tralac’s Daily News Selection
EAC trade and regional integration events scheduled for this week:
Extraordinary meeting of the Sectoral Council on Trade, Industry, Finance and Investment (10-14 September, Arusha)
Implementation of study recommendations for interoperability of card switches and cross border payments (10-14 September, Nairobi)
Forum on China-Africa Cooperation: Beijing Action Plan – 2019-2021 (MFA China)
Extracts from the trade section (3.8): The African side appreciates China’s efforts in implementing the China-Africa trade and investment facilitation plan to promote trade connectivity in Africa by strengthening African countries’ customs and taxation law enforcement capabilities and upgrading customs and transportation facilities. China will continue to work with Africa in such areas as market access, personnel training and customs.
China supports the building of the African Continental Free Trade Area, will continue to hold free trade negotiations with interested African countries and regions, and will actively explore cooperation possibilities with the African side following the principle of mutual benefits and openness.
China supports Africa in boosting its export and has decided to increase imports, particularly non-resource products, from Africa, with a focus on value added agricultural produce and industrial products. China supports Chinese local governments and business councils and associations in organizing companies to carry out trade promotion activities in Africa and will hold, on a regular basis, marketing activities for Chinese and African brand products. China supports African countries in participating in the China International Import Expo. The least developed African countries participating in it will be exempted from paying exhibition stand fees. China welcomes participation of African companies in the China Import and Export Fair, the China International Agricultural Trade Fair and other important trade fairs, and will provide preferential and facilitating measures where necessary.
China will continue to materialize its pledge of zero-tariff treatment for 97% of tax items from African LDCs having diplomatic relations with China, deliver on this policy upon the bilateral exchange of notes, and take effective measures to make it easier for the recipient countries to benefit from this policy.
China supports Chinese companies’ mutually beneficial cooperation with the African side, encourages financial institutions to provide export credit and export credit insurance to key projects such as railway, telecommunications and power projects undertaken by Chinese companies on the premise that risks are under control and supports the setting up of a $5bn special fund for financing imports from Africa. The two sides welcome and support the establishment of the China-Africa Private Sector Forum.
Fourth Investing in Africa Forum: selected, related updates
China Development Bank, Afreximbank trade finance collaboration. China Development Bank has signed an agreement providing a $500m facility to the African Export-Import Bank to enable the African trade finance bank support trade enabling infrastructure projects across the continent. The facility will also be used to support Afreximbank’s trade finance intermediaries to provide medium to long term financing for sub-projects in various sectors, including energy, telecommunication, transportation, agriculture, medical sector, industrial park or any related trade finance transactions. The facility carries a 10-year tenor. Zheng Zhijie Liu, Vice Chairman and President of CDB, and Prof. Benedict Oramah, President of Afreximbank, signed the facility agreement on behalf of their two institutions during a ceremony held on the sidelines of the “4th Investing in Africa Forum” which took place in Changsha.
Fourth Investing in Africa Forum yields agreements worth $1.371bn across agriculture, industry, energy, industrial park construction and health sectors. “Africa has become an important continent for Hunan province regarding overseas investment and cooperation,” said Du Jiahao, Secretary of the CPC Hunan Provincial Committee and chairman of the Standing Committee of the Hunan Provincial People’s Congress in the opening ceremony of the forum. In 2017, the province invested $2.07bn in Africa, while from January to July this year, the volume of imports and exports between Hunan province and Africa increased by 49.5% compared with the previous year, said Du.
ECA and GEIDCO cooperation agreement. The ECA Executive Secretary Vera Songwe attended the Forum on African Energy Interconnection Development (4 September), organized by Global Energy Interconnection Development and Cooperation Organization (GEIDCO) and attended by over 400 Chinese and African energy experts. The main objectives of the Forum were to present the findings of GEIDCO research on African energy interconnection planning, promote key energy projects in Africa, and the highlight cooperation between China and Africa in clean energy development and energy interconnection. She delivered opening remarks in which she stressed the important role of global and African energy interconnection as well as clean energy development in achieving the Sustainable Development Goal of universal access to electricity by 2030. She also emphasized the nexus between Africa’s regional transport corridors and cross-border energy interconnection as well as the implications for the Belt and Road Initiative. A cooperation agreement between ECA and GEIDCO was signed at the end of the Forum.
South Africa, China enhance enhance cooperation on sanitary and phytosanitary matters. Minister Zokwana and Vice Minister Zhang committed to continue to cooperate on market access matters and resolved that South Africa will host the 7th Sanitary and Phytosanitary Cooperation meeting in November 2018. The 7th SPS Cooperation meeting is expected to discuss animal quarantine, plant quarantine and food safety matters in the quest to facilitate trade in agriculture, forestry and fisheries products. Minister Zokwana and Vice Minister Zhang urged technical experts to work on priority lists for sector trade. Minister Zokwana reported that South Africa is currently compiling a list of new and compliant export facilities to export beef and lucerne to China. The new facilities will have a strong focus on smallholder farmers and businesses. The objective is to broaden participation of smallholders in accessing markets and ensuring the continued revitalization of agriculture and agro-processing value chain. The compliance of the new establishments will be subject to further assessments by China before permission is granted for exports.
65 CSOs oppose China’s $15bn bauxite development plan in Ghana’s forests, citing social and environmental risks. The number includes 37 CSOs in Ghana, 11 from Africa and 17 of them operating outside the African continent. An agreement, already signed between Ghana and China for the Chinese government to support bauxite development in Ghana, is funded by the Chinese Development Bank at $10bn, with the project’s key developer being, the China Railway Engineering Corporation. The CSOs, in a statement, indicated that China Development Bank’s signing of the UN Global Compact, and its membership of UNEP’s Finance Initiative, both of which are designed to ensure that signatories take a precautionary approach to development projects, which could have probable negative impacts on the environment and people, especially affected communities, is being compromised by the bank.
Businesses push for direct Yuan conversion in Ghana. Executive Member of the Ghana Union of Traders Association Benjamin Yeboah said the introduction of the Chinese Yuan will be of great benefit to businesses in Ghana. “We are always using the dollar as the rate in accessing the strength of the cedi. Therefore most at times, people have to change to that medium, the dollar in trying to bring goods down to Ghana. Majority of our members or traders usually ply their trade from China and therefore using the Yuan as a medium is a great idea so that should one attain the Yuan here, in terms of trying to bring in goods, it builds that much pressure on the Dollar where we are all choosing to secure and bring goods in from China. It will help a lot, bring pressure lower to bear on the dollar and who know, it can even help the strength of the cedi. So it is a good idea, and I think it should be explored” he explained.
Customs experts from member states of ECOWAS have urged the Commission to support the implementation of the Supplementary Act on Mutual Administrative Assistance and Cooperation between Customs Administrations in the region. The experts who met in a three day meeting from 4th to 6th September 2018 in Abuja, Nigeria to review and amend the draft Supplementary Act also called for the computerisation of customs offices in Member States for better interconnectivity of Customs computer systems. The ECOWAS Commission’s Commissioner for Trade, Customs and Free movement, Tei Konzi stated that this would help improve the exchange of information and strengthen cooperation amongst Customs operatives in the region.
EGCSP II is carefully designed to build on the policy measures and achievements of EGCSP I by consolidating the gains already recorded. Following Board approval of the first phase on 10th May 2017 and disbursement of the resources in June 2017, the Bank maintained constant dialogue with the Authorities. The dialogue centred on the fiscal consolidation efforts, structural measures to support public sector efficiency and business environment reforms, with particular emphasis on industrialization. Many of the measures are designed to build on and help operationalise some of the transformational policy and legal frameworks passed under Phase I, including the PPP Act, NAMRA Act and the Public Procurement Regulations. An assessment of program implementation so far shows that it has yielded immense benefits for Namibia in a number of ways:
Supporting entrepreneurs at the local level: the effect of accelerators and mentors on early-stage firms (World Bank)
We investigate the association between entrepreneurship support programs and the likelihood of receiving funding for early-stage firms. We use a novel database of 2,887 early-stage technology companies from nine local ecosystems (including Cairo and Dar es Salaam) in eight countries that includes data about the founders’ demographic characteristics, educational background, work experience, and entrepreneurial history; we also use data about the start-ups’ history and evolution that follow their progress through support programs and early-stage funding. We isolate two support interventions—acceleration and mentorship—that the literature has found to have a larger effect on a firm’s performance, and we test if such effect is supported from an ecosystem perspective.
Monday’s Quick Links:
SADC Secretariat, China explore peace and security cooperation, SADC Regional Logistics Depot
Report on the OECD workshop on Regional Trade Agreements and the environment (pdf)
Closing the gender gap in extractives: what has been done and what have we learned?