tralac’s Daily News Selection
From tralac’s recent high-level dialogue on SACU: the workshop report (pdf). Discussions centred on SACU revenue sharing, SACU’s external relations, and the future of SACU. Updates were provided by the SACU Secretariat and member states.
Kenya and Ghana formally submitted their instruments of AfCFTA ratification this morning to the African Union. @AUTradeIndustry: “I look forward to you encouraging other signatories to the AfCFTA Agreement to ensure that a minimum of 20 additional instruments of ratification are deposited before the end of 2018. That is the expectation of our Heads of State and Government” – @AUC_MoussaFaki
World of work
The future of work in African agriculture: trends and drivers of change (ILO)
This report synthesises available evidence (pdf) regarding how salient demographic and economic trends in sub-Saharan Africa are influencing the future of work in agriculture. It also identifies some of the major policy challenges that African governments are facing, which may influence future work in agriculture. Specifically, the report seeks to: document major social, economic, demographic and environmental changes in Africa’s economic landscape and examine their potential effects on agricultural growth and the livelihoods of agricultural workers; consider the relevance and feasibility of smallholder-led agricultural development in Africa in light of emerging changes in the economic landscape; examine the evolving role of agriculture in Africa’s on-going economic transformation; and discuss key entry points for policy and investments towards inclusive, competitive and productive agriculture that will improve livelihoods for agricultural workers. [The authors: Thomas Jayne, Felix Kwame Yeboah, Carla Henry] [African agri-tech startups boom with 110% growth since 2016]
Related “world of work” updates:
(i) SA’s President Ramaphosa has been invited by the ILO Governing Body to co-chair the Global Commission on Future of Work
(ii) Atlas of Work: facts and figures about jobs, employment and livelihoods. All diagrams in the report, published by the German Federation of Trade Unions and the Hans Böckler Foundation, can be individually downloaded.
US-Africa trade policy: pdf Recommendations from the President’s Advisory Council on Doing Business in Africa (741 KB)
On 29 November 2017, the President’s Advisory Council on Doing Business in Africa, under the leadership of Secretary of Commerce Wilbur Ross, adopted its pdf Issues Report (598 KB) , identifying the top obstacles US companies face when approaching, competing in, and operating in African markets. The Council was then tasked with developing a set of recommendations for the US government on how to diminish the obstacles highlighted in the Issues Report. The members of the PAC-DBIA have spent the last three months examining the tools at the US Government’s disposal, the gaps in capacities and programming, the existing resources that could be improved, and what new platforms might spur more opportunity for US exports and business expansion across the African continent. The Recommendations Report we are now submitting focuses on some of the obstacles we identified that are of particular pressing concern in Ethiopia, Kenya, Côte d’Ivoire, and Ghana – the four countries that Council members and U.S Government representatives will visit with Secretary Ross this summer on a fact-finding trip. [Background]
Exporting, importing and wages in Africa: evidence from matched employer-employee data (ILO)
We find that exporters pay on average higher wages to their workers than non-exporters. It is gains from economies of scale that explain the positive wage premium of exporters, rather than differences in skill utilization, the employment of certain types of workers, or technology transfers. In contrast, there is no evidence for a positive firm-level wage premium of importing, at least after controlling for firm age, and the wage premium of importing at the employee-level is estimated to be negative. The paper also finds indirect evidence for a weaker bargaining power of workers employed by importers. These results fit into the African context, where the comparative advantage of firms in export markets is mainly based on low costs than on quality, and where firms import predominantly out of necessity than out of choice. Finally, the paper provides evidence that a gender wage gap is absent within trading firms, while we find evidence for a gender wage gap in non-trading firms. [The authors: Marta Duda-Nyczak, Christian Viegelahn]
The beneficiaries are primarily small-scale traders, in particular women traders, that regularly cross the borders in the COMESA/tripartite region to sell and buy goods, as well as the associations who represent them and defend their interests. Under the programme, gender disaggregated statistical data and analysis on small-scale cross-border trade shall be systematically collected, compiled, harmonized and disseminated. The aim is to increase evidence-based knowledge on the topic and inform better trade policy-making processes at national and regional level as well as ensuring that adequate and gender sensitive basic border infrastructures for small-scale traders are built/upgraded at selected border areas.
Angola’s final accession to the SADC free trade zone is expected to take place next year, according to the Angolan trade minister. Jofre Van-dúnem said that the country formally acceded to the free trade zone in February 2003, but its roadmap was only approved on Monday by the Cabinet Council. According to the minister, the roadmap to the SADC secretariat should be presented in June, and Angola’s negotiating strategy should be drafted. The minister reported that there were 5000 tariff items to negotiate, depending on the consensus to be reached, but not losing the sight of the national interest. The effective accession process will be gradual and may last for more than a decade, with the escalation of categories of tax exemption or restraint in some cases in the interest of protecting domestic production
Malawi: 2018 Article IV Consultation
Annex III: External Sector Assessment. Malawi faces a moderate risk of external debt distress and remains vulnerable to shocks. The net foreign assets stood at -35% of GDP as of end-2015.1 External liabilities (at 53% of GDP) consisted mostly of debt liabilities (36% of GDP) and inward FDI stock (17% of GDP). The former consists mostly of concessional loans from multilateral and bilateral official sectors. Public sector loans accounted for most of the external debt, equivalent to 33% of GDP as of end-2017. FDI stock, concentrated in agriculture and manufacturing, is expected to help improve the current account balance through higher export growth and productivity. The accompanying update on debt sustainability analysis indicates that Malawi faces a moderate risk of debt distress based on an assessment of public external debt, whose trajectory remains vulnerable to exogenous shocks, notably shocks to export revenues and exchange rate, pointing to the continued need for rebuilding external buffers. External sustainability is expected to improve as the current account deficit narrows and the economy becomes more resilient. Selected Issues report (pdf):
Malawi is one of the least banked countries in the world. The banking system’s credit to the private sector (relative to GDP) is low compared to peers (Figures 1 and 2). Other measures of financial depth, such as the ratio of broad money to GDP exhibit a similar pattern. Only 16% of the population have accounts at a financial institution, compared to averages of 29% for the Sub-Saharan African region and 22% for Low Income Countries.
Mozambique trade, business and investment pointers: Netherlands Embassy newsletter
De Beers, which is piloting a scheme using blockchain to create a virtual ledger of diamond sales, said that 100 high-value stones were tracked through the cutting, polishing and manufacturing process to a final retailer. The company plans to roll out the platform later this year. The technology allows De Beers to show transactions to all participants while keeping their identities and the values hidden. It is meant to give buyers confidence that the stones they are buying aren’t fakes or so-called conflict diamonds -- gems used to finance war, terrorism or tyranny. It could also reassure bankers, who’ve been stung by fraud in a business cloaked in secrecy.
The Shippers Association of Lagos State has said many of the containers coming into the West African coast from Europe and Asia are old, leaking and rusted and cannot be accepted back into Europe. According to the group about 50% are unfit, adding that this is the reason why there are so many empty containers at the seaports.
UNCTAD has begun posting Secretariat Notes for the Trade and Development Board session (4-12 June, Geneva):
New ways in which the UN could address the crisis of multilateralism and trade and its development machinery, as well as what the contribution of UNCTAD would be (pdf). Section 1 of this note discusses the crisis in multilateralism and international trade. Section 2 delineates approaches to maximizing the contribution of trade to inclusive and sustainable development. Section 3 discusses stronger UNCTAD intergovernmental consensus-building and soft-law approaches, to complement hard rule-making. The note concludes with several suggestions and questions for discussion with a view to revitalizing multilateral approaches to trade and sustainable development.
Industrial policies and productive capacity policies for a digital economy (pdf). To harness the development benefits that these impacts of digitalization on the production process may provide, developing countries may need to rebalance their traditional innovation and industrial policies oriented to the supply side, shifting towards greater attention to demand considerations. For innovation policies, this might imply complementing the traditional focus on building capabilities that support and accelerate the diffusion and adoption of imported technology, as well as the technology’s adaptation to local circumstances, towards greater emphasis on generating newly designed goods and services with entirely new functionalities and features that are customized for local consumers. These more proactive approaches emphasize the importance of interaction between all actors who contribute to innovation.
Today’s Quick Links:
The ECOWAS Parliament convenes today, in Abuja, for its 2018 First Ordinary Session: an overview of its agenda
Nigeria’s Senate to investigate Gambia-Nigeria trade facilitation MoU
Kenyatta urges EALA to strengthen its Secretariat
Enhancing rural road access in Mozambique’s Zambezia and Nampula provinces: World Bank approves $150m loans
Nigeria now has 19 million active taxpayers, up from 14 million in 2017 – Osinbajo
India merges anti-dumping, import safeguard bodies
India giving rice and wheat production vast support, US tells WTO