The 53rd Annual Meetings of the African Development Bank opened yesterday in Busan. AfDB President Akinwumi Adesina: Korea is a model for Africa’s industrialization

Underway, in Arusha: EAC Sectoral Committee on Trade

Later this week, in Johannesburg: SADC set to hold Technical Committee on Certification and Accreditation Meeting (24-25 May)

South Africa: Toyota, BMW, Ford battle over SA support plan (Fin24/Bloomberg)

South Africa is proposing automakers including Toyota, Ford and BMW more than double production, in return for tax breaks so generous that the companies can ship the cars all the way to Europe. With talks under way, the two parties are at odds on several issues – especially the state’s targets for what it wants the industry to achieve by 2035, according to NAAMSA Director Nico Vermeulen. A production increase over that period to 1% of global output, or as many as 1.5 million vehicles per year, is overambitious, he said. South Africa produced about 600 000 units in 2017, the majority for export, and NAAMSA forecasts an increase to 850 000 in 2020. “The levels of support proposed are inadequate and insufficient to realize the ambitious targets,” Vermeulen said by phone from Pretoria. “We need internationally competitive levels of support.”

A second point of contention in the negotiations is a government demand for the automakers to double the size of their combined workforce to about 225 000. That’s unrealistic given the global industry’s shift toward robotics and automation, he said. The manufacturers are committed to increasing production and employment if the incentives are adequate, Vermeulen said, but are reluctant to agree to specific targets. [Related: The R50bn plan to turn Tshwane into South Africa’s car manufacturing capital]

Nigeria: Dangote gets license to establish new Peugeot plant in Nigeria (Mairametrics)

The new assembly plant by Dangote-Peugeot Automobile Nigeria Limited DPAN is a joint venture between Dangote Industries Limite, the Kaduna State Government, and Peugeot of France PSA Groupe. This comes after the Dangote group made an initial ₦11bn bid for majority stake in Peugeot Automobile Nigeria from the Asset Management Company of Nigeria AMCON, an exercise which has remained unresolved for more than a year. Dangote group has now gone to invite tenders from members of the public for the construction of a new Peugeot Assembly plant to be located at Dutse, along the Kaduna-Abuja expressway, Kaduna, about 25 kilometers away from the present location of PAN Limited assembly plant in Kakuri industrial zone of Kaduna. [Edward T Hightower: Now is the time to kickstart an auto manufacturing revolution in Africa]

LLDC Ministerial Meeting on Trade and Transport, 16-17 May

Astana Ministerial Declaration (pdf)

We stress the importance of LLDCs integrating into regional and global value chains and call on development partners, transit countries and international organizations to help the LLDCs to strengthen their capacity to participate in regional and global value chains and in identifying the best opportunities for developing new products and export markets, given their comparative advantages; We emphasize the full operationalization of the International Think Tank for Landlocked Developing Countries to enhance the analytical capabilities of LLDCs, provide home-grown research to cater for their specific needs and support the development efforts of the LLDCs as well as strengthen their collective voice at global level;

Profiled country submission: Botswana (pdf): In this regard, we are in the process of finalizing the review of our customs legislation to align it with the WTO TFA and the Revised Kyoto Convention. Botswana and South Africa are in the process of interfacing their customs IT systems with a view to facilitate trade. Botswana is also working on implementing a National Single Window.

Profiled background note: Promoting international trade in the LLDCs and enhancing the implementation of the WTO Trade Facilitation Agreement – Session 3 (pdf): The 32 LLDCs account for less than 1% of global merchandise trade. The LLDCs’ participation in international trade, measured as the share of their merchandise exports in global exports reached a peak of 1.22% (2013), before suffering a decline to 1.19% in 2014 and 0.86% in 2016. The decline in the LLDCs’ share of their merchandise exports is attributed mainly to declining commodity prices. In 2017 the estimated share of the LLDCs merchandise trade slightly increased to 0.9%. Figure 1 below shows this trend as compared to a group of 34 transit countries that includes China and India. In all, transit countries share of merchandise trade was around 23% in 2016 and when China is excluded, the share of these countries stood at 9.5% in 2016.

A closer look at the disaggregated data at country level shows a clearer insight into the group. Figure 2 shows that only four LLDCs accounted for about 49% of the group merchandise exports. The majority of the LLDCs accounted for no more than 2%. The LLDCs’ share of merchandise exports is not only meagre compared to the developing countries but their export remains highly concentrated in a few products, in particular, primary commodities with very little value added. The volume and product composition of a country’s commodity trade determines its vulnerability to commodity price volatility. The LLDCs are therefore greatly affected by the volatility in the global demand and prices.

Ministerial meeting of LLDCs on Trade and Transport conference documentation

East and Central Africa updates

Central and Northern Corridors, other EAC institutions: pdf Report of the EALA’s sub-committee on-spot assessment (4.09 MB)

The tour, undertaken by the EALA in February this year, was intended to assist the operations of EAC Institutions and Authorities/Agencies that provide services and to create an awareness among the EALA members on the gains and challenges of integration. The tour was also intended to inform the citizens of East Africa on the role of the EALA in the integration process; to receive requisite feedback and recommendations from the citizens on their perception of the integration efforts. [Companion EALA report: pdf Report of the Committee on General Purpose on the EAC Monetary Institute Bill, 2018 (2.79 MB) ; Secretary General concludes first phase of his visits to EAC Institutions]

Central Corridor:  pdf Annual Performance Monitoring Report 2017 (1.98 MB)

The Annual Performance Monitoring Report 2017 compiles and publishes statistics covering four trade and transport performance areas, namely: volume of transactions, cost and rates, productivity and efficiency and transit time and delays. Under the four categories, the CCTO monitors over 25 corridor performance indicators, all of which are reviewed periodically. The efficiency and productivity indicators give a basic guideline on how well the corridor performs operationally. On port efficiency, container dwell time has reduced significantly even if it has not yet reached the BRN target of 5 days. The truck turnaround at TICTS terminal has improved from 3.6 hours in 2016 to 2.3 hours in 2017. The number of foreign registered transit trucks carrying transit cargo has increased significantly from 1.27% in 2013 to 8% in 2017; Tanzania-registered transit trucks still dominate the transit transport market. The increasing of transit trucks can be attributed to the harmonization of road user charges between Tanzania, Rwanda and Burundi to $152 against $500 charged by Tanzania before.

EAC to roll out new export regime: a statement from the EAC Customs Committee said they started piloting the single customs regime for exports on 10 May, with a full rollout of all exports set for 1 June.

EAC integration: a commentary by Peter Munya (Daily Nation)

Nigeria: The blurry lines of domestic trade (BusinessDay)

But Kano – like her few sister trade/commerce hubs – in Nigeria is sitting in a super market that may be limiting her potential, simply because of the nomenclature that it’s a state or city within Nigeria. The simple but sad fact is that, if Nigeria had a strong unencumbered framework for optimizing internal trade, Kano would be far greater than Rwanda and the rest of Nigeria would be Kano’s equivalent of the EAC bloc. Imagine a market system, tailor-made infrastructure development and national plans, geared towards the systematic linkage of major hubs and the sharpening of weaker and blurry trade lines and corridors in Nigeria. There are plans, completed and on-going projects, especially in rail and road networks for linking some hubs; commendable! But they are yet to incorporate the global view or represent the scale of the situation. Even in the absence of any real trade borders between states in Nigeria; movement of goods is still constrained. The numerous transportation options available in peer countries are simply absent here and the available ones are simply sub-optimal. The obscure truth is that even Nigeria’s export potential is constrained by the poor structure of internal trade.

India: The ease of doing business conundrum (Business Line)

But this is only part of the explanation. Perhaps the key to the puzzle lies in the fact that perceptions about India reflect the actual interface between investors and businesses interacting with regulators and government departments on the ground. It is on this ground level experience that India falters, even compared with countries in the wider Asia-Pacific region that are perhaps formally more trade restrictive, or have less transparent laws and regulations. To my mind, this sub-optimal actual experience of those doing or wanting to do business in India can be ascribed to three broad institutional challenges in the Indian system. [The author, Pritam Banerjee, is Senior Director-South Asia, Deutsche Post DHL Group]