Building capacity to help Africa trade better

tralac’s Daily News Selection


tralac’s Daily News Selection

tralac’s Daily News Selection
Photo credit: World Bank | Gerardo Pesantez

Released today: Infrastructure Financing Trends in Africa – 2017

Extracts (pdf): Overall commitments to Africa’s infrastructure from all sources increased to $81.6bn in 2017 from $66.9bn in 2016. Though fewer ICA members reported data this year than in the past, this is the highest level of directly comparable commitments reported since 2010. Factors driving the higher commitments include a $13bn increase in identified Chinese investments from $6.4bn to $19.4bn, and a $3.7bn increase in African national and sub-national government spending from $30.7bn to $34.4bn.

According to the World Bank’s Private Participation in Infrastructure Project Database, the value of projects with private sector participation reaching financial close in 2017 totalled $5.2bn, an increase from the $3.6bn reported in 2016. Of this, $2.3bn (44.8%) was privately financed.

With commitments of $34bn, the transport sector continued to be the largest beneficiary of infrastructure commitments in 2017 by a significant margin. Financing of transport infrastructure was equal to 41.7% of all funding. As with previous years, most of the $20.1bn was provided by African national or subnational governments. The energy sector, which recorded $24.8bn of investments in 2017, accounted for 30.4% of the total. The water sector accounted for $13.2bn (16.2%),followed by multi-sector investments, which registered $5.1bn (6.3%).

Public and private stakeholders consulted in the preparation of this report said the main reasons for Africa’s infrastructure deficit centre not on a lack of funds but a lack of bankable projects. As noted in previous years, countries with sound institutional arrangements are attracting public and private sector finance. Subsectors attracting investment include renewable energy generation, ports and maritime activities and mobile telephony. [Ibrahim Mayaki: We must find alternatives to state funding of infrastructure]

Africa Investment Forum: African development changes course from aid to investment (SAnews.gov.za)

African Presidents have been saluted at the inaugural Africa Investment Forum for embracing the continent’s economic growth project, with event organisers on Wednesday saying this will go a long way in attracting tangible investment. At a panel discussion on the first day of three-day forum at the Sandton Convention Centre, African Development Bank (AfDB) President Akinwumi Adesina emphasised that the Africa Investment Forum is not an event but a platform on which African governments, the private sector, project promoters and investors can converge to give impetus to a number of crucial deals. It’s all about transactions, the AfDB head said. 

Africa Trade Forum: Private sector crucial to successful AfCFTA implementation (UNECA)

The 2018 Africa Trade Forum ended in Lagos, with delegates agreeing that while governments need to set a conducive environment through collective and coordinated actions for the successful implementation of the AfCFTA, the private sector should to be the main driver of the AfCFTA. They also agreed that complementary interventions to boost competitiveness and reduce the high costs of doing business on the African continent would be crucial to ensure win-win gains from the AfCFTA – these will require proactive policies and programmes in the areas of infrastructure, financing, skills development, trade facilitation and quality infrastructure. “In implementing the AfCFTA we must also make sure not to forget MSMEs, women traders, smallholder farmers and informal cross border traders, who represent the majority of Africa’s trading community, and are crucial to driving poverty reduction efforts,” ECA’s Regional Integration and Trade Division Director, Stephen Karingi said in summing up the major takeaways from the Forum. On the next steps, Mr Karingi said the ECA, with financial support of the EU, was offering technical assistance to support Member States in developing comprehensive AfCFTA National Implementation Strategies. These strategies will:

Ethiopia: Company perspectives on non-tariff measures (ITC)

Ethiopia’s export sector has grown rapidly in recent years, but the country’s businesses would be performing even better in international markets were they not held back by an array of non-tariff measures. According to a new survey (pdf) of Ethiopian exporters, importers and producers by the International Trade Centre, 96% of trading companies report difficulties related to the application and implementation of NTMs. Exports are much more affected than imports: 90% of exporting companies report facing burdensome NTMs, while only 56% of importing companies report such problems. The NTM Business Survey (pdf) focuses on six economic sectors: coffee, oilseeds, other agricultural products, textiles, leather products, and other manufacturing. Among them, leather products are the most affected by NTM-related obstacles. Many of the obstacles reported by Ethiopian traders relate to domestic policies and procedures.

Costly import compliance demands blunt Kenya’s regional competitiveness (Business Daily)

Costly and lengthy border compliance procedures for imports threaten Kenya’s competitiveness in the region, a new World Bank report showed, pilling pressure for further review of the country’s customs and inspections systems. Border compliance entails a raft of procedures including customs clearance and inspections by other regulatory agencies. The World Bank’s Doing Business 2019 report indicated that the costs when importing to Kenya stood at about Sh84,466.2 ($833), which is higher compared with the Sub-Saharan Africa’s average of Sh69,388.02 ($684.3). The average time it takes an importer to comply with regulations is also a concern because it would take a trader about 180 hours to do so---way above SSA’s 126.3 hours. “It tells you we are doing badly in terms of the time taken to clear cargo. It shows that government interventions are taking longer and this is impacting on cost of clearing goods,” Mr William Ojonyo, chairman of the Kenya International Freight and Warehousing Association said.

African air passenger traffic, air freight results for September (IATA)

African airlines posted a 6.0% rise in RPKs in September, down from 6.8% in August. Capacity rose 4.9% and load factor edged up 0.8 percentage point to 74.6%. The healthy growth is taking place against an increasingly challenging economic backdrop for the region’s largest economies, South Africa and Nigeria. African carriers saw freight demand contract by 2.1% in September 2018, compared to the same month last year. This was the sixth time in seven months that demand contracted. Capacity increased by 6.2% year-on-year. After a peak in demand at the end of 2017, seasonally-adjusted international freight volumes have stopped declining and recovered sharply in recent months. However, they remain 6% lower than the November 2017 peak. Demand conditions on all key markets to/ from Africa remain weak.

Measuring travel services in West Africa (UNCTAD)

UNCTAD statistical experts met with tourism and travel specialists from the World Tourism Organization to discuss the travel element of trade-in-services in West African Monetary Union countries during the second meeting of the working group on Measuring the Sustainability of Tourism in Madrid (24–25 October). UEMOA members are Benin, Burkina Faso, Cote d’Ivoire, Guinea-Bissau, Mali, Niger, Senegal and Togo. “Travel services pose a particular set of challenges,” UNCTAD’s Ms Barnat said. “That’s because unlike most services transactions, which can be measured using enterprise surveys, international travel can only really be measured at national borders.” She proposed that UNCTAD collaborate with UNWTO to implement a joint questionnaire on travel that addresses the needs of trade-in-services and Measuring Sustainability in Tourism initiative. The collaboration offers an opportunity to not only collect harmonized data across the eight UEMOA countries – and perhaps other regions in the future – but to also harmonize or align data collection for both sustainable tourism and the travel part of trade-in-services.

Namibia’s implementation of WTO TFA: WCO diagnostic mission

At the request of the Namibia Customs & Excise Directorate, the WCO conducted a diagnostic support mission (22-26 October) focused on the implementation of the WTO Trade Facilitation Agreement. It is envisaged that the subsequent WCO diagnostic report, containing a series of tailored recommendations, will provide the framework by which NCE and the WCO can engage further in support of TFA implementation as part of a broader Customs modernization and reform agenda.

East African countries urged to engage youth in regional decision-making body (New Times)

EAC member states on Monday called for enough political space for young people to actively take part in the regional decision-making body so that their voices can be easily heard. Charles Njoroge, EAC Deputy Secretary General in charge of Political Federation, made the call when speaking at the first High Level EAC Youth Ambassadors Dialogue on Regional Integration 2018. The theme is “Harnessing young people’s participation in the political process.” The dialogue brought on board 80 youth from Tanzania, Kenya, Uganda, Rwanda and Burundi.

Wandile Sihlobo: Who is buying South African beef?

While not amongst the top exported products, the South African beef industry has made some inroads in terms of exports in the past couple of years. This is clear from Figure 1. In fact, South Africa is typically a net exporter of beef (chilled and frozen) and recorded a positive trade balance of R203m in the period between 2012 and 2016. In terms of volumes, medium-term trends show a sharp increase in overall beef exports, from 14 634 tons in 2012 to 39 135 tons in 2016. Frozen beef exports increased from 2 921 tons in 2012 to 18 067 tons in 2016 – a 5-fold increase. Meanwhile, fresh/chilled beef exports increased from 11 714 tons to 21 068 tons over the same period. Above all, Jordan, UAE, Kuwait, Mozambique, Swaziland, Namibia, Lesotho, Mauritius and Angola are important markets for the South African beef industry as they account for over 90% of its exports by value.

Kenya, South Africa to launch long-term multiple travel visas (News24)

Long-term visas will become available for South Africans wanting to travel to Kenya and Kenyans wanting to visit South Africa as of 1 December. The announcement was made by Home Affairs Minister Malusi Gigaba and his Kenyan counterpart Interior Minister Fred Matiang’i on Monday after the two held bilateral talks. The Kenyan minister said he believed relaxing visa requirements would lead to the most “seamless interaction between South Africa and Kenya in history.” South Africa’s home affairs minister, in turn, thanked Kenya for its efforts in preventing illegal immigrants from making their way to the country. “I thanked the minister for the work they continue to do to repel a lot of illegal immigrants destined for South Africa, on a daily basis hundreds of people are being stopped in Kenya who are destined for South Africa.”

Nigeria summons Ghanaian envoy over closure of 400 Nigerian shops (Ghanaweb)

Nigeria’s Federal Government has summoned the High Commissioner of Ghana to Nigeria, Ambassador Rashid Bawa, over the closure of over 400 Nigerian shops in Ghana. Foreign Affairs Minister, Geoffrey Onyeama, said the Ghanaian envoy was invited to explain the treatment of Nigerian traders in his country. The closure of over 400 Nigerian businesses had sparked protest by the National Association of Nigerian Traders, NANTS, and Nigerian Union of Traders Association, Ghana, NUTAG. Onyeama said a committee was being set up at the highest level in Nigeria to look into the matter and to look at how government can respond to the situation.

Emerging, developing economies to face challenges if global inflation rises (World Bank)

Further upward acceleration of global inflation from record low levels may impair efforts in emerging and developing economies to sustain the low inflation environment achieved over the past several decades, the World Bank said in a groundbreaking examination of inflation in the emerging and developing world. The adverse effects of high inflation can fall disproportionately on the poor, who hold most of their assets in cash and rely heavily on wage income, welfare benefits, and pensions, the World Bank said in Inflation in emerging and developing economies: evolution, drivers, and policies (pdf). To investigate the impact of inflation on emerging and developing economies, the World Bank’s Prospects Group has produced the first wide-ranging analysis of inflation and its implications for these economies in a long time. The new study also includes a global inflation dataset that covers more than 175 countries over 1970-2017. The study documents the confluence of structural and policy factors that have fostered low global inflation over the past five decades. Foremost among these has been unprecedented international trade and financial market integration.

Today’s Quick Links:

Uber and Taxify in Africa: good work or a race to the bottom?

Jokkolabs partnership grows AfriLabs network to 135 hubs

EAC steps up construction of unified border posts

World Bank’s economy profile of Libya, Egypt

AfDB, key UN partners push for improved gender statistics

Jacqueline Andall: Women, migration, and cross-border trade in Africa

World Bank blog: Making room for Africa’s urban billion


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