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tralac’s Daily News Selection

tralac’s Daily News Selection
Photo credit: Simone D. McCourtie | World Bank

06 Dec 2018

Getting to 22: Namibia, South Africa ratify the AfCFTA

  1. @AmbMuchanga: More great news on AfCFTA ratification! The National Assembly of Namibia has approved the ratification of the AfCFTA Agreement. Only 40.9% more ratifications left for the Agreement to enter into force. Africa is moving, in the right direction and at the required speed.

  2. South Africa’s Minister of Trade and Industry, Dr Rob Davies, has welcomed the ratification of the Agreement establishing the AfCFTA by Parliament. Minister Davies says South Africa is expected to deposit the instrument of ratification during the 32nd Ordinary Session of the Assembly of the African Union in February 2019.

Continental workshop on Trade and Gender 2018 (16 December, Cairo)

In 2017, the ECA embarked on a comparative assessment of the status of gender mainstreaming in trade at the level of RECs, to identify success stories and challenges for incorporating gender considerations into trade policy. The 2017 Continental Workshop on Trade and Gender served as a platform for RECs and gender experts to share related experiences. As a follow-up to that meeting, further data collection on gender mainstreaming good practices was carried out in the form of missions by representatives of ECA to several REC headquarters during 2018. The pdf 2018 Continental Workshop (111 KB)  will present key findings of the study and a way forward for member States, RECs and their development partners in the gender-sensitive implementation of the AfCFTA agreement. Experts will discuss various topics, including the alignment of proposed measures with the current policy frameworks of RECs, comparative strengths and weaknesses, existing and potential partners, and collaboration opportunities for RECs. [Note: This workshop will be one of five UNECA side events organised during the Intra-African Trade Fair. Concept notes for each workshop can be downloaded here]

AEC2018: Africa’s private sector can be major driver for regional integration (UNECA)

Stephen Karingi (ECA’s Director Regional Integration and Trade Division) emphasised the need to invest in information and technology to drive regional and continental integration. While Africa is already tapping into the possibilities created by digitalization and the mobile revolution, it is also the region that lags most behind in terms of the ability to engage in and benefit from e-commerce and the digital economy. “Half of Africa’s population won’t enjoy benefits of the AfCFTA because they have no IDs. We can harness the power of the private sector in the AfCFTA through digital identification,” Mr. Karingi said. For instance, three quarters of the African population are yet to start using the Internet. And in the UNCTAD B2C E-commerce Index 2017, the regional average index value for Africa was 28 compared with the world average of 54.

South African trade facilitation updates: as per the cabinet statement issued this morning

The cabinet approved the One-Stop Border Post National Framework for implementation. “The OSBP will enhance trade facilitation without compromising national security or revenue collection through the efficient movement of goods, persons and services between South Africa and the adjoining states of Botswana, Lesotho, Namibia, Mozambique and Zimbabwe.”

Cabinet ratified a decision of the Minister of Trade and Industry, Dr Rob Davies, to designate the Nkomazi SEZ and to grant a SEZ licence to the Mpumalanga Provincial Government’s Department of Economic Development and Tourism. “The Nkomazi SEZ will be positioned as an ‘agro-processing hub’ using green energy and forms part of the Maputo Development Corridor project.”

Cabinet approved that the National Treasury and Financial Intelligence Centre will coordinate South Africa’s preparation for the national risk assessment and upcoming mutual evaluation process which commences in mid-April 2019.

Cabinet approved the publication of the streamlined White Paper on Home Affairs for public comment. “The White Paper argues that for South Africa to fully realise the potential of the Fourth Industrial Revolution, the DHA must play a critical enabling role in citizen empowerment, inclusive development, efficient government and national security.” [President Ramaphosa: Launch of Atlantis Special Economic Zone]

Mozambican Customs announce new app for valuation of imported goods (Club of Mozambique)

The Mozambican Customs software platform used by importers is getting a new application to determine the value of goods, the system operator has announced. It is “a customs valuation system associated with a commodity database called eValuator” which should “facilitate trade, as it will reduce the time spent in disputes related to the value of goods,” the project manager of the JUE Guilherme Mambo says. “This tool will make it easier to know exactly what method customs use to determine the value and consequent calculation of customs duties,” said Dixon Chongo, representative of the Chamber of Customs Brokers and of the Confederation of Economic Associations of Mozambique, the country’s largest employers association, also quoted in the communiqué. “We felt a certain abitrariness on the part of the customs, with the value of the goods being adjusted upwards without any clear explanation being given.”

Mozambique: Over 50% of 2019 budget deficit funded by loans (Club of Mozambique)

The Mozambican government will fund more than 50% of the State Budget deficit for 2019 with internal and external credit, according to the documents on public spending presented on Tuesday in the country’s parliament. The Economic and Social Plan and the State Budget for 2019 include a deficit of 90.912 billion meticais (€1.29bn), or 8.9% of GDP, an increase of 0.8% of GDP forecast for this year. In the account presented on Tuesday to the Mozambican parliament, the government said it planned to take on loans amounting to 43.724 billion meticais (€620m) and internal loans amounting to 19.447 billion meticais (€276m). The 2019 Budget will also be financed with 27.740 billion meticais in donations (€394m), an increase of 0.9 percentage points compared to 2018. [EIU: Mozambique to grow “only 3.4% in 2019”]

Ethiopia and the IMF: Article IV and Selected Issues reports

  1. IMF Executive Board concludes 2018 Article IV Consultation. Directors stressed that implementation of structural reforms is critical to promoting competitive markets and improving the investment climate to catalyze private investment. Privatizations, public private partnerships with adequate safeguards, and removal of obstacles to private investment could support renewed growth momentum while attracting foreign resources and know how. Directors underscored the importance of addressing data gaps and delays to improve the quality of statistics. They welcomed Ethiopia’s decision to join the African Continental Free Trade Agreement and looked forward to progress toward World Trade Organization membership. Directors also welcomed the joint analysis conducted with UN Women which shows that further reducing gender disparities would yield large economic benefits over time and commended the authorities’ efforts in this direction.

  2. pdf 2018 Article IV Consultation (2.60 MB) . The Debt Sustainability Assessment (DSA) shows that Ethiopia remains at high risk of debt distress owing to its small export base. Public and publicly-guaranteed external debt breaches the thresholds for the present value of debt-to-exports and debt service-to-exports in the baseline. Debt service payments are expected to increase in the coming years, as grace periods on non-concessional debt acquired in the past expire. The MOFEC has announced that no new projects will be financed with non-concessional debt in 2018/19.

    Ethiopian authorities’ views: The authorities agreed that the external position remains vulnerable but consider that the conditions for a sustained export take-off are now in place. This should lead to higher growth in the baseline and reduce risks. In addition, the normalization of the political environment should see an increase in FDI and remittance flows from the diaspora. Thus, they continue to view the DSA as overstating risks and considered that there was a strong case for the use of judgment to override the mechanical signal from the framework.

    IMF Staff appraisal: While Ethiopia has maintained high and inclusive growth, its public sector-led development is reaching its limits, exacerbating external imbalances and public debt vulnerabilities. The DSA shows Ethiopia remains at high risk of debt distress; the exchange rate is overvalued; and international reserves are thin. Sustained policies to reduce public sector’s external borrowing and imports have substantially narrowed external imbalances in recent years. Going forward, the policy mix of tighter fiscal and monetary policies and exchange rate flexibility would help address external and domestic imbalances, while structural reforms to strengthen competitiveness and foster private investment would help support economic growth and job creation.

  3. pdf Selected Issues: Women and the economy in Ethiopia (1.13 MB) . We quantify the macroeconomic returns to closing gaps in labor force participation and education levels between men and women using different statistical and theoretical approaches. The findings suggest that, eliminating gender gaps in both educational attainment and the rate of formal employment could increase output in Ethiopia over time by over 24%.


Ethiopia to establish customs police to fight contraband trade (Ezega)

The Council of Ministers recently approved a proclamation for the establishment of the customs police as part of the fight against illegal trade that has been flourishing over the years. The new customs police will operate under the Federal Police of Ethiopia. Ethiopian Minister of Revenues, Adanech Abebe, said the new police force will specifically work to control contraband trade, which is significantly affecting the country’s economy and a threat to the country. Illicit trades are also believed to be abusing Incentives that the nation introduced to attract more investments, such duty free and tax-exempt equipment. The Minister of Revenue cited 55 international hotels using the tax-free privilege in a very small rural town in Afar regional state of Ethiopia. [Chinese market “huge potential" for Ethiopian products]

Angola and the IMF (@PaulWallace123): Christine Lagarde will visit Angola just before Christmas as the IMF and the government negotiate what’s likely to be a $4.5bn three-year funding programme, according to the OPEC member’s finance ministry.

Kenya’s ambitious plan to provide electricity to all citizens by 2022 (World Bank)

The government today launched the Kenya National Electrification Strategy. Developed in partnership with the World Bank, KNES provides a roadmap to achieving universal access to electricity for all Kenyans by 2022. With the help of the geospatial tool, the strategy has identified least-cost options for bringing electricity to households and businesses throughout the country. Alongside the KNES launch, the government also launched The Electricity Sector Investment Prospectus which presents the investment opportunities in the energy sector over the next 5 years valued at about $14.8bn.

SA-Tunisia Business Council mooted to boost trade and investment (dti)

SA’s Deputy Minister of Trade and Industry, Mr Bulelani Magwanishe has received the assurance of Tunisian business people that they are committed to the establishment of the joint South Africa-Tunisia Business Council. The President of the Tunisia-Africa Business Council, Mr Bassem Loukil, said opportunities were available for Tunisian and South African companies to explore jointly the automotive, pharmaceutical, agriculture and tourism sectors of the Tunisian economy. The President of the Tunis Chamber of Commerce and Industries, Mr Mournir Mouakhar, gave his association’s commitment to mobilise its members work towards increasing his country’s trade and investment with SA. “We are also looking at the development of business relations among South African, Tunisian and French companies. The fact that Tunisia has become a member of COMESA means that businesspeople in the two regions will be able to work closely together and contribute in stimulating intra-Africa trade and investment.”

UNCTAD Handbook of Statistics 2018: Growth of global goods exports to reach 10.4% in 2018

Global merchandise exports could grow by 10.4% this year, hitting almost $19.6 trillion, according to the UNCTAD Handbook of Statistics 2018, published yesterday. The figures are the result of “nowcasts” based on the most recent information provided by a large number of economic indicators. This follows substantial growth in 2017 when global trade in goods increased by 10% (after two years of decline). The “nowcast” for global trade in services indicates a growth of 9.5% in 2018. The 2018 “nowcasts” are the first in the Handbook’s 50-year history and thought to be unique among available trade statistics. [Downloads include 15 fact sheets]

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