Building capacity to help Africa trade better

tralac’s Daily News Selection


tralac’s Daily News Selection

tralac’s Daily News Selection
Photo credit: Reuters | Akintunde Akinleye

Talks between Kenya and Tanzania to resolve the non-tariff barriers affecting bilateral trade entered their second day today. For updates: @Trade_Kenya

Concluding today, in Lagos: Standard Bank’s pan-African trans-regional conference

AfCFTA updates: South Africa, Nigeria

(i) South Africa’s foreign minister says South Africa should have ratified the AfCFTA by the end of this year

(ii) AfCFTA can stimulate Nigeria’s economy by $2.9bn – Osakwe. Nigeria’s chief trade negotiator/director-general, Nigeria Office for Trade Negotiations, Ambassador Chiedu Osakwe, has disclosed that the AfCFTA has the potential to stimulate the nation’s economy with an increase of $2.9bn in 2018. Osakwe also disclosed that international and domestic studies carried out showed that the AfCFTA is estimated to stimulate 8.8% increase in Nigeria’s total exports, with a small structural shift towards manufacturing and services. He also outlined other benefits of the AfCFTA to include, but not limited to: integrating the informal sector into the formal sector, empowering women, investing in trade infrastructure to reverse the systemic deficit and dilapidated one, reducing the cost of money which precludes trade finance/micro credits and finance for MSMEs. [Nigeria: State of play on the AfCFTA sensitization and consultation exercise]

(iii) NOTN’s position on AfCFTA agreement worries MAN. Manufacturers Association of Nigeria has expressed dissatisfaction with the outcomes of the Nigerian Office of Trade Negotiations in just concluded nationwide stakeholders’ engagements on the AfCFTA agreement. According to MAN President, Dr Frank Jacobs, “we are now even more worried that, in spite of the widespread concerns that necessitated Mr President’s reservation of his signature at the summit in Kigali, the subsequent activities of the NOTN was not tailored towards addressing those concerns. Rather than squarely addressing those critical issues, all efforts were geared towards extolling the laudable objectives of the AfCFTA, its potential benefits and what Nigeria is expected to benefit from its implementation.” The manufacturers urged government to provide details of how concerns bordering on the tariff lines and product lines (categorised using HS codes) that have been agreed for liberalisation, as well as the exclusion and sensitive lists, implementation of market access without negotiating the rules of origin and other safeguard measures, would be addressed once the AfCFTA is ratified.

Implementation of trade policy instruments on rice trade in the EAC: the experience of Tanzania (USAID Hub)

The USAID Hub has embarked on publishing a series of EAC Common Market Implementation Impact Studies. This second study (pdf) showcases how the implementation of EAC trade policy instruments has a significant impact on grain trade in the region. Specifically, how these policies affected Tanzanian rice trade from 2008 to 2016 and leading up to one of the Hub’s trade policy reforms in 2017, where Tanzania’s longstanding dispute with Rwanda – Rwandan authorities assessed a charge of $300 per metric ton on rice originating from Tanzania - was resolved. Although the existing EAC policy framework is intended to benefit trade in sensitive products like rice and further domestic food security objectives, its application and ineffective implementation has undermined trade in the rice market for Tanzanian producers. There is need for joint action at the EAC level in terms of the treatment of rice as a sensitive product and the applicable CET rates and for a review of the inbuilt flexibilities availed through stays of application of the CET and the duty remission schemes.

Tanzanian trade facilitation updates:

(i) Tanzania Ports Authority in $690m initiative geared to boost port of Dar es Salaam. The funding will be sourced mainly through a $600m International Bank for Reconstruction and Development soft loan and a $30m grant jointly offered by the UK’s Department for International Development and Trade Mark East Africa. Speaking on the sidelines of the first-ever Port of Dar es Salaam stakeholders’ forum which began in the city yesterday, Kakoko said TPA is implementing a total of 163 projects major expansion projects to increase depth and handling capacity of the country’s seaports. The authority has embarked on a new marketing campaign to attract and retain customers of the port of Dar es Salaam in particular, with representatives of clients from at least seven countries invited to attend the Transit Markets Stakeholders’ Forum. Apart from local customers, delegates from Uganda, Malawi, Zambia, DRC, Rwanda, Burundi, and the Comoros attended.

(ii) Govt sets up ‘business clinic’ in reform push. Industry, Trade and Investment minister Charles Mwijage launched the initiative - dubbed the Tanzania Business Clinic- in Dar es Salaam yesterday. The launch followed the recent adoption by the cabinet of a blueprint meant to lay the groundwork for a raft of amendments to laws and regulations with a view to improving the business environment. Mr Mwijage said TBC would identify and provide long and short-term solutions to challenges specific companies or sectors were grappling with. The blueprint – prepared after thorough consultations with various private sector associations and World Bank officials – will see the government initiate amendments of various laws including those governing value added tax; indicative prices for imports; immigration and labour; social security and environmental management, among others.

Country updates

Kenya: MPs give Rotich two weeks to decide fate of cryptocurrencies (Business Daily)

Parliament’s Finance and National Planning Committee took Mr Rotich to task to explain why trade in bitcoins and other virtual currencies was taking place in the country. The committee sought to know why the Treasury and the Central Bank of Kenya allowed people to venture into the unregulated cryptocurrency space without being licensed to operate and taxed. Mr Rotich told MPs that like any other developing technology, the government was yet to determine whether or not trade in cryptocurrencies will be allowed to thrive. He said discussions were ongoing globally to regulate the trade in virtual currency to minimise risks including money laundering.

Nigeria: Dangote Ibese Cement achieves 2.4m metric tons export to West African markets (BusinessDay)

Dangote cement plant, Ibese, Ogun State with production capacity of 12 million metric tons of cement per annum has achieved 2.4 million metric tons export annually to West African markets, mainly Benin, Togo and Ghana. Armando Martinez, plant director, said that the cement plant in Ibese has concluded plans to export 2 million metric tons annually, of klinker, a major cement raw material, to Dangote cement plants in both Ghana and Cameroon for a full-fledged cement production. Speaking during a facility tour conducted on Dangote cement plant, Ibese by the Standards Organisation of Nigeria, Martinez noted that Dangote cement and Dangote Group was vigorously expanding and covering more African countries by locating more cement plants across Africa, explaining that the former grinding and packaging plants in Cameroon and Ghana would be converted to cement production plants. Martinez said that Dangote cement targets 77 million metric tons of cement annually, but produces 44 million metric tons of cement at present. Nigeria accounts for 29.5 million metric tons of the total cement production.

Ethiopia: DP World plans logistics complex to serve landlocked African countries (The National)

DP World is planning to set up a logistics facility in landlocked Ethiopia to transport goods from a port it is developing in neighbouring Somaliland, in its latest foray into Africa where it has faced dual challenges. The Nasdaq-listed company’s logistics complex in the east African country would transport goods to various landlocked states on the continent, said Sultan bin Sulayem, chairman of DP World, according to UAE news agency Wam. DP World’s planned facility in Ethiopia would strengthen its position in Africa, Mr bin Sulayem said. “Business groups in Dubai can always benefit from DP World’s presence in different countries including Rwanda and Egypt where re-exporting opportunities are abundant.”

Tunisia, China sign deal on developing digital economy (Xinhua)

Tunisia and China have signed a partnership agreement on developing digital economy, the Tunisian Institute for Strategic Studies (ITES) said Tuesday. The deal was inked during the Belt and Road Digital Economy conference held in Beijing, the ITES said.

Indonesia targets African market, eyes Tunisia as hub (Antara News)

The Indonesian Government is committed to penetrating the African market following the launch of negotiations on the preferential trade agreement between Indonesia and Tunisia on 25 June. Indonesian Trade Minister Enggartiasto Lukita stated here on Wednesday that the negotiations were expected to be concluded in 2018, and Tunisia was seen as a hub to extend Indonesia`s product exports to the northern African region and the EU. The value of bilateral trade between Indonesia and Tunisia in 2017 was recorded at $87.96m, increasing from $60.74m in 2016.

Global Infrastructure Outlook: Infrastructure investment need in the Compact with Africa countries (GIH)

Moreover, the required $621bn is part of a greater total infrastructure investment need of US$2.4 trillion for energy, telecommunications, airports, ports, rail, roads and water to 2040, if these 10 countries are to meet the demands of accelerating economic and population growth. Based on current trends, forecast investment is $1.4 trillion, leaving a $1 trillion investment shortfall. In delivering these findings, Outlook forecasts for the first time the scale of the overall infrastructure investment gaps at both country and sector level in 10 Compact with Africa countries, and how these relate to meeting the SDGs.

OECD-FAO Agricultural Outlook 2018-2027: Poorer countries set to be ‘increasingly dependent’ on food imports (UN)

Global agricultural and fish production is projected to grow by around 20% over the coming decade, but with considerable variation across regions. Strong growth is expected in Sub-Saharan Africa, South and East Asia, and the Middle East and North Africa. By contrast, production growth in the developed world is expected to be much lower, especially in Western Europe. As a baseline projection, the Agricultural Outlook 2018-2027 assumes policies currently in place will continue into the future. Beyond the traditional risks that affect agricultural markets, there are increasing uncertainties with respect to agricultural trade policies and concerns about the possibility of rising protectionism globally. Extract:

The important contribution from Sub-Saharan Africa and India reflects in large measure continued strong population growth in these regions (Figure 1.4). The global population growth rate is expected to fall from 1.1% at present to 0.9% per year in 2027. Since around 2013, growth has also been falling in absolute terms, although world population will still grow by around 74 million people per year by 2027. Most of this growth occurs in Sub-Saharan Africa and India, as well as the Middle East and North Africa. Population growth in Sub-Saharan Africa is accelerating in absolute terms: while the region’s population increased by 27 million in 2017, this rate will increase to 32 million extra people per year in 2027. In addition to population growth, food demand is influenced by the growth of per capita incomes. The macro-economic assumptions underlying this Outlook suggest strong growth in per capita GDP in India (6.3% p.a.) and China (5.9% p.a.). For Sub-Saharan Africa, 2.9% p.a. per capita growth is expected over the coming decade, but with variations across the continent. Moreover, high growth in average incomes does not necessarily translate to income growth for poorer households. Per capita food demand in Sub-Saharan Africa is therefore expected to remain at relatively low levels. [The 41st Session of the Codex Alimentarius Commission is taking place in Rome: conference documentation]

Wednesday’s Quick Links:

JICA’s World, July 2018: a focus on Southern Africa

Nigeria: ActionAid, ECOWAS, others want improved safety measures on food

Falling EAC trade worries regional business leaders

KEBS doesn’t know who imported substandard sugar

The AfDB has posted an EOI for a consultant to coordinate the production of the African Development Report, 2018

WAIFEM, IMF convene forum on balance of payments statistics

The Gambia Revenue Authority hosts OECD, ATAF tax forum

COMESA signs aviation cooperation pact

Stears: The problem with Nigeria’s ports


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