Building capacity to help Africa trade better

tralac’s Daily News Selection


tralac’s Daily News Selection

tralac’s Daily News Selection
Photo credit: Rediff

Profiled African trade and investment events to diarise:

The NEPAD Agency is organizing three events next week in New York, on the margins of the UN General Assembly debate

First Ordinary Session of the AU Ministerial Sub-Committee on Tourism (1st-3rd October, Nairobi)

The 2nd Africa-Turkey Economic and Business Forum (10-11 October, Istanbul)

The African Union has posted two important resource publications:

(i) African Trade Statistics Yearbook 2017 (AU, Eurostat)

Scope of publication: The 2017 African Union Trade Statistics Yearbook provides time series for the years 2010-2016 in a single volume in two parts. Part I presents a set of summary tables providing AU aggregates, followed by a set of country tables (Part II). The [bilingual English, French] publication presents data about international trade in goods only. Figures on international trade in services are not included. Data sources and data availability: The publication is based on trade data provided by the vast majority of AU Member States. However, in order to compile AU aggregates for the period 2010-2016, missing data for certain years or countries have been estimated.

Short overview of African Union trade development: The whole of the African Union (AU-55) accounts for approximately 3% of the world’s trade in goods valued in USD. During the period 2010-2016, AU annual exports and imports were fairly stable (at around $500bn), its imports slightly exceedng exports in the most recent years. The trade balance up to 2012 was positive. The ratio of goods exports/goods imports has however changed over the period: in 2010, the AU was a net exporter (the ratio of exports over imports reached 103%), whereas in 2016 it became a net importer (the ratio of exports over imports reached 74%). Among countries the main net exporters in 2016 were Angola (ratio 265%), Gabon (ratio 162 %), Côte d’Ivoire (ratio 127 %), and Botswana (ratio 121 %). In 2016, the three major African importers (Egypt, South Africa and Algeria) and three major exporters (South Africa, Nigeria and Angola) accounted together for 39 % of total AU imports and exports.

Intra African trade is very important for the economic development and integration of the continent. However, the share of Intra African trade in Africa’s total imports and exports remains rather low: on average 13% for intra-imports and 17% for intra exports over the period of the last seven years. While the value of total exports decreased, the share of intra-exports trade increased by 30% in 2016 in comparison with 2010. Extra African trade makes up more than 80% of the total trade. The volume of extra exports and extra imports are similar: on average $450bn for exports and $490bn for imports. The main player in intra-African trade is South Africa, with a share in intra exports which varies from 27 to 30% over the period of 7 years. It is followed by Nigeria (8%) and Gabon (7%). South Africa is also a leader for intra imports (13%), followed by Botswana (8%) and Namibia (8%). [ECA’s David Luke: AfCFTA will spur Africa’s industrialization and economic development]

(ii) pdf Pan-African Financial Institutions (1.50 MB)

Extract from the foreword by Prof Victor Harison (Commissioner for Economic Affairs): Considering the urgent need for Africa to assume its financial self-sufficiency through its own financial institutions, the Commission would like to invite member states to make a firm commitment to translate Article 19 of the Constitutive Act of the AU into reality. These institutions also aim to strengthen the sovereignty of Member States and their independence from the Bretton Woods institutions in particular. The AUC, through the Department of Economic Affairs, would like to make a strong appeal to all member states of the Union to sign and ratify the founding texts of the financial institutions and encourage and congratulate the member states that have already accomplished these acts. The establishment of these institutions not only strengthens Africa’s sovereignty but also increases its resilience and enhances its financial self-sufficiency. This document has three parts: The joint AUC-AACB strategy for the establishment of the African Central Bank; The protocol and statutes of the African Investment Bank; and the protocol and statutes of the African Monetary Fund.

European Union:  pdf Discussion paper on investment in South Africa (105 KB)

In anticipation of South Africa’s Investment Conference, planned for the 25-27 of October 2018, as well as the EU-SA Presidential Summit in November 2018, this discussion paper outlines key challenges that are of particular concern to European investors. The paper also presents proposals to be discussed with South Africa on how these challenges could be improved and/or even overcome. Extensive consultations with the EU member states as well as European business (EU Chamber, Bilateral Chambers, specific companies across different sectors) have identified three main constraints to potential FDI (and trade) that would benefit from the government’s urgent attention: Black ownership requirements under the B-BBEE Codes of Good of Practice; Localisation requirements in public procurement; Delays in obtaining letters of authority from the National Regulator for Compulsory Specifications. Extract from the conclusion: The establishment of a regular EU-SA forum where investment related matters could be addressed, including participation by private sector representatives, would be welcome. Specific to the EU, the resolution of pending differences in the implementation of the SADC EU EPA should be swiftly resolved, hopefully by the time the announced EU-SA Presidential Summit takes place. Without an effectively functioning EPA, the value of the EU-SA Strategic Partnership would otherwise be seriously undermined as a platform for inviting further trade and investment.

Aviation drives economic prosperity for Mauritius (IATA)

The International Air Transport Association called on the government of Mauritius to continue to focus on aviation as a strategic enabler of the country’s economic and social development. “The leaders of Mauritius have always understood that air connectivity is vital. As we celebrate the first half-century of the country’s success, let’s keep in mind the critical role that aviation plays as a pillar of the economy. And let’s look to the next fifty years with a comprehensive strategic focus on maximizing the benefits of aviation for this island nation,” said Alexandre de Juniac, IATA’s Director General and CEO in a keynote address to Aviation Day Mauritius which is marking the 50th year of Mauritian independence. “The key elements of any aviation strategy are safety, global standards, competitiveness and cooperation. But Mauritius and other small island states have a critical competitive advantage in implementing an aviation strategy—and that is size. The country is small enough to rally the aviation universe—the airlines, the airport, the tourism infrastructure—to agree a strategy and to get it implemented quickly and nimbly,” said de Juniac. [Mauritius set to become an Education Hub in the region, reiterates Prime Minister]

RETOSA faces closure due to non-committal member states (Southern Times)

The Southern African Development Community is on the verge of losing its own marketing tourism body as the majority of member states are failing to honour their obligations of paying membership fees. This matter was discussed by the SADC Council of Ministers in August 2018, during the 38th SADC Summit in Windhoek. During its 5th Extra Ordinary Meeting on 8 May 2018 in Durban, South Africa, the board of RETOSA recognised that it was unable to discuss the rescue plan for the organisation without a commitment from member states and recommended that a due process is followed to close RETOSA.

Securing the 21st Century: Mapping India-Africa engagement (ORF)

This year marks 10 years of the India-Africa Forum Summit, and provides an important moment to take an in-depth look at the India-Africa relationship. This publication (pdf) takes into account the longstanding and multifaceted nature of India-Africa ties, and the endeavour to pursue a development partnership that seeks to urgently respond to critical challenges that require organic solutions. Given both the boundless opportunities and the scale of challenges these regions face, it is inevitable that solutions and pathways will also be incubated here. As such, this publication is a knowledge bridge between Indian and African institutions, particularly as we have attempted to bring together views and policy suggestion from both Indian and African contributors. [Note: The trade and investment chapters are written by Pranav Kumar (Confederation of Indian Industry) and Miriam W. Oiro Omolo (Institute of Economic Affairs, Kenya)]

Cecilia Malmström: European Commission presents its vision for the modernisation of the WTO

The pdf EU’s concept paper (708 KB) published today, and already consulted with EU member states, sets out the direction of this modernisation effort. Without prejudice to the EU’s final position on these matters, these ideas relate to three key areas: (i) updating the rule book on international trade to capture today’s global economy; (ii) strengthening the monitoring role of the WTO; (iii) overcoming the imminent deadlock on the WTO dispute settlement system. The EU already started to engage with other WTO partners: with the US and Japan, in the framework of the trilateral discussions; with China, in the dedicated working group set up during the latest EU-China Summit; with other partners, most recently at the G20 Trade Ministerial. The EU will continue discussing these first ideas with various WTO partners in the coming weeks with a view to preparing concrete proposals to the WTO. [Related: ICC welcomes G20 Trade Ministers’ call to support WTO reform; China’s Foreign Minister, Wang Yi: reform of the international trade system]

CDI 2018 and trade: Advanced economies and poverty-weighted trade tariffs (CGD)

As the global trade powerhouses lurch towards protectionism, CGD’s Commitment to Development Index, released today, reveals which advanced economies have trade policies that support—or fail to support—lower-income countries. The Netherlands comes out on top, with overall trade policies that do the most for development, while Australia and New Zealand have the lowest tariffs against low-income countries, with the EU close behind. But some countries can do much more to remove tariffs against their poorest trade partners, and almost all countries have room for improvement. Here we look at the results, and at how countries can encourage development in the face of a global trade slowdown:

South Asia can triple regional trade by removing trade barriers (World Bank)

By reducing man-made trade barriers, trade within South Asia can grow three times, from $23bn to $67bn, says a new World Bank report. Bangladesh has the potential to more than double its trade with South Asian countries. Increased regional trade can accelerate Bangladesh’s growth and create more jobs for men and women. The report, A glass half full: the promise of regional trade in South Asia, documents the gap between current and potential trade in South Asia and provides a roadmap for deepening regional trade. It identifies four critical barriers to regional trade: tariffs and para tariffs, real and perceived non­tariff barriers, connectivity costs, and a broader trust deficit. Intraregional trade in South Asia remains one of the lowest in the world and accounts for about 5% of region’s total trade, compared with 50% in East Asia and the Pacific. [World Bank: Trade facilitation challenges and reform priorities for maximizing the impact of the Belt and Road Initiative]

Wednesday’s Quick Links:

African Cotton, Textiles & Apparel Monitor: #27

Africa sharpens expertise in agricultural statistics

Strengthening the capacity of regional financial institutions in the CEMAC region: the project is expected to become effective on 24 October 2018 (pdf)

Botswana’s 2018 budget deficit to widen to 2.3% of GDP

Julian Hattem: Morocco in the middle

Gates Foundation: Goalkeepers Report

Levels and trends in child mortality: Report 2018

Statement by President Trump on additional tariffs on $200bn of imports from China

China vows to retaliate after Trump’s $200bn tariff hit

A twist in the US tariff battle: “It’s helping China be more competitive”


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