Building capacity to help Africa trade better

tralac’s Daily News Selection


tralac’s Daily News Selection

tralac’s Daily News Selection
Photo credit: AU-UN IST | Stuart Price

Management of Africa’s global position must change:  pdf Rwandan President Paul Kagame’s UNGA address (328 KB)

Let me start with a paradox. In no other region is the sense of trans-national solidarity and unity so deeply felt as in Africa. The idea that our respective national identities stand in contradiction to Pan-Africanism is unheard of in our context. And yet, despite this unique civic endowment, Africa has too often stood out for division and dysfunction in practice. This left Africa unable to articulate and advance our common interests. We ceded responsibility for our future to others, not by force but by default. But times are changing rapidly, and so the management of Africa’s global position must also change.

The trend on our continent is toward closer and more productive cooperation, both through the African Union and our Regional Economic Communities. The evident decline of old certainties and authorities is not bringing turbulence to Africa, as would have been the case, as of a previous era. On the contrary, the effect has been to focus Africa’s attention on the urgent need to get our house in order and fundamentally change how we do business. That is why the African Union initiated a major financial and institutional reform, more than three years ago. We are already seeing practical results: [President Al-Sisi’s visit to US and UN General Assembly speech: Egypt adjusting the compass] [Note: Speeches by other African leaders at the ongoing UNGA debate can be accessed here]

UNGA side events

  1. Invest in South Africa private roundtable: remarks by President Cyril Ramaphosa. “We are taking immediate steps to finalise reforms in key sectors like mining, oil and gas, tourism and telecommunications – all of which are sectors that have great potential for growth, but which have been constrained by policy uncertainty. We are reprioritising our budget – within the existing fiscal framework – to invest more in those activities that are most likely to boost growth, including agriculture, township and rural businesses, and infrastructure.”

  2. Third Industrial Development Decade for Africa: enhanced and innovative global partnerships key to a successful AfCFTA

  3. High-Level Panel on Migration and Structural Transformation in Africa: Africa must look to internal migration to boost development

  4. A call to invest: investing in jobs for young people in Africa. Extract from speech by UK PM, Theresa May: Next year the UK will host an Africa investment summit in the UK – bringing African leaders together with private and institutional businesses and investors.

  5. African Leaders Roundtable on Identification for Development: The World Bank Group estimates it will take $6bn to meet Africa’s digital identification and civil registration needs. Through the ID4D initiative, the World Bank Group is providing a comprehensive package of financial and technical support at national- and regional-levels in Africa. Nearly $1bn is being mobilized for digital identification and civil registration projects across 30 countries – 23 of which are in Africa. For example, recently-approved and pipeline projects in West Africa will build foundational identification platforms that are interoperable across borders for more than 200 million people.

Africa-to-Africa Investment Report:  pdf A first look (1.80 MB) (AfDB)

To start to plug the data gap on intra-African investments, the report takes a look at the dynamics behind African investment from the point of view of leading African companies. It shares key lessons and experiences to offer practical solutions for the region’s investors. The report features case stories from eight publicly listed or privately owned African companies operating in a range of sectors. Each has a significant African footprint – registered and operational in at least one country outside of the company’s home base. The companies represent consumer services, finance, industry, media and diversified portfolios and investment from across North Africa (Morocco), West Africa (Nigeria, Togo), East and Central Africa (Ethiopia, Kenya) and Southern Africa (Mauritius, South Africa). The companies in the report were selected from a potential pool of 300 African companies.

IMF updates:

IMF completes 2018 Article IV Mission to Ethiopia: “Growth is expected to step up in 2018/9 to 8.5%, supported by stronger confidence as the uncertainty of the previous year recedes, and the availability of domestic and foreign direct investment improves. The authorities’ strategy to shift the engine of economic activity to private sector development while the public sector consolidates is appropriate to maintain strong growth. The mission supports the ambitious reform agenda announced by the Prime Minister aimed at opening up important parts of economy to competition and encouraging private sector investment. At the same time, measures to reduce public sector borrowing and bring inflation back to target need to be intensified, as external imbalances and indebtedness remain a source of macroeconomic risk.”

IMF on Madagascar’s economic programme: “Economic conditions have continued to improve. Growth is expected to exceed 5% this year, the highest level in 10 years. This outcome is driven by a rebound in agricultural production, especially for rice, as well as growing public investment. Despite rising international oil prices, external developments have remained favorable, with a strong export performance underpinned by high prices and production for vanilla and mining.”

Ethiopia to Mauritius: How will Africa match jobs to its population boom? (The Guardian)

There’s a speech that the Nobel-prize winning economist Joseph Stiglitz has been taking around African countries these past few years. It is a problem that has been troubling many, including the billionaire philanthropist Bill Gates. And Stiglitz’s message is not entirely reassuring. “What I have argued is that the reason exports were so important [to Asia beginning in the 1960s] is threefold: it created jobs, created goods for exchange and was the basis of modernisation. There won’t be a single sector or activity that will do all three for Africa, so its approach will need to be more subtle. It follows that you need to have a multi-pronged strategy. Some African countries have natural resources, which means they can get foreign exchange – but that won’t create jobs. But there are a variety of sectors that can embed modernisation, including advanced tourism and telecoms.” [The authors: Peter Beaumont, Tom Gardner]

Strengthening National and Regional Trade Policy Dialogue Platforms: Trade policy should not be left to governments alone, says UNECA’s David Luke

“Trade policy and its effects are too complicated and far-reaching to be left to governments alone and must include dialogue with the private sector through which trade occurs, and the civil society which can play a key role in monitoring outcomes and advocacy. Effective trade strategies are a product of a trade policy-making process that includes all the key stakeholders. We expect, therefore, to see consultation and dialogue become an inherent feature of trade policy governance at all levels.” Commenting on some ECA initiatives, David Luke said: “Currently we are working on the next edition of Assessing Regional Integration in Africa, volume 9, which will focus on a detailed analysis of AfCFTA Phase II issues, including e-commerce. We are also developing a monitoring and evaluation tool to be known as the AFCFTA Country Business Index that will provide concrete data and information on the impact of the AFCFTA.”

Lifting the lid on the black box of informal trade in Africa (The Conversation)

Reducing tariffs should help formalise some of this informal trade. But it is difficult to predict by how much. It’s possible that incentives to go informal remain high for many traders, even under the continent’s proposed free trade agreement, especially if preferential treatment is costly or difficult to obtain. [The authors: Joachim Jarreau, Cristina Mitaritonna, Sami Bensassi]

Liberia: ECOWAS Parliamentarians to assess bottlenecks at borders (Daily Observer)

A 35-person delegation from the 4th Legislature of ECOWAS Parliament of 15 West African countries is expected in the country today, 27 September 27, for a three-day border surveillance exercise on the Liberia-Sierra Leone border at Bo-Waterside in Grand Cape Mount County and the Liberia-Guinea (Ganta) border in Nimba County.

Kenya escalates Tanzania trade war with new tariffs (Business Daily)

Nairobi has hit back at Dar es Salaam by imposing new tariffs on Tanzania products like flour after the neighbouring country ignored a deal that granted Kenyan-made chocolate, ice cream, biscuits and sweets unrestricted entry into its market. This came after Tanzania and Kenya failed to resolve the trade war sparked by use of imported materials in goods made in the countries, setting the stage for a fresh round of the trade war. Tanzania will continue to levy 25% duty on Kenya’s edible oils as well as the Tembo cement brand produced by Bamburi Cement Factory which it says are made from imported palm and clinker respectively. Kenya, on the other hand, is imposing 25% duty on Tanzania’s products like flour which it says are produced from imported wheat.

Nigeria:  pdf Commodity price indices and terms of trade (Q2 2018) (2.29 MB)  (NBS)

Between January and June 2018: The all commodity group import price index rose by 2% driven by miscellaneous manufactured articles; The all commodity group export price index rose by 11% driven by mineral products, wood products, live animals and vegetable products; The all products terms of trade index rose by 9% driven by mineral products; The all region group export index rose by 9% as a result of trade with the Americas region; The all region group import index fell by 2% as a result of trade with Oceania region; The all region terms of trade rose by 11% as a result of trade with the Americas. In Q2 2018, Nigeria’s top five trading partner countries were Belgium, China, Spain, the Netherlands and India.

What can African countries learn from China about transport and logistics? (World Bank)

The lesson for African policy makers is that timing and context are critical. Going forward, African countries will also need to consider current realities and the competitive advantage of respective countries or indeed groups of countries. Growth patterns have shifted, with emerging megacities in Asia and new trade routes have dramatically affected global supply chains. Keeping up with a trend of growing middle class and the number of cities with GDP over $100bn expected to exceed 80, most of the production will be focused on meeting this demand in Asia. The implication for Africa? [The author, Dr Bernard Aritua, is a Senior Infrastructure Specialist in the Transport & ICT Global practice]

New UNCTAD reports:

(i) Fostering gender mainstreaming in National Trade Facilitation Committees. Results show that, at present, National Trade Facilitation Committees are not gender balanced. On average, only 36% of members of NTFCs are female. This percentage goes down to 24% in the case of the developed countries that participated in the survey (see Figure 1, pdf). Not only are Committees not gender balanced, but it also transpires from the survey that most NTFCs (62%) are usually chaired or co-chaired by men. As shown in Figure 2, in Least Developed Countries only 17% of National Trade Facilitation Committees are chaired or co-chaired by a woman.

Besides having a gender imbalance in both the composition and leadership of Committees, NTFCs also lack concrete actions and decisions towards gender mainstreaming in trade facilitation. From the 39 countries that answered the survey, only one country affirmed that the Committee has ever taken a decision or action to mainstream gender in trade facilitation. When asked why this is the case, almost half of NTFCs affirm that this is due to a lack of awareness on gender mainstreaming (44%). Almost a third of Committees (31%) considered that gender mainstreaming is not relevant at this stage.

(ii) Trade and Development Report 2018: power, platforms and the free trade delusion. Global trade continues to be dominated by big firms through their organization and control of global value chains with, on average, the top 1% of each country’s exporting firms accounting for more than half its exports. The spread of these chains contributed to a rapid growth of trade from the mid-1990s up to the financial crisis, with developing countries posting the fastest growth, including by trading more with each other. But the report shows that countries have had to trade more intensely to generate the same growth of output as in the past and that too much of this trade has been unequal, with gains skewed in favour of lead firms through a mixture of increased market concentration and control of intangible assets. The report documents a general decline – with China an exception – in the share of value added from manufacturing activities in these chains and a rise in the share of pre- and post-production activities. The rents captured at these ends of the chain have had a pronounced effect on the distribution of income in all countries.

Thursday’s Quick Links:

Kenya: Oil export deadlock deepens as key investors lock horns, head to court

EAC and IGAD launch Nutrition Knowledge Hubs

UN retreat discusses Mauritius Strategic Partnership Framework 2019-2023

Africa’s environment ministers urge action on environmental challenges through innovative solutions

Africa Conference on Social Entrepreneurship: speech by Ms Susie Kitchens, UK Deputy High Commissioner to Kenya

Methodology for a World Bank Human Capital Index


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