Building capacity to help Africa trade better

tralac’s Daily News Selection


tralac’s Daily News Selection

tralac’s Daily News Selection
Photo credit: Sebastian Liste | NOOR for FAO

Just released: Africa Agriculture Trade Monitor 2018 (ReSAKSS, AGRODEP, CTA)

The report notes the European Union as the continent’s dominant trading partner, accounting for 40% of exports and 30% of imports, but Asia is catching up rapidly. There are promising signs for export performance from many countries, with African exporters increasing their competitiveness in global markets for three-quarters of commodities studied. Moreover, many new export commodities, such as wool, soybeans, soybean oil, live trees and plants, and cocoa preparations, showed strong gains in competitiveness, suggesting the potential for diversifying exports by expanding trade in these areas. The study highlights the benefits of intra-regional trade to stability and resilience of markets and food supplies.

Key factors limiting Africa’s trade in agricultural products include the poor quality of physical infrastructure, inefficient customs processes and high harassment costs, inconsistent regional standards and regulations, and non-tariff trade barriers including stringent food safety and traceability requirements in importing countries. Support to domestic agricultural producers in OECD countries also reduces Africa’s trade. African countries have limited control over trade policy in other countries, the study notes, but they should continue to take part in global efforts to lower trade barriers. In addition, much can be accomplished by addressing the domestic constraints to expanding trade. Download:  pdf Africa Agriculture Trade Monitor 2018 (3.70 MB)

Table of contents: Introduction; Africa’s global trade patterns; Regional trade patterns across Africa; Competitiveness of African agricultural exports; Determinants of African agricultural exports; Major developments affecting Africa’s trade performance: a summary of key literature; The West African trade outlook: business-as-usual compared with alternative options; Summary and conclusions

Africa Agriculture Status Report 2018: Catalyzing state capacity to drive agriculture trans-formation (AGRA)

Most African countries are struggling to follow the lead of Asian countries in using agriculture to spark widespread economic growth because they have yet to marshal strong political support for agriculture – and then pair it with compelling visions, strategies and related implementation capacity for transforming their poorly performing farms, according to a major new study released by the Alliance for Green Revolution in Africa. The assessment was released on the opening day of this week’s African Green Revolution Forum in Kigali. Download:  pdf Africa Agriculture Status Report 2018 (13.66 MB)

The 2018 AASR notes that if one looks at countries like China or South Korea or, closer to home, at Ethiopia, Rwanda or Morocco, it’s clear that intensifying commercial production on small, family farms packs a powerful economic punch. The AASR finds that a consistent feature in each of these success stories is rock solid political support - led by heads of state, senior government ministers, private sector leaders and farmer organizations - for the “institutions, investments and policies” that can unleash the economic potential of smallholder agriculture and local agribusinesses. Equally important: the report finds political capital is typically invested in a detailed plan of action that is carried out by a strong cadre of skilled professionals. And not just from the agriculture sector.  The AASR offers a detailed exploration of the seven different levers governments must pull to unleash the potential of their smallholder farmers to deliver both food security and economic growth. They include: [Profiled technical note: Ratio of agricultural exports to agricultural imports, by country 2007-2017; Alan Doss: Kofi Annan’s Unfinished Green Revolution]

Nigeria’s foreign trade statistics Q2 2018: merchandise trade declines by 8.89% (NBS)

The total value of Nigeria’s merchandise trade was N6,569.98bn in the second quarter of 2018, which was a -8.89% contraction from the figure recorded in Q1, 2018 and a 14.56% growth from Q2, 2017. In the second quarter, the top five import destinations for Nigeria were China, Netherlands, Belgium, India and United States which, respectively, accounted for 25.2%, 8.6%, 8.1%, 6.9% and 6.7% of imports. Import trade from African countries stood at N109.1 billion, or 5.2%, while imports from the region of ECOWAS amounted to N14.2 billion, or 0.4%, of total imports. Exports by country of destination showed that Nigeria exported goods in Q2 2018 mainly to India, Netherlands, Spain, South Africa and United States. These five countries accounted for 50.9% of the total exports in Q2, 2018. [Download the NBS report]

Botswana: 2018 Article IV Consultation (IMF)

Public sector reforms to lift growth potential and increase equity: Public sector reforms are needed to enable the expansion of the private sector, create jobs, diversify exports, and reduce income inequality. In an environment of constrained mineral and SACU revenues, a gradual reduction in the size of the public sector over time would allow the state to focus on providing high-quality services more efficiently. At the same time, expenditure and tax policy reforms could help reduce income inequality.

Making the public sector more efficient and effective: In the short term, there is a need to rationalize parastatals and privatize key enterprises. At end-2017, there were 61 parastatals, comprising 24 commercial enterprises. Many are inefficient, with overlapping mandates, unclear value-addition, and contribute to fiscal costs and contingent liabilities. The staff underscored the importance of avoiding the creation of new parastatals and supported the authorities’ plans to strengthen financial oversight, improve transparency, and make public reports on meeting standards. It also noted the need to adopt a private management model for parastatals by professionalizing their boards. Lastly, the staff urged the authorities to proceed with the privatization of key enterprises, notably Air Botswana, the Botswana Meat Commission, and the National Development Bank.

Appendix VI: Economic diversification. Diversification remains a key goal and the authorities aim at developing sectors with perceived comparative advantage. After a comprehensive consultation process with stakeholders including the private sector, a new approach based on a cluster-based plan was adopted as part of the 11th National Development Plan that commenced in 2017. The authorities also based their approach on a study prepared by an external consultant that identified beef, tourism, and financial services as strategic sectors with potential comparative advantage. This appendix assesses the constraints that have kept these sectors from reaping the intended benefits and recommends policy actions to eliminate restrictive and costly government’s interventions while leveling the playing field to achieve greater competition and private sector participation.

Lesotho: Statement issued as IMF mission concludes visit (IMF)

The mission discussed with the authorities a number of options for containing the deficit to a level that can be fully financed. The mission noted that the adjustment should be focused on expenditure measures, including efforts to address the public sector wage bill, which is one of the largest in the world compared to the size of the economy, while making efforts to ensure that the most vulnerable are protected. The mission also discussed other possible areas for savings, including on government travel, foreign embassies, and procurement. Discussions also considered measures to modernize tax policy and improve the revenue system. The mission noted the need to address long-standing PFM issues to ensure the provision of reliable fiscal data and ensure sound use of public resources. Significant progress was made during the visit, and discussions will continue in the coming weeks. If agreement is reached on policy measures in support of the reform program, an arrangement to support Lesotho’s economic program could be proposed for the IMF Executive Board’s consideration.

Kenya calls for speedy passage of EAC laws on integration to resolve trade barriers (EABF)

Kenya’s EAC and Regional development Ministry has called for a speedy enactment of regional integration laws to address the issue toxic trade barriers given numerous emerging challenges faced by Kenyan products in accessing the regional market. According to EAC and Regional development Cabinet Secretary Adan Mohamed, the National Assembly should redirect legislative focus towards harmonizing EAC laws in the context of various domestic laws to ensure they strengthen regional integration efforts. “We must guard against the constantly changing regional dynamics in the East and Horn of Africa which greatly impact on strategic regional interests,” said Mohamed, who urged the legislators to probe the various Bills, Reports and Protocols in the context of emerging regional dynamics.

Mombasa Port: New charter outlines key port reforms (Business Daily)

A team spearheading a charter signed in 2014 to enhance cargo clearance at the Port of Mombasa has submitted its reviewed report to the government. The Mombasa Port Corridor Charter report was presented during last week’s validation workshop in Mombasa, an event attended by Maritime Principal Secretary Nancy Karigithu. The Charter Steering Committee chairperson Gilbert Langat said for the last four years since the first charter was signed, government agencies and private sector players have supported efforts to make the port more efficient. About 25 organisations drawn from the government, private sector, civil society and other interest groups are signatories to the charter.

Thursday’s Quick Links:

Declaration of the 2018 Beijing Summit of the Forum on China-Africa Cooperation

Yun Sun: China’s 2018 financial commitments to Africa – adjustment and recalibration

Dr Joseph Okpaku: Time for smart, more ambitious China-Africa partnership

Ghana: Akufo-Addo woos Chinese investors with juicy incentives

Chinese heavy-duty truck manufacturer Sinotruck to set up in Ghana

South Africa: US confirms it’s not using AGOA as leverage over land expropriation

Global Trade Review: Kenyan trade financiers “losing the battle” with Chinese banks

International Centre for Settlement of Investment Disputes: Tanzania loses appeal, now Tanesco to pay $148m

UNCTAD training manual: Building the capacities of Least Developed Countries to upgrade and diversify fish exports


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