Building capacity to help Africa trade better

tralac’s Daily News Selection


tralac’s Daily News Selection

tralac’s Daily News Selection
Photo credit: Africa Capital Digest

A profile, from 2016, of Botswana’s youthful, new trade minister: Ms Bogolo Kenewendo

African trade policy event previews:

(i) Inaugural Indonesia-Africa Forum (10-11 April, Bali)

(ii) STC on Finance, Monetary Affairs, Economic Planning and Integration (12-17 April, Addis Ababa): Mobilisation of domestic resources: fighting against corruption and illicit financial flows

(iii) 4th US-Morocco Trade Forum (19 April, Washington)

Pioneering One Africa: The companies blazing a trail across the continent (Boston Consulting Group)

African business is integrating Africa - economically and otherwise. It has been a long time coming, and plenty of hurdles remain, but the economic integration of the continent, which many see as key to its continued development, is manifest. Driving it are indigenous entrepreneurs and fast-growing African companies, as well as multinational corporations. Since 2010, BCG has been tracking business and economic development in Africa, with a focus on the roles of leading African companies and MNCs. We have identified 150 companies that are blazing a trail toward a more integrated Africa (see Exhibit 5.)

They consist of 75 Africa-based companies and an equal number of MNCs that have established impressive track records in Africa and are contributing to further integration. The African pioneers come from 18 countries on the continent: 32 are based in South Africa and 10 in Morocco; Kenya and Nigeria are home to 6 each; 4 are from Egypt; and 2 each come from Côte d’Ivoire, Mauritius, Tanzania and Tunisia. The MNCs are a global group, with France, the UK, and the US most strongly represented. At the same time, a dozen MNCs from China, India, Indonesia, Qatar, and the UAE are active across Africa.

Air freight market analysis: Africa tops the international growth chart once again (IATA)

African airlines fly less than 2% of global FTKs but topped the international FTK growth chart in February for the 17th time in 18 months. As we have noted before, the strong growth seen in African airlines’ freight volumes has partly reflected higher volumes between Africa and Asia, on the back of ongoing foreign investment flows into Africa from the latter. While the surge in traffic looks to have stabilized, FTKs on the market segment were still nearly 24% higher in January 2018 than they were a year ago (see chart 5). [Related: Air passenger market analysis, pdf]

The Commonwealth Trade Review 2018: Strengthening the Commonwealth advantage – trade, technology, governance

Changing dynamics of Commonwealth trade: There have been several modest but perceptible shifts in the drivers of Commonwealth trade. Commonwealth developed economies still account for more than half of total exports, although their share is declining over time, while Commonwealth Asian members now account for 41.1% of the combined total Commonwealth exports of goods and services in 2016. Commonwealth developed countries were the largest exporters of services in 2016, valued at $498 billion, or 54.5% of total Commonwealth services exports. However, the relative share of Commonwealth Asian countries’ services exports has risen significantly in recent years: from 25% of total Commonwealth services trade in 2005 to 39.6% ($361.6bn) in 2016. The Commonwealth Caribbean members are the most dependent on services exports. In 2016, all but two countries – Belize and Guyana – depended on the services sector for over 70% of their exports.

Prospects for intra-Commonwealth trade: Using new data on bilateral services trade, and taking into consideration the prospects for world trade growth, new estimates are presented for intra-Commonwealth trade. Intra-Commonwealth trade is projected to reach $700bn by 2020. The adoption of proactive and pragmatic policy measures by member countries can further boost intra-Commonwealth trade.

Closing the gaps – implications for growth and development. Results of several multi-country studies show that increased broadband penetration and increased internet speed contribute to increased growth and employment. Consequently, narrowing these technology gaps across the Commonwealth is a priority. Applied to Commonwealth countries, if all member countries achieved a minimum broadband penetration of 50%, equivalent to the global average, Commonwealth GDP could increase by between $74bn and $263bn, with similar large increases in both direct and indirect jobs. Although no members have achieved it, reaching 100% broadband penetration could increase Commonwealth GDP by between $377bn and $1.1 trillion. However, the most pragmatic target would be for those Commonwealth member countries below the world average to commit to a doubling of their present broadband coverage, while countries above the world average would work towards full universal broadband provision. This would contribute around $600 billion to the GDP of the Commonwealth. [Note: The report (pdf) was prepared by Brendan Vickers (team leader), Jodie Keane and Kirthika Selvakumar, under the supervision of Teddy Y. Soobramanien, acting head of International Trade Policy Section]

AfCFTA pointers:

(i) tralac’s Trudi Hartzenberg, Gerhard Erasmus: Governments do not trade but they shape and control the rules of the game. A new trade agreement about how governments, and officials, exercise jurisdiction and improve trade governance is a necessary first step to a thriving rules-based trade environment for Africa. [Note: This article was originally published as a tralac Discussion note].

(ii) COMESA’s Francis Mangeni: The moment for Africa is now but nothing is pre-determined and the efficacy of the ACFTA will depend on how well the myriad constraints facing Africa are addressed. Nigeria and South Africa need to sign the agreement. A systematic ratification programme should be put in place and this should not be left to chance.

(iii) Carlos Lopes: Intra-African trade already accounts for 20% of the continent’s total trade (and not 12%, as most still believe)

(iv) Ola Bello: Thousands of small and medium-sized Nigerian enterprises should enjoy the first mover advantage in a CFTA scenario. They already have a foot on the ground, however tenuous, in key markets. Nigerian banks increasingly exert their heft across swathes of the continent too, positioned to help facilitate access for businesses seeking to expand or venture outwards.

Nigeria: VP Osinbajo launches Nigerian Economic Diplomacy Initiative (Sun News)

Osinbajo described the initiative as a game-changing synergy that ought to have happened years ago. “Economic diplomacy, as most of us know, is the use of diplomatic methods to address national economic interest and, of course, it has a key role to play in our case in achieving the objectives in our Economic Recovery and Growth Plan. So, it is imperative that given the size of the Nigerian economy, we are well positioned to actively participate in international economic affairs in a manner that is collaborative and mutually-beneficial to us and, of course, to our international partners.” [Nigeria ERGP focus labs identifies 59 projects for execution]

Egypt to set up logistics centre in West Africa to boost exports (Egypt Today)

Egypt is studying the establishment of a logistics centre in Ghana or Côte d’Ivoire to boost Egyptian exports to West Africa, Trade Minister Tarek Kabil said Wednesday. This came during Kabil’s meeting with the new Lebanese ambassador to Egypt, where he said that the “Egypt-Lebanon to Africa” initiative is a milestone for economic integration between Egypt and Lebanon. The initiative, launched in 2016, allows Egypt to benefit from the distinguished Lebanese presence in West African countries to boost Egyptian exports to these countries. Under the initiative, an Egyptian-Lebanese company for marketing Egyptian and Lebanese exports in the African continent has been established.

Zimbabwe: Govt to re-tender Harare-Beitbridge highway construction (The Herald)

Briefing the Anhui Foreign Economic Construction Corporation yesterday, the President said Government had become impatient with lack of construction activity along the country’s busiest highway that links Zimbabwe, South Africa and several other countries in the north. “In the area of infrastructure development, we need bidders for the dualisation and widening of the Beitbridge-Harare Chirundu Highway,” he said. “For two years we have had problems with Geiger, so Cabinet has taken a decision to institute a legal process to terminate the deal as a result of non-performance.” Geiger won the tender for the highway and commissioned the work in May 2016, but to date the road has remained untouched. [New diamond policy on cards]

The Gambia: 2017 Article IV Consultation report (IMF)

Following the historical transition to a democratically elected government in January 2017, the new administration has had to contend with a dire economic situation with unsustainable debt, failing SOEs, and crowding out of the private sector. Moreover, the economy was hit by economic shocks in 2016/17 (agriculture, tourism, trade). [Related: Selected Issues paper (pdf)]

Measuring the digital economy: IMF executive board discusses new policy paper (IMF)

The paper assesses the current state of play in measurement of the digital sector in macroeconomic and financial statistics, recommending steps to overcome the measurement challenges posed by digitalization. It focuses on a digital sector comprising the producers at the core of digitalization: online platforms, platform-enabled services, and suppliers of Information and Communications Technology goods and services.

Today’s Quick Links:

@rodrikdani: Boy, is this an eye opener! Anyone who thinks ISDS provides an acceptable bypass for domestic jurisprudence should read this

Zimbabwe’s 2017 Human Development Report is posted: Towards building a climate resilient nation

ZAS director Dr Eve Gadzikwa: Zimbabwe must strive for international trade standards

SADC-Parliamentary Forum gears up for governance index

Competition in the telecommunications sector in Kenya: IEA-Kenya memorandum

Enhance trans-boundary basin management: here are some useful tools

OECD Working Party of the Trade Committee paper: Market opening, growth and employment (pdf)

2018 ECOSOC Partnership Forum: Business leaders challenged to invest in a more sustainable future for all


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