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tralac’s Daily News Selection

tralac’s Daily News Selection
Photo credit: EAC

25 Jun 2018

Underway, in Dar es Salaam: Workshop on establishing a National Trade Facilitation Roadmap in Tanzania (25-29 June)

Underway, in Victoria Falls: NEPAD Agency, PIDA_Africa strategic dialogue on advancing infrastructure development in Africa (25-26 June). Extract from the concept note (pdf): The 2018 Dialogue will focus on three work streams: (i): How to mobilize African institutional investment for infrastructure development in Africa through the NEPAD 5% Agenda Campaign; (ii) Options to scale risk mitigation and operationalize an effective African Guarantee Scheme that enables the mobilization of institutional investment and private finance for African infrastructure projects; and (iii): How to create the foundation for the bankability of trans-boundary projects, including how to enhance the role of the PIDA Service Delivery Mechanism in early stage project preparation.

As the AU Summit preliminary meetings began today in Mauritania: President Kagame meets AU reforms team in Kigali

A listing of this week’s EAC trade and regional integration events

COMESA cues African states against protectionism as free trade takes effect (Business Daily)

COMESA Competition Commission chief executive officer George Lipimile says countries that enjoy some protectionism measures will have to get better alternatives in order not to undermine the effectiveness of AFCTA. Kenya is one of the countries that has been enjoying COMESA safeguards on sugar for over 10 years, even after exhausting the allowable limits. The current quota, which limits the amount of sugar that regional countries export to Kenya to 350,000 tonnes, comes to an end in February next year. ACFTA, which if effective, will allow free movement of goods from one country to another, was signed by 44 African states in Kigali this year. “Countries should not hide on protectionism to hinder free movement of goods under the ACFTA and as a result of this we need to look for alternative ways of issuing the safeguards,” said Dr Lipimile. Dr Lipimile noted that some of the alternatives include looking at case by case for specific countries and if at all it is justifiable for those countries to be given safeguards and to what extent.

Impact of non-implementation of revised EAC RoO: the case of motor vehicle assemblers in Kenya (East Africa Trade and Investment Hub)

This case study analyses the impact of non-implementation of the pdf EAC Rules of origin 2015 (792 KB)  and highlights the specific experience of private sector companies compared to the general performance of the Motor Vehicle Assembly Industry in the region. It illustrates how two large private sector companies have not been able to take advantage of the revised RoO which require that locally assembled motor vehicles be given preferential treatment in other Partner States. The study reveals continued violation of commitments undertaken by EAC Partner States in terms of non-implementation of RoO. It identifies five significant negative impacts: (i) underutilized assembly capacity; (ii) further investment disincentive as a result of low capacity utilization; (iii) fewer jobs created as a result of less market; (iv) high prices for consumers; and (v) negligible regional sales/loss of a regional industrialization opportunity.

Extract (pdf): This study finds that the implementation of the zero-import duty provided for by the RoO will in turn reduce the Retail Selling Price of Kenyan assembled motor vehicles in the Partner States by 14-20%. In addition, industry players will be able to optimize their industry capacity utilization to at least 30,000 units per annum. The assemblers project that they can progressively increase assembly line jobs by 1,000, with the additional knock-on effect of increasing the parts manufacturers/suppliers to assembly plants employees to approximately 6,000. This study makes the following recommendations: [Note: Over the coming weeks, the USAID Hub will publish a series of EAC Common Market Implementation Impact Studies]

Kenya: International trade moved from Foreign Ministry (Daily Nation)

President Uhuru Kenyatta has handed all matters of international trade to the Ministry of Industrialisation, buttressing the docket for Cabinet Secretary Adan Mohamed, but potentially reducing areas of turf wars between departments. In the new Executive Order 1 for 2018, the President transferred the Department of International Trade, headed by PS Chris Kiptoo, from the Ministry of Foreign Affairs to that of Industrialisation, Trade and Co-operatives. The President said the new directive “supersedes the Executive Order No 1” of 2016 to rearrange government departments and ministries. In the new structure, the President says the Ministry of East African Community will be dealing with implementation of the EAC treaties as well as projects under the Northern Corridor. However, it is not clear whether it is Peter Munya who should continue to negotiates the EPAs agreements with the EU (and EAC member countries) or Mr Mohammed. [Mandera County pays the economic cost of Somali border closure]

East Africa: Northern Corridor initiative resumes meetings (New Times)

Foreign Affairs Ministers of the Northern Corridor Integration Project initiative are convening in Nairobi today. The ministerial meeting will make way for a Heads of State Summit slated for tomorrow. The body has not held summit level sittings since April 2016, which had led to concerns on whether the initiative is still alive. The slowdown in regards to regular meetings and consultation had been previously explained as due to the busy election calendar of member countries in 2017. The initiative was borne when Presidents Paul Kagame, Yoweri Museveni, and Uhuru Kenyatta first met in Uganda on June 2013, to discuss how to co-operate and speed up development in the region. South Sudan has since graduated from observer status to an active member of the initiative.

Ghana: Single window saves Ghana $500m in two years – UGBS report (GhanaWeb)

The introduction of the national Single Window system has saved Ghana $500m since its implementation in 2016, a University of Ghana Business School report has stated. Dubbed the Ghana Business Development Review, the 20-page report discusses developments, performance, managerial and governance issues and major constraints on businesses covering the period 2015-2017. According to the report, the introduction of the Single Window system, apart from increasing revenue, had also made operations at the ports more effective and productive. The report also quoted figures from the Ghana Revenue Authority’s Customs Division’s Monthly Revenue performance, noting that the implementation of the single window system had increased government revenue significantly by 24% over the past two years, rising from GH¢744 billion in 2015 to GH¢975 billion in 2017.

Mauritian exchange sees $6.5bn gold trading in five years (Moneyweb)

A Mauritian commodity exchange that plans to start operating in the fourth quarter expects to trade $6.5bn of gold annually within five years, part of the Indian Ocean island nation’s plan to become a financial gateway to Africa, its chairman said. The introduction of the Mauritius International Derivatives and Commodities Exchange brings to fruition Prime Minister Pravind Jugnauth’s pledge last year to introduce gold trading to the country. Mauritius’s Financial Services Commission approved Mindex’s license application “in principle,” exchange chairman Hirander Misra said Monday. Its operations will eventually include derivatives trading, a vault to store bullion and a refinery, he said. Mindex projects that it will trade 31 tons (997 000 ounces) of gold in 2019, increasing to 156 tons by 2023. [Mauritius industrial production year-on-year at 2.7%]

Kenya: Authorities arrest standards bureau head over fertiliser imports (Reuters)

The authorities have arrested the managing director of the Kenya Bureau of Standards (KEBS) and other officials on charges they allowed the import of fertiliser that failed KEBS tests, the public prosecutor said. Investigations by the Director of Criminal Investigations found that the fertiliser imported from Morocco failed to meet KEBS’s standards when tested but it was released to the market instead of being destroyed or returned, the Director of Public Prosecutions, Noordin M. Haji, said in a statement.

South Africa: SABS under fire for costing SA R4bn a year (Fin24)

The SA Bureau of Standards has been strongly criticised by business, which says the entity is losing the country at least R4bn a year in exports in the manufacturing and engineering sectors alone. This comes after years of businesses complaining about a lack of testing by the SABS, resulting in manufacturers losing contracts because they are unable to obtain the SABS mark timeously, or they have been unable to renew 2 600 permits to use the mark. Trade and Industry Minister Rob Davies is assessing representations from the SABS board on why he should not go ahead with his intention to put the entity under administration for not performing to its mandate. The SABS falls under Davies’ department. SABS CEO Boni Mehlomakulu hit back at industry and the department of trade and industry this week, saying she was fulfilling her mandate according to policy that was implemented in 2005. She said the issues affecting industry were inherent in the policy, which emerged from the 2004 National Economic Development and Labour Council report, titled Modernising the South African Technical Infrastructure.

Nigeria: FG mulls implementation of auto policy (ThisDay)

The Minister of Industry, Trade and Investment, Dr. Okechukwu Enelamah, says the federal government is finalising the auto policy and would soon commence its implementation. Enelamah said this in his keynote address delivered at the seventh German-Nigerian Business Forum in Lagos. He said the federal government had been reviewing the policy to ensure its effective implementation. For close to four years now, there has been no pronouncement by the federal government on the automotive policy which was introduced in 2013 by the administration of former President Goodluck Jonathan. The policy was to encourage auto firms to set up their plants in Nigeria.

Nigeria: Automobile policy impacting negatively on revenue, NPA boss laments (Ripples)

The Nigerian Ports Authority (NPA) on Thursday said the revenue accruing from car importation into the country dropped by 20 percent this year, a fallout of the Federal Government’s Automobile Policy. The NPA warned that the drop in the revenue was an indication that the government’s overall revenue might be affected negatively, and called for an urgent review of the policy in order to reduce subsequent losses. The automobile policy, which raised import duties on cars, was introduced in 2013 by former President Goodluck Jonathan to revive the ailing Nigerian auto industry, encourage local manufacturing of vehicles and discourage importation of cars. The Managing Director of NPA, Hadiza Bala-Usman: “We have recorded a drop in revenue by 20%. How many cars are being manufactured and how many Nigerians can really afford to buy brand new cars? So, the implication is that while the government is losing revenue on importation, the manufacturing or assembly plants are not achieving the aims of the policy.”

Reimagining regionalism: Heterodox and feminist policy proposals from Africa and the Caribbean (FES)

Reimagining Regionalism is a compilation of five policy papers that present heterodox and feminist policy proposals around fundamental questions of economic policy and sustainable development: trade, climate change, fiscal governance, agriculture, and debt. This analysis emerges from three regional workshops co-convened in 2016 and 2017 by Regions Refocus and several autonomous regional civil society groups in collaboration with the Friedrich-Ebert-Stiftung. Answering the call of these workshops for regional specificity and analytical clarity, Reimagining Regionalism addresses separate but related policy areas fundamental to the Caribbean, the African continent, and the overlaps between them. Written by leading activist intellectuals from the Caribbean (Mariama Williams, Rosalea Hamilton and Vanus James, and Don Marshall) and Africa (Tetteh Hormeku-Ajei and Mohamed Said Saadi), the papers articulate shared imperatives of democratic participation, meaningful policy space, and targeted efforts to stimulate and bolster domestic productive capacities.

Monday’s Quick Links:

CGD: Domestic resource mobilization in low-income countries – proposal for a surge in multilateral support

Brookings: Enhancing the attractiveness of private investment in hydropower in Africa

AIIB Summit: Will the bank be more hands-on with funding environmental projects?

AIIB to expand spending to $3.5bn, with focus toward India

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This post has been sourced on behalf of tralac and disseminated to enhance trade policy knowledge and debate. It is distributed to recipients across Africa and internationally, serving in the AU, RECs, national government trade departments and research and development agencies.

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