Building capacity to help Africa trade better

tralac’s Daily News Selection


tralac’s Daily News Selection

tralac’s Daily News Selection
Photo credit: Xinhua

AfCFTA presentations by ATPC’s David Luke to recent Canada-Africa Chamber of Business events (Toronto, Ottawa)

(i) What the African Continental Free Trade Area means for Africa and its trading partners (pdf)

Rationale for consolidating Africa: Africa’s economic structure is broadly similar to India’s. Population: India, 1.3bn, Africa, 1.2bn; GDP: India, 2.6tn, Africa, 2.5tn; Tax revenue to GDP: India, 20.4%, Africa, 20%. India is a single consolidated market (7th biggest in the world): allows scale economies and competitive businesses; Africa is fragmented over 54 countries and 107 unique land borders: businesses face average tariffs of 6.9% and non-tariff barriers

Trade policy coherence: The AfCFTA is expected to go beyond a traditional free trade area and in doing so will serve as a basis for continental trade policy coherence. Rather than a patchwork of individual agreements, a consolidated Africa would ensure that all African countries are brought along together in a manner that better suits regional value chains and trade integration. In looking forward to trade negotiations with the EU, the US post-AGOA plans, and potentially emerging markets like India and China, this will give Africa a stronger negotiating footing.

AfCFTA timeline: next steps to bring the agreement into effect: Entry into force after 22nd instrument of ratification deposited with the AUC; Implementation Roadmap (target Jan 2019): prepare schedules of concessions for trade in goods, prepare schedules of concessions for trade in services, conclude specific list rules of origin; Conference of State Parties meet to adopt structure of AfCFTA Secretariat, staff rules and regulations, and budget – as well as establish the host country; AfCFTA committees convene to begin facilitating implementation

(ii) The AfCFTA and its implications for Canada (pdf). Draw from Canadian expertise: A services trade and investment focus should be emphasized; Canada can leverage its expertise in tertiary education, clean energy development, technological cooperation on climate change, and agricultural productivity services; Canada’s cooperation model with mining companies for improved corporate social responsibility provides lessons for deeper engagement in Africa: lessons learned – both good and bad – can help develop new bilateral trade and investment relationships; But also a change in perspective: need to good beyond traditional investment and trade opportunities.

AfCFTA sensitisation updates:

(i) @AUTradeIndustry: The African Union, in partnership with the @AfroChampions, started, Monday, the 1st AfCFTA sensitization tour in West Africa. The first step was Accra where they discussed with Association of Ghana Industries under the theme, A win-win approach to successfully implement the AfCFTA. “We rely on the investments and the entrepreneurial spirit of the private sector to make the AfCFTA deliver tangible benefits to African people through employment & supply of quality & affordable goods & services” stated Amb. Albert Muchanga, AU Commissioner for Trade & Industry.

(ii) @TradeOfficeNG: South-South Zone unanimously adopts Calabar Communique, strongly endorsing the AFCFTA. Cross River State Executive Governor, Prof Ayade, accepts role of AFCFTA Champion, bestowed by Forum Stakeholders

Starting today, in Harare: African finance leaders to debate China’s yuan as a reserve currency (Xinhua)

Central bankers and officials from 14 African nations will discuss the viability of using China’s yuan as a reserve currency for the region, the official Xinhua news agency said on Tuesday. Seventeen top central bankers and officials from the region will meet at a forum in Harare to consider the possibility of using the yuan in national reserves, Xinhua said, citing a statement from the Macroeconomic and Financial Management Institute of Eastern and Southern Africa (MEFMI). The forum, to take place on Tuesday and Wednesday, will be attended by deputy permanent secretaries and deputy central bank governors, as well as officials from the African Development Bank, Xinhua reported. “Most countries in the MEFMI region have loans or grants from China and it would only make economic sense to repay in renminbi (Chinese yuan),” said MEFMI spokesperson Gladys Siwela-Jadagu. MEFMI statement:

The theme for the 2018 Forum is Trends in sovereign reserve management (pdf) and is driven by the lingering concerns of the weakening external positions that are faced by the region following the aftermath of the global economy slowdown. As at the end of 2017, for most of the countries in the MEFMI region, official reserves stood barely at or below the traditional three months of import cover benchmark. There has also been an increasing pattern of foreign portfolio investment flows in the domestic debt markets, which are volatile in nature and susceptible to reversals. All these point to increasing external vulnerabilities and the need for the region to act swiftly to implement much needed policy adjustments to ensure macroeconomic stability and strengthening of external buffers.

Here are 5 ways to make West Africa more competitive (WEF)

Certainly there have been large differences across the region. Nigeria, the largest economy in the area, has under-performed, driving regional competitiveness down. On the other hand, Côte d’Ivoire, Senegal and Ghana have achieved better performances both in terms of competitiveness and growth of per-capita GDP. To build more resilient economies, West African countries need to address the structural foundations of their prosperity. Two years ago, the Africa Development Bank, the World Economic Forum and the World Bank started to map these “structural foundations” for West African economies in a multi-stakeholder workshop. These stakeholders, which included governments and businesses as well as civil society organisations, identified five areas that must be tackled to increase prosperity. Since then, very little progress has been achieved. It’s time to make these five factors a priority, and help West Africa towards a more prosperous future:

Country updates

Ghana: Govt calls the bluff of freight forwarders on UNIPASS (GhanaWeb)

The government has insisted that it will not be liable for any judgment debt with the introduction of the UNIPASS system at the country’s ports. The Ministry of Trade and Industry which signed on behalf of the government maintains that the new system is crucial for the blocking of all revenue leakages at the ports. The UNIPASS is expected to replace all trade facilitation roles involving the clearing of goods and tracking of revenue at the ports, currently being carried out by GCNet and WestBlue. The freight forwarders have complained of the distortions to their operations. But a Deputy Trade and Industry Minister, Carlos Ahenkorah tells Citi Business News they will not back down on their decision.

Liberia: Weah’s tariff cut ultimatum backfires (Daily Observer)

Today, May 29, is the deadline for LRA Commissioner General Elfreda Stewart-Tamba to make a report in compliance with the 72-hour ultimatum. The LRA is expected to present a new schedule, to ensure immediate tariff reduction on a wide range of basic commodities and other consumables imported into the country. The president’s decision has triggered a bipartisan response from members of the 54th Legislature, with Nimba County District #8 Representative Larry Younquoi arguing that the 1986 Constitution gives the authority to the Legislature, to review and approve treaties and financial instruments, including tariffs. The House Chairman on the Committee on Good Governance & Government Reform, Rep. Larry Younquoi, told the Daily Observer in an exclusive interview that the ECOWAS CET Tariff was adopted by Liberia as part of the Protocol or Treaty as member of ECOWAS. Representative Younquoi said the House of Representatives and the Liberian Senate approved the ECOWAS CET Tariff, attested by former President Ellen Johnson-Sirleaf and in accordance with the Constitution; therefore the reduction of the ECOWAS CET Tariff must be done by the Legislature.

Nigeria: Lack of scanners at ports, Customs checkpoints hurting investors (Business Day)

The Organised Private Sector says poor state of equipment at the Nigerian ports and multiplicity of checkpoints by the Nigerian Customs Service are major issues affecting manufacturers and importers, discouraging investors from further pumping money into key sectors of the economy. “The current state of some equipment in use by some operators at the ports is worrisome,” said Iyalode Alaba Lawson, national president, Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture at a press briefing in Lagos on Monday. According to her, this was confirmed during a recent on-the-spot visit to sea and border posts in South West by NACCIMA as a member of the National Trade Facilitation Committee. She stressed the need for Nigeria to embrace modern technology at the ports to speed clearance processes and provide confidence to investors.

Rwanda: African nations are fed up with the West’s hand-me-downs – but it’s tough to keep them out (Washington Post)

This week, Rwanda faces the suspension of some of its duty-free trading privileges pertaining to clothing under the African Growth and Opportunity Act. Its efforts to foster a domestic clothing industry, meanwhile, have yielded few results. And Rwandans who work in the used-clothing business are complaining that they are suffering. The deadlock between the world’s economic giant and one of Africa’s fastest-growing economies doesn’t exactly qualify as a trade war — it’s more like a scuffle. Rwanda’s total used-clothing imports were less than 7% of all of East Africa’s in 2016, according to government statistics. And its clothing exports to the United States were a minuscule $2 million. But it reflects the difficulties that even a low-wage country like Rwanda can have developing an industry in an intensely competitive global market. [The authors: Max Bearak, David J. Lynch] [Related: African Cotton, Textiles & Apparel Monitor – #11]

Kenya: Lovers of imported goods to pay more in bid to shield local firms (Business Daily)

Principal Secretary Kamau Thugge has indicated that the Finance Bill 2018 will contain a wave of increases in duty on final goods in a protectionist policy aimed at discouraging the importation of products that can be made locally. “It was agreed we leave the Railway Development Levy and Import Declaration Fee unchanged, but increase the (import) duty on final goods to protect local manufacturers of final goods,” Dr Thugge said in a text message, without disclosing specific goods targeted.

Mauritius Declaration on Digitalisation and Sustainable Tourism

We, the delegates, gathered at Le Meridien, Pointe aux Piments, launch the following appeal (extracts): to create a Working Group on Digital Platforms aimed at identifying, analysing and proposing a balanced approach, exchanging best practices and helping in developing regulatory framework and policies to create a level playing field for tourism service suppliers; to ensure compliance with the General Data Protection Regulation of the European Union, the Travel and Tourism Industry shall take proper steps in collecting consumers’ data with their explicit consent and protecting same during any transfer from Europe to any countries; to acquire adequate and coordinated support from tourism operators to keep policy-makers and regulators aligned on recent developments thereby narrowing the gap between innovation and regulation; to establish an Indian Ocean Agency on “Climate Change and protection and conservation of the biodiversity”

Malawi:  pdf Public Service Management Policy 2018-2022 (447 KB)  (GoM)

The Public Service Management Policy fills a gap that has existed for many years. Government is aware that the Malawi Public Service did not have a unified policy to effectively support management and delivery of public services in a multi-party dispensation which among other things, calls for greater transparency, accountability and citizen participation in the management and delivery of public services. This policy underscores the importance that government places on the Public Service as the engine for development and comes at an opportune time when Government is about to launch the MGDS III. [ pdf Annex 1: Implementation Plan (281 KB) ]

Today’s Quick Links:

Anzetse Were: Risks to manage in the African Free Trade Area (Business Daily)

Imports of sugar into SA were accidentally duty free for seven weeks – even as the sugar-tax debate raged

President Buhari’s Democracy Day 2018 speech: full text  

Olu Fasan: Okonjo-Iweala’s big reminiscence day in London

UK moves to expand export finance in West Africa

Kerry Logistics swoops on South African forwarder

Mauritius hosts 9th SADC Regional UN Public Administration Network workshop: impact of 4th Industrial Revolution


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