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tralac’s Daily News Selection

tralac’s Daily News Selection

04 Oct 2018

Maritime trade and Africa (UNCTAD)

Maritime trade in Africa is shaped by the continent’s trade concentration and limited diversification. Accordingly, 40% of goods exported by sea in 2017 comprised of crude oil, while over two-thirds of imports were accounted for by dry cargoes (dry bulks and containerized goods) and close to 20% of imports were made up of petroleum products and gas. The EU remains Africa’s major trading partner although its share of trade has declined from about half in 1995 to one-third in 2017. In recent years, the share of trade with the US has fallen while trade with China has increased: China, and Asia in general, have incrementally cut into the EU and US share of African trade.

Africa’s ports account for 4% of global containerized trade volume, much of which comprises imports of manufactured goods. Africa’s shipping and ports do not always match global trends and standards. Apart from four container terminals in Morocco, Egypt and South Africa, no other African port was featured in the 2016 list of Top 100 global container ports. By diversifying their economies and enabling greater integration into regional and global value chains, Africa can improve its containerized trade and port traffic volumes and emerge as an exporter of containerized goods. For this to happen, however, trade policy and regional integration initiatives such as the AfCFTA will not be enough. Africa’s container ports and hinterland transport networks need to support these efforts by upgrading infrastructure and services, and improving performance, to match international standards. This entails, among other things, enhancing productivity levels: on average, crane productivity is around 20 moves per crane per hour in West Africa, 25 to 30 in South Africa, and 35 to 40 in Asia. [Additional downloads from UNCTAD’s Review of Maritime Transport 2018]

Related perspectives on African logistics:

  1. 2018 African Ports and Rail Evolution Conference: African transport infrastructure insufficient for continental growth – Nzimande

  2. Africa Renewal: West African traders demand investments in roads, rails and telecom


Africa’s Pulse (World Bank)

Economic growth in Sub-Saharan Africa is estimated to have picked up to 2.7% in 2018 from 2.3% in 2017, barely above population growth. The region’s economic recovery continues but at a slower pace than expected (0.4 percentage points lower than the April forecast), due to downward growth revisions in the three largest economies in the region. The road ahead is bumpy. On the supply side, the moderate recovery reflected higher oil prices and better agricultural conditions following droughts. On the demand side, growth was supported by consumer spending amid eased inflation and public investment - especially among non-resource-rich countries. The external environment became less favorable for Sub-Saharan Africa. Global trade and industrial production lost momentum. Metals and agricultural prices fell due to concerns about trade tariffs and weakening demand prospects, while oil prices were on an upward trend. The tightness of oil supply suggests that oil prices are likely to remain elevated through the rest of the year and into 2019. Metals prices have been lower than previously forecasted and may remain subdued in 2019 and 2020 amid muted demand, particularly in China. Financial market pressures intensified in some key emerging markets and developing economies. Concern about dollar-denominated debt has risen among emerging markets amid a stronger US dollar.

Related World Bank regional analysis: MENA Economic MonitorA new economy for the Middle East and North Africa; East Asia and Pacific Economic UpdateNavigating uncertainty

IMF’s World Economic Outlook – Chapter 2: The global recovery 10 years after the 2008 financial meltdown

Against this backdrop, this chapter takes stock of the global economic recovery 10 years after the financial meltdown of 2008 and the policy lessons that can help prepare for the next downturn. Specifically, the chapter addresses the following questions:

  • Compared with pre-crisis trends, how did output evolve across countries in the aftermath of the crisis?

  • How did the associated components – capital, labor inputs, total factor productivity – advance after the crisis? What does this decomposition show about why it took a long time for output in many economies to return to its pre-crisis level?

  • Even as the world economy experienced its worst slump in seven decades, post-crisis macroeconomic performance varied across countries. What accounts for this variation? Which policies and structural attributes helped limit the damage and facilitate recovery?

WTO Trade Forum: Less talk, more action needed on e-commerce (UNCTAD)

But while rules are needed, they must be business friendly and simple enough that everyone can navigate them, said Jack Ma, co-founder and executive chairman of the Chinese online commerce giant Alibaba Group. Online sales have mushroomed from $16 trillion in 2013 to around $26 trillion in 2016, offering new business opportunities to anyone with an internet connection. “[People] can buy everywhere, sell everywhere, deliver everywhere, and pay everywhere,” Mr Ma said during a discussion on “enabling an inclusive future for e-commerce”.

WTO head Roberto Azevêdo agreed that e-commerce allows entrepreneurs to overcome some of the traditional obstacles to trade, such as physical distance. “If you have a phone now you’re connected to a global marketplace,” Mr Azevêdo said, adding that online platforms allow consumers to access a broader selection of goods at better prices. But without the right approach, the big players could easily dominate this market at the expense of the smaller businesses, he said, reminding the audience that 4 billion people still don’t have an internet connection. “If we cross our arms and do nothing that is precisely what is going to happen. Poorer countries would be left behind.”

Miriam Altman: Taking China-Africa trade relations to new heights (China Daily)

Second, South Africa has lost its market share in Sub-Saharan Africa, the destination for 22% of its manufacturing exports, with China’s share growing to more than 25% of manufactured imports in most of these markets. South Africa’s loss of market share in Sub-Saharan Africa to China is particularly seen in non-electrical machinery, electrical machinery, iron and steel products, vehicles and parts, rubber, and iron and steel. The overlap between South African and Chinese exports has become more prominent in Sub-Saharan Africa. Only 17% of South African exports to Sub-Saharan Africa overlapped with Chinese exports in 1997, as against 74% by 2010, as China introduced new products. [The author is a member of South Africa’s National Planning Commission]

Lesotho’s economic recovery slowed by weaker South African growth (Fitch Solutions)

Tepid real GDP growth in South Africa will weigh on Lesotho’s economic recovery over the next two years, with lower remittances and subdued consumer demand expected to weigh on manufacturing and wholesale and retail trade sectors. At the same time, weaker growth in South Africa will also weigh on government consumption in the short-term, limiting fiscal stimulus. That said, we still see Lesotho exiting the period of recession registered in 2017, mainly on the back of stronger activity in mining and construction. We have revised down our forecasts for growth in 2018 and 2019 to 1.3% and 1.1% respectively, from 2.6% and 2.2% respectively to account for this poor economic performance. Moreover, Lesotho’s textile manufacturing sector, which made 13.1% of GDP growth in 2016, is expected to underperform due to structural issues and lower demand from South Africa. The textile sector has been one of the main engines of growth in Lesotho, but its prospects remain grim due to several factors.

IMF completes mission to Côte d’Ivoire: statement

The fiscal budget deficit is expected to be contained to 4%of GDP in 2018, in line with the program target, with a small revenue shortfall offset mostly by lower public investments. The IMF mission and authorities agreed on fiscal policy measures for the 2019 budget to secure key program objectives. These measures should enable the projected fiscal deficit to decrease to 3% of GDP in 2019 and thus comply with the WAEMU regional deficit norm. IMF staff and the authorities also agreed on policies to secure debt sustainability while making space to finance the National Development Program (2016-2020). The mission noted improvements in the restructuring and the oversight of public enterprises, and the monitoring of public-private partnership projects and their fiscal-related risks.

Cabo Verde: Investment policy review (UNCTAD)

Cabo Verde’s solid foreign direct investment attraction performance was instrumental in the country’s graduation to middle-income economy. However, FDI and economic activity remain concentrated in a few sectors and limited to a few locations. The IPR of Cabo Verde was initiated at the request of the Government. It analyses the legal and regulatory framework for investment, and contains a strategic analysis on how to better utilize FDI in the tourism sector as a leverage for sustainable development. The IPR is based on two fact-finding missions undertaken in July and December 2017 and information current at that time, as well as additional information made available to UNCTAD until May 2018. [Related UNCTAD analysis: Investment Policy Review Implementation Report – lessons learned (pdf)]

Tuberculosis must fall! A multisector partnership to address TB in Southern Africa’s mining sector (World Bank)

This book presents key activities, promising practices, and lessons learned to date from the World Bank’s Tuberculosis in the Mining Sector Initiative - an innovative multi sectoral, multi country, public-private regional initiative. It examines how a collaborative platform was established to cover 10 southern African countries, and details the processes through which multiple countries, ministries, sectors, and partners have been brought together to address the various dimensions of the epidemic. The primary focus of the case studies is how these cooperative regional processes - at both technical and political levels - have been designed, implemented, managed, and sustained through various partnerships to complement country-level efforts.

3rd PACA Partnership Platform: Calls for enhanced country-led approaches for sustainable aflatoxin mitigation in Africa (AU)

African Union Commission Chairperson, Moussa Faki Mahamat urged all AU Member States to tackle the impact of aflatoxins through a strong continental vision supported by robust political will, as well as the establishment of the necessary technical structures and the promotion of coordinated approaches. Speaking during the opening of the 3rd Partnership for Aflatoxin Control in Africa Partnership Platform Meeting themed ‘Scaling-out country-led approaches for sustainable aflatoxin mitigation in Africa,’ yesterday, Chairperson Faki emphasized the need for collective action to address the major health risks posed by Aflatoxins in Africa which also impact negatively on the agricultural and trade sectors of the continent.

AU STC-TTIET Sub-Committee on Tourism: Towards a Continental Tourism Framework. Access the speeches here.

Today’s Quick Links:

Afreximbank trade programme designed to de-risk African banks

Member states endorse ECA’s strategic plan for statistical development in Africa

Deep concern over Tanzania’s statistics gagging law

Kingdom of Lesotho: Technical Assistance Report-Government Finance Statistics

Scramble for Eritrea likely to change Horn, Nile geopolitics

British firm gets nod to build mega dam in Kenya

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This post has been sourced on behalf of tralac and disseminated to enhance trade policy knowledge and debate. It is distributed to recipients across Africa and internationally, serving in the AU, RECs, national government trade departments and research and development agencies.

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