Request for research proposals: Regional growth and development for southern Africa’s prosperity. Deadline for submissions: 25 May 2018

Featured African trade and development newsletters, posted today:

Issue 6 of the African Cotton, Textiles & Apparel Newsletter

Bridges Africa: Harnessing renewable energy for sustainable development

Ahead of this weekend’s Ibrahim Governance Weekend, the Mo Ibrahim Foundation has released a major new report, 2018 Public Service in Africa (pdf)

African Financial Governance Outlook: effective public financial management for sustainable development (ACBF)

This African Financial Governance Outlook, Effective Public Financial Management for Sustainable Development (pdf), is a new flagship report to enrich understanding of public financial management and its contribution to good governance, with the ultimate aim of reducing poverty and delivering sustainable and inclusive economic growth. It complements quantitative indicators with qualitative analysis to show trends over time and to explain the drivers of change in financial governance across AFGO pilot countries. Covered in this outlook are 10 African countries that have participated in the African Peer Review Mechanism - Burkina Faso, Ethiopia, Ghana, Kenya, Mali, Mozambique, Rwanda, Senegal, Tanzania, and Uganda. The countries were drawn from the different regions and represent different political and administrative traditions (Anglophone, Francophone, and Lusophone) to ensure a wide range of countries.

Ethiopia: Country brief (pdf, Afreximbank)

Ethiopia is the 91st largest export economy in the world and the 23rd largest export economy in Africa. In 2017, Ethiopia exported $2.86bn and imported $14.7bn, resulting in a trade deficit of $11.84bn. This large trade deficit is on account of bulky infrastructure expansion projects, most notably the Ethiopia-Djibouti railway project that was launched in 2016, as part of the government’s Growth and Transformation Plan. Ethiopia’s total intra-African trade amounted to approximately $1.27bn in 2017, accounting for around 7.2% of its total trade, significantly below the regional average of 15%. Although Ethiopia’s share of intra-regional trade is relatively low, the country has a thriving trade relationship with its neighbours including Somalia, Djibouti, Sudan, and Kenya which account for the bulk of its destination markets in Africa. Ethiopia’s largest African import trade partners are Morocco, South Africa, Egypt, Nigeria and Kenya which together accounts for over 95% of Ethiopia’s total intra-African imports.

Mozambique: Survey of manufacturing firms 2017 (UNU-WIDER)

The main objective of the IIM 2017 is to trace the companies interviewed in the previous survey round, thereby documenting how the economic situation has developed for firms in the manufacturing sector in Mozambique. Out of 831 firms interviewed in 2012, 523 firms were found to be still in operation, 216 were found to have closed in the period between the two survey rounds, and 92 were either not traceable or refused to partake in the survey. The survey covers the main urban areas of seven provinces in Mozambique: Maputo City, Maputo Province, Gaza, Sofala, Manica, Tete, and Nampula. While this report provides a descriptive overview, more in-depth studies are being elaborated in 2018. An important improvement over previous rounds of the IIM survey is the completeness and level of detail in economic accounts data - even for companies with no formal accounts. This was possible due to an emphasis on understanding of such accounts during the hiring and training of enumerators.

Algeria completes bulk of trans-Saharan highway project (Xinhua)

Algeria announced that it has completed the construction of 1,600 kilometers of Trans-Saharan Highway with another 200 kilometers under working progress, the official APS news agency reported. APS quoted Mohamed Ayadi Secretary General of the Trans-Saharan Liaison Committee as saying Monday in Algiers at the 68th session of the committee that the north African country has completed the construction of 1,600 km of the road and the remaining 200 km in south Algeria will be finished in short time. The meeting focused on the review of the progress of the highway and the consultation on future steps to be taken with the countries concerned in order to carry out its realization and delivery as soon as possible.

IGAD Regional Forestry Policy and Strategy: inception workshop update

Identification of issues at national level will therefore form the basis for harmonisation of the member states’ strategies and policies for sound management of forest/range resources. These issues identified to be implemented at regional level will form the basis for the IGAD Regional Forestry Policy and Strategy. The document will be endorsed by the Ministers of Forestry/and Environment from across IGAD for potential implementation. It will also be integrated into national policies and strategies, and inform future working in the area of cross border/trans-boundary forest resources.

Climate policies, economic diversification and trade (pdf, UNCTAD)

This paper explores two broad areas of policy that may hold some promise. Both are trade-related. Section 2 asks whether the rise of global value chains as a mode of production offers any opportunities to foster economic diversity that leads to reduced response measure vulnerability. Section 3 then asks whether green industrial policy might similarly bring new light to the discussion. In exploring these two policy areas we are consciously bridging the policy spheres of trade policy and climate policy. While that nexus is not novel (see Tamiotti et al., 2009; Cosbey, 2007), there has been very little in the way of assessing the connections between trade-related policies and the impacts of the implementation of response measures. The hope is that this analysis provides concrete examples of the ways in which trade policy might help to address this aspect of the climate change challenge, in the process playing its part in the implementation of the Paris Agreement.

Structural change for inclusive and sustainable industrial development (UNIDO)

LI Yong, UNIDO DG: UNIDO’s research shows that the types of industries that emerge in the middle-income stage are likely to be more emissions- and material use-intensive and thus often increase the pressure on the environment, unless proper mitigation measures are introduced. The successful shift of the industrial structure from labour-intensive to capital-intensive industries increases productivity and generates higher wage jobs, which could help sustain industrial growth and lead to the creation of shared prosperity. Entering a high-income stage of development often slows down the growth of manufacturing relative to services, with the exception of technology intensive industries. While the growth of manufacturing moderates, manufacturing activities gradually shift away from resource-intensive industries to high valued-added activities, and to a manufacturing sector that is less emissions-intensive. Extract: Deindustrialization can mean developing countries grow more slowly (pdf):

Deindustrialization measured in terms of a fall in the share of manufacturing in total employment has become a key policy issue in both member countries of the OECD and developing economies. In the former, in particular, the decline in the rates of employment in manufacturing post-1970 has been quite rapid and a similar problem ensued in some middle-income countries, particularly in Latin America, from the 1990s. Deindustrialization can be positive if it means that resources are being transferred from industry to dynamic high productivity activities, like modern services. It is negative if the transfer is to low productivity, low wage activities, whether informal services or traditional agriculture. Current evidence suggests it is the negative aspect that has dominated in many countries, and where this is the case, measures are needed to reverse the trend towards deindustrialization.

Empirical analysis identifies an inverted U-shaped relationship with the share of manufacturing employment first rising and then falling with income per capita. However, this relationship has not been stable over time with a clear tendency for the estimated relationship between manufacturing employment share and income per capita to fall over time. Hence, the discussion of ‘premature deindustrialization’ in the sense that the share of employment in manufacturing in many of today’s middle- and lower-middle-income economies has declined at levels of real income per capita at which it was still rising in earlier periods in today’s developed economies.

Where economies are major primary exporters or have a large tradable service sector (for example, in finance or tourism), so that they do not need an export surplus in the trade in manufactured goods, their deindustrialization pattern as incomes rise is more pronounced, but also potentially less serious. [Note: See Appendix C for a complete list of countries and economies by region, industrialization level and income level, as well as detailed information on the classifications of sectors used throughout the report.]

Today’s Quick Links: 14th Comprehensive Africa Agriculture Development Partnership Platform (25-27 April, Libreville, Gabon) Ministerial Conference on Maritime Security in Western Indian Ocean (26-29 April, Mauritius) Nigeria, ECOWAS conference on herder-farmer conflicts (26 April, Abuja, Nigeria) Seychelles hosts first African Shipowners Association Summit: speech by President Danny Faure Pakistan keen to enhance trade ties with C-4 countries Devex: 5 takeaways from the World Bank Spring Meetings Scott Morris: Trump’s Treasury delivers at the World Bank - more capital for climate, solid policy framework Head of EBRD hopes to expand into sub-Saharan Africa Christine Lagarde: Shining a bright light into the dark corners of weak governance and corruption The trade facilitation agenda of the WTO and India’s commitments: where does India stand?