News

tralac’s Daily News Selection

tralac’s Daily News Selection
Photo credit: Rediff

03 Jul 2018

Updated: tralac’s AfCFTA Ratification Barometer

UNU-WIDER has posted an early view of the forthcoming book Industries without Smoke-stacks: Industrialization in Africa reconsidered. The editors: Richard Newfarmer, John Page, Finn Tarp

Profiled newsletter: African Cotton, Textiles & Apparel Monitor – #16

China and the World Trade Organization: a new White Paper (State Council Information Office)

The Chinese government is publishing this white paper to give a full account of China’s fulfillment of its WTO commitments, to explain China’s principles, stances, policies, and propositions regarding the multilateral trading system, and to describe China’s vision and actions in advancing higher-level reform and opening-up, according to the white paper. Box 2. China takes concrete action to expand imports (extract): From 1 July 2018, China is to reduce the most-favoured-nation tariffs for automobiles from 25% and 20% to 15%, and for auto parts from 25% to 6%. As a result, China’s average MFN rates will have fallen to 13.8% for automobiles and 6% for auto parts. From 1 July 2018, China is to cut MFN tariffs for 1,449 consumer products from an average MFN rate of 15.7% to 6.9%, representing an average reduction of 55.9%. Table of contents: China has faithfully fulfilled its WTO accession commitments (p3); China firmly supports the multilateral trading system (p10); China’s significant contribution to the world after accession to the WTO (p15); China is actively advancing opening-up to a higher level (p20); Conclusion (p26). [Washington Post: Trump’s trade war is getting very real]

Understanding global remittances corridors in the DRC (FinMark Trust)

In light of these diverse migrant flows, this report has sought to obtain an understanding of the major global remittance corridors of the DRC, including the split between formal and informal channels, the value of funds sent and received, the regulatory environment, and the remittance product market. Information and data was obtained through a review of existing research on DRC migration and remitting patterns, as well as primary research interviews with senders and receivers of remittances domestically, the Congolese diaspora in Belgium, (in Belgium, USA, Canada, China, India, South Africa and Angola), and foreigners living in the DRC. Extract from the conclusion (pdf):

However, political and economic instability have also destabilised the formal payments system, and driven a high proportion of payments into the cash economy, and informal transacting methods. Simultaneously, the regulatory environment seems to have become more focused on preventing money laundering abuses than on enabling access to finance. The opportunity to facilitate remittance markets in the DRC, and by doing so to improve the access of extremely vulnerable populations to financial services and resources, is thus large. Given that the bulk of remittances likely come from other African countries, a focus on facilitating regional markets would be appropriate. [Note: The report is also available in French, pdf]

Related: Blog commentary by Nikki Kettles. The total remittances into DRC from these nine destination countries are found to be in the region of $305m per annum, of which 81% is estimated to flow via informal channels. The largest of these remittance markets is Angola, followed by France and Congo-Brazzaville. 58% of remittances come from other African countries, and 92% of African remittances travel informally.

Eswatini: FinScope MSME 2017 survey (FinMark Trust)

Thus, in trying to understand and unlock the full potential of the sector, a FinScope MSME survey was conducted between October 2016 and March 2017. The main objective was to size and scope the MSMEs in Eswatini while describing the levels of access to financial products and services (both formal and informal). The following useful insights have been gained (extract, pdf):

People: The overall Eswatini MSME sector is estimated to consist of 59 283 business owners (10% of the population own MSMEs) and employs approximately 93 000 people (16% of the total working age population). MSME business owners in Eswatini are typically local citizens who are 35 years or older. The MSME sector:As of January 2017, there were 59 289 Micro, Small and Medium Enterprises business owners with an average of 1.14 businesses per owner. Business owners surveyed comprised 75% independent entrepreneurs, 18% micro businesses, 7% small businesses and 1% medium businesses. About a quarter (26%) of these businesses operate in the agricultural sector, followed by 11% of businesses in manufacturing.

Country updates

Ghana: Fifth National Annual Civil Society Forum (GhanaWeb)

The Civil Society Platform has advised government to position itself economically to avoid going back to the IMF after its exit from the programme in 2018. It explained that gross indiscipline in the management of Ghana’s resources had been responsible for the country’s financial woes. However, to restore policy credibility and macro-economic stability due to poor economic management and enhance investor confidence, the current government asked for a one-year extension of the IMF programme to address key challenges. At the opening of the Fifth National Annual Civil Society Forum in Accra on 28 June, Francis Tsegah, a former Ambassador and Senior Research Fellow with the Ghana Centre for Democratic Development, urged the government to make more efforts to strengthen fiscal discipline. He said although the government had announced an exit from the programme by the close of 2018, the fiscal performance under the current ECF-backed programme has been generally disappointing.

Tanzania: LNG project to create over 10,000 jobs, says PM (IPPMedia)

The planned liquefied natural gas project in the southern region of Lindi is set to create more than 10000 jobs, Prime Minister Kassim Majaliwa has said. “Talks are on-going between the government negotiation team and international oil companies on how implementation of the economically viable project could begin,” Majaliwa told the National Assembly. The $30bn project will cover 2,071.1 hectares in southern Tanzania, said Majaliwa, adding that once completed it will see Tanzania becoming a gas exporting country as well as increasing government revenues. [World Bank supports aim to turn Egypt into regional hub for oil and gas trading]

Tanzania: Acacia Mining’s economic and tax contributions in Tanzania, 2017 (pdf, Acacia Mining)

A recent independent report released by Ernst and Young demonstrates the significant contribution that Acacia’s three mines – North Mara, Bulyanhulu and Buzwagi – continue to make to Tanzania’s economy as well as the country’s broader social development. The report, entitled Acacia Mining plc Total Economic and Tax Contributions in Tanzania, 2017 (pdf), concludes that during the year Acacia’s businesses purchased $434m of goods and services from suppliers located in Tanzania. This represented 67% of our total spend on goods and services in 2017. Of this amount, approximately $120m of goods and services were purchased from businesses in the direct locality of the three mines in the country’s Lake Zone. Despite facing several challenges during the year, in 2017 Acacia contributed $712m to the national economy, which represents around 1.5% of Tanzania’s total GDP. This compares with a total contribution of $724m the previous year.

Nigeria’s export earnings rise by 10% to $14.4bn in Q1 2018 (Central Bank of Nigeria)

Export earnings rose by 10.2% to $14,393.61 million in Q1 2018 when compared with Q4 2017. It also indicated an increase of about 44.4% when compared to Q1 2017. Earnings from crude oil and gas, which accounted for 93.3% of total export earnings during the review period, increased by 10.1% to $13,426.53 million in Q1 2018 when compared with the preceding quarter. Earnings from non-oil and electricity exports also increased by 12.3% to $967.08 million in Q1 2018. Available data showed that payments for import of goods (fob) to the economy in the review period grew by 13.9% to $8,641.60 million above the level recorded in the preceding period. This was largely as a result of 99.5% increase in the imports of petroleum products (Table 1, chart 2).

Millennium Challenge Corporation announces new collaboration with the AfDB

MCC and the African Development Bank will also work together to implement MCC’s new authority to make regional investments. In April 2018, Congress passed and President Trump signed the AGOA and MCA Modernization Act giving MCC increased flexibility to promote regional collaboration, trade, and economic growth by authorizing MCC to enter into an additional, concurrent compact with a country partner specifically to promote regional integration. This new authority aligns with AfDB’s Regional Integration Policy and Strategy for 2014-2023 that seeks to create larger, more attractive markets, link landlocked countries to international markets, and support intra-African trade. [USTDA, AfDB expand procurement partnerships]

Implementing a survey on exports of ICT-enabled services: findings and lessons learnt from survey implementation during 2017 (pdf, UNCTAD)

This project lies within the perspective of statistics on the digital economy. It stems from the observation that no comparable statistics on trade in ICT-related services are currently available while there is a growing demand for better data from countries exporting such services. In India, the survey found that 70% of total services exports could be ICT-enabled in the financial year 2016-17. Some 81% of the services exports that could be ICT-enabled were actually delivered over ICT networks. ICT-enabled services thus accounted for 57% of total services exports from India. Computer services were the biggest contributor accounting for almost two-thirds of the total amount. For services exporting SMEs, delivery over ICT networks constituted the predominant mode of supply (more than 99%). In Costa Rica, the survey found:

Global value chains and industrial development: lessons from China, South-East and South Asia (pdf, UNIDO)

This volume brings together the findings from a series of studies carried out for a joint project of UNIDO and the University of International Business and Economics. Part One takes a macro perspective, in which linked input-output tables are used to map participation of the Asia region in value chains over time. In Part Two, firm-level surveys and case studies of individual firms and GVCs from China, India and Viet Nam are analysed to further understand the drivers and consequences of successful integration and upgrading. To deepen our understanding at the firm level, the project focussed on the electronics and apparel industries, which have been at the foundation of Asian GVCs. Part Three presents the main conclusions on these issues and policy implications drawn therefrom.

Could Japan become a role model for the Fourth Industrial Revolution (WEF)

In recent months, I have worked closely with Japanese government, business and civil society leaders to establish the World Economic Forum Centre for the Fourth Industrial Revolution Japan — the first Centre in the Forum’s new global network to be established outside the United States. Supported by the Japanese government and businesses, Centre for the Fourth Industrial Revolution Japan will co-design pilot projects to speed up Japan’s response to technological change. The goal is two-fold: First, to help Japan make the most of technology as it confronts critical issues like an aging and shrinking population — part of an ambitious program of social transformation that Japanese leaders are calling Society 5.0. And second, to create new governance models for other countries to follow. Japan is, in many ways, a canary in the global coal mine: [The author, Murat Sönmez, heads the WEF’s 4th Industrial Revolution & Global Network]

The rise of the robot reserve army: working hard or hardly working? (CGD)

What does automation mean for developing countries? Are the East Asian pathways to development based on job creating manufacturing-led growth gone forever? Will 1.8bn or two-thirds of the workers in developing countries need to find new jobs (as the World Bank says they will)? Is a global universal basic income needed as Indonesian Minister of Finance proposed at the IMF and World Bank meetings? Does every developing country need to set up a ministry of automation as Thailand has done? [The authors: Lukas Schlogl, Andy Sumner]

Tuesday’s Quick Links:

Fred K. Nkusi: African arbitration association is a welcome initiative

Egypt, Poland discuss Polish industrial zone in Suez Canal Economic Zone

World Bank: New country classifications by income level – 2018-2019

Q2 2018 update: World Development Indicators

Five ways Nigeria can realize mobile technology’s potential for the unbanked

TIPS: The Green Economy Barometer 2018 South Africa