tralac’s Daily News Selection
Featured AfDB policy document: pdf Industrialize Africa – strategies, policies, institutions & financing (5.72 MB)
Extract from the introductory remarks, by Joe Stiglitz:
In the developing countries, they are moving from agriculture to manufacturing. In many of these countries, there is a process of moving toward an urban economy. This year marks the first year in which a majority of the world’s population will probably be living in cities, and that is a very big transformation. In advanced countries, there are other aspects of structural transformation insofar as they are moving toward service sector economies. In all of our economies, we should be moving from a finance-based economy to a real economy, and we should put emphasis on inclusive growth and inclusive industrial development.
Ironically, one of the problems facing the world today has to do with innovation. There is something very peculiar about the nature of innovation going on today, especially, in the developing countries in which the real challenge is job creation. Innovation across the globe is largely focused on saving labor, which goes in exactly the wrong direction. If employment does not increase, then inequality will, and if inequality increases, then aggregate demand will become weak. If aggregate demand is weak, then GDP growth will be weak. This is a vicious circle.
To prevent this from happening, it is very important for us to frame policies that shape the direction of technology. We need to encourage innovation, which is focused on saving the planet and protecting the environment and less involved in saving labor. If we want to have sustained economic growth, we have to make sure that the industrial policies framed should create employment and shared prosperity, as well as save the planet. [Download the pdf Industrialize Africa Brochure (5.68 MB) ]
Section 1: Industrialise Africa – how to do it. Chapter 1: Industrialisation – a primer; Chapter 2: Inclusive and sustainable structural transformation in Africa; Chapter 3: Industrial policy in Africa: from state leadership to the investment climate; Chapter 4: Africa’s manufacturing sector: building complexity; Chapter 5: Ethiopia: lessons from an experiment
Section 2: Learning from experiences. Chapter 6: Industrial policy and China’s economic development: from the perspective of New Structural Economics; Chapter 7: Building effective clusters and industrial parks; Chapter 8: China’s financial mechanisms in industrial development with inspirations for Africa; Chapter 9: Financing industrial development in Korea and implications for Africa; Chapter 10: Competitiveness and industrialization in Africa: what have we learned?
South Korea wants to step up cooperation with African nations in the technology sector, the nation’s top economic policymaker said Wednesday, as Seoul seeks to deepen ties with the resource-rich continent. Finance Minister Kim Dong-yeon, in his speech for the 53rd annual meeting of the AfDB, said South Korea’s technology could help African nations overcome bottlenecks in infrastructure, transport and communications. “The field of smart infrastructure is a main area where South Korea and Africa can promote cooperation,” Kim said.
An interview with UNECA’s Vera Songwe: To spur growth, Africa must look to e-commerce, women, local resources
What about women’s contribution? Starting in-house, I hope to increase the number of women on the staff to match their male counterparts at the ECA because I intend to use women more to define policy. Not much has been done to define how women should be integrated into the economic decisions affecting the continent and we are losing much as a result. Various studies have established that there are too few women involved in these discussions and decision making. I intend to change this. We are working on creating a women fund to economically empower women in Africa. [A related commentary, by Aubrey Hruby: Driving gender equity in African business]
The Viva Tech conference starts tomorrow in Paris: Tiny African tech start-ups draw big interest after slow start (Straits Times)
African high-tech startups are minuscule compared with their US and European peers but they are finally gaining momentum and attention in some of the world’s most promising economies. “There are little glimmers of light everywhere” in Africa, said Mr Gilles Babinet, a digital technology expert with the European Commission. “In Africa, when there is a problem, there is always a solution and the idea of a startup,” said Mr Samir Abdelkrim, author of “Startup Lions”, which charts his experience in the sector. Nigeria, Kenya and South Africa dominate by far and account for about three-quarters of startup funding in the continent but their small neighbours are slowly catching up. “There are other markets where there is a lot going on”, such as Ghana, Tanzania and Uganda in English-speaking Africa, or francophone Senegal, Ivory Coast and Cameroon, said Mr Deme. This year’s edition of Viva Tech will take place from May 24-26, with a special focus on Africa.
Over 60% of banks surveyed in the new ICC report – Global trade: securing future growth – reported to have implemented, or to be in the process of implementing, technology solutions to digitalise their trade finance operations. However, only 9% of banks reported that the solutions implemented have so far led to a reduction of time and costs in trade finance transactions. In what the report describes as a “reality check”, 30% of respondents say their banks remain 1-2 years away from implementing technology solutions while 7% say digitalisation is not on their agenda at all.
A heavily paper-based industry with transactions worth over $9 trillion in 2017, trade finance is often noted to be ripe for digital disruption. The multitude of documents and players (banks, customs authorities, shippers, and insurers, among others) involved in trade finance transactions, though, make it difficult for the industry to digitalise quickly. In the findings, 65% of respondents say that physical paper has to some extent been removed in the issuance/advising and settlement/financing of documentary transactions. A notable exception is the document verification process, where 52% of respondents say that paper has not been removed at all.
Abebe Aemro Selassie: The debt challenge to African growth (Project Syndicate)
Sub-Saharan Africa is confronting a pronounced rise in public debt. At the end of 2017, average public debt in the region was 57% of its GDP, an increase of 20 percentage points in just five years. While this is well below the peaks of the early 2000s, the current spike is concerning.
Free trade to benefit East Africa – China (The Star)
China has asked East Africa countries to consider its free trade proposal, saying it will be of great economic benefit to the region. The Chinese embassy’s economic and commercial affairs counsellor, Guo Ce, further downplayed claims that Kenya had declined the plan, noting that they are yet to receive any formal response on the proposal from any of the EAC member countries: “Claims that Kenya has opposed free trade proposal are not true. Not a single country has responded to this proposal. The proposed trade arrangement will deepen economic and cultural ties between China and East Africa, opening numerous opportunities for business operators.” Speaking during a Sino-Kenya cooperation forum hosted by the Kenya Chinese Chambers of Commerce and Kenya Investment Authority yesterday, Guo acknowledged the existing trade imbalance in favor of China, saying that open trade borders will remedy the situation. “This being the first forum on Kenya-China cooperation, we are confident to come up with roadmaps that will guide our future of doing business where we foresee increased collaboration between companies from the two countries through harmonized trading practices.”
Mauritius: Corruption Risk Mapping workshop update (GoM)
A four-day workshop on Corruption Risk Mapping, organised at the initiative of the Mauritius Revenue Authority, in collaboration with the World Customs Organisation, kicked off yesterday at the WCO Multilingual Regional Training Centre in Port Louis. Some 40 participants, namely officers from the Customs departments from the WCO Member States, are attending the workshop which aims at inculcating appropriate techniques of identifying and assessing the level of risks associated with corruption in organisations assigned the responsibility of revenue collection.
Mozambique: Financing and risk sharing mechanisms for agricultural and forestry value chains (World Bank)
Mozambique has significant potential to increase the productivity and efficiency of its agriculture and forest-based value chains. The absence of affordable financial services, however, is preventing communities, small scale forest operators, smallholder and small emerging commercial farmers, and micro and small- to medium-size agribusinesses from improving natural resource management and increasing growth potential.
UAE show Nigeria the way to attracting foreign investors (BusinessDay)
As Nigeria continues to innovate and source strategies to attract foreign investors, making the country an investor destination in sub Saharan Africa and indeed the whole of Africa, the United Arab Emirates’ example is perhaps the way to go. Sheikh Mohammed bin Rashid Al Maktoum, the Vice President and Prime Minister of the United Arab Emirates, and Ruler of the Emirate of Dubai revealed in a tweet from his handle @HHShkMohd, yesterday that “At today’s Cabinet meeting, we decided to allow 100% foreign ownership of companies in United Arab Emirate, with a 10 year visa for investors, scientists, doctors, engineers, entrepreneurs and innovators. The United Arab Emirate has always welcomed, and always will, innovators and business leaders”
While Nigeria can’t be said to have stringent laws prohibiting foreign ownership of companies and investments, the challenge has been providing enabling environment to encourage foreign investments. The struggle getting around regulatory bottleneck, the length of time it takes to close a deal to the very high cost of doing business resulting from infrastructural deficit (especially power infrastructure) have made doing business in Nigeria is an uphill task.
State and trends of carbon pricing 2018 (World Bank)
To date, 70 jurisdictions (45 national and 25 sub-national) have implemented, or are scheduled to implement, carbon pricing initiatives. These mechanisms helped governments raise about $33bn in 2017 in carbon pricing revenues from allowance auctions, direct payments to meet compliance obligations, and carbon tax receipts. This represents a 50% increase compared to the $22bn raised in 2016. Implementation of carbon pricing initiatives has tripled in the past decade. [Download the report]
Today’s Quick Links:
On the African Women Leaders Fund: “Guided by African women fund managers, the plan is to invest up to $500 million in African women-led companies over the next decade”
Tackling the gender gap in Rwanda’s burgeoning tech sector
Google South Africa launches R25m Impact Challenge
Facebook opens first Africa hub footprint in Lagos
AfDB launches new Civil Society Committee: CSO rapporteurs presented key recommendations on the Industrialize Africa’ strategy, consolidated after two days of interactive sessions and consultations (7-9 May).
EU’s corn-buying spree is boosting rare trade with South Africa
ICTSD: US Section 301, China, and technology transfer – law and its limitations revisited (again)
UN calls on Algeria to stop expelling thousands of sub-Saharan African migrants