tralac’s Daily News Selection
Profiled African trade and investment conferences:
(i) Starting today
In Johannesburg: The Corporate Council on Africa’s US-Africa Infrastructure Conference. For Twitter updates: @CorpCnclAfrica
(ii) Later this week
In Arusha: EAC Sectoral Committee on Investment (6-7 November)
In Johannesburg: Africa Investment Forum (7-9 November)
Today’s media briefing: All set to tilt the tide of investments into Africa
The Africa Investment Forum kicked off on Monday with a media briefing in the South African capital. The game changing event, aimed at attracting multi-billion-dollar deals across the continent, is set to usher in a new era for Africa’s investment landscape. Dubbed by the African Development Bank President Akinwumi Adesina as the “collective deal of the century for investment in and the development of Africa,” the forum will focus on advancing projects to bankable stages, raising capital and accelerating the financial closure of deals.
Nigeria and the AfCFTA: speech by Nigeria’s VP, Prof Kemi Asinbajo, to the Africa Trade Forum
As a metaphor for the purpose of our gathering, Lagos demonstrates that economies, cities and countries that are open, grow faster and prosper more than those that are closed. And Lagos is one such example, becoming very quickly, we are told, climbing up to the 5th largest economy in Africa. Permit me to speak briefly on the value of a rigorous domestic process of stakeholder engagement for trade agreements. It is well over seven months since the agreement establishing the AfCFTA was signed in Kigali, on 21 March 2018. My principal focus, therefore, is to share with you the stage of the on-going internal process in Nigeria and the results of outreach, sensitization and consultations with stakeholders, because everybody has been asking: so, what is Nigeria doing? So, I think it might just be very helpful to fill in the gaps. So, what have we done? What have we learned? What are the current state-of-play and envisaged next steps? [Dangote urges African countries to get foundation right for AfCFTA signing]
Chairmanship of the continental FTA negotiations. During the 6th meeting of the African Union Ministers of Trade that took place in Dakar, 3-4 June 2018, Uganda was unanimously elected to chair the AfCFTA Forum for African Ministers of Trade. Uganda is expected to champion the AfCFTA for a period of one year, which commenced in June 2018. The election is in recognition of Uganda’s active participation in the Continental Free Trade Area negotiations that started in 2016 with the aim of creating an African single market. During this tenure, Uganda will lead the conclusion of the AfCFTA negotiations.
Promotion of cross-border export zones. The informal cross-border export earnings in the financial year 2017/18 were estimated at $595.51m, representing 17.08% of Uganda’s exports. The main informal commodities included beans, maize, sugar, other grains, bananas, fish, among others. DR Congo was the main informal partner of the country with total informal export trade amounting to $291.48m in 2017/18. It was followed by Kenya at $149.94m; Rwanda at $54.41m; South Sudan at $54.17m and Tanzania at $45.52m, in the same period. [Various downloads available]
Why importers could derail SGR’s Kampala journey (The Standard)
China plans to sell off its African infrastructure debt to investors (The East African)
Regional governments could soon get access to more Chinese debt if a plan by a leading Chinese banking conglomerate to buy African infrastructure debts from the government starting next year, repackage them into securities and then sell them to investors, comes to fruition. The plan will see Hong Kong mortgage insurer Hong Kong Mortgage Corporation buy a diverse basket of infrastructure loans next year and explore the idea of “securitising” or repackaging them into securities for sale to investors, allowing it extra liquidity that it can loan out to finance more infrastructure projects. “This initiative we believe will help ‘recycle’ commercial banks’ capital to be redeployed into other greenfield infrastructure projects, besides enabling wider capital markets participation in infrastructure development under the Road and Belt initiative,” said HKMC Greater China chief executive Helen Wong.
UNDP-China case studies: Experience and innovation of China’s agricultural assistance in Guinea-Bissau, Mozambique
With both African countries working to expand agriculture production - a challenge heightened by climate change - the two programmes linked local farmers and officials with Chinese knowledge, technology, and market-inclusive systems to boost food production. The reports assess the two partnerships - the Agricultural Technical Cooperation Project in Guinea-Bissau and the Agricultural Technology Demonstration Center in Mozambique - as examples of what South-South collaboration can achieve. ”UNDP welcomes these joint assessments, which illustrate China’s commitment to partnerships that support the achievement of national development goals and the aspirations of Africa’s Agenda 2063 and 2030 Agenda. We will continue to facilitate increased South-South cooperation to help address the Global Goals’ financing gap, supporting the full national ownership of partnering African countries in the process,” said Ms Ahunna Eziakonwa, UNDP Assistant Administrator and Regional Director for Africa. [International Forum on Reform and Opening Up and Poverty Reduction in China: consensus statement]
China silk giant to set up base in Kenya (The East African)
The world’s largest producer of silk, Guangdong Silk-Tex Group, has announced its plans to set up shop in Kenya. Top officials of the government-owned company met President Uhuru Kenyatta in Shanghai, Sunday during which they confirmed plans to set up business in Nairobi. The company will not only setup a silk processing factory at the Export Processing Zone in Athi River, but will also establish a silk farm. The Guangdong Silk-Tex Group will establish a cocoon farm on an estimated 8,237 acres of land, with capacity to handle the entire silk value chain covering cocoon procurement, silk reeling, weaving and trading. The venture is expected to create over 300,000 jobs for Kenyans.
Related: Uhuru takes on China, demands ‘mutually beneficial’ trade deals. The Star understands that during the bilateral talks, Uhuru expressed concern about the trade imbalance and demanded access to the Chinese market for Kenya’s produce. “Access to the Chinese market will have a positive impact on the lives of common people and this will help counter any negative propaganda peddled by detractors of our strong Sino-African relations. As a nation we look forward to an open Chinese market for Kenya’s exports,” Uhuru said in a tweet after the meeting. [Xi Jinping pledges to cut Chinese import tariffs]
Kenyan exporters scouting for deals at Shanghai trade fair. “The China International Import Expo is set to attract about 90 firms from Kenya which will be showcasing their products for six days at the National Exhibition and Convention Centre in Shanghai,” said Export Promotion Council CEO Peter Biwott. “We are looking forward to showcase agriculture related products such as tea, flowers, coffee and nuts. These are areas where we have competitive advantage.”
Deutsche Bank and South Africa’s Standard Bank have agreed to co-operate under a US-led guarantee programme to promote US agricultural exports. The GSM-102 programme, which applies to US exports exclusively, seeks to encourage commercial financing of agricultural commodities exports to countries where credit is necessary to sustain and increase US sales. [SA’s champion in the US, Congressman Ed Royce, takes a bow]
Ghana: Textile workers demand border monitoring to check smuggling (Ghanaweb)
Leadership of the Textile, Garment and Leather Employees Union are demanding that the borders at Aflao and other entry points be strictly monitored to stop pirated goods from entering the country. Their demand follows the decision by the Ministry of Trade and Industry and the Ghana Revenue Authority to make the Tema port the only entry point for textiles into the country. According to the Ministry of Trade and Industry, it is prudent that there is a designated point of entry for textiles in order to prevent the influx of pirated goods onto the markets.
Indonesia: Expanding palm oil exports without neglecting existing markets (Jakarta Post)
Speaking at the 14th Indonesian Palm Oil Conference on Thursday, Trade Minister Enggartiasto Lukito cited potential export markets the government is targeting in Africa such as Mozambique, Morocco, Tunisia and Algeria. He hoped palm oil businesses would follow suit. Opening new markets, however, is always easier said than done. According to Association of Palm Oil Producers chairman Joko Supriyono, palm oil businesses faced tough challenges in opening new markets. First, a new market has no strong demand. Second, new markets have their own barriers. Iran, for example, is cut off from the international financial system as a result of United States sanctions and therefore, trading with it has to go through a third party. African countries, meanwhile, have no storage infrastructure for palm oil, and therefore, exports to Africa have to be delivered in packages, resulting in higher costs.
The Union government is planning to draw up a long-term road map to promote India as a major hub for exports of automobiles and spare parts with a focus on Africa and Latin America. The commerce ministry is in consultations with industry body Society of Indian Automobile Manufacturers and leading auto makers to help prepare the plan, two people directly aware of the development told Mint. A key focus of the commerce ministry is to drive exports to countries such as Nigeria, Algeria, Egypt, South Africa and Kenya in Africa, and to Chile, Peru and Colombia in Latin America. Also discussed were ways to drive exports to West Asian countries such as Saudi Arabia and Southeast Asian nations such as Indonesia, Philippines, as well as Australia. [Nigeria imports 1.2m vehicles in six years]
This paper explains how and why assumptions about the nature of global value chains can have major implications for such competitiveness calculations going forward. In particular, we argue that accounting for global value chains lowers the importance of countries that export components in global value chains, which generally involve trade with close neighbors, and increases the importance of exports of final goods, which tend to go to countries that are further away. As the weight of neighboring countries linked to each other through regional supply chains fall, more weight is placed on countries further away. We also find that the distinction between the new and the traditional indexes has not had significant implications because of how key bilateral exchange rates have behaved in the past. Going forward, assessments of the relatively roles of major currencies in competitiveness calculations will become more important.
Today’s Quick Links:
Collins Odote: Lessons from Kenya’s Ease of Doing Business rating
World Bank’s $293m for East Africa’s technical schools
Posted: The AfDB’s Governors’ Digest
Capital outflows force Nigeria’s external reserves down to $41.995bn
Laurent Gonnet: Toward a deep transformation of the banking industry in Africa
Dubai group seeks to enhance Nigeria’s agriculture exports