tralac’s Daily News Selection
AfCFTA ratification update, Ambassador Albert Muchanga: Good news! The threshold is within grasp! Parliament of Senegal approved ratification of AfCFTA Agreement yesterday. Seventeen so far, five to go. AfCFTA Champion reaching out to fellow leaders to secure those five before the African Union Summit in February.
Zambia and the AfCFTA, @AUTradeIndustry: The African Union is organizing a meeting on the impact of the AfCFTA on the Zambian economy. The study intends to quantify impacts at level of individual sectors and products in order to establish areas of most risk for Zambia under the liberalization scenario.
WEF 2019: selected highlights
Kagame makes case for an institutionally strong Africa. President Paul Kagame has said that the African continent can no longer continue to delegate responsibility for its growth and development to external parties. Kagame was addressing African Heads of State on Shaping Africa’s Agenda in the Global Context in Davos, Switzerland at the ongoing World Economic Forum Annual Meeting. “Challenges relating to migration, security and climate change among others mean there is no longer any actor who sees an advantage in an Africa that is institutionally weak and economically stagnant. Everyone benefits from a stronger, more united Africa. This is reflected in the more constructive tone of Africa’s partnerships with China, Europe and others. But no one is going to transform Africa on our behalf. It is up to us.”
Anand Mahindra has a way out. Mahindra Group Chairman Anand Mahindra said that localisation can bypass protectionist policies that have sparked concerns among business leaders across the globe, and help make profits. “We’re in fact using it to make our businesses local. We don’t know how long this protectionist, nationalist thrust may last. I personally don’t think it will be a short-term phenomenon,” Mahindra told BloombergQ on the sidelines of the World Economic Forum in Davos. Mahindra, illustrating an example of how his own automaker benefited from going local, said the move has an “enormous dividend”. “We finally opened an assembly plant in South Africa. The auto market grew one percent last year, we grew 26%,” he said. “We are already seeing the dividends of being seen as local. So there’s huge economic logic for going local. Once you go local, this entire question of protectionism and nationalism hurting you becomes academic.”
WEF lauches Innovation with a Purpose Platform. While food security is a global issue, its impacts are all too often hidden. The WEF’s new report, Innovation with a purpose: improving traceability in food Value chains through technology investigates the role of disruptive technology applications capable of effectively tracing such inefficiencies in food value chains. Focusing on 12 key technology applications, it estimates the concrete benefits which could be delivered in terms of reduced water usage, greenhouse gas emissions, and food waste; increased productivity and farmer income; and reduced obesity and undernourishment of consumers. [WEF White Paper: Civil society in the Fourth Industrial Revolution]
Audio: A conversation with Abiy Ahmed, Prime Minister of Ethiopia; CNBC Africa interview with Tony Elumelu (Chairman of Heirs Holdings): How can Africa take advantage of the fourth industrial revolution to maintain the “Africa rising” narrative?
International Conference on the Emergence of Africa: emergence, the private sector and inclusiveness (CIEA III)
Two new McKinsey reports:
Leadership lessons from Africa’s trailblazers. This article presents reflections from five of Africa’s leaders. Taken together, their insights illustrate what is needed to thrive on the continent. Nadia Fettah, CEO of Saham Finances, describes the strategic revitalization of the Moroccan insurance company she leads. James Mwangi, the CEO of another financial-services player, Equity Bank, explains how his company has innovated its business model to boost financial inclusion. Aliko Dangote, who has transformed a trading company into a large-scale manufacturer, elaborates on the resilience he’s trying to build into Dangote Industries and how he hopes this will help the company thrive far into the future. Fred Swaniker, founder of the African Leadership University, shows how technology-enabled solutions can unleash Africa’s young talent. Finally, human-rights advocate Graça Machel shares insights about doing well by doing good, through the lens of New Faces New Voices, the network she founded to expand the role and influence of women in the financial sector. [The authors: Mutsa Chironga, Georges Desvaux, Acha Leke
Globalization in transition: The future of trade and value chains. Although output and trade continue to increase in absolute terms, trade intensity (that is, the share of output that is traded) is declining within almost every goods-producing value chain. Flows of services and data now play a much bigger role in tying the global economy together. Not only is trade in services growing faster than trade in goods, but services are creating value far beyond what national accounts measure. Using alternative measures, we find that services already constitute more value in global trade than goods. In addition, all global value chains are becoming more knowledge-intensive. Low-skill labor is becoming less important as factor of production. Contrary to popular perception, only about 18% of global goods trade is now driven by labor-cost arbitrage. Three factors explain these changes: growing demand in China and the rest of the developing world, which enables these countries to consume more of what they produce; the growth of more comprehensive domestic supply chains in those countries, which has reduced their reliance on imports of intermediate goods; and the impact of new technologies. Globalization is in the midst of a transformation. Yet the public debate about trade is often about recapturing the past rather than looking toward the future. [The authors: Susan Lund, James Manyika, Jonathan Woetzel, Jacques Bughin, Mekala Krishnan, Jeongmin Seong, Mac Muir]
PwC’s 22nd Annual Global CEO Survey of 1,378 chief executives in more than 90 territories explores that question and many others regarding the global business climate in 2019. Conducted in September and October of 2018, this year’s survey drills down on CEO insights in top-of-mind areas such as: Growth, Data and Analytics, and Artificial Intelligence. [South Africa: In SA, only 30% of those surveyed expect an improvement]
Ghana set to join ATI (GhanaWeb)
In the bid to lessen the demand for sovereign guarantees by international institutional investors who seek to make investments in Ghana, government is in the process of becoming a member of the Africa Trade Investment Agency. Government has so far secured a grant of $18.4m from kfw, the German government-owned development bank, as part of the Compact with Africa, to pay for its shares, awaiting parliament’s ratification. This will enable ATI commence its operations in the country, providing globally acceptable insurance cover for investments made in Ghana by premium paying clients. The minimum share subscriptions that an African country needs to qualify for membership in the Agency is a minimum of 75 shares having a par value of $100,000 each. By this requirement, Ghana is expected to hold about 184 shares in the Agency.
Ghana to export timber to EU market (Business Ghana)
Ghana is close to making history as the first country in Africa to get clearance to export timber to the European market by the end of the year. This is after the country had met a series of requirements spelt out in the voluntary partnership agreement that was signed with the EU over a decade ago. Currently, processes are being finalised to issue the Forest Law Enforcement, Governance and Trade licence to Ghana to ensure that the export of timber and wood products to the EU meets the acceptable standards. The Deputy CEO of the Forestry Commission, Mr John Allotey, who disclosed this yesterday, said the country would be the second in the world, after Indonesia, to get that licence from the EU.
International trade in services 2018 Quarter 3 (pdf, UNCTAD)
World services exports grew by 4% in the third quarter of 2018, year-on-year (y-o-y), measured in current United States dollars. The growth slowed down across all main service categories, compared with the first half of 2018. The services grouped under travel, which expanded strongly over the twelve previous months, showed the weakest increase in quarter 3. On the regional level, Asia and Oceania were the growth leaders in the third quarter of 2018, recording a high increase in other services (7.7%). On the other hand, the statistics from Latin America and the Caribbean revealed a decline (-2.6%) in exports for that group of services.
Today’s Quick Links:
Mozambique to host 2019 US-Africa biennial summit
Morocco’s trade deficit rises 8% in 2018
SAPSN statement to the SADC chairperson on Zimbabwe’s current crisis
Nigeria outlines strategies to boost economic diplomacy with Russia
The value of South Africa’s wine exports grew 4% in 2018: but current shortages of stock meant volume exports fell 6%
Loss of FMD-free status devastating for SA’s trade
The Gambia’s rice value chain transformation programme: AfDB appraisal report
Côte d’Ivoire’s SIR financing highlights innovations in Africa’s debt markets