tralac’s Daily News Selection
Simon Freemantle: The geopolitical context of the 10th BRICS Summit (Standard Bank)
The BRICS can also use the upcoming gathering to emphasise the primary original purpose of the grouping, which was the need for the collective and rising importance of the developing world to be reflected in the global multilateral institutions that preside over the geopolitical, financial and economic global order. It is in this sense worth emphasising how profoundly the developing world’s contribution to the global economy has lifted since the turn of the century. Indeed, in 2000, the collective GDP of the developing world stood at around USD7tr, compared to almost USD27tr held by advanced economies. Fast-forward to 2017, and the relative gap between these two baskets of nations has narrowed profoundly...:
Internal BRICS imbalances: China looms large. While the BRICS will very likely use the summit to reflect their strong commitment to free trade, the grouping should not ignore the reality that the trade imbalances President Trump laments between the US and China are echoed between China and most of its BRICS partners. Indicatively, last year China ran a roughly $14bn trade surplus with its four BRICS partners, with India being by some margin the most affected by this imbalance (Figure 6). China’s dominant economic role also presents a constant threat to the internal balance of power within the BRICS – as it stands, China accounts for fully two-thirds of collective BRICS GDP, compared to South Africa’s meagre 1.6% share (Figure 8).
BRICS, Africa and Global Economic Governance: achievements and the future (GEG Africa)
This paper explores both the efforts of the BRICS in advancing reforms in international financial institutions), considering specifically how coherent and united the grouping has been in these efforts and the extent to which each member of the group has benefitted. Two surveys of BRICS experts and African stakeholders also assess South Africa’s stated agenda of supporting and advancing African interests in the grouping. The paper recommends that South Africa should push for the development of a dedicated BRICS–Africa strategy, as well as the integration of African developing country concerns in the various BRICS strategies such as the ‘Strategy for BRICS Economic Partnership’ or the ‘Action Plan for Deepening Industrial Cooperation among BRICS countries’ to support regional development chains in Africa. The recently signed African Continental Free Trade Area provides further opportunities in this regard. The paper also proposes that the AUC set up a dedicated unit to provide support on BRICS-related issues to the AU rotating chairs. [The authors: Elizabeth Sidiropoulos, Cyril Prinsloo, Luanda Mpungose, Neuma Grobbelaar]
African countries have been urged to develop a common position in their engagement with China in the run-up to the Ministerial Conference and Heads of States and government Summit of the Forum on China-Africa Cooperation taking place in Beijing in September. The AUC and Africa's RECs are also encouraged to strengthen their engagement in the FOCAC process to ensure regional and continental development strategies are fully considered and carry the aspirations of the African continent. The call was made by participants of the Regional Awareness and Capacity Building Workshop Towards FOCAC 2018 that was held in Nairobi during June 19th-20th. Organised by TRAFFIC and WWF, the aim of the workshop was to provide a platform for dialogue, exchange and sharing of good practices and lessons learned amongst key government officials, Civils Society Organizations and other relevant stakeholders to inform their preparation for a strategic engagement in FOCAC 2018. Key issues raised during the workshop include (pdf): [Download in French, pdf)
Namibia reviews position on SACU revenue (The Namibian)
Cabinet has approved that Namibia continues consultations to refine the country's position on the Southern African Customs Union revenue-sharing agreement. This was said by deputy information and communication technology minister Engel Nawatiseb at last Thursday's media briefing on Cabinet resolutions taken at Tuesday's meeting. He said Cabinet had noted that the proposed changes to the revenue-sharing arrangement are not consistent with the guiding principles of the union, and may result in an unfair loss to some member states and unfair gains to others.
Nigeria: NACCIMA urges FG to sign Africa Free Trade Area Agreement (Financial Watch)
The Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) has called on the Federal Government to immediately sign the AfCTFA to make the economy more competitive. The National President, Chief Alaba Lawson, made the call at a press conference on Monday in Lagos. He urged the Federal Government to take full advantage of the AfCFTA and eradicate non-tariff and regulatory barriers to international trade. “Currently, while the AfCFTA is entering critical stages and negotiations are going on in priority sectors in member countries, our nation is dithering and still ruminating. Nigeria cannot afford to lose out in the opportunities inherent in a common African market. You cannot negotiate what you are not part of.”
@Trade_Kenya: PS Trade, Dr Chris Kiptoo, has been appointed to chair the Inter-Agency Anti-Illicit Trade executive forum. CEO KAM will be the vice chairperson while executive director of the Anti-Counterfeit Agency will be the Secretary.
6th Annual EAC Secretary General's Forum: update
The Executive Director of the East African Business Council, Ms Lilian Awinja, informed the Forum that working together with the EAC Secretariat and the Regional Dialogue Committee, the Parties had analyzed and discovered that out of the previous 5 EAC SG Foras, the level of implementation of the agreed recommendations was still very low. The analysis indicates that only 16% of the recommendations had been fully implemented, 43% partly implemented, 36% not implemented and 5% had no update at all. “These figures are worrying and explain why this forum has been organized as a strategy forum, such that the Dialogue Parties together with the EAC Secretary General brainstorm and agree on a clear path to the realization of the objectives of the Consultative Dialogue Framework as envisaged under Article 127(4) of the EAC Treaty.”
Benefits and challenges of free movement of persons in Africa: statement by Ambassador Minata Samate Cessouma (Commissioner for Political Affairs)
In order to facilitate free movement in Africa, we need a combination of measures undertaken in the short and medium term to speed up the ratification and the implementation process leveraging the rich experiences of the RECs, most notably the EAC and ECOWAS. We do recognize that some of the measures will take time as we seek to harmonize national laws and practices with the Protocol, but a lot also needs to be done now and not tomorrow. It is in this spirit that we, together with IOM, have undertaken and completed this study aimed at highlighting the benefits and challenges of Free Movement of Persons in Africa. We have also highlighted the challenges in this study so that we don’t forge forward blindly, oblivious of potential risk factors. Some of these challenges include National Security concerns such as `transnational crimes’; terrorism and violent extremism, irregular migration, drugs and human trafficking etc. But let me also underscore that these challenges are not insurmountable. Since advantages of free movement of persons far outweigh the disadvantages, free movement of persons should be facilitated while not ignoring the fears, but rather looking at possible solutions to such valid fears.
Kenya-Mauritius Joint Commission: update (GoM)
The Joint Commission between Mauritius and Kenya will be held from 1-3 August 2018 in Kenya. The main issues to be discussed include Ocean/Blue Economy, Fisheries, Export Processing Zone, Special Economic Zone, Financial Sector and Business Exchanges, Maritime Sector, Air Services, Education and Sugar. In the margins of the Joint Commission, various Memoranda of Understanding will be signed.
PM Modi’s Rwanda visit: India extends $200m credit lines (Tehelka)
India has extended $200 million lines of credit to Rwanda as Prime Minister Narendra Modi who is on a three-nation African tour reached Rwanda on July 24 and held talks with President Paul Kagame and discussed measures to strengthen bilateral ties by in defence, trade and agriculture sectors. India and Rwanda also signed MoUs on collaboration in the areas of leather and allied sectors, dairy cooperation, agricultural research and education collaborations between Rwanda Agricultural Board and Indian Council of Agricultural Research. The lines of credit are for the development of industrial parks, the Kigali Special Economic Zone and for three agricultural projects in Rwanda
Rwanda, China reaffirm cooperation (New Times)
The two countries signed 15 bilateral MOUs and agreements. The agreements include visa exemption for diplomatic and service passport holders, culture and scientific operation and Silk Road Economic Belt cooperation. Other agreements signed include those aimed at strengthening cooperation in investment in e-Commerce, cooperation in civil air transport, law enforcement cooperation and human resource development cooperation. [Reuters: Rwanda signs $300m in loan deals with China and India]
A commentary, published in the Washington Post, by Deborah Bräutigam: Xi Jinping is visiting Africa this week. Here’s why China is such a popular development partner.
Nigeria: Only 63% of privatised enterprises performing – BPE DG (Daily Trust)
Speaking, yesterday, at the opening Enterprise Stakeholders and Investors’ Forum in Abuja, Director General of the Bureau for Public Enterprises, Mr Alex Okoh, said 142 enterprises have been successfully privatized from the time the privatization programme started in the 1980s to December 2017. According to him, out of this number, a total of 94 enterprises have been successfully monitored, covering critical sectors of the Nigerian economy from the transport sector to vehicle assembly plants, oil palm, cement, hospitality, fertiliser, bricks and clay, mines and steel, national facilities, oil and gas, ports, power and communication. “This assessment is based on an analysis of the covenants and levels of compliance, challenges and recommendations from 2010 to 2017.”
Macro-financial linkages in shallow markets: experience from the African Department’s pilot countries (IMF)
This paper assesses and disseminates experiences and lessons from low-income countriesin Sub-Saharan Africa that were selected by the Africa Department in 2015-16 as pilots for enhanced analysis of macro-financial linkages in Article IV staff reports. Extracts: The pilot countries show substantial heterogeneity in the level of financial inclusion (access) by households and enterprises. Indicators of access for households are highest in Benin, Tanzania, and Uganda (Figures 3a, 3b, and 4) and lowest in Guinea. However, Benin is also among three pilots in which more than 50 percent of firms identified access to finance as a major constraint (Figure 5). Several countries, mainly in Anglophone Africa, demonstrated the expanding role of mobile payments and banking services in boosting access to financial services. In Tanzania, the nominal value of mobile money transactions and their importance relative to broader monetary aggregates has risen exponentially since 2010, boosting financial access for previously excluded segments of the population. Mobile money platforms are also serving as a gateway to more sophisticated financial products and services; for example, banking in Uganda. The rapid growth of these novel financial services has benefited from efforts to strengthen the regulatory environment. Those few pilot cases also highlighted some of the challenges raised by mobile money services in terms of appropriate regulations and financial sector supervision. [Investigating the financial capabilities of SMEs: lessons from a 24-country survey]
UNCTAD has posted the full text of Botswana's voluntary peer review of competition law and policy (pdf)
Nigeria's First Bank to promote China-Nigeria ties with currency swap agreement
AU blames lack of information for low intra-Africa trade
PM Modi in Africa amid a trade slump
How MENA can escape the middle-income trap?
Outlook for the Americas: a tougher recovery
Maya Forstater: The truth about illicit financial flows
International corporate tax avoidance: a review of the channels, magnitudes, and blind spots