Building capacity to help Africa trade better

tralac’s Daily News Selection


tralac’s Daily News Selection

tralac’s Daily News Selection
Photo credit: Planet KB

Australia’s trade and investment relationships with Africa: update, submissions. The reporting date for the Senate inquiry has been extended to 21 June 2018. Download the submissions and transcript from the 2 and 11 May hearings (Perth and Canberra, respectively) here.

DFAT submission (pdf, Number 30, 11 May): Australia’s trade and investment relationships with the countries of Africa. Australian companies’ commercial interests in Africa are mainly in the extractives sector but are increasingly in services, education and agriculture. Australia’s trade (goods and services) with Africa has fluctuated over the past decade from $6.1bn in 2004 to a high of $10.3bn in 2014. Total trade (goods and services) with Africa was valued at $7.6bn in 2016, comprising two-way merchandise trade of $5.3bn and two-way services trade valued at $2.3bn. Aluminium ore, wheat, vegetables, coal, machinery and parts dominate Australian exports to Africa. Petroleum and, to a lesser extent, motor vehicles are Australia’s largest imports from Africa. Services trade was dominated for both exports and imports by personal travel services, with education-related travel making up almost 50% of the value of services exports. By comparison, total goods and services trade with ASEAN in 2016 was $38bn, representing 13.8% of Australia’s total trade that year. In the same period trade with Africa was approximately 1% of all trade flows.

Investing in global prospects: new Netherlands policy document on foreign trade and development cooperation (GoN)

Key changes in BHOS policy: The focus of development cooperation will shift to unstable regions (the Sahel, the Horn of Africa, the Middle East and North Africa) in order to tackle root causes of poverty, migration, terrorism and climate change; Improving the position of women and girls is a key objective in all areas of BHOS policy; Emphasis in economic diplomacy on SMEs and startups, on new growth markets including those in the field of innovation and the SDGs, on international cooperation for innovation and on knowledge diplomacy; The provision of top-level services to the Dutch business community, via the establishment of Trade & Innovate NL, NL International Business and Invest NL; Establishment of the International Strategy Board to flesh out a strategy to help expand international presence in promising markets and public-private cooperation through NL Works to help implement this strategy.

Olu Fasan: Nigeria, soft target for Trump’s bullying on trade (BusinessDay)

Second, the trajectory of US-Nigeria trade over the past decades shows a drastic reduction in Nigeria’s trade surplus with the US. In 2016, Nigeria exported goods worth $4.2bn to the US and imported goods worth $1.9bn; so, the US had a trade deficit of $2.5bn. But it’s different with trade in services. Nigeria exported services worth only $411m in 2016, but imported services worth $2.5bn, putting the US services trade surplus with Nigeria at $2.1bn. Thus, in 2016, the US goods and services trade deficit with Nigeria was a paltry $216m. When the US talks about its trade deficits, it focuses only on goods trade not on services trade where it has huge surpluses with many countries. Yet, even with trade in goods, Nigeria’s $4.2bn exports to the US in 2016 marked a drastic drop from the £38bn worth of goods it exported in 2008 or even the $33bn in 2011. The main reason for the huge fall in Nigeria’s goods exports to the US is, of course, because of the US’s near-total refusal to buy Nigeria’s oil. The second reason is Nigeria’s failure to benefit from the opportunities provided by the African Growth and Opportunity Act to export goods into the US. Under AGOA, Nigeria could export 6,500 products duty-free into the US market. Yet, Nigeria is Africa’s least beneficiary of AGOA. For instance, Nigeria exported only $9m worth of agricultural products into the US in 2017.

Anzetse Were: Much ado about China debt (Business Daily)

The focus on Kenya’s and indeed Africa’s rising debt needs to be approached in an intellectually honest manner that demonstrates, firstly, that the appetite for debt is coming from Kenya. China is not saddling us with debt, the government wants the debt. Kenya has prioritised infrastructure and gone through expansionary fiscal policy to finance this priority. Thus, it is hard to conceive that given the financing demands of infrastructure development, the government would turn down credit lines that can finance this priority. Secondly, if you look at the portfolio of the Chinese debt, it is focused on infrastructure indicating the government feels it has found a partner willing to invest in its focus on building railways, roads, electricity transmission lines, dams etc. It is important Kenya has a sober conversation about debt, because no matter where it comes from, if mismanaged we will be in hot water regardless. [Bloomberg: Trump takes aim at Chinese loans to poor nations; Chinese projects firing up Namibia’s logistics hub ambition]

Malawi: 2018/19 budget statement, draft financial statement (GoM)

It is the expectation of the Government that the stable exchange rate coupled with the low levels of inflation will help the private sector to invest more to boost its productivity for exports, import substitution and job creation. It is in view of this, Mr. Speaker, that the Government through the Ministry of Industry, Trade and Tourism is also developing the Trade Remedies Bill which will address technical barriers to trade and ensure anti-dumping in order to bring sanity in importation of goods and trade practices. In addition, the Government, through the same Ministry, is in the process of establishing Special Economic Zones in the country, as a tool for attracting both Foreign Direct Investment and Domestic Investment into the industrial sector. [Delivered on Friday, by Minister of Finance Goodall Gondwe] [Downloads:  pdf 2018-2019 Budget Statement (786 KB) pdf 2018-19 Draft Financial Statement (1.96 MB) pdf 2017-18 Mid-Year Budget Review (1.54 MB) ]

South Africa: Agricultural trade surplus increased in March 2018 (Agbiz)

Africa and Europe were the biggest destination markets, absorbing 43 and 32% of South Africa’s agricultural exports at the end of March 2018. Exports to Europe were up by 5.6% while to Africa were down by 5.8% as compared to the same time in 2017. In the same period, exports to Asia and Americas increased by 1 and 5.5% respectively. [Kenya: Agriculture ministry projects 44% rise in maize output; Tanzania’s huge cattle herds: boon or bane]

South Africa woos Chinese investors for special economic zones (SAnews.gov.za)

South Africa’s Ministry Trade and Industry will this week hold investment shows in China to woo investors for the country’s special economic zones. The delegation, led by the Deputy Minister of Trade and Industry Bulelani Magwanishe, will hold road shows in Shanghai on 26-31 May. They will hold workshops where the South Africans will present opportunities in the SEZs and incentives. The delegation will also conduct a benchmarking exercise for the country’s SEZ by visiting thriving SEZs in Shanghai for knowledge sharing. Magwanishe said the South African government want to use the SEZs to industrialize the country. [Bushbuckridge: Row over land set aside for Chinese]

Nigeria: Lekki Free Trade Zone is Africa’s next investment destination (ThisDay)

Lagos State Governor, Mr. Akinwunmi Ambode, yesterday noted that the sustained flow of investments to the Lekki Free Trade Zone showed that the state’s free economic zone “is the next investment in Africa.” Africa’s richest man, Alhaji Aliko Dangote, buttressed Ambode’s claim, noting that the combined projects under different stages of completion at the Lekki Free Trade Zone was the largest anywhere in the world. They made the remarks yesterday during the inspection of the ongoing industrial jetty project the Dangote Group is currently constructing at the zone to facilitate the movement of the heavy duty machinery.

The local business community in Rwanda: prospects for an expanded role in economic transformation (ODI)

This paper, drawn from 80 in-depth qualitative interviews with members of the local business community in Kigali and up-country towns in five districts, focuses on a notable gap in current knowledge – what the community currently consists of, why it has prospered in particular sectors and not others, and how it might be harnessed in the future to supporting manufacturing.

Kenya: Plan to help businesswomen plug into international trade (Business Daily)

The International Trade Centre has launched the Kenya chapter of SheTrades in the Commonwealth, in a drive to connect more Kenyan women entrepreneurs to global markets. SheTrades aims to drive increased trade, productivity and competitiveness for women entrepreneurs and women-owned firms to ensure they play an active role in international trade. Through training and mentoring, it seeks to strengthen the capacities of 3,000 women-owned businesses with a view to generate sales worth Sh3.8 billion ($38 million) by 2020.

Sudan, Chad agree to establish second border free-trade area (Sudan Tribune)

The government of West Darfur State said Sudan and Chad have agreed to establish a free-trade zone inside the Chadian territory in parallel to the free zone in El-Geniena. The Minister of Urban Planning in West Darfur, Faisal Hassan Haroun said an agreement was reached during the recent border conference to establish a free-trade zone in Chad.

AU Peace and Security Council communique on the African migrants crisis: the imperative for expediting free movement policy in Africa

Also commends ECOWAS and the EAC for the significant progress recorded to date in the promotion of free movement of persons, goods and services and urges other Regional Economic Communities and Regional Mechanisms to emulate the good examples; Further commends Member States which have signed the Protocol to the Treaty Establishing the African Economic Community Relating to Free Movement of Persons, Right of Residence and Right of Establishment in Africa and the Agreement establishing the AfCFTA and emphases that the two instruments go hand-in-hand and are crucial in addressing the challenge of irregular migration in Africa. Council acknowledges that the implementation of these continental instruments will ensure dignified and legitimate movement of Africans without hindrance. Furthermore, Council emphasizes that the free movement of persons will promote regular migration and prevent migrant traffickers from exploiting migrants. Council further notes that necessary steps are being taken to address security concerns, in particular through sharing of bio-data as regular migrants travel legitimately using official border crossings;

@AU_KwesiQuartey: An entire generation in South Sudan is at risk of being illiterate and we need to look at the spill-over effects in terms of hampering growth and development and the burden it places at the national, regional and continental levels.

Today’s Quick Links:

Digitalisation and sustainable tourism: Mauritius workshop (23-24 May)

Mozambique, Uganda identify multiple sectors for cooperation

Stears: Welcome to Computer Village, Lagos

The Guardian: Should Africa let Silicon Valley in?

Forthcoming book: Taxing Africa – coercion, reform and development (by Mick Moore, Wilson Prichard, Odd-Helge Fjeldstad)

Uganda Debt Network’s Priscilla Naisanga: Rising public debts choke EA countries

Global Compact on Migration: overview (by Dilip Ratha) and background papers (pdf) prepared for an experts meeting are posted. Dilip Ratha Blog

Reuters: US commodity exports to China to rise amid trade talks, but volumes are capped


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