boma are inland up the Congo river and are incapable of handling traffic from large cargo liners because of a lack of capacity and draught, according to a PwC study of DRC’s infrastructure. As a result, it relies on transshipments of cargo from Pointe Noire in neighbouring Republic of Congo. The new port will “dramatically improve” the cost and speed of trade and reduce dependency on neighbouring countries for shipments, Jose Makila, DRC Transport Minister said.

Today’s Quick Links:

South Africa: Statement by Department of Trade and Industry on Section 232 duties by United States; Rob Davies calls for exemption on US tariffs

President Ramaphosa says SA to lift visa restrictions for Rwandans

SA BRICS Business Council calls on BRICS to reduce trade barriers


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