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tralac’s Daily News Selection

tralac’s Daily News Selection

13 Nov 2018

17 minute read

Regional Risks for Doing Business 2018 (WEF)

Of the 34 countries in sub-Saharan Africa that we surveyed, “unemployment and underemployment” was identified as the most pressing concern for businesses in 22 of them. No other region recorded anything like this level of consensus among respondents, highlighting the profound challenges that the region faces on this issue, particularly in light of the demographic changes that lie ahead. The second-highest risk cited by businesses across sub-Saharan Africa is “failure of national governance”. Although this risk came top in only two countries (Ethiopia, Mozambique), it ranked in the top five for a further 18 countries, including the region’s largest economies (Nigeria, South Africa). [WEF: These are the top risks for doing business around the world]

Africa Group statement: 10th Session of the Trade and Development Commission (UNCTAD)

The African Group notes with appreciation the UNCTAD-UNEP collaboration that helped the Northern Corridor to develop its Green Freight Programme. This programme is now integrated into the NCTTA Master Plan and will be mainstreamed into the NCTTCA’s long term Sustainable Freight Transport Strategy. The Group also takes note in particular of the current work aimed at helping the Central Corridor articulate its Sustainable Freight Transport strategy that will be integrated in the Central Corridor Transit Transport Facilitation Agency Master Plan. The African Group welcomes the new collaboration between UNCTAD and the Islamic Development Bank relating to the commercialization and the management of the Trans-Saharan Road corridor linking Algeria, Tunisia, Niger, Nigeria, Mali and Chad. [Download pdf Statement by Sudan on behalf of the African Group (422 KB) ]

AfCFTA, EPAs and Brexit: Africa needs holistic integration (BusinessDay)

So, my message at the GTR Africa conference was that Africa must integrate internally, by making AfCFTA work, and externally, by engaging constructively with Europe on the EPAs and with a post-Brexit open Britain. Africa must, of course, not ignore America, China, India, Japan and other major trading nations! In other words, Africa must integrate holistically! In a world of interconnected yet sovereign nations, free trade agreements are the guaranteed means of securing market access for a country’s exports, gaining access to cheap, valuable imports, and attracting foreign investment and capital. But FTAs are also powerful tools for incentivising domestic policy and institutional reforms and for signalling to the outside world that a country is open for business. When a country enters into meaningful FTAs it necessarily undertakes pro-market reforms, which assure foreign investors of its business-friendliness.

But Africa is reluctant to undergo radical policy and institutional transformation needed to make it business and investment friendly and, so, has failed to integrate internally, let alone externally, through deep and comprehensive FTAs. Indeed, Africa is the only continent that has failed to participate in meaningful FTAs. As a result, it is, perversely, signalling to the rest of the world that it is not a good place to do business. This was evident from the views of participants at the GTR Africa conference: [The author: Olu Fasan. Related commentary: Vera Songwe, Mamadou Biteye on the AfCFTA]

In Africa, more not fewer people will work in agriculture (World Bank Blog)

That Africa’s agricultural labor force continues to rise in numbers while the share declines is therefore not anomalous. Quite the opposite—an absolute net flow of labor out of agriculture would be extraordinary given the size of the agricultural labor force relative to the receiving sectors of services, construction, manufacturing and mining. Even as these sectors grow and absorb labor, they are not yet large enough to support a net reduction in number of people employed in agriculture. The period of absolute increase and relative decline in Africa’s agricultural labor force is likely to be prolonged given Africa’s slow demographic transition and the associated slow per capita income growth. Out of the slightly larger than 3 percentage points annual increase in Sub-Saharan Africa’s demand for food (in volume), about 2.6 points still come from population growth; the remainder from urbanization and income growth. [The authors: Luc Christiaenson, Karen Brooks]

Towards the African Governance Report: Institutional architecture to address illicit financial flows from Africa (UNECA)

The report will draw on insights from ECA’s previous work on illicit financial flows to provide a more systematic, comprehensive and in-depth treatment of how African countries can best develop and use institutions to tackle IFFs. The meeting, this week in Addis Ababa, will review, discuss and provide feedback and inputs, which will validate and enrich the content and structure of the concept note and lay the groundwork for the preparation of the report.

The political economy of South Sudan (AfDB)

The report provides the AfDB with a tool defining the entry points for dialogue and development interventions with South Sudan’s Transitional Government of National Unity. The political economy of South Sudan is characterized by six realities (pdf): (1) overwhelming opportunities in the non-oil sector that remain untapped due to political and civil insecurity; (2) high dependence on oil, which accounts for about 90% of government revenue, 95% of total exports and more than half of the country’s GDP; (3) political and security challenges that drain government resources and constrain foreign and domestic direct investments, and create macroeconomic instability; (4) poor economic and social infrastructure, limiting economic productivity and diversification; (5) diversion of attention by development partners to humanitarian support since the 2013 conflict; and (6) governance challenges and limited political will and capacity to make the necessary institutional changes.

IOM Trends Analysis: Most Horn of Africa migrants move within region (IOM)

Nearly 400,000 migrant movements were recorded in Djibouti, Ethiopia and Somalia during the first six months of 2018 – an average of 2,000 or more individuals per day. It is an active migration zone, characterized by what is considered “mixed” migration – or the movement of different population groups for a variety of reasons. A slim majority (51%) of these individuals are moving from, but also within, the Horn of Africa, followed by about 36 per cent whose movements are towards the Gulf Cooperation Council countries on the eastern route – through Djibouti, Somaliland and Puntland. Smaller movements are being tracked along the Southern Route (to South Africa) and the Northern Route (to Egypt and Israel), about 8 and 5%, respectively. These are a few of the findings detailed in a new report, pdf A Region on the Move (7.24 MB) . [Various downloads available; Related: IDA funding for refugees and hosts: 5 ways to improve and why we need more]

Bribes, beatings and gridlock at ports choke Nigeria’s economy (Bloomberg)

It can take 20 days to clear products, compared with 48 hours in neighboring Benin and Ghana, according to the LCCI. The cost of moving a container from Apapa to other parts of Lagos has soared to as much as 700,000 naira ($1,930) from about 150,000 naira two years ago as trucking firms put up their prices to make up for the delays, according to the Nigerian Shippers’ Council. It’s taken a toll on the companies of Aliko Dangote, Africa’s richest man. Dangote Cement Plc, Nigeria’s biggest listed firm, may cancel plans to build an export terminal at Apapa because of the congestion, Chief Executive Officer Joe Makoju said on a call with investors last month. Dangote Sugar Refinery Plc blamed a fall in third-quarter profit partly on the bottleneck there, which it said was leading to more smuggling of sugar through Nigeria’s land borders.

Nigeria’s FG is committed to expanding export of locally produced goods, services – Udoma (SundiaPost)

In line with government’s commitment towards expanding exports of locally produced goods and services as well as implementation of some critical aspects of the Plan, Minister of Budget and National Planning, Senator Udoma Udo, said a National Committee on Export Promotion has started implementing the Zero Oil Plan, as set out in the ERGP. The NCEP, the minister said, is working in close collaboration with the State Governments to promote the establishment of Domestic Export Warehouse and Aggregation Centres in each of the six geo-political zones of the country. “The Committee is also promoting Project MINE - ‘Made-in-Nigeria for Export’. Under Project MINE, the SEZs will be used as the mechanism for making Nigeria the pre-eminent manufacturing hub in Sub-Saharan Africa and a major exporter of Made-in-Nigeria goods and services regionally and globally.”

Kenya’s sugar import rises but production increases too (The East African)

The country imported more than 135,000 tonnes of sugar from Comesa and the EAC, out of the 189,000 tonnes it imported in the nine months to September, a significant reduction from the 933,000 tonnes of sugar it imported last year, of which only 300,000 tonnes was from Community countries. “Within the nine months to September, Comesa-FTA countries supplied Kenya with 84,127 tonnes, while 5,000 tonnes came from Comesa Non-FTA. The EAC provided 51,285 tonnes, with the majority being from Uganda, whereas imports from the rest of the world were 49,208 tonnes,” the latest report from the Sugar Directorate shows. There was also a slight rise in sugar exports in the nine months of this year to 1,947 tonnes against 363 tonnes in the same period last year. [Taskforce to salvage Kenya’s cane sector]

Tanzania: Govt keeps its word on saga over cashewnuts (IPPMedia)

Following the president’s intervention, the Lindi-based Bucco Investment Holdings factory will now be in the hands of the military. Speaking soon after swearing in newly appointed ministers and deputy ministers as well as Law Reform Commission chairman Judge (rtd) January Msoffe, President Magufuli said the Tanzania Agricultural Development Bank would buy the nuts at 3,300/- per kg, compared with the 3,000/- set by the government for auctions. Prime Minister Kassim Majaliwa, who hails from the cashewnut-producing Lindi Region, earlier told the president that some 15 companies had by yesterday confirmed that they would buy the stock from farmers at 3,000/- per kg. President Magufuli also warned that a thorough audit would be carried to gauge the performance of all boards, which include the cotton board, the pyrethrum board and the coffee board as well as the Cereals and Other Produce Board of Tanzania. President Magufuli also declared that the Tanzania Investment Centre would henceforth be a wing of the Prime Minister’s Office for enhanced performance.

South Africa needs an ‘explicit’ digital industrial policy (Engineering News)

Trade and Industry Minister Dr Rob Davies is warning that unless South Africa develops an “explicit digital industrial policy” there is no guarantee that the potential benefits of the so-called Fourth Industrial Revolution will outweigh the disadvantages. South Africa has had an official industrial policy since 2009, but the policy does not fully capture the technological advances that are disrupting primary, secondary and service sectors internationally. Speaking at a digital industrial policy colloquium in Pretoria, hosted by the Industrial Development Think Tank, Davies said digital technologies were transforming all industries, from farming to manufacturing. “There are a number of people around, either free-market fundamentalists, or ‘techie wow-wows’, who will tell us that every industrial revolution has winners and losers, but that, in the end, there were more winners. I don’t think we can take it for granted that that is going to be the case; we are actually going to have to work to make sure it happens in an inclusive way.” [2018 Internet Governance Forum, in Paris: summary of address by UN SG António Guterres]

South Africa: Industrial parks can be turned into Special Economic Zones if properly supported (dti)

The Director-General of the Department of Trade and Industry, Mr Lionel October, says with proper infrastructure, utilities, and management, the 26 approved Industrial Parks across South Africa can in future, become Special Economic Zones that can contribute immensely to the economy of the country and create jobs. October was speaking at the opening of the two-day Industrial Parks Symposium. “We must propose to cabinet what is it that we want to see out of these parks and eventually they must have the same benefits and support as the SEZs. We can also find a way to fast track this process so that they too can be managed efficiently and businesses can be clustered together.”

Today’s Quick Links:

Kansas Department of Agriculture participated in a trade mission to South Africa

Kenya’s stevia farmers to benefit from trade deal with China

Gabon Special Economic Zone: Afreximbank’s revolving trade financing facility to CDC Gabon

IMF’s Zambia end-of-mission statement

OECD’s Global Forum on Competition: (i) Benefits and challenges of regional competition agreements (revised, pdf); (ii) Annexure: Inventory of provisions in regional competition agreements (pdf)

IMF analysis of China’s rebalancing: recent progress, prospects and policies

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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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