tralac’s Daily News Selection
New from tralac
tralacBlog: Trudi Hartzenberg and Gerhard Erasmus reflect on select trade-related matters currently on the SADC agenda
tralacBlog: John Stuart asks, Does Rand depreciation help South Africa’s exports?
Wesgro, tralac and the Department of Trade and Industry recently hosted a seminar on the AfCFTA and its practical implications for intra-African business: read the workshop report
In today’s news
Andrew Mold: The case for an integrated African market – the costs of ‘non-AfCFTA’ (The East African)
In the late 1980s, the European Commission was confronted with an uphill struggle to persuade citizens and member states to support the implementation of their Single Market Programme. In an effort to allay those fears, European researchers published a series of in-depth research papers on the costs of “Non-Europe,” to make clear what was at stake. The resulting “Checcini Report,” published in 1988, made a strong case for the Single Market, paving the way for its eventual implementation on 1 January, 1993. African researchers, think tanks and policymakers need to make a similar, vigorous and clear case for the costs of a “non-AfCFTA.” What are those arguments?
Lagos Chamber of Commerce & Industry: How to make ECOWAS trade liberalisation work (The Nation)
Some of them, who spoke with The Nation, lamented that bureaucratic bottlenecks have made product registration extremely difficult for exporters. They insisted that to mitigate exporters’ sufferings, ETLS’s administration should be moved from the Ministry of Foreign Affairs to the Ministry of Industry, Trade and Investment, specifically the Nigeria Investment Promotion Commission to serve exporters better. LCCI President, Mr Babatunde Paul Ruwase, who pushed that the scheme’s administration be excised from of the Foreign Affairs Ministry, however, identified other grey areas that needed to be smoothened if Nigerian exporters must benefit fully from the scheme:
Recommendations at the continental level include: (a) piloting of “follow the money” partnerships to curtail trade mispricing globally; (b) setting up of a continental-level data standard for the exchange of tax information; (c) extending the provisions of the African Union Convention on Preventing and Combating Corruption, especially, with regard to the functions of the Advisory Board on Corruption; (d) amending the African Peer Review Mechanism questionnaire to include illicit financial flows; and (e) introducing systems for automatic exchange of tax information among African countries.
Recommendations at the national level include: (a) requiring multinational corporations to provide comprehensive reporting on their operations, indicating disaggregated financial reporting on by-country or by-subsidiary bases; (b) require companies to prepare cost-benefit analyses before allowing them to invest in a country; (c) African countries should join voluntary initiatives, such as the Extractive Industries Transparency Initiative; (d) African Governments should provide training to and empower investigators responsible for combating illicit financial flows; (e) greater coordination should be instituted between revenue authorities and ministries of finance in developing transfer pricing rules and build capacity in this area; (f) ensure transparent procurement procedures and government tenders and build capacity in this area; (g) introduce effective incentives for civil servants with clear documentation; and (h) place politicians’ companies into trusts for the duration of their political term and prohibit them from engaging in any government businesses.
The ECA Southern Africa Office has launched the Zambia STEPS Profile and the Country Profiles for Botswana, Lesotho, Namibia, and Zimbabwe in Lusaka. The five profiles provide detailed analyses of the socio-economic developments in the respective countries, level of regional integration, and performance in terms of gender equality and empowerment, amongst others. In addition, they address a specific theme of economic relevance and proffer key policy options and recommendations to be considered by the member States. The STEPs Profile for Zambia focuses more on the issue of structural transformation with key elements of production, employment, and society. [Ethiopia STEPS Profile, pdf]
China Railways has proposed the construction of a rail link connecting Mozambique to Zimbabwe via Zambia, a project costing an estimated $2.5bn that will give companies in the latter two countries easy access to Mozambique’s ports. The Trans-Zambezi line project led a delegation from China Railways, headed by Vice President Shao Gang, to contact with the local government in late July along with local partner Global Power Bridge International, according to a report in the Harare press. The China Railways project also involves the construction of a 1,700-kilometre line directly connecting Binga, on Zimbabwean border with Zambia, to the port of Nacala. China Railways stated its interest in the project in March this year in a letter to the Zimbabwean government signed by Gang Shao, according to the Financial Gazette. The project also involves China’s New Century Energy International, which has a $500m large-scale soybean production project in Zimbabwe. [Zimbabwe decries US renewal of sanctions]
Tanzania: How porous ports, airstrips hinder revenue collection (IPPMedia)
Tanzania has uncovered 134 illegal ports and 58 unregistered airstrips through which illegal goods enter and leave the country, causing a huge loss to the government in revenue. Minister for Works, Transport and Communication Isack Kamwele revealed the shocking number of illegal ports and airstrips on Friday when he was on a familiarisation tour of TPA and Dar es Salaam port where he held a meeting with the port’s management. He said a survey conducted by TPA identified 134 illegal entry ports on lake shores and the shores of the Indian Ocean while 58 airstrips were found to be operating while unregistered. He said Kibirizi port, which was operating illegally in Kigoma municipality, was said to have collected revenues totaling Sh40m a month when TPA decided to post its staff to oversee it.
Ghana and Cote d’Ivoire have agreed on plotting all seven coordinates to determine the maritime boundary as per the International Tribunal for the Law of the Searuling in October, 2017. In its initial ruling in 2015, the Chamber placed a halt on new projects, compelling Tullow Oil to put on hold operations including new drilling in the disputed area. However, on 23 September, 2017 the Chamber ruled in favour of Ghana in a unanimous decision, stating that there has not been any violation, on the part of Ghana, of Côte d’Ivoire’s maritime boundary. Senior Minister, Yaw Osafo-Marfo, reading the agreement in Accra last Friday said “in pursuance of the implementation of the decision of the Special Chamber of the ITLOS, concerning the delimitation of the maritime boundary between Ghana and Côte d’Ivoire’, the second meeting of Ghana-Côte d’Ivoire’ joint committee was held 9-10 August in Accra at the International Conference Centre.
Regional coffee players target domestic market (New Times)
Regional coffee growers, exporters and sector policy makers are turning their focus to domestic consumption, a move they say is intended to cushion them against fluctuations on the international market, which sometimes adversely affects their incomes. They were speaking Friday at the official launch of the 17th African Fine Coffee Conference and Exhibition in Kigali. About 2,000 people are taking part in the event, including coffee producers, exporters, roasters, policymakers and buyers from around Africa, the Americas, Europe, among other parts of the world. Amb. George William Kayonga, the chief executive of NAEB, stated that Rwandan coffee is consumed more in foreign markets than back home. He said there was need to emulate the consumption habits of countries like Ethiopia, which consumes about half of the coffee it produces. Kamau said Africa produces about 15 million bags of coffee annually – mainly for export – of which five million bags are specialty coffee produced mainly by Ethiopia, Kenya and Rwanda.
The World Bank has posted two more background notes prepared for its recent South Africa Systematic Country Diagnostic: (i) Does employing workers or accepting work pay? Analyzing labour costs in South Africa; (ii) Systemic, sectoral risk and the myth of a corporate savings glut
This study is important in at least two respects. The first is that although the role of trade and trade policy in the development process is well documented, there is less research on their roles in fostering export diversification or structural transformation, particularly in Africa and the Least Developed Countries. Unlike existing studies, this paper employs both non-parametric and parametric techniques to examine the nexus between trade and diversification. Export diversification and upgrading is particularly crucial for developing countries in Africa and LDCs in general: the prevalent high concentration of resources in a few sectors based on commodities involves dealing with cycles of volatile prices and exports earnings, with potentially adverse consequences for overall economic performance. The second reason why this study is important is that over the past three decades, African countries and LDCs have increased their dependence on trade and have also adopted more liberal trade regimes than in the past. Yet, they have not made any significant progress in terms of diversifying their export structure, suggesting that the realization of any potential benefits of trade for diversification is not necessarily automatic and may depend on domestic policies and the macroeconomic environment facing a country. In this context, there is the need to provide empirical evidence on the role of trade in the diversification process. [The authors: Patrick Osakwe, Amelia Santos-Paulino, Berna Dogan]
Trade in developing East Asia: how it has changed and why it matters (World Bank)
East Asia, for long the epitome of successful engagement in trade, faces serious challenges: technological change that may threaten the very model of labor intensive industrialization and a backlash against globalization that may reduce access to important markets. A detailed analysis of the evolution of East Asia’s trade and trade policy in goods and services leads to the conclusion that how East Asia copes with these global challenges will depend on how it addresses three more proximate national and regional challenges:
Monday’s Quick Links:
Bobby Kamani: Time for a global flower auction in Kenya
How Ghana became one of Africa’s top mobile money markets
Morocco now major aircraft spare parts hub as Nigeria lags
Sell Ethiopian Airlines minority stake to African governments, CEO urges
Lagos, French multinational Alstom SA sign MoU to complete light rail project
David Pilling: African economy – the limits of ‘leapfrogging’
Ghana won’t return to IMF after current programme – Akufo-Addo
Youth employment in agriculture: next week’s Kigali conference
Transforming microfinance institutions in the Arab world: opportunities, challenges and alignment of interest