Building capacity to help Africa trade better

tralac’s Daily News Selection


tralac’s Daily News Selection

tralac’s Daily News Selection
Photo credit: MediaClub South Africa

Featured tweet, @AntheVrijlandt: Frank Matsaert at Africa Summit – partnership between Europe and Africa should be about mutual trade flows. Now, for every four containers imported, three leave the continent empty.

South Africa to begin AfCFTA ratification processes after AMOT Dakar meeting (dti)

SA’s deputy minister of trade and industry Mr Bulelani Magwanishe said the conclusion of the annexes to the Protocol on Trade in Goods and the annexes to the Protocol on Dispute Settlement is a significant achievement. “The conclusion of this work enables South Africa to rapidly commence domestic processes for signature of the AfCFTA. We must ensure that the disciplines on modalities for tariff liberation support the creation of commercially meaningful value-chains in Africa, such that we attract investment in job creating productive sectors”.

The key AMOT outcomes: At the end of the two day Ministerial Meeting, the Ministers adopted the recommendations of the STO on the legally-scrubbed annexes to (i) the AfCFTA Protocol on Trade in Goods (ii) the Protocol on Rules and Procedures on the Settlement of Disputes (iii) agreed on the five priority sectors (transport, communication, financial, tourism and business services) and the approach to be adopted in developing Schedules of Specific Commitments on Trade in Services. The Ministers called on AUC, ECA and UNCTAD to undertake further analytical work to inform the preparation of Schedules of Tariff Concessions for Trade in Goods and to make them available to member states no later than end June 2018. This is to be followed by the preparation of templates for Schedules of Tariff Concessions for Trade in Goods and Schedules of Specific Commitments on Trade in Services by the end of July 2018. The meeting of the 12th AfCFTA-NF tentatively scheduled to be held in September is expected to approve the templates for the operationalization of the AfCFTA. The Schedules of Tariff Concessions for Trade in Goods and Schedules of Specific Commitments on Trade in Services will be submitted to the January 2019 Session of the AU Assembly of Heads of State and Government for adoption.

Note the new AMOT Bureau: Uganda, DRC, Mauritania, South Africa, Cote D’Ivoire

Latest Bridges Africa edition: Supporting small-scale cross-border traders across Africa

What initiatives have various stakeholders taken to facilitate small-scale cross-border trade and promote its formalisation? What are the concrete challenges that African small-scale traders face, and why should they be supported to overcome these difficulties? How can efforts to leverage the development potential of such trade be most effective? The lead article, written by Paul Brenton and Carmine Soprano, insists on the importance of maximising the development dividends that small-scale cross-border trade can offer, outlining some of the ways in which this can be done. In the second piece, Lily Sommer and Chris Nshimbi reflect on how the African Continental Free Trade Area could be used to help overcome the challenges related to small-scale trading activities. Emma Marie Bugingo focuses on how supporting small-scale traders can contribute to women’s economic empowerment. The issue also features an article in which Taku Fundira looks at the simplified trade regimes implemented in eastern and southern Africa, and offers insights based on these experiences. The final piece looks at the trends and dynamics of cross-border trade in West Africa from a more general – and historical – perspective.

REC updates

ECOWAS Trade Ministers move to improve regional economic integration

ECOWAS Ministers of Trade have moved to strengthen economic integration among Member States by urging them to adopt and present a common position based on regional instruments at the AfCFTA negotiations. This was one of the key recommendations of the Ministers during the regional meeting which held on 24th May 2018 in Abuja, Nigeria in order deliberate on trade policies which included the West Africa - EU EPA and the ECOWAS Common Trade Policy. Regarding the EPA, the Ministers called for more flexibility on the part of the EU with regard to the perverse effects of the implementation of the interim-EPA on regional integration by pushing back some aspects of the liberalization schedules and examining the possibility of making adjustments in the regional EPA to encourage accession of the sixteen West African States to the agreement. [ECOWAS reform: Extraordinary Administration and Finance Committee]

EAC tables $100m budget at EALA sitting

The 2018/2019 budget is a step-down from $110,130,184 presented to the House in the previous financial year. According to the Chair of Council of Ministers, the priority interventions for FY 2018/2019 will focus on enhanced free movement of goods in the region and further liberalization of free movement of labour and services; improved cross-border infrastructure to ease cost of doing business in the region; and enhanced regional agricultural productivity. The budget is to be financed by Partner State contributions ($50,227,920); Ministries responsible for Education ($4,466,210) and Ministries responsible for Fisheries ($ 1,551,032). Development partners will support the Community to the tune of ($42,925,613) while Member Universities will inject in to the kitty $ 333,970. The 2018/2019 Budget is allocated to the Organs and Institutions of the EAC as follows:

SADC energy (electricity and petroleum gas): SADC Secretariat, SAPP meeting

The meeting (31 May, Johannesburg) also discussed and validated the TORs for the Regional (Inter-State) Gas Committee. The outcomes of the meeting will be presented to the Joint meeting of SADC Ministers responsible for Energy and for Water which will be held in Sandton, South Africa on 27 June 2018 to be preceded by the Ministerial Workshop on Regional Gas Infrastructure and Market Development. The meeting was preceded by two workshops on SAPP Competitive Electricity Markets Stakeholder and SAPP Generation and Transmission Masterplan (Pool Plan) 2017 which were held on 29th and 30th May 2018 respectively.

Country updates

DRC-Zambia: Construction of $300m dry port commissioned at Kasumbalesa (COMESA)

Initial steps towards the construction of a $300m dry port at Kasumbalesa border post has begun following the commissioning of the project (1 June). President Joseph Kabila commissioned the Multi Modal Logistic Trade facilitation dry port project by the DRC government and the African Roads Rail Ltd (a South African company), in association with China Railway Construction. It will be funded through Private Public Partnership. Construction is expected to take 36 months generating over 2,000 direct jobs and over 5,000 indirect jobs from the numerous services needed to operationalize the facility. The port will be connected to five major maritime ports namely, Beira, Mombasa, Dar es Salaam, Walvis Bay and Durban ports, integrated into the international logistic chain for eastern and southern Africa. [Mozambique-China: Joint Commission for Economic, Technical and Trade Cooperation update]

South Africa: Economy disappoints in Q1 2018, contracting by 2,2% (Stats SA)

After growing by 3,1% in the fourth quarter of 2017, the South Africa economy wobbled in the first quarter of 2018, shrinking by 2,2% quarter-on-quarter (seasonally adjusted and annualised). Agriculture, mining and manufacturing were the main contributors to the slowdown, with the electricity, construction and trade industries also recording negative growth. The 2,2% fall is the largest quarter-on-quarter decline since the first quarter of 2009. In that quarter, the economy contracted by 6,1%. After recording four consecutive quarters of robust growth in 2017, the agriculture industry lost ground in the first quarter of 2018, contracting by 24,2%, the largest quarter-on-quarter fall since the second quarter of 2006. [Tanzania sees GDP growth at 7.2% this year says finance minister; Mozambique growth will hit the bottom this year, rebound to 3.7% in 2019 says Standard Bank]

Rwanda: Mineral export revenue grew by over 120% in 2017 (New Times)

Mining exports raked $373m (Rwf325bn) in 2017 up from $166m in the previous year, a growth rate that represents 124%, according to statistics from the Rwanda Mines, Petroleum and Gas Board. The country exported about 7000 tonnes of assorted minerals. This exceeded the sector’s initial target of $240m. The organisation attributed the performance to improved mineral prices at the global market, increased mining practices by practitioners as well as diversification of products. The sector has goals of increasing minerals export revenues to $800m by 2020 and $1.5bn annually by 2024.

Kenya: Cut flower exports defy poll jitters to hit Sh82bn in 2017 (Business Daily)

Cut flower business last year shrugged off prolonged electioneering to post a record Sh82.2 billion export earnings representing a 20 per cent rise from Sh70.8 billion in 2016. The all-time high earnings were attributed to the sale of 159,961 metric tonnes compared to 133,668 tonnes shipped to European markets in 2016. Kenya Flower Council said the labour-intensive subsector witnessed heavy investments in new farms and expansion driven by tax incentives for key imported inputs.

Ghana: Textile retailers threaten to beat up anti-piracy taskforce (GhanaWeb)

Retailers in the textile industry have threatened to beat agents of the joint textile taskforce if they invade the markets to seize their materials again. According to them, the real problem of textile piracy is from importers and at the various borders, therefore that should be their first point of call and not the markets. [Issue 12 of the African Cotton, Textiles & Apparel Monitor is posted]

UNCTAD’s Trade and Development Board: updates

(i) EU’s Malmström: bad domestic policies also make trade unfair. While Ms. Malmström did address the current trade frictions with the US – taking the opportunity to defend the EU’s stance and caution against talking about a “trade war” – she spoke more about the bigger picture of growing public backlash against multilateralism and trade. She said that while international institutions should take to heart people’s concerns that trade is doing more harm than good, and ensure the rules are fair and respected by all – including the most powerful nations organizations like the WTO can only do so much. “It’s up to the individual countries to make sure the benefits of trade trickle down.” UNCTAD Secretary-General Mukhisa Kituyi echoed Ms. Malmström’s view that trade rules are only part of the story. “The crisis of poverty is not exclusively a crisis of trade rules,” Dr. Kituyi said.

(ii) Tomorrow’s world is already here but the spread of benefits remains unclear. Speaking on behalf of the West African Economic and Monetary Union, Ambassador Iba Mar Oulare said that e-commerce was just starting up in his region, so West African countries were at the stage of grappling with the policy implications. “Africa currently trades mostly raw materials with little value added and it is now urgent that its leaders fully comprehend how technology will change this trade and all trade on the continent,” Mr Mar Oulare said. With little data on which to base policymaking, Mr. Mar Oulare said, his group welcomed the actions undertaken by the African Union and UNCTAD to deepen knowledge of implications of the digital economy in his region. “E-trade is no doubt occurring in Africa, but national and regional legislation is out of date,” Mr. Mar Oulare said. “My group welcomes the initiative taken by UNCTAD to organize an e-commerce event for Africa.”

Today’s Quick Links:

In Dar es Salaam: East African Trade and Transport Facilitation Project meeting

In Nairobi: EAC–IGAD strengthened collaboration, partnership meeting

Kenya, Botswana to revisit 2016 deal to raise trade volumes

Ghana gold production hits 2.81 million ounces

Restrictions on Kenya EPZ exports to remain

Nigeria to double new tax rate on tobacco products in 2019

Zimbabwe: Mnangagwa to host investor round table

Philip Muema: The complexity of collecting taxes from digital firms

Equatorial Guinea: IMF MD approves a staff-monitored programme

Sustainable development goal diagnostics: the case of Egypt


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