Building capacity to help Africa trade better

tralac’s Daily News Selection


tralac’s Daily News Selection

tralac’s Daily News Selection
Photo credit: Rob Beechey | World Bank

The two-day Ministerial Session of the EAC Council starts today in Arusha. The meeting will, inter alia, consider the Status of Implementation of the EAC Brand Architecture Strategy, and the Report of the 7th Meeting of the Sectoral Council on Interstate Security.

The fourth Transform Africa Summit starts today in Kigali on the theme, Accelerating Africa’s Single Digital Market: a New Times preview

President Kagame opened the Transform Africa Economic Forum which deliberated on the vision for a smart Continental Free Trade Area.

Diarise: The 2018 Africa Transport Policy Program Annual Meeting is scheduled to take place in Abuja (2-6 July). SSATP’s DP3 programme is structured around three thematic pillars: Pillar A: Integration, connectivity and cohesion; Pillar B: Urban transport and mobility; and Pillar C: Road safety. Download the draft conference agenda (pdf)

SADC consultancies: (i) Assessment of current practices on poverty and inequalities measurement and profiles in SADC; closing date is 11 May; (ii) Development of a SADC tourism programme; closing date is 25 May

Whose responsibility is it to scale up arbitration in Africa? (New Times)

Last week, I attended the 4th Edition of the SOAS Arbitration in Africa Conference held in Kigali, organised by the Kigali International Arbitration Centre. The purpose was to analyse the role of Arbitration practitioners in Africa and how they can play a pivotal role in settling commercial and business disputes. Besides, it was indeed a momentous occasion to identify challenges inhibiting active visibility of African arbitrators. But the fundamental question is who has the responsibility (perhaps primary) to change the status quo – which is outwardly short of a desired leverage. The answer is: arbitrators themselves. Today, there’re six major African arbitration institutions: the Cairo Regional Centre for International Commercial Arbitration, the Kigali International Arbitration Centre, the Nairobi Centre for International Arbitration, the Arbitration Foundation of Southern Africa, the Common Court of Justice and Arbitration, and the East African Court of Justice. Broadly speaking, nobody would underestimate significant leverage these arbitration centres can make if the arbitrators themselves were able to convince African governments that they’re in a better position to handle commercial and business disputes than anyone beyond the continent. [The author: Fred K. Nkusi] [Download: conference discussion paper, pdf]

Commentaries on the AfCFTA

Africa’s free trade agreement hinges on commitment and implementation (Africa Renewal)

Trudi Hartzenberg, the executive director of Trade Law Centre, a South Africa-based think tank, tells Africa Renewal that while the free-trade zone could significantly enhance competitiveness and foster intra-African trade, it also requires “strong leadership and technical capacity to assist member states in the negotiations that lie ahead. We are also witnessing strong streams of protectionism in the global economy.” Africa does not need to embrace protectionism (taxing imports as a strategy to shield domestic industries from foreign competition), advises Ms Hartzenberg. “It may be tempting to retreat behind protective barriers, but there is ample evidence that this is not conducive to economic growth, especially for small economies. And by global standards Africa’s economies are small, and the continent is fragmented.”

The AU’s commissioner for trade and industry, Albert Muchanga, tells Africa Renewal that Africa’s free trade area agreement will not be a traditional trade agreement that focuses on reducing tariffs. Instead, the Kigali agreement will aim to liberalise the services sector. “This is crucial as services constitute roughly 60% of Africa’s GDP and in 2014, for example, services accounted for 30% of world trade…. domestic services markets are to be opened for service suppliers from other African countries,” says Mr Muchanga. Businesses frustrated by trade barriers could take advantage of a “non-tariff barrier mechanism” in the agreement to report and demand solutions to trading problems, explains Mr Muchanga.

Olu Fasan: The long, hard road to one African market (BusinessDay)

But, key question remains: Is AfCFTA a credible forerunner of a Single Market for Africa? Well, Yes and No! Yes, because many aspects of the instruments point in the direction of a single market. No, because some aspects don’t. First, on the former...Yet, despite the above, there are some aspects of the AfCFTA instruments that appear to undermine the goal of a future single market. For space constraint, I will briefly discuss three potential obstacles inherent in the agreement. The first is the contradictions between the stated aims of AfCFTA and some of the principles set out in the AfCFTA Agreement. It is stated in Art 3 that the objectives of AfCFTA are, inter alia, to “create a single market” and to “lay the foundations for the establishment of … a Continental Customs Union”. Yet, one of the principles under Article 5 is “variable geometry”, that is, differentiated integration. Another critical issue is the legal relationship between the RECs and the AfCFTA. The second disincentive to the emergence of one African market is the unwillingness of African countries to embrace economic and trade liberalisation. The third limitation is that the AfCFTA agreement is based almost entirely on the WTO system.

Carl Manlan: An Amazonian trade strategy for Africa (Project Syndicate)

One of the biggest challenges that Africa’s economies have always faced is overcoming exceptionally low volumes of intra-continental trade in value-added products. The AfCFTA could address this imperative. By opening these economies to the free flow of people, products, and services, the AfCFTA could help drive Africa’s future growth. Getting to that point will require an Amazon-like “platform” approach to business, and the recognition that after decades of sub-regional protectionism, the continent’s future will be brighter if it is one of shared openness.

AGOA capacity building and skills development workshop (UNECA)

Over 40 delegates from 33 AGOA countries were joined by representatives from RECs, the private sector, US government officials, the AUC, the AfDB and trade experts in Accra last week for the AGOA Capacity Building and Skills Development Workshop. The workshop was organized by the ECA African Trade Policy Center, the African Union Commission, and the Government of Ghana. On behalf of ECA David Luke, Coordinator of the African Trade Policy Center noted the considerable opportunities offered by AGOA and underscored the workshop as a “call to action” for African countries to step up and strategically take advantage of AGOA for promoting trade, investment, and contributing to industrial development in Africa. He urged the US private sector to step up its investment in the AGOA beneficiary countries as the evidence shows that investment is closely tied to the effective utilization of the preferential trade regime.

South Africa: Cars make up 14% of SA’s total exports (IOL)

South Africa’s automotive industry achieved total export sales of vehicles and components worth R164.9 billion in 2017, which represented almost 14% of total South African exports. This enabled the domestic automotive industry to register its third consecutive annual trade surplus at R10.3bn despite a 3.6% decline in the total export value from R171.1bn in 2016. Germany, at R46.7bn, followed by the US, at R18.8bn, were the South African automotive industry’s top export markets. Automotive Industry Export Council executive manager Norman Lamprecht said Africa remained a priority focus for the South African automotive industry and highlighted the enormous potential for growing vehicle demand in Africa. Automotive exports to 40 African countries amounted to R29.7bn, or 18% percent of the country’s total automotive exports of R164.9bn in 2017.

South Africa’s patent system is failing to encourage innovation (Business Day)

We considered and analysed a data set consisting of 4,064 patents, about 10% of those granted domestically to South African individuals and bodies from January 2005 to July 2015. Our analysis is in a paper, pdf Innovation and intellectual property in South Africa: the case for reform (587 KB) , recently published by the accessibsa project and enabled by the Shuttleworth Foundation. Surprisingly, the single largest category of local patentees is made up of individuals, accounting for 44.8%. This is closely followed by companies, with 39.5%. The remaining patentees are universities (6.1%) and research organisations such as the CSIR and Mintek (1.6%). Our paper comes to the conclusion that the data indicate that the majority of patents being granted to South Africans may not be valuable in other countries. If these patents are not valuable outside SA, it is more than likely that they are also not valuable within the country. [The authors: Jonathan Berger, Andrew Rens]

Egypt: Inclusive growth and job creation conference

Extract from remarks by IMF First Deputy Managing Director David Lipton: In Egypt, there are several immediate reasons to press ahead with reform. Public finances certainly are on a firmer footing, but public debt remains very high. A strong effort is needed both to consolidate and to make room for spending in key areas such as health and education. Delays in following through on the reform of energy subsidies could again leave the budget at risk from higher global oil prices. But more than anything else, Egypt cannot delay on jobs. By 2028, Egypt’s working age population will increase by 20 percent. That works out to a labor force of 80 million Egyptians just 10 years from now. Creating jobs for all those people has to be Egypt’s biggest economic challenge. For the purpose of this discussion, let’s look briefly at three countries [Indonesia, Mexico, India] that have surmounted several of the hurdles that Egypt now confronts. [Egypt plans to cut deficit by 2020: Minister of finance]

The UN Inter-Agency Cluster on Trade and Productive Capacity: delivering aid for trade (pdf, UNCTAD)

Trade and trade-related policies, activities, institutional and legal frameworks have direct implications on all the domestic aspects of development. The Cluster aims at highlighting that the insertion of developing countries in the international economy and trading system has wide and profound impact on all aspects of their social, economic, cultural life and development processes. The Cluster emphasizes the need for greater focus on the ability of developing countries to derive development gains from the opportunities offered by the international trading system. It intends to raise the awareness at national level with regard to the development potential of trade policies and activities. One important objective to be achieved through greater interagency cooperation within the Cluster is the improvement of institutional and human capacity constraining the ability of many developing countries to undertake in-country trade policy formulation and prioritization, and building of trade infrastructure. [The Cluster www]

India’s Commerce ministry to prepare action plan on trade with Africa (Economic Times)

The commerce ministry has decided to formulate a comprehensive action plan to boost India’s trade with Africa which is relatively small at present, Union Minister Suresh Prabhu said. A series of engagements have been lined up in different parts of Africa to discuss ways to promote trade and investments between the two regions, he said.

Today’s Quick Links:

Museveni looks for new BOU Governor

Namanga one-stop border post aims at easing Kenya-Tanzania frosty trade relations

SSATP/WCO/IRU/ALCO: key outcomes of the April 2018 transit workshop for West and Central Africa

Anzetse Were: How local firms will find Big 4 a challenge

Kingori Choto: Kenya should complete transition to seamless mobile money platform

Kenya: Coffee prices drop 21% on poor quality

The Nigeria and China currency swap: how much room?

Ethiopia: China Trade Week update

Ghana Mine Workers Union calls for forum on contract mining policy


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