African countries focus on global trade prospects, challenges

African countries focus on global trade prospects, challenges
Photo credit: Jan Hoffmann

27 Nov 2018

Trade officials and experts from Commonwealth African countries gathered in the Seychelles recently to discuss regional and global trade issues affecting their growth and development.

Recognising the challenges facing world trade and the slow progress in multilateral negotiations, the meeting focused on how to improve trade and investment, boost market access for micro, small and medium enterprises (MSMEs), and strengthen regional integration following the launch of the African Continental Free Trade Agreement.

Delegates also discussed the potential for digital trade and e-commerce to transform African economies, as well as strategies to overcome infrastructure and regulatory hurdles.

Delivering the keynote address at the opening on Thursday, 15 November, the Minister of Finance, Trade, Investment and Economic Planning, Maurice Lousteau Lalanne highlighted the growing importance of the services sector, especially in expanding output and creating jobs.

“We should therefore focus on creating an attractive, well-regulated business environment which is optimum for investors,” he told the meeting, which wrapped up on 16 November 2018.

Mr. Lalanne called for measures that will help MSMEs across Africa tap into international markets for their products and services. Noting the vulnerability of small economies, least developed countries and other developing countries, he urged further regional integration to stem the effects of external shocks.

In his remarks, Deputy Director General of the World Trade Organisation (WTO), Yonov Frederick Agah, underscored the need for renewed commitment to the multilateral trading system, despite little progress to date on WTO trade talks.

Acting Head of International Trade Policy at the Commonwealth Teddy Y. Soobramanien added: “These consultations are timely, give the tremendous evolution of global trade landscape in the last decade. With the rise in non-tariff barriers to trade, slow progress in WTO trade talks, and the threat of trade wars, it is important for African countries to strategise on how to respond to these trends.”

The discussions were preceded by the second meeting of the Commonwealth African Trade Negotiators’ Network, an informal network of former trade negotiators from the continent. Outcomes of both meetings will help shape the Commonwealth’s work programme to support trade and development in member countries.

Presentations and the outcome statement from the Commonwealth Regional Consultation on Multilateral, Regional and Emerging Trade Issues for Africa are available to download courtesy of the Commonwealth Secretariat.

Keynote speech by Maurice Lousteau Lalanne, Seychelles Minister of Finance, Trade, Investment and Economic Planning

On behalf of the Government of Seychelles, I would like to extend a warm welcome to all of you for this very important meeting. It is indeed a great honor to host the Commonwealth consultative meeting on Multilateral, Regional and Emerging Trade issues for Africa.

Dear colleagues, for many years the commonwealth secretariat have been instrumental in providing trade related assistance to member countries through technical support and capacity building. This assistance has mostly targeted the most capacity constraint countries; such as the small island states, least developed countries (LDC’s) and sub Saharan African countries, focusing primarily on export development in goods and services; market access liberalisation,and trade facilitation.

Having said that, it is worth noting that over the years considerable liberalisation has been achieved in trade in goods at both the regional and international level. Whilst much has been attained in this area, trade in services is another area that is showing much prominence and thus remains one of the issues on the commonwealth agenda.

Trade in services has developed immensely over the years, as in most developing countries and small island states, the tourism, telecommunication, financial and transport services sector contributes more than 50% to their Gross Domestic Product (GDP).

Therefore, enhancing services trade remains significant as it certainly contributes to expanding output, creating jobs, improving services standard and increasing efficiency as more businesses enter the market. Furthermore it may increase competition, bringing about better skilled workers, new technologies and increasing investment capital within the economy.

Colleagues, whilst we must consider introducing regulatory frameworks within the various services sectors in order to maintain service standards and to protect consumers and the environment, we need to ensure that we do not introduce measures that may deter investment, as improving the ease of doing business in Africa should remain a priority, particularly for developing countries.

As per the 2018 ease of doing business index, out of 190 countries, only seven sub Saharan African countries are ranked in the top 100, namely, Mauritius, Rwanda, Kenya, Botswana, South Africa, Seychelles and Zambia. Investors seek easy and quicker access to foreign markets, as the saying goes, “time is money”.

We should therefore focus on creating an attractive, well-regulated business environment which is optimum for investors. It is my sincere hope that this platform can be one where such issues can be discussed.

Given that our meeting will be also covering the aspect of e-commerce, it is worth noting that at the 11th WTO ministerial conference held in Bueno Aires in December 2017, Member States reaffirmed the importance of a number of issues including, e-commerce and the many opportunities it creates for inclusive trade and development. In recent years, many African countries, including Seychelles have started recognising the importance of e-commerce as a tool for economic development.

As the level of investment in internet infrastructure and technology development increases, e-commerce has become more relevant. I am proud to say that Seychelles is an example of a developing African country that has achieved significant progress in the e-commerce sector. Seychelles’ ICT sector has achieved 4G coverage, internet penetration rate reaching 87.58% and mobile penetration rate stands at 175.2% of the population.

We witnessed the introduction of Seychelles’ first sub marine cable in 2012, which is connected to mainland Africa, and furthermore the government has signed another agreement this year, for the construction of a second submarine cable to be connected to Asia. Construction is expected to begin in the year 2019.

Irrespective of the improvements made, more work is still required in this area to further develop this sector and integrate it with all aspects of Government and the economy in order to reap maximum benefits. This includes the necessary needs assessment, framework and resources which I hope this meeting will deliberate further on.

Fellow invited guests and participants, another growing area of interest is the development and promotion of Micro, Small and Medium Enterprises (MSMEs) which we can all agree contributes to the expansion and diversification of our economies and contributes towards eradication of poverty. Therefore, adequate measures needs to be put in place to ease access to markets for MSME products and services across Africa.

The aim is to enable them to increase cross border trade, thus creating more jobs, which in the long run contributes to achieving better economies of scale leading to a reduction in cost of production. These in turn, would translate in lowering the cost of living for the consumers.

I must point out that limitations exist in providing for a well-regulated framework in supporting our MSMEs and it is my sincere hope that discussions on this issue can contribute towards possible outcomes or future work in this area.

Colleagues, the world is an interconnected place, small economies, LDCs, and developing states are extremely vulnerable to external shocks, thus there is a need for further integration in the African continent through the different regional trading blocs in order to mitigate the effects of these shocks.

This consultative meeting is a great opportunity to deliberate on such issues and recommend strategies to boost trade, improve the business environment for MSMEs and generally increase investment across Africa. 

In conclusion, on behalf of all the African states present, I would like to express my heartfelt appreciation to the Commonwealth Secretariat for organising and supportingthis consultation on multilateral, regional and emerging trade issues for the African agenda.

I do hope you find the consultative meeting very productive, enriching and above all provide you with concrete deliverables that you can all take back to your respective capitals, and for our partner, the commonwealth secretariat, tangible recommendations that can be considered to be included in the Commonwealth strategy.

Thank you very much.