tralac’s Daily News Selection
Towards an EAC Regional Intellectual Property Policy: 15 August is closing date for completion of a questionnaire to inform the policy
Netpreneurs event: “Let’s make Africa a digital Africa,” Jack Ma tells entrepreneurs (UNCTAD)
From Madagascar to Liberia, Africa’s “digital lions” are preparing to roar, speakers said at an event co-organized by UNCTAD, the Alibaba Business School and the Jack Ma Foundation at South Africa’s Wits University on 8 August. The day-long e-commerce and technology event, dubbed Netpreneurs: The Rise of Africa's Digital Lions, featured an announcement by Jack Ma, co-founder and executive chairman of Chinese e-commerce giant Alibaba, of a $10 million prize fund for African internet entrepreneurs, to be known as the African Netpreneur Prize.
Germany’s Development Minister: EU must open markets to ‘all African goods’ (The Local)
Development Minister Gerd Müller (CSU) has called on the EU to open its markets to African goods, in a bid to stimulate growth on the continent and tackle the migrant crisis. Millions of jobs could be created for young people in Africa if the EU were to allow custom and quota free imports of agricultural produce in particular, argued Müller in an interview with “Welt”. “The European market is effectively blocked, and yet at the same time, European exports to Africa are increasing. So my message to Brussels is: open the markets to all African goods.”
“Our prosperity is to a large extent built on Africa’s resources,” said Müller. “No mobile phone works without coltan from the Congo. Yet we don’t pay people fair wages and we accept that we are exploiting nature. That’s why we need a new way of thinking and acting in politics, economics and society.” While Chinese, Turkish and Russian business were investing heavily in Africa, Müller said, the EU was lagging behind, with only 1,000 German companies at all involved in the continent, despite what he saw as Africa’s economic potential.
The COMESA region would annually gain $17.5bn in intra-COMESA exports if all the member states fully implemented the digital trade facilitation reforms that involved the use of paperless trade facilitation measures. According to research findings presented to the 5th COMESA Annual Research Forum, five countries have the greatest intra-COMESA export trade potential for the region. These are Eritrea, Egypt, Sudan, Libya and Ethiopia. The researcher, Mr Adam Willie, Principal Economist, Ministry of Commerce, Industry and Enterprise Development of Zimbabwe, said this was based on their low baseline implementation score of the six digital trade facilitation measures in the study. Top scorers under the assessment criteria were Kenya, Madagascar, Mauritius and Rwanda.
The UNECA, on Monday, revealed a partnership with Chinese digital financial giant Ant Financial to promote financial inclusion in the continent. ECA Executive Secretary, Vera Songwe, who stressed the importance of digital financial inclusion platforms for Africa’s future development, has underscored the positive protects working in partnership with Ant Financial - an affiliate of the Alibaba Group - mainly in the digital financial arena. Noting that Ant Financial runs one of the world’s largest online payment platforms, valued at $150bn, Songwe also underscored that Africa has an “opportunity to leapfrog technology for social, financial and political inclusion” by working with the Chinese giant. Ant Ant Financial CEO Jing Xiandong said that his company serves over 650 million people on a daily basis and that the company’s vast reach has involved over the years. [Silk Road to the Sahel: African ambitions in China’s Belt and Road Initiative (pdf)]
Playing to strength: growth strategy for small agrarian economies in Africa (World Bank)
With urban industrialization on the scale achieved by East Asian economies looking increasingly less plausible, small economies in Africa need an alternative strategic approach to long-term growth. The purpose of this paper is to identify a growth strategy with the greatest potential for small, landlocked economies in East Africa. The paper uses Malawi, Rwanda, and Uganda as case studies to explore the potential for growth in agriculture, manufacturing, and tourism in these countries. Extract (pdf): The economic centre of gravity in these economies is in services whether rural or urban, formal or informal. Between 52% (Malawi) and 55% (Uganda) of GDP is sourced from services, which is close to the SSA average (56%). The disquieting development in all three countries, like Africa overall, is the trend decline in the salience of industry and manufacturing. Industry’s share in SSA fell by an astonishing 10 percentage points from 36% in 2000 to 26% in 2014. It slid downwards in Malawi and Uganda: from 18% to 16% in Malawi and from 23% to 20% percent in Uganda; it remained constant at 14% in Rwanda. Manufacturing also dipped below the already low SSA average of 11% to just 5% in Rwanda and to 10% and 8% in Malawi and Uganda respectively. [Note: This paper was prepared as a background document for the pdf Malawi Country Economic Memorandum, 2017 (2.33 MB) ]
Country, bilateral trade updates
Impact of macroeconomic reform on labour markets and income in Zambia: assessing ZAMMOD (ILO)
This paper, authored by Alemayehu Geda, John Weeks and Herryman Moono, reviews an econometric model (ZAMMOD) currently being used by the Zambia Ministry of Finance for forecasting, policy analysis and budget preparation; identifies some limitations to the labour market block of ZAMMOD, and makes specific recommendations on how the block could be enhanced. The authors then introduce these recommendation into the model and run simulations examining the labour market impacts of the austerity measures.
Government has been urged to make a definite pronouncement that will quell the rising tension between Ghanaian Traders and their foreign counterparts, particularly those from neighbouring Nigeria in the retail trade arena. Some unscrupulous persons claiming to be Ghanaian traders have been up in arms against their foreign counterparts in the last couple of days, locking up their shops and threatening to take the law into their own hands should government not enforce the law on retail trade in the country. These traders are banking their strength on the part of the law that reserves the retail trade for only Ghanaians and want that law enforced to the letter and are therefore engaging in these acts despite government’s calls for a halt.
Ghana: Minerals Commission to monitor small-scale mining electronically (GhanaWeb)
Speaking during the University of Mines and Technology’s sixth biennial international minerals and mining conference held at Tarkwa in the Western Region, the CEO of the Minerals Commission, Addae Antwi-Boadiako, said this would be done using satellite imagery, drones, and tracking of excavators. He said the Commission would also offer online mining cadaster licensing system for small-scale miners. Mr Antwi-Boadiako noted that the sub-sector in recent times produced a third of Ghana’s gold, which was over one million ounces of gold annually. Unfortunately, the small-scale mining operations were characterized by illegality, social conflicts and adverse health and safety issues; the CEO pointed out.
South Africa: Small business policy is based on wrong assumptions, study shows (Business Day)
The Small Business Institute, in partnership with research company SBP, has been working in 2018 on SA’s first baseline study of SMMEs. We have completed the first phase and have learned that: There are only about 250,000 formal SMMEs in SA - a far cry from the range of 1.2-million to 6-million estimated up until now; Despite comprising a relatively high proportion of formal firms (98.5% in 2016), SMMEs provide a relatively low proportion of jobs in SA (28% in 2016). [The authors: Bernard Swanepoel, Chris Darroll]
Business and transport was paralysed at Namanga border town for the second day as Kenyans protested mistreatment by Tanzanian authorities after several milk traders were arrested and placed in custody at Tanzania last Saturday. About 100 trailers ferry goods into Kenya daily, underlining long-running trade disputes between the two States that has seen Tanzania recently restrict entry of Kenya-made goods to its market like confectionery, juice and ice cream. Irate traders and transporters yesterday complained of harassment by Tanzanian authorities.
Nigeria: LCCI canvasses 13% derivation benefit for states hosting ports (Premium Times)
The Lagos Chamber of Commerce and Industry says the 13% derivatives principles applied to oil producing areas should be extended to states hosting the nation’s ports. The President of LCCI, Babatunde Ruwase, made the suggestion at a news conference on the state of the economy on Thursday in Lagos. Mr Ruwase said that ports activities created profound negative externalities to host states and exerts tremendous pressure on the states’ facilities, which significantly affects roads, health facilities, traffic, environmental management and pollution. “These are costs that are borne by the states in which the ports are located and offers basis to argue that derivation principles should be applied to revenue generated through customs’ duties from the ports.” [Importers, agents groan under 400% hike in cost of container haulage]
East Africa’s gas pipeline plans progress steadily (Daily News)
Tanzania’s plans to export gas to Uganda are advancing towards fruition as the government moves ahead with construction plans of a natural gas transmission pipeline from Dar es Salaam to Uganda via Tanga and Kagera regions. Tanzania Petroleum Development Corporation MD Kapuulya Musomba told the ‘Daily News’ East African Edition that they were now looking for a consultant to conduct a feasibility study for construction of the pipeline.
Just a day before her retirement on 31 July, commerce secretary Rita Teotia tabled the draft e-commerce policy before a panel headed by commerce and industry minister Suresh Prabhu. Little did she know that her last act will draw severe criticism. The draft e-commerce policy, which effectively seeks to regulate all aspects of online retail and recommends strict restrictions, including curbs on discounts, may impact not just e-commerce companies, but also countless sellers working on those platforms. Amazon and Flipkart, which make the majority of the $18bn online retail market but were not part of the deliberations, are now lobbying to get the government to scrap the draft and consider fresh regulations instead.
India: 2018 Article IV Consultation (IMF)
On trade policy issues: Further trade liberalization and reforms to facilitate trade and investment will ultimately benefit India, and expand its role in the world trade system. Trade barriers remain significant. Trade documentation and procedures are cumbersome, and lengthy processing times are burdensome. India’s average most favored nation applied tariff rate (at 13.4% as of 2016) is higher than in some peer countries, though with relatively large differentiation between agricultural and non-agricultural products. In addition, tariffs are being changed frequently, including in the FY2018/19 budget. Trade in services is also restricted. Restrictions on foreign entry, barriers to competition, and lack of regulatory transparency are reportedly the main obstacles. Reducing non-tariff barriers, stabilizing and then subsequently decreasing tariffs, and implementing supply-side reforms to improve the business climate would help increase India’s integration in global markets. The recent liberalization of FDI policies is a positive step in this direction. Several trade-related issues concerning India are currently being considered at the WTO: Extract from the accompanying Selected Issues report: This chapter analyzes the structure and composition of FDI flows to India and factors underlying FDI flows across countries. FDI inflows to India have increased significantly in recent years, partly benefiting from FDI liberalization and improved investor sentiment. Empirical analysis highlights the importance of capital account openness and infrastructure in attracting FDI. Going forward, further investment liberalization, supply-side reforms, and infrastructure investment could help sustain FDI. [See figure 2: India - FDI and Exports by States] [LiveMint: 10 things the IMF numbers tell us about the Indian economy]
Wednesday’s Quick Links:
Africa Report interview with Arunma Oteh (Treasurer and Vice-President, World Bank Group)
Connecting Sustainable Development Goals 15 and 16: BioTrade experiences in Colombia, Indonesia
Sectoral and regional distribution of export shocks: what do 200 000 UK firm observations say? (pdf, OECD)
US seeks $350m annual sanctions in Indonesia trade row
Project Syndicate commentary: The need for a global patent market