AfCFTA special selection (2)

Trade and development events to diarise:

2018 Spring Meetings of the IMF, WBG (16-22 April, Washington)

53rd Annual Meeting of the Board of Governors of the AfDB (21-25 May, Busan, Korea)

Annual Bank Conference on Africa: Examining the challenges and opportunities of firms’ productivity in Africa (14-15 June, Stanford)

The 2018 Africa Transport Policy Program AGM (2-6 July, Abuja)

Continuing with our AfCFTA updates:

(i) The Nigerian government is, today, holding multi-stakeholder consultations on the AfCFTA. Follow this @NGRPresident thread for details.

(ii) SA wants more clarity before signing African free trade plan (Fin24). The SA government wants more clarity on details related to the AfCTFA before signing the agreement, says Trade and Industry Minister Rob Davies. He likened the agreement, in its current form, to a circuit board which was missing transistors. At the briefing, Monday, Davies said that several countries signed the free trade document which is about 250 pages long, as well as a protocol on trading goods and services. He pointed out that the agreement was done “remarkably quickly” given the deadline of the summit, and as a result “a lot of work was not completed”, he said. There are a series of annexes and appendices in the agreement which have not yet been legally scrubbed, he said. “We have no problems with the overall broader content of documents. They are a circuit board. You have the board and design, but you do not have transistors and circuits linked up for it to work. Those have to come. There is not a tariff schedule.”

(iii) Kenya: Foreign Affairs CS quells fears over Africa trade deal (Daily Nation). The Foreign Affairs ministry moved to quell fears that a newly signed trade deal could swallow local companies and encourage cross border crimes. Foreign Affairs CS Monica Juma on Monday said the CFTA agreement will be implemented with respect to local laws on investment and security to ensure Kenyans are given priority. “We have been working on robust security frameworks over the last five years. Peace and security is a priority for Kenya, as well as the protection of our territorial integrity,” she told the Morning Show on Capital FM radio. “There should be no fears that foreigners will take our jobs. The department of Immigration has an elaborate system of work permit issuance. No foreigner can own a company 100%. They also can’t get work permits for jobs that can be done by Kenyans.”

(iv) Promoting the AfCTA: AfroChampions Initiative. The AfroChampions Initiative thus becomes an official platform of exchange between the African private sector and the leaders of the AU, in particular its department in charge of Trade and Industry. As part of this roadmap, various awareness-raising and private sector consultation activities will be carried out by the AfroChampions Initiative. This campaign will be structured around 4 projects, including: Research and knowledge sharing to support the African Union’s public policies impacting business. The AfroChampions Initiative’s research center, will share its extensive research work on intra-African investment, trade and African multinationals to inform and support the AU’s interactions and policies.

(v) Irungu Houghton: African common market will boost trade (The Standard). More explicit attention must be placed on the distributional value of the new common market. The interests of South Africa’s MTN, Dangote Cement and Brookside are very different from the millions of small scale farmers, cross-border traders and low skilled workers. These interests combined are very different from China’s Tecno, America’s Google or India’s Bharti Airtel. To industrialise, we must aggressively add value to our crops and raw materials at home. Unregulated market access for non-African companies and countries to dump their finished produce in Africa will betray the real vision of the common market. This market must deliver a prosperous and industrial continent in which all share in the growth. Without this, we will not close the productivity gap between us, the Chinese, Americans and the Europeans. [Houghton is Executive Director, Amnesty International, Kenya]

(vi) EABC moots new strategies to benefit from AfCFTA (New Times). Regional governments should move fast and expedite integration process to give the EAC a competitive edge in proposed continental free trade zone, the East African Business Council leaders have said. However, EABC leaders say the slow implementation of projects expected to improve business climate in the region could put the region at a disadvantage when the treaty finally comes into force. This may leave the region behind if nothing is done to have the projects fast-tracked and late alone cost the region an opportunity to fully participate in the bigger “African market”. Jim Kabeho, the EABC chairman, said EAC states now have no choice, but to fast-track the integration to “ahead of the game”. Felix Mosha, a former EABC chairman, called for research-supported solutions in the integration process. [EABC lauded for championing the private sector at EAC level]

(vii) At a glance: a comprehensive map, via @TradeNewsCentre, of the actors that signed the AfCFTA

(viii) Prof. Landry Signé: African leaders have created the world’s largest free trade area since the WTO. Here’s its potential.

(ix) Financial Times: Pan-African trade bloc faces lengthy obstacle course

(x) Shaping the future of Africa: markets and opportunities for private investors (IFC). The report finds that certain sectors show potential for high growth due to productivity gains or consumer demands. Food production and agriculture stand out in a region that continues to import food while a rapidly urbanizing population requires more choice. Extract (pdf): By 2030, 100 million new people are expected to join Africa’s middle- and high-income groups, boosting them to over 160m across the region. Household spending in Africa is projected to grow at an average rate of 5%, surpassing the 3.8% average growth among other developing countries. The robustness of Africa’s consumption growth potential is present across all sectors (Figure 10). While consumption growth in Africa is expected to exceed 6% in most sectors, spending on transportation and information and communication technologies is expected to grow faster than spending on other sectors. Expenditures on food and beverages - the largest share of total spending for African households - should continue to grow much slower, but will remain the most important component of total household spending. At the country level, Senegal, Mozambique, Rwanda, Niger, and Ethiopia are the leaders in terms of household consumption growth in most sectors (Figure 11). Senegal’s household spending is projected to grow fastest (more than 9%) on transport, education, ICT, and housing, whereas water supply, pharmaceutical products and ICT are the fastest growing sectors in Mozambique.

In other African trade news:

Zimbabwe in $44,4m trade deficit with SA (NewsDay)

Latest data from the Zimbabwe National Statistics Agency shows that Zimbabwe exported goods worth $216,9m to South Africa in February this year against imports of $261,2m, giving a trade deficit of $44,4m. During the same period in 2017, Zimbabwe recorded trade deficit of $14,2m, with imports at $171,2m against exports of $185,4m. South Africa is Zimbabwe’s largest trading partner. [At Africa CEO Forum: ED pledges to remove business restrictions]

Holland overtakes Uganda as top buyer of Kenya goods (Business Daily)

Goods purchased by Ugandan traders fell by nearly Sh1bn in January compared to a year earlier, pushing the country down to third position in the list of top buyers of Kenyan products. Exports to Uganda fell by 21.8% to Sh3.52bn largely on import substitution, data collated by the Kenya National Bureau of Statistics indicate. Uganda, which was last year dethroned by Pakistan as a top buyer of Kenyan goods, was in January overtaken by the Netherlands whose order book is largely made of cut flowers. The order book from the Netherlands rose 10.38% to Sh4.19bn in the month, while those to Pakistan — predominantly black tea — were flat at Sh7.31bn, a 0.02% drop year-on-year. [See Tables 10 to 14c in the KNBS report: Leading Economic Indicator January 2018]

Uganda: Exports to ease as Uganda starts using single customs territory (Daily Monitor)

Clearing exports to various destinations will now take less time as Uganda begins using the Single Customs Territory. The territory was officially rolled out on Monday for the export of commodities via Mombasa Port. The Single Customs Territory was officially launched on Monday, starting with coffee, Uganda’s leading export commodity. Mr Abel Kagumire, the Uganda Revenue Authority manager for customs, said they would start with coffee in the first quarter before moving onto other commodities such tea, fish and skins and hides.

Nigeria signs treaty on acceptable axle load in West Africa (Vanguard)

Minister of Power, Works and Housing, Mr Babatunde Fashola, made this known at a one-day Public Enlightenment on the Developments in the Road Sector, where he presented the Federal Highways (Control of Dimensions, Weights and Axle Load) Regulations 2018. He said: “Sensitising road transporters and imbibing the existing treaty obligations is the only way to optimise the opportunities that lie in road networks like Trans-Saharan highway that connects Nigeria to Chad, Niger, Tunisia, Mali and Algeria; the Lagos- Abidjan Highway through Benin, Togo and Ghana, or the Enugu-Cameroon Highway through Abakaliki – Ogoja, Ikom and Mfum.”

At the global level:

Macro-economic developments and prospects in Low-Income Developing Countries – 2018 (IMF)

The paper examines macroeconomic trends across LIDCs in recent years, contrasting key features of the current situation with the period prior to the 2014 decline in commodity prices. Particular attention is given to the evolution of fiscal positions and public debt levels, including detailed analysis of the drivers of debt accumulation and the current severity of debt vulnerabilities. [IMF Executive Board assessment, Tao Zhang blog]

Assessing the effectiveness of environmental provisions in regional trade agreements: an empirical analysis (pdf, OECD)

The number of RTAs that include environmental provisions has been increasing since the mid-1990s and reached 121 RTAs in force in 2016 with an explicit reference to environmental objectives in the preamble of the agreement. These provisions vary in content and degree of enforcement and have been mainly proposed by developed countries to strengthen stringency of domestic environmental policies of potential RTA Partners. However, despite their increasing importance, the evidence on the impact of including environmental provisions in RTAs on environmental outcomes has been scarce.

UNCTAD has posted the publication Services and Structural Transformation for Development: it reflects the deliberations and results of the fifth session of the multi-year expert meeting on trade, services and development on services, structural transformation and inclusive development. It includes a commentary, Perspective from South Africa, by Sudhir Sooklal (Minister, Economic, Embassy of South Africa to Belgium, Luxembourg, EU)

ITC has launched its e-Trade for Impact strategy: it regroups the focus on digital into three areas and promotes collaboration inside and beyond the organization.

Today’s Quick Links: Uganda spends Shs1.6 trillion to import drugs EU still pushing for EPA deal with EAC South-Sudan finally joins East African Employers’ Organisation South African firms storm Nigeria to shop for business opportunities African energy ministers call for accelerated energy access Mauritius to sign MoU with Zambia Bureau of Standards India, Africa trade can grow 3-fold to $150bn in 5 yrs: Chaudhary Ahmed H Adam: Are we witnessing a ‘new scramble for Africa’? Nigeria: FG signs MoU to enhance return of assets stashed in Switzerland National Economic Council (Special Session): full text of speech by Bill Gates