Building capacity to help Africa trade better

tralac’s Daily News Selection


tralac’s Daily News Selection

tralac’s Daily News Selection

Diarise: 5th COMESA Research Forum (6-10 August, Nairobi)

The 3rd Annual SADC Industrialisation Week began yesterday in Windhoek: an overview

Featured infographic: @AUC_MoussaFaki: As of July 2018, the status of AU member states adherence to the African Continental Free Trade Area Agreement. Help ensure your country signs and ratifies by January 2019 so the AfCFTA enters into force for the #TheAfricaWeWant.

Trump suspends duty-free status for Rwanda's apparel exports to US (Reuters)

US President Donald Trump has suspended Rwanda’s ability to ship apparel products duty-free to the United States due to a trade dispute over Rwanda’s increased tariffs on American used clothing and footwear, the US Trade Representative’s office said on Monday. The ban, ordered by Trump in a proclamation that followed a 60-day notification period, will maintain Rwanda’s other duty-free benefits under the African Growth and Opportunity Act. “We regret this outcome and hope it is temporary,” Deputy USTR C.J. Mahoney said in a statement.  He added that the move would affect about $1.5m in annual Rwandan exports, or only about 3% of the country’s total exports to the United States.  [Inside Rwanda, China bilateral agreements]

Seifsa’s Michael Ade: Protectionism limits AGOA at a time when its benefits need to be spread (Business Day)

ECOWAS-ECCAS Joint Summit: communiqué

The Heads of State and Government considered the overall security situation in West and Central Africa. They took note of the risks created by the increased number of security challenges, particularly terrorism, human, drugs and arms trafficking, money laundering and cybercrime.  In this context, the Heads of State and Government decided to adopt a shared view of the threats and a common approach to the solutions to be provided. Accordingly, they adopted the Lomé Declaration on peace, security, stability and the fight against terrorism and violent extremism in the ECOWAS–ECCAS space.

On the promotion of peace and stability, the Heads of State and Government commit to cooperate in conflict prevention, promotion of peace and stability in the two regions, particularly through the establishment and strengthening of early warning and rapid response to crises mechanisms at the national and regional levels, which involve civil society, opinion leaders, women, young people and state actors. They condemn the violent acts perpetrated particularly during internal crises aimed at destabilising States and calling into question national borders. The Heads of State and Government also undertake to adopt, at their next Summit, a regional framework on the convergence of constitutional principles in ECOWAS and ECCAS. The Heads of State and Government decide to put in place a Ministerial Monitoring Committee for the implementation of the decisions of the joint Summit which shall meet once every year.

South Africa: 2018 Article IV Consultation (IMF)

Full implementation of the reform package would deliver a sustained private investment-led growth recovery (Text Table 2). Informed by historical trends in private investment and estimates of reform impacts, staff projects that real GDP growth could rise to 4% by 2022. A meaningful reduction of unemployment and poverty would follow. Public debt would decline to close to 50% of GDP by 2023 - as much as 10 percentage points of GDP below that in the baseline scenario. Bank lending would rise, creating virtuous macro-financial feedback loops and further financial deepening. Inflation would decline to the midpoint of the band (4.5%) partly as higher competition counterbalances the impact of robust domestic demand. The current account deficit would initially widen as investment-related imports expand, before narrowing as higher competitiveness boosts exports. FDI’s contribution to external financing would increase markedly.

Staff advised the authorities to advance the broad package of reforms urgently (Text Figure 2 and Figure 10). Cross-country experiences hint that the growth payoff of comprehensive reform implementation could be large and followed by a durable decline in unemployment. As many other countries, South Africa could benefit from a social compact to convincingly build trust and secure implementation, particularly when addressing areas that generate short-term costs in exchange for sustainable long-term benefits.

Leveraging digitalization: Digitalization is at the core of the authorities’ and private sector’s agenda (Figure 11). The recently established Fintech Unit (pdf) of the SARB is already seen as a regional model. It is now piloting interbank clearing and settlement using distributed ledger technology. Market players are also modernizing business models, with emerging SME financing, mobile banking, and student financing companies. Companies are exploring ways of leveraging technology to promote financial inclusion. South Africa has the potential to leverage its regional leadership in digitalization. Several multinational corporations manage their African operations from South Africa. However, to compete globally—scalability matters significantly for some market segments—infrastructure and skills constraints need to be addressed. Lowering the cost of data will support digital inclusion. [Table of contents for the SA Selected Issues report:  (i)  What led to the doubling of public debt in the last decade? Was debt good for growth?; (ii)  Inequality in South Africa: trends and the role of fiscal policy; (iii)  Vulnerabilities and buffers: how resilient is the South African economy?;  National Treasury statement (pdf);  @StatsSA: South Africa’s unemployment rate was 27,2% in Q2:2018, up from 26,7% in Q1:2018. 6,1m people of working age in SA were unemployed]  

Madagascar economic update: fostering financial inclusion (World Bank)

The external sector - extract (pdf):  Exports are increasingly concentrated around a limited number of goods. Export performance has been improving in recent years, where the export-to-GDP ratio has increased from 30% in 2013 to 35% in 2017, also reflecting higher vanilla prices. This upward trend indicates that the economy is increasingly open, access to external markets is widening and that export earnings have improved. However, the export concentration index is trending upward, which means that fewer goods dominate the export basket. Over the past five years, 58% on average of the country’s total exports have been dominated by vanilla, nickel, and garments, which have also been the main drivers of export growth.  This export concentration can be a source of vulnerability. An unexpected fall in demand or a sharp change in prices could have a significant impact on export receipts. To mitigate potential risks, measures could be undertaken to diversify exports and strengthen domestic demand. The development in service exports observed recently, including in business process outsourcing, for example through call centres and telecommunications activities, as well as tourism is encouraging  (see figures 9-11).

Zambia:  June 2018 trade deficit (pdf, CSO)

Zambia recorded a trade deficit of K1,612.8 million in June 2018, against a trade surplus of K245.4 million recorded in May 2018. Imports increased by 13%; this increase is mainly attributed to the increase in the imports of capital goods by 24.6%.  Exports decreased by 7.4% which is mainly attributed to the reduction in traditional exports by 9.2%, from K7,314.3 Million in May 2018 to K6,641.2 Million in June 2018. [See: Zambia’s major export destinations by commodity in June 2018; Export market shares by selected regional groupings and major trading partners, June 2018 and May 2018; Zambia’s major import sources, by product in June 2018)

Kenya:  Monetary Policy Committee (pdf, CBK)

The foreign exchange market remains stable supported by balanced inflows and outflows, and a continued narrowing in the current account deficit. The current account deficit narrowed to 5.8% in the 12 months to June 2018 from 6.3% in March 2018. It is expected to narrow further to 5.4% of GDP in 2018, with strong growth of agricultural exports particularly tea and horticulture, resilient diaspora remittances, and improved tourism receipts. Although the petroleum products import bill is expected to increase due to higher international oil prices, lower imports of food and SGR-related equipment in 2018 will moderate the impact on the current account. Data for the first quarter of 2018 showed a strong pickup of the economy, with real GDP growth of 5.7% compared to 4.8% in the first quarter of 2017. This outcome was driven by a strong recovery in agricultural activity due to improved weather conditions, a recovery of the manufacturing sector, and resilient performance of the services sector particularly wholesale and retail trade, real estate, and tourism.

Mauritius, Kenya to sign several Memoranda of Understanding  (GoM)

A MoU focusing on the development of Special Economic Zones and Export Processing Zones in Kenya will be signed with Kenya. The purpose is to establish a framework for collaboration between the two countries for the development of SEZs and EPZs in Kenya through the setting up of a Joint Technical Committee which would, inter alia, oversee the implementation and viability of SEZ or EPZ in designated sites in Kenya. The Mauritius Standards Bureau will also sign an MoU with the Kenya Bureau of Standards to promote and facilitate bilateral trade between the two countries through the elimination of non-tariff barriers, thereby minimising any adverse impacts on our export industries. 

Where is Ghana’s national strategy on manufacturing? (GhanaWeb)

Speaking at the ongoing Business/Stanbic Bank Breakfast forum on manufacturing on the theme ‘Unlocking economic growth through manufacturing - cost quality and competitiveness’, industrialist and former president of the Association of Ghana Industries, Dr Oteng-Gyasi said the country seemed lost on how to replace imports with locally produced goods. "Where is our national strategy on fruit processing, on manufacturing? Ours is just a country where we talk, moan and agonise. We have launched a lot of trade policies where we have fanfare and after that we go to sleep," he said, explaining that the country has failed to keep pace with innovations in industrialisation. He said it is regrettable that Ghana lost its rights as a manufacturer of television sets, electric fans, pressing irons and bulbs due to its inability to invest in research and development.

Customs officers from Togo, Mali, Niger to pitch camp at Ghana ports (GhanaWeb)

Custom officers from Ghana’s neighbouring West African countries will before the end of this year have a presence at the ports of Ghana. This is to ensure effective inspection and monitoring of goods meant for the respective neighbouring countries such as Togo, Mali, Burkina Faso and Niger among others.  The Vice President, Dr Mahamudu Bawumia who disclosed this on Monday explained that the new system would be known as the first port duty rule. Dr Bawumia was speaking at the 39th annual council meeting of the Port Management Association of West Africa and Central Africa in Accra.

Imperatives of metrology in intra-African trade (ThisDay)

Stakeholders in the country converged on Enugu, Enugu State, at the 12th AFRIMETS General Assembly  in Enugu State, where how to deploy metrology to boost trade in Africa was the focus. The goal of the forum-hosted by the Standards Organisation of Nigeria with over 25 African countries representation was to ensure a significant increase in the assessed low level of trade between African countries through the deployment of metrological infrastructure. Consequently, SON, while announcing plans to boost trade within the region through metrology, also stressed that the imperative of developing, strengthening and upgrading the national metrological infrastructure to facilitate trade, enhance export, accelerate economic development and protect the environment cannot be over emphasised.

Turkish steelmakers eye push into West Africa (Daily Star)

Namik Ekinci, board chair for the Turkish Steel Exporters Association, told Reuters that Turkey was looking to boost its trade with West Africa and sub-Saharan countries, where there is demand for the less capital-intensive steel products that Turkey mainly exports. He said a union of Turkish exporters would jointly start a new firm to penetrate the target markets through time charter shipments, aiming to increase Turkey's market share in West Africa from below 5% to 15% by cutting shipping costs. The project is expected to cut transport costs of steel exported to West Africa to around $30 per ton, from nearly $100, making it significantly more competitive. 

Tuesday's Quick Links:

UNECA:  Inclusiveness and community-level engagement crucial for AfCFTA’s success

Alan Hirsch: The free movement of people is an AU ambition - what’s standing in its way

Nigeria warns Ghana, says Nigerian retailers in Ghana not ‘foreigners’

COMESA: Harmonized regulatory frameworks key to vibrant regional energy market (COMESA)

Caroline Freund: How to measure trade protection

Morocco: Voluntary peer review of competition law and policy (pdf)


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