tralac’s Daily News Selection

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tralac’s Daily News Selection

tralac’s Daily News Selection
Photo credit: CMA CGM Group

Africa’s trade and investment relations: selected updates from recent events

Prime Minister Theresa May in Cape Town

(i) Joint statement by UK, SACU and Mozambique on a future EPA: Ministers responsible for Trade in the UK (G Hollingbery) and in SACU and Mozambique (represented by B.J. Kenewendo of Botswana) met in Cape Town yesterday. “We take note of the progress achieved regarding the UK and EU’s agreement on a time-limited implementation period between the EU and UK following the UK’s departure from the EU, and in particular the intention for the UK to be treated, for the purposes of EU international agreements, as an EU Member State for the duration of the implementation period between the EU and UK. The SACU and Mozambique Trade Ministers indicated that they look forward to receiving formal confirmation of the same via the proposed notification, and to continuing to receive regular updates on progress from the UK on the EU-UK negotiations under Article 50 of the Treaty of the European Union on the UK’s withdrawal from the EU. SACU and Mozambique emphasise the importance of continued cumulation between all the parties in promoting continuity and to avoid disruption in trade, and urge both the UK and the EU to recognise the importance of cumulation in the discussions on a post-Brexit EU-UK arrangement. Nevertheless, we recognise that it is responsible to prepare for all potential outcomes. We confirm that we are therefore taking steps to ensure that our replicated agreement can be in place, if required, immediately upon the UK’s withdrawal from the EU in March 2019, in the event that no agreement is reached between the UK and EU.”

(ii) South Africa-UK Business Forum: speech by Prime Minister Theresa May. So a driving focus of our development programme will be to ensure that governments in Africa have the environment, knowledge, institutions and support to attract sustainable, long-term investments in the future of Africa and Africans. And to help bring those investments about, I can today announce an additional £4bn programme of UK investment in African economies that will pave the way for at least another £4bn of private sector financing. This includes, for the first time, an ambition from the UK government’s Development Finance Institution, CDC, to invest £3.5bn in African nations over the next four years. And next year London will host an Africa Investment Summit, helping investors and African governments forge closer ties with one another. And because markets and economies need people as well as capital, we will also be sharing our expertise – supporting partner countries in developing their business environments and institutions, integrating into global value chains, building ties with investors and tackling barriers to growth. To do so, we will radically expand the UK government’s presence in Africa, opening new missions and bringing in trade experts, investment specialists, and other policy experts.

(iii) President Cyril Ramaphosa’s remarks at SA-UK Investor Roundtable: Earlier this year, we announced an ambitious investment drive that aims to generate at least $100 billion in new investment over the next five years. This drive will culminate in an Investment Conference on 25-27 October, which will bring together investors both from within South Africa and from other parts of the world. We are looking forward to welcoming British investors to this Conference, both those who have long been invested in South Africa looking to expand their operations and those who would be investing here for the first time. We are encouraged by the fact that the UK is one of the largest foreign investors in the South African economy with more than 650 British firms present in the market. This means that there are many British business leaders who have a good understanding of the South African market and recognise its potential, and who are also able to identify constraints to growth and development. [President Cyril Ramaphosa and UK Prime Minister Theresa May’s press statements]

President Uhuru Kenyatta in Washington

(i) Joint statement by Presidents Trump, Kenyatta: The Presidents are pleased to announce that their governments established direct flights between Nairobi and New York City, a move that will expand the economic and cultural ties between the two great countries. Recognizing the importance of high-quality infrastructure, President Trump and President Kenyatta welcomed the proposal by United States engineering and construction firm Bechtel Corporation to build a modern superhighway from Nairobi to Mombasa. Both sides agreed to undertake further consultations to conclude the terms of the financing agreement. This and nearly $900m in other commercial deals and engagements announced during the visit are expected to create thousands of American and Kenyan jobs, further enhancing the prosperity and economic competitiveness of both nations.

(ii) On the establishment of a US-Kenya Trade and Investment Working Group: USTR Robert Lighthizer, Kenyan Cabinet Secretary for Industry, Trade and Cooperatives, Peter Munya - “our two countries will work together to explore a mutually beneficial trade and investment framework to guide our relationship moving forward, including by maximizing the remaining years of AGOA and looking ahead to the next steps”

(iii) President Kenyatta at the Business Council for International Understanding: The US Overseas Private Investment Corporation and Kipeto Wind Energy Company signed documents to close a $232m deal in financing for the construction and operation of a 100-megawatt grid-connected wind power plant south of Nairobi. The second agreement signed was a $5m letter of commitment in financing to expand the distribution network of Twiga Foods and improve food security and agricultural wages in Kenya.

(iv) US Trade and Development Agency and Kenya: The upcoming visit will connect leading US manufacturing and technology providers to Kenyan officials that are responsible for enhancing Kenya’s communication capabilities in fire, health, or weather-related emergencies and improving access to emergency responders for all Kenyan citizens.

(v) Related: USTDA announces call for African transportation project proposals; ICT project proposals; and energy project proposals

Africa-Singapore Business Forum

(i) Minister for Trade and Industry Chan Chun Sing calls on African businesses to make Singapore a base and a partner “in South-east Asia and beyond”. Even as some developed economies pull back from the world stage, Africa and South-east Asia can work together more closely and promote economic integration, Mr Chan told an audience of some 600 delegates, in a keynote address at the biennial Africa Singapore Business Forum. At Tuesday’s forum, an avoidance of double taxation agreement was inked between Singapore and Gabon - the 13th such deal with an African country. Five other pacts were also signed at the event, which was held at the Grand Copthorne Waterfront Hotel and organised by government agency Enterprise Singapore. The agency’s Singapore Cooperation Enterprise arm and the Mozambique Investment and Export Promotion Agency have agreed to work on exchanging consultancy, advisory and training services for urban master plans and special economic and industrial zones, while the Singapore Manufacturing Federation and Egyptian Businessmen Association will work to match companies in each country with their counterparts. Enterprise Singapore said it has successfully facilitated close to 50 projects for Singapore companies in Africa in the last two years, 80% of which were undertaken by small and medium enterprises (SMEs). Over 60 Singapore companies are present in Africa, operating across more than 40 African countries and multiple industries. [Decoding development: Insights from Singapore’s Economic Development Board]

(ii) Enterprise Singapore supports companies in Africa’s Digital Economy: In the last year, Enterprise Singapore has helped more than 10 Singapore companies to break into Africa’s digital technology space including e-Government services, e-commerce platforms and cross border payments. According to Singstat, foreign direct investment from Africa into Singapore amounted to S$27.4bn in 2016. In 2017, trade between Singapore and Africa amounted to S$9.78bn according to data from Enterprise Singapore, while Singapore investment into Africa reached S$18.5bn in 2016, making the republic its 7th largest trading partner.

(iii) Singapore and Africa – partners for Smart Cities: theme of the Third Singapore-Sub-Saharan Africa High-Level Ministerial Exchange. Remarks by MFA, Dr Vivian Balakrishnan on Singapore Cooperation Programme and Africa: We believe that no single country, let alone a tiny city-state, has a monopoly on the answers to the challenges we face. We also do not believe that there is a single universal model of development that is applicable to all. All of us have our own unique history, geography, societies, and our own unique set of challenges. We believe that by coming together, on occasions like this, we can exchange ideas and perspectives, synthesise them and come up with something that works in our own unique national circumstances. For this reason, we have sought to share our own development journey through the Singapore Cooperation Programme (SCP) over many decades. In fact, since 1992, over 120,000 officials from 170 countries, including 9,000 from Africa, have attended our SCP courses.

(iv) Related: Inaugural Session of the 3rd Indian Ocean Conference. Let me share a couple of principles which shape Singapore’s views of the Indian Ocean, which are drawn from our experience at the tip of the Straits of Malacca. The first thing which we in Singapore believe – and I think I can speak on behalf of ASEAN – is that we need an open and inclusive regional architecture. The key words here are “open” and “inclusive”. This brings me to my second point today. ASEAN has always sought a regional architecture that articulates a complete, coherent, and consistent economic strategy. In other words, trade is strategy. We must look for every opportunity to facilitate trade and mutual investment, enhance connectivity, and invest in infrastructure. The global consensus for free trade and economic integration is fraying.

My third point is a rules-based world order. This again comes from the perspective of a small, tiny, city state. By definition, we cannot believe that “might is right”. We have to believe in a rules-based world order with multilateral institutions setting multilateral rules and having access to peaceful resolution of disputes. In the maritime field, you will understand why, therefore, the 1982 United Nations Convention on the Law of the Sea (UNCLOS) is such a sacred document for Singapore. It keeps the sea lanes free, open, peaceful, and allows small states like Singapore as well as Sri Lanka to have an equal say even when we are dealing with much bigger political and economic entities.

In other news

Rwanda Development Board Annual Report 2017: selected highlights (pdf)

Total exports increased by 36% compared with 2016, almost reaching$2bn as merchandise exports grew by 58%; In 2017, the main export destination regions for Rwandan goods were the Middle East, Africa (without close neighbours) and Europe while major country destinations were UAE, Kenya & Switzerland; RDB supported promising exporters as well as SMEs - yielding a 43% export increase for 8 leading manufacturing and agro-processing companies; Service exports grew by 20% as tourism exports continued on a growth trajectory increasing by another 12% from 2016-2017; As the chief negotiator for the Government of Rwanda, RDB closed 8 strategic deals in 2017, resulting in the registration of $588m new investments. [Rwanda’s Greens pledge to push for import-export bank]

International tourism arrivals hit record high in 2017 (UNWTO)

The latest edition of its Tourism Highlights, published on Monday, shows international arrivals reached 1.323 million last year. The figure represents an 84 million increase over 2016, and a new record, with the sector also recording “uninterrupted growth” in arrivals for eight consecutive years. Europe and Africa led the regions with increases in arrivals, with growth of eight per cent and nine per cent, respectively. WTO added that tourism is the world’s third largest export category, earning $1.3 trillion in receipts in 2017: an increase of five per cent. Meanwhile, total exports from international tourism stood at $1.6 trillion, or an average of $4 billion a day: that is, seven per cent of the world’s exports. Extract: Africa regional results (pdf):

International tourist arrivals in Africa are estimated to have increase by 9% and receipts at the same level (+8%). Results were driven by the continued recovery in North Africa and the solid growth in most destinations that reported data. Tunisia continued to rebound strongly in 2017 with a 23% growth in arrivals, while Morocco also enjoyed better results after weaker demand in the previous year. Growing demand from European source markets and a more stable environment contributed to the subregion’s positive results. In Sub-Saharan Africa, strong performance continued in large destinations Kenya, Côte d’Ivoire, Mauritius and Zimbabwe. The subregion’s top destination South Africa reported slower growth in arrivals though a strong increase in receipts. Island destinations Seychelles, Cabo Verde and Reunion; all reported double-digit growth in arrivals, benefiting from increased air connectivity. [AfDB: Africa Tourism Monitor 2018]

South Asia’s transport corridors can become engines of growth (World Bank)

The report The web of transport corridors in South Asia (pdf) – jointly produced with the ADB, DFID and JICA – argues that the many transport corridors proposed across Asia would cost trillions of dollars to implement, far exceeding the financing resources available. Hence, countries need to prioritize the most promising corridors that will deliver transformative impacts on economies and people – or, in the terms of the title of the report, will offer wider economic benefits. And while engineering designs and geopolitical considerations are important factors in the decision, sound economic analysis is key to designing truly successful corridors, the report notes.