Building capacity to help Africa trade better

tralac’s Daily News Selection


tralac’s Daily News Selection

tralac’s Daily News Selection

German minister pushes for free trade deal ahead of Africa trip (DW)

Germany’s development minister Gerd Müller is promoting a “customs-free trade deal in Africa” ahead of his seven-nation Africa visit. Experts say the real issues are being ignored. When it comes to the economic relationship between Germany and Africa, the issue of customs exemption is no longer an important topic. At least that’s what renowned development economist Robert Kappel from the University of Leipzig thinks. Instead, agricultural subsidies and trade barriers should be the main topic of discussion. However, Kappel blames Europe for pursuing neocolonialism in its monetary policy. Yet, Müller avoided these issues before his trip to Africa this week. According to Kappel, he has failed to recognize that a trade imbalance has only increased in recent years – despite a customs exemption. “The minister is not well informed, therefore it’s right to criticize him,” Kappel told DW.

The trade relationship between Europe and Africa is increasingly turning out to put Africa at a disadvantage. While the imports from Europe in most African countries are on the rise, the total number of African exports to most European countries is decreasing. This mostly has to do with the trend of prices, says Kappel. Oil and gas are the main exports from Africa to Germany and Europe, followed by agricultural products. “The prices of agricultural products and that of oil and gas have dropped in the past years,” says Kappel. “This is why the trade balance of African countries with Europe has become negative.”

South African trade updates

South African poultry group targets US import quota (Reuters)

The South African Poultry Association has filed a lawsuit seeking to force the government to suspend a quota that excludes some US poultry imports from an anti-dumping tariff, a senior official with the association said on Tuesday. If successful, the move - a response to the Trump administration’s decision to impose tariffs on aluminum and steel imports - could put at risk duty-free access to the US market for nearly $2bn worth of South African exports. South African Trade and Industry Minister Rob Davies acknowledged that the government had received the court papers relating to the lawsuit from the poultry group but declined to comment further. South African meat importers argue that ditching the tariff-free quota would drive up prices for the country’s consumers and likely provoke retaliation by the US poultry industry. “I don’t think they’re going to take it sitting down,” said David Wolpert, CEO of South African meat importers association AMIE SA, referring to U.S. poultry producers. A Reuters update:

“We will certainly be encouraging our government to take appropriate action,” James Sumner, president of the USA Poultry and Egg Export Council, told Reuters late on Tuesday. “We hope that the US and South Africa will amicably resolve and differences they have over the (steel and aluminium) tariffs but it should not interfere with agreements already reached on poultry trade.”

SABIO relieved at Zambia honey import ban (Farmer’s Weekly)

South Africa’s recent ban on imports of non-irradiated honey from Zambia has been described as a “good thing” by the chairperson of the SA Bee Industry Organisation, Mike Miles. The ban was implemented following the discovery of a batch of imported of non-irradiated Zambian honey reportedly containing specimens of the American foulbrood Paenibacillus larvae that’s deadly to bees. Miles told Farmer’s Weekly SABIO had long been concerned about the safety of Zambia honey imports “because they are not irradiated due to trade agreements” between Zambia and SA. “Now we need to ascertain the original source of the bacterium. This can be done. It’s a concern if the American foulbrood found in Zambian honey is coming from outside of Zambia.”

South Africa’s retailers get to grips with Namibia Charter (Retailer News)

SA retailers supplying products to Namibia have to abide by that country’s retail charter, which aims to control access to the local market to allow for the development of local suppliers. The Spar Group is among those finding it challenging to operate in Namibia because local supplies are not always readily available. The retail charter was introduced by the Namibian government in 2016 to promote increased procurement of locally grown and manufactured goods. It has become the Achilles heel for SA retailers, which would largely have home products in their stores. According to the Namibian Trade Forum, one of the main objectives of the charter is to increase the retail shelf space devoted to local products. The charter aims to raise local procurement from 6% of purchases of all retailers, ultimately ensuring that 20% of products are sourced locally.

Angola and the IMF: statement by IMF Deputy Managing Director, Tao Zhang (IMF)

We have received a letter from the Angolan authorities for IMF staff to initiate discussions on an economic program that could be supported by the Extended Fund Facility. The request follows an IMF staff mission visit in Luanda (1-14 August) and an initial letter requesting a program to be supported by a Policy Coordination Instrument. The Government of President Lourenço has taken important steps toward improving governance and restoring macroeconomic stability. The IMF stands ready to help the authorities address Angola’s economic challenges by supporting their economic policies and reforms based on the Government’s Macroeconomic Stabilization Program and in the National Development Plan for 2018–22. We expect to initiate program discussions with the Angolan authorities as soon as feasible.

EALA, EABC set to deepen co-operation on integration matters

The East African Legislative Assembly and the East African Business Council have agreed to deepen co-operation in a bid to strengthen the integration process. EALA Speaker Ngoga Karoli Martin rallied for a clear avenue of engagement that institutionalizes the efforts of the regional legislators and the private sector. “This is something we need to bring to fruition so that we strategize together and regularly consult over key matters of integration”, he added. EABC Chairman, Mr Nesbitt reiterated the EABC was focused on the ultimate prize of full integration and said the apex body as part of its strategy would be aligning itself with key institutions to realise mutual beneficially relationships. Mr Nesbitt informed the Speaker that EABC would be holding a full Board meeting in Arusha in September 2018 and that a second meeting between both institutions was necessary to discuss the “nuts and bolts” of co-operation.

A New Times editorial: EAC and its organs should take safety seriously

Early at the beginning of the year, members of the East African Legislative Assembly conducted on-the-spot inspections of East African Community projects, organs and facilities along the two trade corridors; Northern and Central. The aim of the tour was to identify bottlenecks to the effective implementation of the EAC Customs Union Protocol. Among the facilities put in place was the East Africa Trade and Transport Facilitation Project set up to reduce transit cargo time by eliminating Non-Tariff Barriers and enhance safety.

When EALA members arrived at the Rusumo One-Stop Border Post along the Tanzania-Rwanda border, they pointed at the lack of adequate safety and emergency measures. Seeing the number of trucks hurdled together, with some carrying inflammable liquids and gases, it was as if they were waiting for disaster to strike … and it did this week. Though it claimed only one victim, the Rusumo tragedy should be a wakeup call to fully implement the EATTFP by clearing cargo trucks as soon as possible and installing safety features wherever they converge. Next time the toll could be higher. [Was Rusumo border fire avoidable?]

IGAD: Enhancing transboundary animal disease control and livestock trade

The IGAD Center for Pastoral Areas and Livestock Development organized a meeting between Ethiopian and Kenyan technical teams (14-15 August, in Adama) to finalize development of the implementation framework (IF) for operationalization of the MoU between the two countries that was signed in June, 2016 by Ministers responsible for livestock. Recommendations and way forward:

Innovation activity in South Africa: measuring the returns to R&D (World Bank)

The paper aims to deepen our understanding of the dynamics of innovation practice and technology absorption in South Africa at the firm-level by estimating the returns to R&D expenditure in the manufacturing sector. The paper is novel in that it is one of the first to measure the returns to R&D using firm-level data in a developing country. This is done by (i) estimating the intensity of R&D expenditure of South African manufacturing firms; (ii) estimating the elasticity of R&D expenditure with respect to output; (iii) putting these two estimates together to derive estimates of the return to R&D expenditure in the South African manufacturing sector from 2009 to 2014. This kind of analysis has been done many times for OECD countries, but far less frequently for developing countries, due in part to the lack of accessible firm level data. [The authors: Mark Schaffer, Andre Steenkamp, Wayde Flowerday, John Gabriel Goddard]

Building inclusive payment ecosystems in Tanzania and Ghana (World Bank)

Box 1. Why are the Tanzania and Ghana experiences unique? While this analysis could have highlighted the experiences of any number of countries that have succeeded in developing inclusive payment ecosystems, the Tanzanian and Ghanaian experiences hold unique and complementary lessons:

Wednesday’s Quick Links:

Namibia hosts first Arts Summit of Southern Africa

Beijing ups pressure on Taipei’s last African ally, eSwatini, to abandon it for Beijing

Wang Yiwei: Why African countries need the Belt and Road Initiative

Japan’s contrarian Daikin Industries makes Africa its next big bet

Julius Probst explainer: why some current account imbalances are fine but others are catastrophic

Nigeria Customs warns exporters against contrabands

World Bank: Methodology for poverty measurement in Malawi

UNDP Ghana: Northern Ghana Human Development Report (pdf)

Influential foreign companies pushing ‘dirty seeds’ in Africa – Ghanaian CSOs warn

Framing the social contract: a review of Algeria, Morocco and Tunisia


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