tralac’s Daily News Selection
Diarise: 25th SWIFT African Regional Conference (20-22 June, Kigali) on the theme Transforming the future – driving a new digital economy
The total value of Nigeria’s merchandise trade rose to N7.21 trillion in the first quarter (Q1) of 2018, signifying a 19.74% rise over the N6.02 trillion recorded in Q4, 2017 and a 35.07% growth from Q1, 2017 (N5.33 trillion). The trade balance in Q1, 2018 was a surplus of N2.175 trillion, which is a 20.95% increase from the figure in Q4, 2017 (N1.798 trillion) and a 221.08% from the figure in Q1, 2017 (N677.42 billion). The strong growth of total trade in the quarter was mainly driven by the strong increase in exports, the National Bureau of Statistics revealed in its latest trade figures. Total value of imports in the review period was N2.518 trillion, 19.22% higher than Q4, 2017 (N2.112 trillion) and 8.04% higher than Q1, 2017 (N2.330 trillion). Total export value amounted to N4.693.34 trillion in Q1, 2018, representing a significant growth of 20.02% over Q4, 2017 (N3.9 trillion) and 56.01% over Q1, 2017 (N3.008 trillion).
Indonesia and Mozambique have started their first-ever negotiations for a Preferential Trade Agreement following a joint commitment reached during the Indonesia-Africa Forum in April this year. Indonesia`s bilateral trade negotiation director in the Trade Ministry, Ni Made Ayu Marhini, said the first round took place in Maputo on 31 May and 1 June. Most articles had been agreed on by the two countries. Total trade of Indonesia and Mozambique, in the 2013-2017 period, declined by 23.75%. Indonesia`s trade balance with Mozambique remains positive. The total trade between the two countries increased by 82.2%, from $44.5m in 2016 to $54.1m in 2017.
Nairobi gives Dar ultimatum in ice cream, sweets row (Business Daily)
Nairobi has given Tanzania and Uganda one more month to lift a ban on duty-free entry of Kenya-made sweets or face retaliatory action from 1 July. Dar and Kampala slapped a 25% import duty on Kenyan confectionery, juice, ice cream and chewing gum earlier in the year, claiming use of zero-rated industrial sugar imports. Trade Principal Secretary Chris Kiptoo said revenue and standards bodies from both countries will separately visit Kenyan factories from 11 June in a bid to resolve the trade spat. “We will make the decision after the verification. We will retaliate (because) that’s always there for us any time, but first let’s allow this process to go on,” he said following the five-day EAC Sectoral Council on Trade, Industry, Finance and Investment meeting in Arusha that ended last Wednesday. The verification process, to be supervised by the EAC secretariat, will extend to factories making other products such as cement, lubricants, cosmetics and wooden pallets which have also had difficulties gaining free access into Tanzania.
Kenya trade pointers, from Trade Kenya: Horticulture accounted for 19.4% of Kenya’s total exports during 2017; Kenya’s National Exports Development and Promotion Strategy will be released in July
Does SADC have an identity crisis? (FinMark Trust)
A deeper look at the SADC region indicates that not only are there a significant number of people without a legal identity, but there exists a great degree of variance across the region in terms of the quality of national identification systems. In other words, for individuals that do hold a legal identity document, this may not be recognised in other member countries. This identity crisis within the SADC region is highly problematic given the prevalence of migration within the region and the resultant reliance on financial services. In line with this, we strongly believe that the development of a digital financial identity, in other words a digital identity specifically for use within the financial sector, can address the identity crisis within the financial sector across SADC. Follow our updates as we embark on the colossal journey of developing a digital financial identity for domestic, and ultimately cross-border use across the SADC region. First stop – a feasibility assessment for digital financial identity for defined use cases to promote domestic financial inclusion in Malawi and Lesotho, with the DRC to follow shortly. [SADC states urged to have unity of purpose to achieve financial inclusion]
Kenya Airways has introduced three non-stop flights from its hub at the Jomo Kenyatta International Airport to Cape Town. The launch of the non-stop flights to the second-most populous urban city in South Africa is in line with the airline’s broader strategy to assert its presence and expand connectivity across Africa and open up opportunities for tourism, trade and investment. The non-stop flights to Cape Town will depart Nairobi every Wednesday, Friday and Sunday at 3:30pm. Currently, the airline operates seven weekly flights to Cape Town. Four flights via Livingstone, Zambia, departing Nairobi every Tuesday, Wednesday, Friday and Sunday and three weekly flights via Victoria Falls on Monday, Thursday and Saturday.
Chinese steelmakers are seeking new export destinations in Africa and South America as shipments to their biggest overseas buyers in Southeast Asia fall by double digits, with new US trade actions threatening to kill off some markets entirely. South America and Africa accounted for a combined 8 percent of China’s steel exports last year, and shipments to some nations there have surged this year. Exports to Nigeria, Africa’s biggest economy and the continent’s top buyer of Chinese steel, rose 15% in the first quarter, and shipments to Algeria, the fourth-largest economy, nearly tripled.
Grant T. Harris: The US is punishing Rwanda for rejecting our old jeans and T-shirts – it’s a short-sighted move (Washington Post)
Banning used clothes is not enough to build Rwanda’s domestic textile and apparel industry, especially given competition from cheap Chinese imports of ready-made clothing. But there is a certain irony in Trump punishing Rwanda for protecting domestic manufacturing in what really is a Rwandan version of “America First.” More to the point, the United States ought to be supporting countries that pursue economic growth and development plans – not just because it is the right thing to do but because the vitality of the U.S. economy depends on whether we have markets for our goods and services.
Until recently, supporting African economic growth was a key piece of US-Africa policy. For instance, building on the African Growth and Opportunity Act’s strong legacy of bipartisan support, Barack Obama launched the Trade Africa initiative to support regional economic integration and work toward a more reciprocal trade relationship. But the suspension of access for Rwandan apparel reinforces the sad truth that the Trump administration has no vision for trade with Africa. And there is no question that US businesses will suffer as a result. Africa represents the last frontier for America’s export-driven economy, with consumer and business spending predicted to reach $6.7 trillion by 2030.
Christopher Wood: A South African strategy for trade in environmental goods (TIPS)
The rapid growth of trade in environmental goods creates opportunities for South Africa, but is complicated by rising global protectionism, which demands a pro-active strategy to support South African exporters. Profiled key recommendations: (i) South Africa should remain out of the WTO’s Environmental Goods Agreement. The EGA offers minimal benefits for the country, as it does not address the core barriers to trade in environmental goods, and violates established South African principles on non-participation in plurilateral agreements. (ii) As a long-term goal, South Africa should consider exploring cumulation of local content rules for regional agreements. This would involve counting components sourced from the region as local, and thus allowing imports from the region to feed into the procurement of designated products.
EAC greener pasture countries for highly skilled Kenyans (Business Daily)
Rwanda, Tanzania and Uganda are the key destinations for high-skilled Kenyan migrants, attracted by opportunities in financial, IT, engineering and hospitality sectors, a new UN report showed. UNCTAD said labour shortages in information technology, engineering, finance, hospitality and management in some regional markets in Eastern Africa have fuelled migration of professionals from the region, some of them young. The report showed that Eastern Africa is the most diversified region with regard to the origin of international migrants from Africa, as it receives significant share of migrants from all other regions, except Western Africa.
UNCTAD’s Trade and Development Board session: Plug tax loopholes before fighting illegal financial flows
Daniel Titelman, director of the development division of the UN Economic Commission for Latin America and the Caribbean, said that although governments and international organizations should fight illicit and licit leakages, they may have more statistical and policy tools to stem the legal flows, particularly tax avoidance. To illustrate the effect this could have, he cited the experience Latin America had two years ago when it offered amnesty to those who voluntarily declared financial assets they had kept under the radar. In Argentina, he said, the undeclared assets put on the table amounted to around 21% of GDP. And the fines paid by those who came forward was worth about 2% of GDP – an amount that would have been very difficult to raise through tax reform. “It can take you two years of debate to pass a tax reform to try to raise the same amount,” he told governments in attendance. [UNCTAD session backgrounder (pdf); UNCTAD Annual Report 2017]
AU Peace and Security Council: communique on illicit flows and financing of arms
Underlines the link between illicit financial flows, transnational crime, terrorism, poaching, proliferation of rebel movements and the illegal exploitation of natural resources, notably by armed groups, and illicit proliferation of weapons. In this regard, Council urges Member States to redouble their national efforts and further enhance the capacity of their law enforcement agencies, in order to enable them to effectively discharge their mandates and curb the illicit flow of weapons into and within Africa, as well as to enhance their capacity to identify, seize and destroy illicit weapons. In the same context, Council further urges Member States to redouble their efforts in the fight against corruption and promotion of good governance and high standards of professionalism, particularly, within the defence and security sectors;
Expresses deep concern over the potential negative effects of the presence of foreign military bases in some volatile parts of the continent to the future security and stability of Africa and underlines the need for external actors to continue to contribute to the promotion of peace and security in the continent;
Also underscores the importance of strengthening import and export control measures, enhancing the criminal justice response to arms trafficking, and enhancing regional cooperation in the management of borders, including through intelligence and experience sharing among Member States. In this regard, Council encourages closer collaboration between and among regional police authorities and the Committee of Intelligence and Security Services of Africa (CISSA). Furthermore, Council requests the Commission, through the AU Border Programme, to provide necessary technical assistance to Member States; [Issued after 776th meeting, 24 May 2018]
India: Rural roads and local economic development (World Bank)
Nearly one billion people worldwide live in rural areas without access to the paved road network. This paper measures the impacts of India’s $40bn national rural road construction program using regression discontinuity and data covering every individual and firm in rural India. The main effect of new feeder roads is to allow workers to obtain nonfarm work. However, there are no major changes in consumption, assets or agricultural outcomes. Nonfarm employment in the village expands only slightly, suggesting the new work is found outside of the village. Even with better market connections, remote areas may continue to lack economic opportunities. [World Bank blog: Uncovering policy guidance from international agreements on transport]
Today’s Quick Links:
Beijing FOCAC summit: Nigeria may take over from South Africa as co-chair
Nigeria oil reserves remain stagnant for 12 years
Nigeria National Stakeholder Dialogue on Land Reform: speech by VP Osinbajo
UNWTO Regional Commission for Africa (4-6 June, Abuja): session documentation
IATA’s Sydney AGM: Airlines urge caution on airport privatization
WEF’s 2018 Industry Strategy meeting (6-7 June, San Francisco): Future scenarios and implications for the industry
Implications of e-commerce for competition policy: summaries of contributions submitted to the OECD (pdf)
The big (data) bang: what will it mean for compiling SDG indicators?
UN ‘Tech Bank’ opens in Turkey, to help poor nations ‘leapfrog development challenges’