tralac’s Daily News Selection
Launched today, in Busia: Cross Border Co-operation Coalition and Campaign. The coalition will consolidate efforts and voices of borderland CSOs to advocate for more enabling cross border cooperation policies, one of them being the AU Convention on Cross-Border Cooperation (the Niamey Convention).
South African trade policy updates:
(i) South Africa and AfCFTA ratification. “Cabinet approved the submission of the Agreement establishing the African Continental Free Trade Area to Parliament for ratification. This agreement will result in access to new and dynamic markets in the rest of Africa, in particular new markets in West Africa and North Africa. It will also provide export opportunities for South African products. This will also be in line with the integrated development approach in the continent. It will stimulate industrial development, investment and the creation of jobs in the continent.”
(ii) South Africa and TFTA ratification: pdf dti’s presentation to the portfolio committee of trade and industry (559 KB)
Slide: Potential benefit for South Africa. (i) When negotiations commence on the investment chapter, South Africa will advance that core provisions of South Africa’s Protection of Investment Act must be taken into account; (ii) Legal certainty and predictability of market in TFTA; (iii) Legal protections for South African exporters i.e. Agreement makes provision for dispute settlement mechanism that is delinked from national courts; (iv) Possibility for the TFTA having a “single-rule book” for trade, investment, IPR and Competition; (v) The TFTA will boost intra-regional trade.
Slide: Potential threats to South Africa. (i) Transshipment (third party imports gaining access through neighbouring countries) – this can be addressed through rules of origin and customs cooperation that is facilitated by the TFTA; (ii) Influx / dumping of substandard goods which can be addressed through effective border management – TFTA itself promotes intra-regional trade in compliance with SA standards; (iii) Non-implementation of commitments by regional partners with implications for preferential access for SA exports; (iv) Risk of implementation of barriers to trade with implications on movement of goods across the region - requires implementation of the industrial and infrastructure development pillars to broaden benefits of the TFTA.
(iii) Exports Councils are key drivers for South African economic transformation. The Deputy Director-General for Trade and Investment South Africa at the Department of Trade and Industry, Ms Lerato Mataboge, says export councils are key drivers for South Africa’s economic transformation and that they should be supported and prioritised. Mataboge said there is a need to find a way for export councils to coordinate better amongst themselves by looking at the clustering approach in order to make sure that they drive the economic strategy of the country. She said the clusters would enable the government and export councils to have an impact on the continent, in the BRICS economies, and the broader global market. “Export Councils, with the dti, need to find a niche in order to have a say in the Presidential R100bn investment drive, because investments and exports are intertwined. We also have to have a relook at the Integrated National Export Strategy in light of the 6% per annum export target that the National Development Plan has set for us. We need to reflect and see what contribution we are making to enable us to reach that target and also to make sure that we take a step back and look at the institutional arrangements that we have, and whether or not they are assisting in driving our export agenda.” Mataboge added that there was a need to discuss the recommendation of the Integrated National Export Strategy, and consider having a National Export Act that will pull together all the elements that speak to exports and the role of the export councils.
(iv) Government commits to increase Export Council funding. The Department of Trade and Industry has committed to increasing the funding of the export councils in order to drive the transformation agenda in different sectors. The commitment emanated from the export councils meeting hosted by the dti’s Director-General, Mr Lionel October in Pretoria. October said it was important to increase the funding in order to meet export targets and also to attach the conditionality of transformation to address the imbalances in different sectors. “Transformation of different industries is very important and that is going to be the pre-condition of funding for all export councils to commit to transformation and to grow the economy through exports. Export councils’ knowledge of industries and global markets is invaluable and it can never be replicated without decisive interventions, but what is important is to pass the knowledge on to the new players and have succession plans in order to transfer knowledge and skills.”
(v) Europeans unhappy about SA’s duties on chicken. The source of the European producers’ wrath is the provisional safeguard duties which the SA government imposed on European chicken imports last year. These duties lapsed but implementation of the final duties is expected soon. The Association of Poultry Processors and Poultry Trade in the EU (Avec), wrote to EC president Jean-Claude Juncker asking for reciprocal measures to be imposed on SA. “Since 2015, EU poultry meat producers have been confronted with a protectionist attitude from SA, who is using several measures to completely block access to the SA market to EU poultry meat producers,” Avec said in its letter. “Following antidumping measures ranging from 22% to 73% imposed in 2015, SA has used a wide range of sanitary and phyto-sanitary bans to block imports of poultry meat from eight of the 10 exporting EU member states. Most of these bans are still ongoing, although the avian influenza outbreaks which led to these bans have been resolved since mid-2017. The latest imposition of a safeguard duty of 35.3%, is another very hard blow to the [supposed] preferential nature of our trade relations with SA and Southern African Customs Union countries.”
(vi) New thinking needed for a collaborative manufacturing base. In the export market, SA’s competitiveness has been affected by a slowdown in investment in manufacturing as companies have been battling with low domestic demand and competition from cheaper imports. It is apparent that while SA has a coherent industrial policy, its implementation has been disappointing. There also appears to be a lack of policy co-ordination, particularly where the country has several other policy plans such as the National Development Plan and the New Growth Plan. SA needs a co-ordinated approach and a synchronisation of policies supporting economic growth and job creation. Policy consistency and collaboration across the manufacturing ecosystem can create synergies and linkages crucial to expanding the manufacturing base and improving competitiveness. [The author, Khumbulani Gumede, is chemicals, forestry, paper and pulp sector head at Absa Corporate & Investment Bank] [KwaZulu-Natal Manufacturing Indaba: speech by MEC Sihle Zikalala]
Chinese Ambassador to Namibia, Zhang Yiming, confirmed yesterday that no meat has been exported to that country, despite the fact that a moratorium on beef export to that country was lifted in February. Zhang confirmed that the reason for this inactivity was that Namibia does not have enough beef to cater for the massive beef-eating Chinese market. He said this while briefing the media on the upcoming China-Africa Cooperation Beijing Summit slated for the first week of September. In 2016, Namibia and China signed a milestone agreement that would have seen A-grade Namibian beef enter the massive Asian market, making it the only country in Africa to export beef to that country. President Hage Geingob last month suggested the removal of the red line in the northern part of the country for the maximum Namibia’s beef benefits to be realised.
Ethiopia: Revenue & Customs Authority reboots customs system to ease hassle (Addis Fortune)
The new system, Electronic Customs Management System, replaces the Automated System for Customs Data (ASYCUDA), which has handled manifests, customs declarations, accounting procedures and transit procedures for the last 15 years. The new system, which has two integrated components, has been under development since 2016 by Webb Fontaine Group. It is expected to go live by the end of this year. A pilot program that automates and integrates operations on the main transit corridor of the country, connecting customs offices between Galafi, along the Djibouti border, and Qality in Addis Abeba, has been running since October 2017. Experts commend the technological advancement, yet question the characteristics, the legal framework and human resources quality of the Ethiopian Revenue & Customs Authority.
Sheikh Khalifa Al-Zaabi, the UAE’s Ambassador to Ghana, said the embassy had set up an Economic and Trade Unit working with all Chamber of Commerce and Investment Authorities from UAE and Ghanaian business to increase the volume of trade and investment between the two countries and was planning an investment forum in Accra to introduce opportunities to Ghanaian businesses in the UAE. “As at 2017, trade volumes between UAE and Ghana were estimated $2.8bn and there are about 60 UAE Companies currently investing in Ghana”. A trade and investment delegation comprising 45 personalities, led by the Undersecretary of the Ministry of Economy for Foreign Trade is expected to arrive in Ghana on September 3 to explore business opportunities.
Following the rally in global crude oil prices, Nigeria has recorded a significant increase in oil export revenue as the country earned an estimated $26bn in the first seven months of this year. The country saw its oil export revenue rise by 30% to $34bn in 2017, from $26bn in 2016, according to the new OPEC Revenues Fact Sheet released by the Energy Information Administration on Tuesday. Nigeria, Africa’s top oil producer, had the sixth biggest revenue in the 15-member Organisation of Petroleum Exporting Countries, and the lowest per capital oil revenue last year. Its rival, Angola, which earned an estimated $31bn in 2017, had a per capital oil revenue of $532. The southern African country earned $21bn in the first seven months of this year.
Improving road safety and urban mobility: Accra expert meeting (UNECA)
Every year, road crashes are estimated to claim over 300,000 lives in Africa. According to WHO, the African region has 2 per cent of the world’s registered vehicles but a disproportionate 16 per cent of the world’s road traffic deaths. Road traffic fatalities are estimated to be the fourth leading cause of death of persons aged 5 through 44 years. To share experience in improving road safety, over 100 participants representing nearly 20 African Government Ministries of Infrastructure/Transport, National Road Safety Authorities and Councils, African sub-regional and regional organizations, international organizations, NGOs, academic and research institutions, and the private sector are attending a 2-day workshop on Road Safety and Urban Mobility in Accra.
IMF technical assistance report on Malawi: Public Investment Management assessment
The strength of Malawi’s PIM institutions is generally comparable to SSA countries and other LIDCs (see figure 22). Malawi has stronger institutions than its comparators in the areas of coordination between entities, infrastructure financing, and budgeting for investment. Nevertheless, its PIM institutions are weaker in project appraisal, budget comprehensiveness, procurement, availability of funding, portfolio management and oversight, and project management. Despite the relative strength of Malawi’s PIM institutions, many of them are not being implemented efficiently and effectively (see figure 23). The gap between PIM institutional strength and its effectiveness is quite pronounced in all areas except project selection, suggesting the need to focus on the better implementation and enforcement of the existing framework of laws, regulations, and procedures that support PIM. Malawi has an opportunity to perform better than its comparators on key PIM institutions over the next five years.
The current ECF arrangement (access of 160% of quota or SDR 224.32 million) was approved on June 30, 2017 in the context of a very difficult and deteriorating social, economic, and financial situation. The crisis was precipitated by the oil price and security shocks that began in 2014, and the heavy burden of external commercial debt. An agreement in principle to restructure the Glencore debt was reached in February 2018, which paved the way for the completion of the first review in April 2018. Chad’s stability is key for the regional security situation given its regional peace-keeping efforts.