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tralac’s Daily News Selection

tralac’s Daily News Selection
Photo credit: Dube Trade Port

01 Jun 2018

Africa, global passenger traffic data for April 2018 (IATA)

African airlines’ had a 5.1% traffic increase in April. Capacity rose 4.6%, and load factor edged up 0.4 percentage point to 72.8%. The upward demand trend remains strong, helped by continuing signs of improvement in the region’s largest economies: Nigeria and South Africa. This is only the fourth time in the past 41 months that both economies have been on an upward trajectory at the same time.

MEFMI’s Caleb Fundanga: African economy needs more usage of Chinese yuan (Xinhua)

Executive director of the Macroeconomic and Financial Management Institute of Eastern and Southern Africa, Caleb Fundanga, said a forum for financial experts earlier in the week had agreed that there was need to use the Chinese yuan as a reserve currency because China was playing an active role in their economies. Fundanga said the coming in of the yuan would give the region more options for managing its reserves. “One of the issues we discussed though was that sometimes if you have borrowed from China they want to bill you in US dollars. Now we are saying our government must start discussing with Chinese enterprises (and) government so that we’re billed in yuan and then we can pay in yuan. Because there is no point if we start keeping our reserves in yuan but we’re billed in dollars. It is no good.”

SACU Stabilisation Fund to offset cyclical revenue fluctuation (New Era)

Part of the ongoing discussions regarding the revision of the revenue sharing arrangement between SACU member states includes the consideration of a Stabilisation Fund to offset the cyclical fluctuation of SACU receipts. This was confirmed this week when a SACU team, led by Executive Secretary, Paulina Elago, met with President Hage Geingob and other senior government officials at State House. The meeting took place to brief Geingob on the upcoming sixth SACU Heads of State Summit scheduled to take place in Gaborone, at the end of June. President Geingob’s Economic Advisor, Dr John Steytler, yesterday told New Era that a SACU Stabilisation Fund would have made a world of difference to the Namibian economy, particularly during the challenging economic performance of the domestic economy during the last two years.

SADC Sub-Committees on Customs and Trade Facilitation: WCO, SADC deepen cooperation

The Sub-Committees noted with satisfaction that the WCO and the SADC Secretariats are exploring the possibility to launch a joint donor-funded regional programme in 2019 to support the SADC Membership with implementation of the SADC Regional Trade Facilitation Programme. The Sub-Committees acknowledged that the WCO expertise in Customs matters and other areas focussed in effective border management will be particularly beneficial to the SADC Members in their regional trade facilitation efforts. The WCO also held bilateral meetings with institutional and development partners such as the EU, GiZ, USAID Trade and Investment Hub to discuss the SADC Trade Facilitation Programme in order to explore synergies and avoid potential duplication of activities.

Mozambique: CDN surpasses its target for goods transport (AIM)

About 100,000 tonnes of cargo were transported in the first quarter of this year by the Northern Development Corridor, which operates the port of Nacala, and the railway which runs from Nacala across Nampula and Niassa provinces to the Malawian border. This figure is around 25% more than CDM’s target for goods transport in the January to March period, which was only 79,955 tonnes. Businesses in Niassa have taken to using the railway to take goods from Nacala to Lichinga, following a substantial reduction in the rates charged by CDN. The cost to take a tonne of goods by rail from Nacala to Lichinga fell in February from 2,900 to 2,150 meticais (from $48 to $39 at current exchange rates), a fall of 26%.

South Africa: Active role by business in BRICS will promote investment (IOL)

As the special envoys on investments scour the globe they will join the unco-ordinated glut comprising National Treasury officials in Davos, diplomats from the Department of International Relations and Co-operation in most world capitals, Department of Trade and Industry, investor roadshow professionals, provincial and municipal officials visiting “sister cities” and IMC’s Brand South Africa. Are our ministers and bureaucrats equal to the task as outlined in the State of the Nation address? Have they changed in their programmes and ways of working and actions to match the vibrant and call for action of “Thuma Mina?” [The author, Sello Mashao Rasethaba, is a council member of the South African BRICS Business Council, chairperson of the African Entrepreneurs Council and the Black Business Council]

Nigeria: AfCFTA, trade updates

Nigeria won’t force African peers to adjust AfCFTA – VP Osinbajo (Punch)

Asked if Nigeria would sign the agreement, the Vice President said: “I don’t think the question is whether we will not sign. I think what we will sign is probably the more important thing for us. What sort of negotiations will go on? Don’t forget that Nigeria is the largest market; so, we have more to lose. There are countries that are waiting for this big Nigerian market to open up. But we have to be a lot more careful. The question for us is: what will we sign? How will it play out for our private sector people?”

Asked if Nigeria would force countries that had already signed the agreement to take another look at it and make some adjustments, the Vice President said: “No; that is not even correct. Let me explain how it works: First, there is a framework; then the actual negotiations, and the actual negotiations haven’t started. So, we are going to negotiate. For us, it is important to sit back and take a look at those negotiations first before heading even into the framework, which is really what we are doing at the moment. Where we are at is that we are looking at the nitty-gritty. Really, we are not saying we are going to negotiate the framework; the framework is already there. Our major concern is with the specifics, and those specifics have to be negotiated, and we are at a point where before we go into that, we will certainly make sure that we are happy with the terms and conditions.”

NBA urges federal government to sign Africa free trade agreement (Today)

The Nigeria Bar Association has urged the Federal Government to endorse the AFCFTA to enable Nigeria reap economic benefits of intra African trade. Mr Olamide Akpata, Chairman, NBA Section on Business Law, said Nigeria’s endorsement of AFCFTA would greatly enhance legal practice in the country. Akpata spoke with newsmen in Lagos on the forthcoming 12th Annual Business Conference of the NBA-SBL, 27-28 June in Abuja. “The economy will be greatly impacted by the AFCFTA as it would improve the lives of Nigerian citizens and take the legal profession continental. The dynamics of the legal profession will change and we lawyers would examine the opportunities available for us when the AFCFTA takes effect,” he said.

Nigeria records 59.9% export growth – Udoma (Leadership)

Minister of Budget and Planning, Sen. Udoma Udo Udoma, on Thursday said the country’s total exports appreciated by 59.9% between 2016 and 2017 following the implementation of the Economic Recovery and Growth Plan. Speaking at the FT Nigeria Summit, Udoma said the non-oil sector accounted for the growth recorded. He said the agricultural sector export grew from N6.7bn in 2016 to N170bn in 2017, and that yam was among the products exported. Udoma said the solid minerals export also rose from N44bn in 2016 to N102bn in 2017.

Nigeria: FG cuts rice import bill to $160m (ThisDay)

The federal government has declared it spent only $160m on importation of paddy rice last year. The Minister of Information and Culture, Alhaji Lai Mohammed, made the revelation yesterday. He said the spending represented a 90% cut in the country’s rice import bill of $1.65bn annually. Mohammed said with the progress made in the rice cultivation, the country was inching towards self-sufficiency than any administration before through the efforts of local rice farmers and millers. “We are just two years away from meeting our target production of 6 million metric tonnes of milled rice, which is Nigeria’s total rice consumption. We increased the number of rice farmers from five million to an all-time high of over 11 million.” [Low productivity hinders Nigeria taking advantage of soybean export]

Cereal market performance in Ethiopia: policy implications for improving investments in maize and wheat value chains (World Bank)

The objective of this study is to provide an updated overview on the performance of cereal markets in Ethiopia. Specifically, the study seeks to inform and guide project operations for the Government of Ethiopia and the World Bank. Currently, there is little private sector investment in grain storage facilities. Most storage warehouses at the primary cooperative and farmers’ union levels are funded by the public sector. About $32.7m of IDA funds under the Agriculture Growth Project were allocated for market infrastructure development, including piloting the construction of forty-four storage warehouses with the objective of further scaling up. Under AGP 2, the government requested $11m toward the construction of more storage warehouses for unions and primary cooperatives. Before constructing more warehouses, though, it is important to shed light on why the private sector is not investing in grain storage.

Uganda imposes WhatsApp and Facebook tax ‘to stop gossip’ (GhanaWeb)

Uganda’s parliament has passed a law to impose a controversial tax on people using social media platforms. It imposes a 200 shilling [$0.05, £0.04] daily levy on people using internet messaging platforms like Facebook, WhatsApp, Viber and Twitter. President Yoweri Museveni had pushed for the changes, arguing that social media encouraged gossip. The law should come into effect on 1 July but there remain doubts about how it will be implemented. The new Excise Duty (Amendment) Bill will also impose various other taxes, including a 1% levy on the total value of mobile money transactions - which civil society groups complain will affect poorer Ugandans who rarely use banking services. State Minister for Finance David Bahati told parliament that the tax increases were needed to help Uganda pay off its growing national debt. [Ghana: Increase ‘sin tax’ to augment NHIS – Philips Africa CEO]

Conference on digital trade in Africa and its implications for inclusion and human rights (UNECA)

Ms Songwe cautioned that too much government intervention could kill innovation. “Digitalization is essentially about owning an identity which is a fundamental human right. With a portable digital identity, the question of identity can be solved for migrants.” The ECA chief talked about India’s growing digital space which has opened vast economic opportunities for its citizens and what Africa could learn from the south Asian country. Mr Carlos Lopes, a Visiting Professor at the University of Cape Town, said African countries should prepare themselves for a digital economy that could possibly be difficult and challenging to adjust to. He said the advantages were, however, immense. For example, the youth bulge was advantageous to Africa as populations in the West and countries like Japan shrink in the next 20 years. Africa’s youth repository will adapt quickly so that’s a huge advantage to the continent as countries navigate the digital economy, he added. “So we need to tell our policymakers that they need to go fast because the windows are closing really, really fast.”

Addressing e-payment challenges in global e-commerce (WEF)

This white paper informs discussion on e-payment challenges and solutions. It provides brief context on the e-payment ecosystem, the opportunities the sector presents for small business and financial inclusion and the payment-related hurdles faced by small players dealing digitally across borders. Given that trade frameworks can address international commercial frictions and support e-payment development, the paper enhances understanding of relevant efforts to date, and reflects on what else could be done. Extract (pdf):

In Africa, despite major increases in phone use with associated m-payment potential, cash-on-delivery is the preferred payment method, used in just under half of all all e-transactions by value.30 Top barriers for e-payment uptake include poor infrastructure – particularly in terms of internet and telecommunications – as well as financial illiteracy. Issues also exist around withdrawal from international payment service suppliers – for example, payments cannot be received or withdrawn from PayPal in a number of African countries. A range of combined regulatory and operational issues can make providing cost-effective e-payment services difficult, as can limitations on the type of services e-payment suppliers may provide or partnerships that can be established. [Landry Signé, Kevin Signé: Global cybercrimes and weak cybersecurity threaten businesses in Africa]

Today’s Quick Links:

AfDB’s Akinwumi Adesina: A roadmap for African industrialization

Options for updating Competition Assessment Toolkit in light of digitalisation: OECD Secretariat note (pdf)

Commission on harmonisation of regulatory framework for the electricity market in Africa: first progress report

Nigeria SWF: $650m capital injection raises savings in SWF to $2.15bn

Aliko Dangote Foundation: update on the gender focus for micro-grant scheme

Ghana to establish Innovation and Research Commercialisation Centre

Arvind Subramanian: India’s new tax breaks down old barriers

World Bank: China Economic Update

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