tralac’s Daily News Selection
Ethiopia and Rwanda, this week, announced gender parity cabinets. The key Trade and Industry portfolio in both countries is now headed by a woman: Mrs Fetlework Gebregziabher and Mrs Soraya Hakuziyaremye, in Ethiopia and Rwanda, respectively.
Exporter of the Year 2018 – Winners (Cape Chamber)
Historically South Africa has been one of the largest investors in Africa. Yet in recent years it has been facing growing competition from other investors – both from outside Africa (notably, China) and from other African countries. South African policy makers need to respond to the changing investment climate on the continent from an informed base. Yet there have been few (especially recent) studies on South Africa’s investment presence or performance in other African countries. To address this gap, an extensive ‘scoping analysis’ was conducted to probe the investment activities of South Africa’s largest publicly listed companies in other African countries. This policy brief summarises the main findings from the analysis, supported by a review of FDI and trade data.
Extracts: South African investment into the rest of the continent is seen as overtly market- (and profit-) seeking. That is, South African investors are motivated to invest in African economies in order to diversify or expand their markets, or to improve their profit margins. This is in contrast to investment that is resource-seeking in nature, which aims to secure resources for extraction.
There are a number of countries in which there is a significant sectoral representation of South African firms. For example, the scoping exercise revealed that in Ghana, Namibia and Zambia, there are South African companies from 14 different ‘supersectors’ operating in those countries. Overall, there are 13 countries in which there is a company presence from 10 or more different sectors. Figure 4 indicates that the total number of identified investments by the largest companies listed on the JSE is dominated by the telecommunications and chemical sectors, which have invested in over 24 and 23 African countries respectively. Furthermore, producers of industrial goods and services, banks and retailers have invested in over 15 different countries across Africa. It is clear that service-oriented (and secondary/manufacturing) sectors, rather than resource-based sectors, have attracted South African investment to the rest of the continent.
South Africa’s agricultural trade: market access permits and export quotas for 2019
The Department of Agriculture, Forestry and Fisheries (DAFF) has issued two new notices concerning procedures for the application, administration and allocation of export quotas under the SADC-EU EPA and market access permits under the WTO Marrakesh Agreement.
Doing Business in Nigeria 2018: subnational doing business report (World Bank)
This fourth report of the Doing Business in Nigeria series updates the data for 36 states and FCT Abuja and measures progress since 2014 in four regulatory areas: starting a business, dealing with construction permits, registering property and enforcing contracts. It also incorporates measures of regulatory quality in the latter three indicators. No single Nigerian state dominates the indicator rankings across all areas benchmarked. The results show that most states, if not all, have something to showcase and something to learn. The states that lagged behind in 2010 have been improving and narrowing the gap in regulatory efficiency with the better-performing states.
In the past four years, 29 Nigerian states implemented 43 reforms across the four areas benchmarked, with Kaduna, Enugu, Abia, Lagos and Anambra showing the largest advance toward the global good practice frontier. Most reforms were federally driven in the area of starting a business, and most were focused on the efficiency of processes rather than the quality of regulations. Location still matters for local entrepreneurs wanting to start and operate a business in Nigeria, as large differences exist in the regulatory environment throughout the country. For example, incorporating a new business can take more than six weeks in Adamawa and just 10 days in Abuja. [Download: pdf Doing Business in Nigeria 2018 World Bank (8.22 MB) ]
The present paper seeks to answer several questions: Is there a relationship between export diversification and employment generally and particularly in Africa and least developed countries? What does the theoretical and empirical literature reveal about the relationship? Assuming that export diversification is potentially an important positive determinant of employment creation in Africa and least developed countries, then what are the appropriate policies for increasing it? Extract:
Africa has consistently performed worst on export diversification. The evidence on export concentration (Chart 3) reveals a substantially lower (higher) level of export diversification (concentration) in Africa, compared with the other developing regions of Asia and the Americas. Furthermore, while diversification in these regions has remained about the same level since the mid-1990s, it actually shows a downward trend for the African region. The use of the bilateral export concentration index corroborates this observation (Chart 4).
There are a number of developing countries (Korea, Brazil, Thailand) that have made significant progress on export diversification over the years and have reaped the benefits of its positive effect on employment. Some of these countries were either on the same socioeconomic development level with most African countries a few decades ago or on lower levels of economic progress compared to Africa. Today, they have made steady progress, overtaken African countries and continue to make significant progress. These countries offer insightful lessons for African countries and LDCs. A few of these examples are highlighted. [Download: pdf Export Diversification and Employment in Africa (4.04 MB) ]
USAID Administrator Mark Green regularly underscores his view that the goal of foreign assistance is to end its need to exist. Consistent with that objective, Green is spearheading a shift in how USAID works to better support partner countries’ ability to plan, implement, and finance their own development. The agency is calling this new country-centered approach the Journey to Self-Reliance, and - as we’ve discussed previously – it incorporates a number of worthwhile elements. Last week, the agency came out with its first major, visible Journey to Self-Reliance product – a series of country “roadmaps” that use 17 indicators to plot low- and middle-income countries’ “commitment” to and “capacity” for self-reliance. [Profiled Country Roadmaps: South Africa, Rwanda, Kenya, Botswana, Ethiopia, Lesotho, Ghana, Nigeria]
Part of the roadmaps’ limitation is that the indicators don’t speak well to the kinds of reform conversations USAID often has. While USAID’s policy engagement does sometimes take the form of big, broad governance statements (e.g., respect civil liberties, conduct free and fair elections), much of its policy conversations are more narrow and specific to the sectors USAID invests in (e.g., revisions to an energy law, supporting the government’s adoption of a WHO-recommended treatment protocol for HIV) - things that aren’t captured in the indicators. Even when an indicator does capture a particular policy area a mission might want to highlight, a policy conversation requires being able to say more about why a country performs the way it does than a top-line number can give. Diving into the underlying data to parse out this kind of information can be difficult and time-consuming and may overtax busy mission staff (though USAID is developing some Washington-based support).
There’s also a risk that the roadmaps hinder policy dialogue by suggesting relatively good performance in an area the mission is pushing the country to improve, or by sparking defensiveness among country counterparts at being presented with an unfavorable assessment and/or something a host country perceives to be prescriptive (the data tool isn’t meant to be prescriptive, of course, but “roadmap” is a tricky name with its “this is how you get there” implications). [The author: Sarah Rose]
This week at the WTO
Official perspectives, discussions: WTO membership meeting: Debate on WTO reform should reflect all perspectives – DG Azevêdo; Committee on Rules of Origin: WTO members review use, application of preferential rules of origin for LDCs; Services Council: Poorest countries call for review of preferential access for exporters of services; WTO General Council sets date of next Ministerial Council (8-11 June 2020, Astana, Kazakhstan); DG Azevêdo’s address to the inaugural International Trade Banquet (London); An IMF interview with Roberto Azevêdo: Trade is not the problem
News updates: US asks for WTO panel over metals tariff retaliation; Brazil, China sugar trade scuffle brought before WTO; New Zealand government statement on next week’s talks in Canada on WTO reform: 13 countries to attend; Kenya joins push for WTO reforms; India pulls up WTO secretariat over comprehensive reforms call; Taiwan quits ‘developing economy’ status in WTO with eye on China