Building capacity to help Africa trade better

tralac’s Daily News Selection


tralac’s Daily News Selection

tralac’s Daily News Selection
Photo credit: AU-UN IST | Stuart Price

Featured tweet, from @ICA_Africa: The ICA Africa ‘Infrastructure Financing Trends in Africa’ report for 2017 is currently in development and should be ready by November 2018. It takes time to draw together full information, particularly from governments, but this ensures the report is accurate and comprehensive.

REC updates:

(i) 38th SADC Summit of Heads of State and Government: communiqué

Summit noted progress made in the implementation of SADC Industrialization Strategy and Roadmap 2015-2063, and urged member states to remain committed to the implementation of the SADC industrialization agenda, as the overarching priority for the region.

Summit reviewed the SADC regional economic performance, and urged member states to scale up efforts aimed at diversifying their economies, improve domestic revenue collection mechanisms, and manage public expenditures.

Summit noted the overall decline in food production in the Region, for the 2017/18 crop season, and urged member states to put in place measures to tackle food insecurity in the Region, while developing contingency plans to enhance drought preparedness, in view of the likelihood of adverse El Nino induced conditions during the 2018/19 cropping season.

Summit noted that, the Union of Comoros has deposited her Instrument of Accession, and commended the Union of Comoros for acceding to the SADC Treaty and becoming a full Member of SADC.

Summit urged member states that have not yet signed and/or ratified the TFTA Agreement to do so, and urged member states to expeditiously finalise the exchange of tariff offers, and pave the way for the implementation of the Tripartite Free Trade Area. [Download the communiqué: French, Portuguese]

(ii) COMESA Trade and Customs Committee meeting: update

In her speech at the opening of the 34th COMESA Trade and Customs Committee meeting in Nairobi, COMESA Secretary General Chileshe Kapwepwe observed that though member States had, upon signing the COMESA Treaty agreed to abolish all non-tariff barriers to trade among themselves, new ones kept cropping up thus affecting intra-regional trade. The SG appreciated the progress made in implementing regional programmes with substantial support from international cooperating partners. However, she noted that little progress has been achieved in domesticating trade facilitation instruments at national level as member states took their time to ratify and implement them. High on the agenda of the TCM was the implementation of the COMESA Digital Free Trade Area being rolled out in member states. Other key regional integration issues discussed were reports by member states that are not participating in the COMESA Free Trade Area, Non-Tariff Barriers in the COMESA region, the Kenya Sugar Safeguard and updates on the Tripartite FTA Negotiations and the AfCFTA.

(iii) ECOWAS moves to develop regional strategies for AGOA, TIFA: update

A technical working group, comprising focal points from Directorates of ECOWAS, last week recommended that regional and national strategies be developed to optimize the African Growth and Opportunity Act. A representative of the ECOWAS Commissions’ Directorate of Trade, Mr Kola Sofola, briefed the TWG on the status of the AGOA and the TIFA. He stated that following the 17th AGOA Ministerial Forum held in Washington in July 2018, ECOWAS resolved to strengthen its cooperation with private sector associations in the region and deepen the dialogue of the future of African trade. Regarding the TIFA, Mr Sofola explained that the US has five Trade and Investment Framework Agreements with African RECs and eight bi-lateral TIFA partners in sub-Sahara Africa, which include three ECOWAS member states - Ghana, Liberia and Nigeria.

(iv) Last week’s EAC Aflatoxin Prevention and Control Regional Forum: overview. Download the nine EAC policy briefs launched at the forum, here

(v) IORA Ministerial Conference on Women’s Economic Empowerment (28-29 August, Mauritius): The objectives of the conference are to launch the Working Group on Women’s Economic Empowerment, as set out in the IORA Action Plan for 2017-2021

Kenya’s Ruto roots for stronger intra-Africa trade: blasts protectionism (ChimpReports)

Increased trade among countries in Africa will leapfrog the continent to high levels of economic growth and multiply opportunities for millions of people, Kenya’s Vice President William Ruto has said. Ruto gave the example of Uganda which he said has in the last four months “overtaken Kenya on exports.” The Kenyan government official, who is in Kampala on a three-day state visit, said there are “now more exports to Kenya from Uganda which demonstrates that doing business together is beneficial to everyone.” Ruto also blasted what he described as a “new wave of protectionism,” saying, “we are better off sharing wealth obtained together than protecting poverty in our countries.” He said protectionism is “more reason we must look at blocs that will enable us negotiate for a better share of trade.”

South Africa: Export Councils, DTI explore trade facilitation strategies

The Department of Trade and Industry will host a two-day Export Council Quarterly meeting at the dti campus in Pretoria, starting today. “The meeting will also be used as a platform to cultivate a common vision and programme of action for the department to engage directly with industry on how common goals, objectives and targets can be efficiently and effectively achieved,” says dti’s Director General, Lionel October. Currently, 18 export councils are registered with the dti. They are funded by the dti through the Sector-Specific Assistance Scheme under the Export Marketing and Investment Assistance Scheme.

South Africa bans export of pure Zambian honey (Lusaka Times)

In a letter written to South African authorities, Zambia’s High Commissioner to South Africa, Emmanuel Mwamba stated that he had learnt with regret that South Africa has restricted market access for Zambia’s pure honey with immediate effect. He said that this is because a consignment allegedly from Zambia was found to be contaminated with a disease called American Foulbrood (Paenibacillus larvae). He said the procedure to impose the ban was breached and no official letter has been written to competent authorities in Zambia as required by trade protocols. He also stated that no official results of the analysis and copy of import airway bill were provided for Zambia to authenticate and verify the source of such a consignment.

Ghana: Finance minister stands firm on end to cocoa subsidies (Bloomberg)

As Ghanaian cocoa farmers prepare for the start of the next main harvest in less than two months, Finance Minister Ken Ofori-Atta said their compensation should be set according to international prices, even if it implies a pay cut. The world’s second-biggest cocoa producer subsidized farmers’ pay over the past season that began last October after London prices for the beans fell by almost a third in the preceding 12 months. While cocoa staged a recovery this year on forecasts of a smaller surplus, it remains at least 10% below the local-currency equivalent when producer prices were set at 7,600 cedis ($1,598) per metric ton in October 2016. “If we are getting high prices for our cocoa on the international market, our farmgate price should be high,” Ofori-Atta said in an emailed response to questions. “If we are getting less we should pay less. Government needs to be firm on this so as not to create a debt gap.” [Ghana steps in to help banks]

Afreximbank releases unaudited half-year results: shows $343m in gross revenue

The figure represents a $21m increase over the gross revenue for the same period in 2017. The results (pdf), released by the Bank in Cairo, attributed the higher gross revenue to a significant increase in fee income by 119% while interest and similar income recorded a 2% growth compared to prior year performance. The Bank’s attributable earnings over the six months also amounted to $110 million, beating the budget by 34%.

At WTO: EU, 11 others back US complaint against India’s export subsidies (Economic Times)

The European Union, Russia, China, Japan and eight other countries have backed the US complaint against India’s export promotion schemes at the WTO. They have joined the dispute as third parties. The US has challenged almost all of India’s export programmes at the WTO saying they will harm its workers, citing the Agreement on Subsidies and Countervailing Measures. It pegged the subsidies at $7 bn. ”The number of third parties in the issue is a matter of concern and has serious implications. They are backing the complainant,” said a person aware of the development. Negotiators had expected other countries to join the dispute when it began in March. Former commerce secretary Rita Teaotia has said there was a “real” possibility that India could lose the trade dispute. [Why India hasn’t cut back on coal imports despite rising prices]

Mozambique: Jobs Diagnostic (World Bank)

The existing growth strategy has limited capacity to support continued poverty reduction, because it is too focused on capital-intensive extractives and megaprojects. It doesn’t focus enough on supporting investments that can improve the jobs of the mass of low-income Mozambicans. The strategy is also vulnerable to global market fluctuations, as was seen when the fall in commodity prices in 2016 triggered a sharp economic slowdown. But as the gas revenues from the northeast come on stream over the next decade, Mozambique will have a unique opportunity to shift towards more inclusive growth pattern, focused on jobs transformations for the poor. In this blog, we outline four possible strategies that could help accelerate the shift into higher value-added activities and better livelihoods for the mass of low-paid workers in Mozambique. [Extract from a blog by the author: Ian Walker]

Extracts (pdf): To achieve inclusive growth, Mozambique needs better jobs for households in the bottom 40% of the income distribution. Mozambique’s gross national income is currently around $500 per person (Atlas method). This is below that of most neighboring countries and below the average for Sub‑Saharan Africa. The fact that over 50% of its citizens live below the international poverty line is not surprising. Nevertheless, Mozambique’s poverty rate is much higher than that of Uganda, which has a similar gross national income per capita. Uganda, Rwanda, and Bangladesh are examples of countries that have emerged from the ashes of conflict to deliver strong and relatively inclusive growth. This growth was achieved by investments in the sectors where poor households earn their living, especially in agriculture, and encouragement of private investment in labor-intensive firms, which creates new wage employment in urban areas. This growth pattern created productive employment, raised labor incomes, and allowed households to work their way out of poverty. The result was a virtuous cycle of investment, rising labor earnings, and poverty reduction. This is the growth pattern that Mozambique should aim to emulate.

Box 2 - The danger of Dutch Disease: Contrary to the common pattern among developing countries where this set of interactions occurs, Mozambique does not yet appear to be experiencing significant Dutch disease problems. Oftentimes these interactions stifle productivity growth in agriculture, where most of the poor work now, and dampen jobs growth in manufacturing. However, in Mozambique since 2008, exports have remained stable as a share of GDP. The main inflows of foreign currency have been in the form of foreign direct investment, and were used to finance equally large outflows to pay for import-intensive investments in extractive industries. However, as this investment phase comes to an end and net exports of gas and oil kick in toward the end of the decade, the risk of Dutch disease will increase. There are several possible policies which could mitigate the impact of Dutch disease. They include keeping public spending under control; setting up a sovereign wealth fund to relieve the pressure on the exchange rate by partly offsetting the current account surplus with a capital account deficit; and promoting greater competitiveness in the non-resource tradables industries through sector reforms.

Monday’s Quick Links:

Call for papers: African Journal of Intellectual Property

Ghana: Government to crack down on traders causing confusion over foreign retailers

Mauritius to sign agreement amending the SADC Protocol on Politics Defence and Security Cooperation


Email This email address is being protected from spambots. You need JavaScript enabled to view it.
Tel +27 21 880 2010