News

tralac’s Daily News Selection

tralac’s Daily News Selection
Photo credit: Stephan Gladieu | World Bank

21 Aug 2018

Transnational corporations, business practices and human rights: DIRCO consultation starts today in Johannesburg, ahead of treaty negotiations at the UN

Diarise: The Fourth Investing in Africa Forum (6-8 September, Changsha, Hunan Province, China)

African Cotton, Textiles & Apparel Monitor: Issue #23 is posted

Energy implications of higher economic growth in Africa (US Energy Information Administration)

China, India, and Africa are three of the most populated parts of the world. Their economies collectively consume about one-third of all global energy, and their energy consumption is projected to grow faster than the rest of the world through 2040. As a result, changes in these economies have significant implications for global energy markets. The EIA has released three reports in its International Energy Outlook 2018 that discuss the energy implications of potential changes in these economies. China, India, and Africa collectively accounted for 32% of global energy consumption in 2015, and in the IEO2018 Reference case, these regions are projected to account for 36% of global energy consumption in 2040.

Higher economic growth in Africa leads to an expansion of the manufacturing sector and an increase in industrial energy use because of possible regional competitive advantages. Higher assumed economic growth over the projection period leads to African energy consumption per capita that is about 30% higher than in the IEO2018 Reference case in 2040. The IEO2018 Africa side case highlights the need to further explore the relationship between projected changes in GDP and the response of energy consumption, particularly in the industrial end-use sector.

Kigali agriculture conference: Unleashing the great potential of Africa’s youth to achieve sustainable development (FAO)

“We need to take action to make agriculture more attractive to young people,” underscored José Graziano da Silva, Director-General of the FAO, at the Youth Employment in Agriculture Conference in Kigali. “They must perceive agriculture as a remunerative and profitable sector and the dissemination of information and communication technologies in rural areas play an important role in this regard,” he added. Over 60% of Africa’s estimated 1.2 billion people are under the age of 25 - mostly living in rural areas. Yet, there is a growing uncertainty over the continent’s preparedness to tap this precious resource, which requires that tens of millions of rural area jobs be created annually for the continent to harness the dividends of its youth. [Over 100,000 Rwandans to benefit from AfDB agriculture project]

Country, regional trade updates

Ethiopia: Manufacturing export misses target (The Reporter)

The local manufacturing sector exported less than 50% of the plan set in the export target in the 2017-2018 fiscal year. According to the annual performance report of the Ministry of Industry, presented at the stakeholders’ consultative meeting held on Thursday at Ghion Hotel, the local manufacturing sector exported industrial good valued at $487.5m. The export target set by the Ministry of Industry was $997.9m. At the end of the second Growth and Transformation Plan (GTP-II) in 2020 the manufacturing sector export is expected to generate $3.5bn and employ 750,000. In the GTP plan the manufacturing sector forecast to grow by 2% each year. However, the sector grew by 11% in the year under review.

The local manufacturing sector is using 57% of its installed production capacity. According to the report, textile and garment achieved 46.3% of the export target, leather and leather products 47.7%, meat and milk 55.9%, food and beverage 62.4%, pharmaceuticals 36.6%, chemicals and construction 45.5%, electric and electronics 39% and metals and engineering 27.4%. While discussing the annual performance of the manufacturing sector, industrialists voiced their complaints. Most of the complaints came from leather producers. A representative of the Ethiopian Leather Producers Association said that following the ban on export of rawhide the price of hide in the local market has nosedived driving many traders out of business. “While rawhides are damped here due to minimal prices leather factories are allowed to import leather from abroad.” [Fifty mega projects earmarked for public-private investment]

Pointsettia assembly and selling emotion: high value agricultural exports in Ethiopia (AFD)

Our interviews with farm managers and owners, as well as airline managers and government officials, show that several agricultural enterprises are increasingly knowledge-intense, organizationally and technically sophisticated and by a reasonable definition ‘industrial’. Moreover, we find that horticulture exports embody another dimension of complex, cross-sectoral economic activity through their reliance on extremely sophisticated logistics and transport. The horticulture export sector has created far greater demands and pressures for the development of up-to-date transport and logistics in Ethiopia than, for example, the textile and leather sectors.

We then identify, within the context of the Upper Awash Valley in Ethiopia, some of the apparently technical but, above all, socio- political constraints limiting the potential for high value agriculture to contribute to growth and structural change. Our method and findings are very different from the literature on ‘complexity’ and ‘product space’ and they query pessimistic conclusions about ‘premature deindustrialization’. And our findings suggest the need to rethink how industrial strategies can promote structural change: much more support should be directed to high value agricultural production and less focus on assembling garments or trainers in subsidized industrial parks. [The authors: Christopher Cramer, Jonathan Di John, John Sender]

AfCFTA: One-stop border post will boost trading (UN Africa Renewal)

As the marketing executive of Dairibord Zimbabwe, a stock exchange-listed exporter of food and beverages in Southern Africa, Tracy Mutaviri is looking forward to a bigger market share for her goods when the African Continental Free Trade Area (AfCFTA) becomes operational. Cumbersome border documentation requirements and administrative and bureaucratic delays at ports of entry can mean delays of seven days or more. To expedite clearance, she suggests a one-stop border post to harmonise the export documentation process and expedite administrative processes.

Ghana: Stop cargo tracking note – GIFF to government (GhanaWeb)

The President of the Ghana Institute of Freight Forwarders, Kwabena Ofosu-Appiah, has issued a one-week ultimatum to government to stop the implementation of the Cargo Tracking Note. He said failure by the government to respond positively to their concerns, will result in a sit-down strike of GIFF’s 3,000 members. He was of the view that the CTN is not different from the Advanced Information System which was introduced in 2012. Meanwhile, the President of the Chamber of Freight and Trade, Dennis Anfoh-Sefah, at a counter-press conference disagreed.

Chinese manufacturing moves to Rwanda: a study of training at C&H Garments (pdf, SAIS-CARI)

The Rwandan government’s program for training its citizens across diverse industries has played a key role in the planning, implementation, and scaling of Chinese manufacturing in Rwanda. Yet to date, there have been few studies of Chinese manufacturing or technology transfer in Rwanda. In 2015, C&H Garments, a Chinese garment firm with previous operations in Kenya, opened a factory in Kigali, introducing new experiments in technology transfer and training. This study examines the employee training arrangement between C&H and the Rwandan government and aims to shed light on various approaches for other African countries seeking to bolster skills transfer with Chinese manufacturing firms. This study is significant given that the Rwandan government’s desire to boost local manufacturing capacity has been at the centre of recent trade tensions between Rwanda and the United States under AGOA. [The author: Janet Eom] [Download the policy brief version (pdf)]

How Kenya has let Uganda gain upper hand in regional trade (The Standard)

The Principal Secretary in the Ministry of East Africa Community Betty Maina said this trade pattern might be as a result of either trans-shipment or misdeclaration. “That might be a diversion of products under the guise that they are made in Uganda, which is an offence,” said Ms Maina in a telephone interview with Financial Standard. But Mr Musyoki insists that the problem of cargo diversion and dumping into the Kenyan market has been greatly reduced following the implementation of the Regional Electronic Cargo Tracking System.

PS Maina, on the other hand, said Kenya has been importing a lot of foodstuff such as maize, and milk products from Uganda for a long time but expressed surprise that an increasing number of imports from Kampala are manufactured products. “We import a lot of food products from Uganda but not manufactured goods,” she explained. In 2017, for example, Kenya imported food products valued at Sh24.6 billion. Much of the foodstuff included milk and milk products (Sh8.1 billion) and leguminous seeds (Sh7.1 billion). The PS said she was also perturbed that Kenya was importing more cars and car parts from Uganda. “They (Uganda) do not assemble cars,” she said, noting that KRA needed to do more to deal with the issue of misdeclaration. Imports of car parts from Uganda has since increased four times in 10 years to 2016 from Sh144 million to Sh659 million.

Nigeria wasted $1tn earned in oil booms, says report (ThisDay)

But for the recurring wastefulness of federal government, the country could have used about $1 trillion it earned from its production and sale of crude oil in five different oil booms to develop and diversify its economic base, a report titled Stabilising Nigeria’s Volatile Economy, has disclosed. The report which was co-authored by a former Vice President of the World Bank, Africa Region, Dr Obiageli Ezekwesili; former president of the Nigerian Association of Energy Economics, Prof. Adeola Adenikinju; Prof. Andrew Onyeanakwe of the University of Ibadan, and Mr Bode Longe, an economist, explained that between 1970 and 2014, Nigeria benefitted from five oil booms but refused to use the huge revenues earned from these booms to expand the nation’s economic base. [Related: Assessing Nigeria’s petroleum sector wealth: Nigeria National Petroleum Corporation’s contributions to the Nigerian economy]

Brazilian cooperatives organise trade mission to Angola (Macauhub)

The Organisation of Brazilian Cooperatives announced in Brasilia that, together with the Ministry of Agriculture, it will carry out a mission to Angola (22-29 September) to expand the commercial relations of Brazilian cooperatives with the Angolan consumer market. “The Angolan economy is currently experiencing a moment of growth, which is reflected in foreign trade, with Brazil’s share of imports of food and beverages in Angola reaching 20%,” said a statement from the OCB. The aim of the mission is to explore business opportunities for the grain, dairy, meat, fruit, juice and soft drinks sectors.

Trade in global value chains: an assessment of labour market implications (World Bank)

In exploring the trade-labour market nexus, this paper seeks to disentangle the complex labour market outcomes that result, both within the export sectors and across the wider economy. The paper takes primarily a cross-country, econometric approach based on empirical models linking trade with aspects of the labour market. The exercises draw on the World Bank Labour Content of Exports (LACEX) and Export Value Added (EVA) databases, which both draw on underlying global input-output data from the Global Trade Analysis Project (GTAP). It explores three primary questions: [The authors: Thomas Farole, Claire Hollweg, Deborah Winkler; An earlier draft of this paper was presented at the Global Value Chain Development Report 2019 Background Paper Conference in Beijing]

Tuesday’s Quick Links:

Jakkie Cilliers: Why Africa must industrialise

China writes off $5.5m loan to reduce Seychelles’ debt load

Huawei’s ICT intellectual programme targets Dar, Dodoma universities

More Tanzanians off to China for oil and gas sector studies

More taxes on petroleum will stall Kenya’s economy says KEPSA

Angola: New customs tariff to facilitate new business

Nigeria: Creating conducive environment for investors in Free Zones

ORF: China is building a new Silk Road, and this one is digital

OECD: Which strategies for NSOs in the digital era? Towards ‘smart data’ strategies (pdf)