Thursday was East African Budget Day: an initial overview of some highlights

Launching next week, in Mauritius: AfDB’s 1st Electricity Regulatory Index

Next week, in Lagos: 3rd ICC Africa Conference on International Arbitration

Next week’s OECD SWAC Secretariat seminar presents key results of its analytical work for 2017-18: on cities and urbanisation and the food economy, employment and women.

Featured tweet, @snkaringi: After a successful GTAP Purdue Board meeting advancing Africa global agenda, UNECA will be presenting new preliminary simulation results of AfCFTA to an economists audience among leading researchers in global economic analysis at GTAP Conference

Euler Hermes, Allianz Research: Investment flows in Africa peaks over treaty on free trade area (BusinessDay)

We expect African exports to increase by a wide margin, based on two deterrent scenarios. The first one is without AfCFTA, and is driven by current development trends and foreign investor appetite for Africa. After China, Turkey developed a strategic partnership with African economies, and India is about to do so. In this first scenario, African exports would grow but trade would remain quite vertical, as commodity exports would keep the lion share of total exports. Based on our country scenario (on nominal GDP growth, exports and exchange rates), we estimate that African exports of goods and services would increase by +7% per year and reach $1275bn by 2030. But, intra-African exports would stick with their 19% share of the total.

The second scenario adds an AfCFTA impact on exports. Continental exports would grow by about +8% per year and reach $1415bn by 2030. This scenario yields also to very different structures of trade. Intra-African exports would reach 27% of the total, about the current ASEAN intra-regional trade share. Under this second scenario, intra-African exports would grow by about +11% per year (+7% with the first scenario). Manufactured goods would also represent a higher share of total ex- ports in this second scenario, jumping to 28% ($398bn) from 24% ($308bn) in the first scenario. It also means that the trade impact of an AfCFTA would be asymmetric. Manufactured goods and service exporters will make the bulk of additional export gains (South Africa, East Africa), while many oil exporters would not see key divergences, as e.g. Nigeria, Algeria or Gabon. Additionally, food exporters will also be big winners (Ghana, Zambia, and Côte d’Ivoire), since current barriers to food exports are among the biggest barriers to trade in Africa.

TFTA ratification: South Africa’s trade with TFTA countries (DTI)

South Africa’s trade with TFTA countries represents about 16% of SA’s trade with the world; in 2017 total trade with TFTA countries was in the tune of $27,6bn; a bulk of the trade is with SADC countries. After SADC, Egypt, Kenya, Ethiopia and Uganda feature as export destinations of potential; South Africa exports to Kenya account for 3,3% of TFTA exports. South Africa, in turn, receives about 2% of its TFTA imports from Egypt. [Extracted from the dti presentation to the SA parliament: pdf Ratification of the COMESA-EAC-SADC Tripartite Free Trade Area (405 KB) ]

Kenya Africa exports slide continues to new eight-year low (Business Daily)

Kenya’s exports to key markets in Africa fell to an eight-year low in the first four months of the year, official statistics show, continuing a trend that has been reflected in annual data over the years. Latest data by the Central Bank of Kenya show earnings from the continent were about Sh71.44 billion, a 4.5% drop compared to the same period in 2017 and the lowest since 2010. Reduced trade between Kenya and the rest of Africa is in keeping with a trend observed in the 12 months to December 2017.

National Green Export Reviews: Angola project begins work on ‘greening’ country’s trade (UNCTAD)

The workshop (11-22 June, Luanda) is the first step in the process of coming up with a national strategy for building competitive “green” economic sectors in Angola, which will be defined in the National Green Export Review. Opening the workshop (pdf), Angola’s trade minister, Joffre Van-Dúnem Júnior said: “The National Green Export Review is a key factor for the transition from an economy focused on extractive industries and on the export of a single product to an economy focused on the export of more environmentally-friendly products. The dynamic sectors of the green economy can make important contributions to the attainment of national development objectives related to economic diversification, poverty reduction, rural development, job creation and an overall improvement of social welfare.”

Algeria: 2018 Article IV Consultation (IMF)

Extract from Annex V – External Sector Assessment: The current account deficit remains large, dented only by a recent small hike in oil prices. The large drop in oil prices in 2014 and declining hydrocarbon production turned large positive current account surpluses into large deficits. Since then, Algeria has not been able to redress the balance through fostering non-hydrocarbon exports or sufficiently reducing import demand. The recent increase in oil prices has somewhat helped reduce the current account deficit, which is estimated at 12.3% of GDP for 2017, down from 16.6% in 2016. In the baseline scenario, the current account deficit is projected to narrow significantly in the medium term, reflecting the impact of fiscal consolidation as well as hardened tariff and nontariff trade barriers.

Algeria’s external buffers remain sizeable but are declining rapidly. International reserves stood at about $96bn at end-2017 (excluding SDRs), equal to 19 months of imports and 402% of the IMF’s adjusted ARA metric. But reserves are now about half of their peak value in 2013 and are projected to decline over the medium term in the baseline scenario (13bn in 2023, equal to about 3 months of imports). Total external debt stood at just 2.3% of GDP in 2017 and is unlikely to increase in the foreseeable future as the government remains averse to external borrowing and given restrictions on nongovernment external borrowing. [Selected Issues report: Improving public spending efficiency to foster more inclusive growth]

Ghana remains an important gateway to West Africa – Paul Lewis (GhanaWeb)

The Scottish Development International has described Ghana as an important gateway into the wider West and sub-Saharan African market place for business and upstream oil and gas operations. Speaking at the first Ghana Oil and Gas Trade Mission, Paul Lewis, the Managing Director of the SDI, which is the global arm of Scotland’s enterprise agencies, said they agreed on Ghana half a decade ago to establish the SDI’s direct presence due to its unique features. He said Ghana and the rest of Africa have the potential, and while the SDI has just a little presence, the truth remains that “We have great ambitions for Africa’s market place.” Mr. Lewis said the actualization of its ambitions to enter Africa’s market place depended largely on right and trusted partners to work with for mutual benefits. The mission, he said, could be described as a representation of a team, which is collaborating with Aberdeen and Grampian Chamber of Commerce and the UK Chamber of Commerce with the support of the Petroleum Commission.

Help for Singapore firms to enter East Africa (Staits Times)

Enterprise Singapore (ESG) opened a centre in Kenya yesterday - its third in Africa - to help Singapore companies enter the region and boost trade and investment between both markets. The centre in the capital Nairobi will serve as a regional hub for East Africa and complement ESG’s outlets in Johannesburg and Accra. ESG has identified several growth sectors in East Africa where Singapore firms can contribute, including fintech, e-commerce, logistics, light manufacturing and urban solutions and energy. The official opening coincided with a state visit to Kenya and Rwanda by Deputy Prime Minister Tharman Shanmugaratnam, who is also Coordinating Minister for Economic and Social Policies, and Dr Koh Poh Koon, Senior Minister of State for Trade and Industry.

Kenya: Industry minister warns Chinese firms on fake goods (Business Daily)

“As we get a lot of goods coming to our country, we want to make sure that they comply with all the necessary quality standards,” said Mr Mohammed, while speaking at the opening of the fourth annual China Trade Week exhibition in Kenya. The Industrialisation CS further warned Chinese firms against coming into the country under the guise of attending the exhibition and then using the opportunity to set up shops without seeking the necessary licences. This hampers business for small and medium-sized enterprises owned by Kenyans.

South Africa’s Bureau of Standards: Rob Davies calls for suspension of SABS board following serious lapses; SABS fights back against intention to suspend notice; Presentation by dti’s Lionel October on the pdf Eskom Inquiry: Mr Matshela Koko’s Testimony and Matters Related to the SABS (622 KB) ; Status Report on the SABS Inquiry: pdf Background documents (2.21 MB)

Trade between China and Portuguese-speaking countries up 26% in the first quarter of 2018 (MacauHub)

Brazil remained China’s largest partner in the period between January and March with trade estimated at $21.4bn (+27.9%) followed by Angola with $6.804bn (+22.4%) and Portugal with $1.344bn (+15.3%). Mozambique was China’s fourth-largest trading partner among the Portuguese-speaking nations with total trade of $532m (+25%). China’s imports from Portuguese-speaking countries increased by 7.76% compared to February, while exports from China to Portuguese-speaking countries fell by 20.67% over the previous month.

Vietnam: Economic Update  (World Bank)

The report examines economic developments in Vietnam in 2018, including its strong trade performance, increased FDI inflows, and public debt stabilization, among others. It also includes a special section on the government’s efforts to reduce trade costs and enhance competitiveness. A four-pillar integrated program on trade facilitation and logistics, is outlined. It includes: (i) Promoting trade facilitation by simplifying customs and specialized management regulations; (ii) Enhancing efficiency of trade-related infrastructure and the quality of connectivity; (iii) Building a competitive logistics service sector; and (iv) Strengthening interagency coordination and partnership with the private sector. It is intended to reduce non-tariff costs, thereby further boosting export-led growth, improving the business environment, and enhancing competitiveness.

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