Building capacity to help Africa trade better

tralac’s Daily News Selection


tralac’s Daily News Selection

tralac’s Daily News Selection
Photo credit: M. Johannsen | Fotolia

Promoting the AU Reform Agenda: An Extra-ordinary AU Summit has been called for 17-18 November

Released, today in Abuja: Independent analysis of the potential benefits of the AfCFTA for Nigeria (NOTN)

This study aims to assess the harmony between the AfCFTA and Nigeria’s economic and industrial goals; evaluate the economic benefits and costs of the agreement to the Nigerian economy looking at output, trade and welfare; and harness the perspectives of the private sector on the benefits and costs of the agreement to businesses in all sectors and the overall macro-economy. The study was conducted using a mixed methodology that involved: opinion polling of Nigerian businesses of all sizes from all sectors to harness their perspectives on AFCFTA; in-depth face-to-face interviews with key stakeholders such as business leaders, policy experts and leaders of organized labour about the agreement; simulation of trade and monetary effects, and meta-analysis of welfare and job effects of the agreement. A total of 512 companies were polled from all geopolitical zones of the country.  pdf Findings on the AfCFTA and the business environment (4.34 MB) :

(i) 69% of businesses believe AfCFTA would be advantageous to the country; While 20% of businesses believe AfCFTA would be disadvantageous to the country; and 11% are unsure about how AfCFTA will affect the business environment. The top three advantages are better business environment, promotion of local business and business expansion. Top three disadvantages are influx of sub-standard goods, discouragement of local businesses and loss of revenue for Nigeria. Top three sources of uncertainty are possibilities that AfCFTA will boost the economy, need for time to understand its impacts and the chances of collapse of local industry.

(ii) Overall, 78% of businesses believe that AfCFTA will make a positive impact on local businesses; 10% believe that the impact will be negative while the remaining 12% believe it will have no impact.

(iii) 56% of the poll respondents believe the country does not have the infrastructure necessary to reap those benefits and gains. However, there is an understanding among business leaders that the country should not wait until the infrastructure gap is fully closed before participating in the AfCFTA.

Next week, in Abuja: AU AfCFTA workshop on market access concessions on trade in goods for CEN-SAD, ECCAS, ECOWAS and UMA member states

AU member states have agreed to remove 90% of their tariffs on goods over a period of between 5 and 15 years, depending on whether a country is classified as developing or least developed, with special and differentiated treatment for the group of seven countries (Djibouti, Ethiopia, Madagascar, Malawi, the Sudan, Zambia, Zimbabwe. It has not yet been determined, however, whether the 90% of tariffs (also referred to as non-sensitive) that is to be completely liberalized relates to the percentage of total product lines or to the share in the country’s total value of imported products. Moreover, there are uncertainties regarding how the remaining 10% of tariffs will be treated. Robust empirical analysis and presentations will be made on, inter alia (pdf): Implementation of HS across the Member States; Toolkit on the modalities on goods and then the expected economic implications; Indicative criteria for self-designation of sensitive products and exclusion lists; How to accommodate LDCs within customs unions with common customs regimes in SDT flexibilities – experiences in other FTAs; Double qualification criteria (anti-concentration clause) to balance national sensitivities (i.e. exclusion lists) with the objective of boosting intra-Africa Trade in line with BIAT; Scheduling of tariff commitments in line with agreed modalities: examples of tariff phase-down schedules using national tariff schedules/books; Economic Partnership Agreements – market access schedules, excluded products and intra-African import coverage and approaches to categorizing ‘sensitive’ products; Fiscal implications of removing community levies: the cases of ECOWAS, CEMAC. [Note: the workshop is organised by the AfCFTA Unit of the AU’s Department of Trade and Industry]

Tripartite Free Trade Area: Sudan sensitisation workshop (COMESA)

The COMESA-EAC-SADC Tripartite Task Force, in collaboration with the Ministry of Trade, hosted a two-day national sensitization workshop on the TFTA in Khartoum (24 -25 June). The event brought together key stakeholders from the national technical committee and COMESA Secretariat who deliberated on the TFTA framework. This workshop followed the decision by the 13th Tripartite Committee Meeting of Senior Officials in February 2018, which stressed the importance of national awareness creation workshops to facilitate ratification and implementation of the TFTA. The Government of Sudan has since resolved to initiate the process of ratification of the TFTA, ahead of the deadline set for April 2019.

BRICS updates

8th BRICS Trade Ministers Meeting: BRICS commits to multilaterism (SAnews)

BRICS Trade Ministers have affirmed their commitment to a multilateral trading system as a tool to promote greater inclusivity. “Unilateralism is now placing the future of the multilaterism system at risk and we reaffirmed our commitment to a multi-lateral trading system. Many of us expressed the view that a multilateral trading system needs to become the tool to promote greater inclusivity and lessen inequality in the world,” South Africa’s Trade and Industry Minister, Dr Rob Davies, said. “We have agreed to update some work which we did before, which is to identify areas where we are complementary in trade and to emphasise those. We have a cooperation programme on technical standards, which is going to support the exchange in information and I am aware that these are major issues in international trade now,” he said.

Highlighted outcomes from the Joint Communiqué: On Global economic developments: We note with satisfaction that the intra-BRICS exports have significantly increased in recent years but agree that more should be done to increase trade, specifically value added trade, within BRICS.

Current state of play in the WTO: We recognise that the multilateral trading system is facing unprecedented challenges. We are deeply concerned with the systemic impact of unilateral measures that are incompatible with World Trade Organisation (WTO) rules and that put the multilateral trading system at risk. Of key concern is the disregard of the multilateral rules and principles that underpin international trade. We are further concerned about the increased trade tension which will without a doubt negatively impact countries, including BRICS.

We emphasise that global trade rules should facilitate effective participation of all countries in the multilateral trading system, that development must remain integral in the WTO’s work and the need to continue to make positive efforts to ensure that developing country Members, and especially the least-developed country Members, secure a share in the growth of world trade commensurate with the needs of their economic development.

Trade in Services: We acknowledge that trade in services is an increasingly important economic activity for BRICS countries, driving global economic and trade growth and creating job opportunities, with BRICS countries’ contribution to total global Trade in Services amounting to 12.1% in 2016, up from 8% in 2006. We recognise that BRICS countries have significant potential to enhance collaboration in services trade to promote mutually beneficial outcomes.

Third BRICS Industry Ministers’ Meeting: Fourth Industrial Revolution a step closer (SAnews)

Industry Ministers from BRICS countries on Wednesday signed a Declaration on the implementation of the Digital Industrial Revolution (DIR). Briefing the media after the meeting, South Africa’s Rob Davies said he and his counterparts had discussed issues of skills development and capacity building for the fourth industrial revolution. “We have been talking about partnerships within BRICS to prepare us all for the fourth industrial revolution and to ensure that the benefits of this are widely defused and they outweigh the risks and downsides,” he said. [Note: A concept note on the Fourth Industrial Revolution, tabled by China, needs to be studied before being adopted says SA’s Davies]

Declaration: The New Industrial Revolution (Fourth Industrial Revolution) and the drive for sustainable, less carbon and waste, intensive production, will have profound disruptive impacts on the structure of global production, trade, investment, employment and education. In this context, the action plan of this Third BRICS Industry Ministers Meeting, seeks to build on previously adopted directions and further expand industrial cooperation to secure mutually beneficial outcomes in an increasingly complex global environment. 

The Ministers meeting further resolved, inter alia, to establish the BRICS partnership on the New Industrial Revolution (PartNIR) that aims to translate the vision of the second Golden Decade of BRICS cooperation into reality through deepened BRICS cooperation on Industrialisation, Innovation, Inclusiveness and Investment. Under the partnership, in support of the manufacturing sectors, a new industrial revolution advisory group comprised of policy makers and experts from all BRICS countries will be established. The advisory group will develop a terms of reference and a work plan. 

Bridges Africa: Reflections on China-Africa economic relations at a time of transition (pdf)

Importantly, in a context of slowing Chinese demand and shrinking African borrowing capacity, the intensification of China-Africa economic relations seems to have subsided in recent years, pushing the complexity of the debate yet further. Data from the China Africa Research Initiative reveal that three key indicators – Chinese investment in Africa, China-Africa trade, and Chinese loans to Africa – have all been decreasing since 2013-2014. Against such a background, and ahead of the upcoming 2018 summit of the Forum on China-Africa Cooperation that will take place in September, this issue of Bridges Africa offers a range of reflections on what the future may hold for economic cooperation between China and African countries. Contents: In the lead article, Wenjie Chen and Roger Nord examine the recent evolution of economic links between China and Africa, suggesting that China’s Belt and Road Initiative could help reinvigorate this partnership. The second piece, Yunnan Chen looks at the role of Chinese infrastructure finance on the continent. The issue also features an article in which Lauren Johnston reflects on the possibility for Africa to capitalise on the end of China’s demographic dividend. Thierry Pairault, for his part, underlines the relative weakness of Chinese investment in Africa and sheds light on the nature of China’s economic engagement on the continent. In the final article, Iginio Galgiardone examines whether the involvement of China in Africa’s telecom infrastructure has led to the imposition of a specific information society model.

Mixed migration, forced displacement and job outcomes in South Africa (World Bank)

Southern Africa has a long history of human mobility centred around the migration of labour to farms and mines in the region. Patterns of migration and displacement have since been transformed by the end of Apartheid, changing economic systems, and conflict and political instability, both in the region and elsewhere. These complex patterns of migration and displacement, state responses to them, and the implications of mobility for job outcomes in South Africa - as the major destination country in the region - are the subject matter of this study. Our quantitative analysis on the impact of immigration on local jobs in South Africa finds that one immigrant worker generates approximately two jobs for South Africans during the period analyzed (1996 and 2011). These results and the substantiations provided in this publication are significant for policy makers and development actors in South Africa and the wider region, and as such, their implications should be seriously considered. Compared to earlier papers, this analysis makes several contributions. First, the analysis uses industry-province level data, given significant variation in the utilization of immigrant labour across industries and provinces. Second, the analysis uses an instrumental variables (IV) approach to address endogeneity issues. Third, the analysis includes all immigrants–not only males, as in some studies–given a substantial share of female employment among immigrants. Finally, the study uses wage data from the Post Apartheid Labour Market Series (PALMS) harmonized survey, instead of relying on total income that includes both labour and non-labor earnings as in other studies. For details on the methodological approach, see chapter 4. [Downloads: Executive summary, Main report]

Kenya: SGR raises cargo trains to seven (Business Daily)

Transport Principal Secretary Paul Maringa said six trains carrying 654 containers were leaving Mombasa daily to the inland container depot in Nairobi. However, by tomorrow seven trains will be leaving the port ferrying some 752 containers. Some 1,300 containers arrive at the port daily. Although one cargo train has capacity to remove 150 trucks from the roads daily, some 3,000 trucks still ferry cargo on the Mombasa-Nairobi route daily. Prof Maringa said that only goods destined for Nairobi were being ferried. He said some 2,300 containers that had been cleared were awaiting collection by owners, resulting in congestion. He said plans were underway to ensure that goods were collected within six hours after being cleared and those that overstay attract heavy charges. Prof Maringa said 1000 cargo tracking devices were being used to speed up cargo offloading and that the equipment will be increased to 3000.

Dar es Salaam port and its corridors: Dar port now efficient and secure, say regional users (IPPMedia)

Clients of the port of Dar es Salaam from six countries yesterday pledged to continue using the facility after having being satisfied with the ongoing improvements, including elimination of barriers and expansion of infrastructure. Business Congolese International president from the DRC, Sumaili Edouard promised to persuade their fellow business community to use the facility. For his part, a delegate member from Zambia eng Ernest Mande said indeed, it was a revealing trip since we saw new developments at the port assuring us of better future services. The Comoros port director general Said Anfane said: “Tanzania has accepted our requests to remove barriers and improve infrastructure. Therefore, we are ready to do business”.

Posted by the AU:  pdf Strategy for the harmonization of statistics in Africa 2017-2026 (1.97 MB)

Various evaluations, including evaluations relating to the 1990 Addis Ababa Plan of Action for the Development of Statistics in Africa; the Regional Reference Statistics Framework for the development of Statistics in Africa of 2006; the template for the National Strategy for the Development of Statistics; and the coordination mechanism for the implementation of the African Charter on Statistics, have pinpointed weaknesses in the African Statistical System. This review and update of the “Strategy for the Harmonization of Statistics in Africa (SHaSA)” aims to address all of these challenges in a drive to support the African integration program alongside national, regional, continental, and international development agendas. SHaSA 2 also comes at a time of considerable change for statistical systems globally and notes in particular the challenges and opportunities offered by the emergence of Big Data, methodologies to integrate geospatial and statistical information and calls for a data revolution which places a burden on countries to widen the group of actors involved in the statistical system. [Downloads: Action Plan (pdf), Abridged version (pdf)]

Rate of new trade restrictions from G20 economies doubles against previous period (WTO)

The WTO’s nineteenth monitoring report on G20 trade measures covering the period from mid-October 2017 to mid-May 2018, issued yesterday, shows that new trade-restrictive measures from G20 economies have doubled compared to the previous review period. A total of 39 new trade-restrictive measures were applied by G20 economies during the review period, including tariff increases, stricter customs procedures, imposition of taxes and export duties. G20 economies also implemented 47 measures aimed at facilitating trade during the review period, including eliminated or reduced tariffs, simplified import and export customs procedures and reduction of import taxes. It is notable that the estimated trade coverage of trade-facilitating measures implemented by G20 economies ($82.7bn) exceeded the estimated trade coverage of import-restrictive measures ($74.1bn), but is approximately half the trade coverage reported for these measures during the same period in 2016-17. The trade coverage of import-restrictive measures is more than one-and-a-half times larger than that during the same period in 2016-17. Commenting on the report, Director-General Roberto Azevêdo said:

The Commonwealth connection: growing trade in services. This report (pdf) draws on a series of interviews with senior business and policy leaders participating in the Commonwealth Heads of Government Meeting Business Forum in London in April 2018.

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