tralac’s Daily News Selection
20th Ordinary Summit of Heads of State of the East African Community: Joint Communiqué
Highlights: The Summit received a progress report on the Review of the East African Development Bank (EADB) Charter to streamline it into the EAC mainstream. The Summit directed the Council of Ministers to expedite the process
The Summit received a progress report from H.E. President Yoweri Kaguta Museveni, on the EU-EAC Economic Partnership Agreement (EPA) and decided that the EAC engages the EU on the matter in the next four months to get more clarification on the pertinent issues of concern. Thereafter, Partner States who wish to, may or may not sign the EPA.
WDR 2020: Sneak preview (World Bank Blog)
The next World Development Report, Global value chains: trading for development, is well under way. Check out our website for a sneak preview. Since the Bank’s last report more than 30 years ago on Industrialization and Foreign Trade, the world has been transformed, mostly in positive terms from a development perspective. Several low and middle income countries can now participate globally thanks to global value chains. The WDR will seek to answer three big questions: [Blog author: Pinelopi Goldberg]
Hippolyte Fofack: Overcoming the colonial development model of resource extraction for sustainable development in Africa (Brookings)
Although the Africa Cocoa Initiative has received little publicity, its impact has been significant in Côte d’Ivoire - the world’s leading producer of cocoa beans that, over the years, has captured less than 10% of the global cocoa value chain that generates more than $120bn annually. The support provided by the Bank has enabled Côte d’Ivoire to increase its processing capacity to become a leader in the global cocoa processing space and to overtake the Netherlands as the world’s largest processor of cocoa during the 2014-15 season. The AFRICOIN model could be replicated with a wide range of other soft commodities to extract more value and lift more people out of the vicious cycle of poverty and intergenerational dependency. The process of value addition along African commodities is likely to be enhanced under the AfCFTA, which offers tremendous opportunities for economies of scale and regional value chains to smooth the transition towards more competitive global value chains. At the same time, the success of a few natural resource-rich nations in value addition and export diversification will serve as a catalyst for economic transformation, further accelerating the development of regional value chains for commodity-based industrialization and beyond. [Ghana now processing 34% of its cocoa]
The African continental free trade area: an integration trilemma (ERF Policy Portal)
Plans to establish an African continental free trade area are hampered by three incompatible objectives: solidarity across the continent’s diverse countries; large membership to break the curse of small markets; and deep integration to reap all the benefits of close economic cooperation. This column explains Africa’s ‘integration trilemma’ – and suggests that it may in part explain why no North African country has as yet ratified the AfcFTA Treaty. [The author: Jaime de Melo]
East Africa, India and Europe: norms to enhance Indian ocean commerce (EU India Think Tanks Initiative)
The paper seeks to identify key trade linkages in Indian Ocean littoral states in East Africa along with Indian Ocean island states as a means of understanding the scope for India and the European Union to cooperate in establishing transparent rules-based norms for supply chains in the region. Both India and the European Union are key trading partners for the African nations analysed in this paper, and as the region develops economically, the trade regime in the Indian Ocean will witness substantial changes. The paper sources data on the trade in commodities between India and the European Union with eight African nations in the Indian Ocean, and analyses the data to reveal key commodities traded between them. The paper identifies vital trends in the trade while noting the lack of commonalities. The recommendations in the end are suggested accordingly. Extract (pdf):
As seen in Figure 1.1, India’s exports to the IOA-8 is mostly concentrated around Tanzania, Mozambique and Kenya, all countries with close political ties to India. These countries are also moderately sized and have a larger GDP (nominal) compared to the other nations. Kenya and Tanzania both figure in the top 10 African economies by GDP and have comparatively better trade infrastructure. However, given the fact that East Africa is the fastest growing economic region in the African continent, it is surprising to see that exports from India to the IOA-8 have reduced by gross value over the course of the three years. Across the three-year period recorded within this dataset, there are instances of India’s trade activities with certain East African nations fluctuating drastically. Notably, between 2016 and 2017, India’s combined imports and exports to Kenya decreased by nearly 50%, while similarly, in Somalia, between 2016 and 2017, substantial decreases in exports were noted. Tanzania is another country where exports decreased drastically between 2016 and 2017. India’s exports to Tanzania dropped from $ 1,766,864,783 to $ 1,006,031,268,a 43% drop. [The authors: Mihir Sharma, Tuneer Mukherjee, Gareth Price, John-Joseph Wilkins]
Trade Minister George Hollingbery signed the UK-Eastern and Southern Africa agreement in London on Thursday, 31 January 2019 with a number of representative governments. The new UK-ESA agreement replicates the effects of existing trading arrangements as far as possible. It will come into effect as soon as the implementation period ends in January 2021, or on 29 March 2019 if the UK leaves the EU without a deal.
Last week, President John Magufuli highlighted the difficulties in getting this balance right. At a multi-stakeholder meeting concerning the mining sector, he stated his government’s intention to review the 2017 fiscal regime given his concern that the recent increase in taxes is hindering rather than helping efforts to collect more revenue from the sector. While the media focused on his comments on artisanal and small-scale mining and tax evasion, the president also spoke about the impact of the new regime on large-scale investment. NRGI’s preliminary analysis of the current fiscal regime for Tanzania’s mining sector suggests that the president is right to be concerned. Using an Excel-based economic model that we developed specifically for this analysis (similar to other models we have recently published), we evaluated the impact of the regime on a number of hypothetical large-scale gold projects (ranging from mines as large as Acacia’s North Mara mine to small ones like Shanta Gold’s New Luika mine). We focused on the implications for new projects; since contracts for existing projects are not in the public domain, it is difficult to assess the impact of renegotiating them. [The authors: Thomas Scurfield, Silas Olan’g]
Illicit financial flows: conceptual and practical issues (South Centre)
In this brief (pdf) we share our understanding of the unjust system that drains billions of dollars out of the continent annually, and make recommendations and a case for bringing citizens back into the political economy discourse; and to reshape the rigged rules and systems into an effective framework for stemming them huge illicit financial flows from Africa to other regions.
Confronting tobacco illicit trade: a global review of country experiences (World Bank Blog)
A new report, Confronting Tobacco Illicit Trade: a global review of country experiences, prepared in collaboration with a multisectoral team across different institutions shows that reducing illicit trade in tobacco products is critical from the perspective of public health, public finance, governance, or equity. This publication presents country and regional case studies, covering over 30 countries across the income and development spectrum, detailing their illicit tobacco trade context, legal and policy frameworks, enforcement strategies, progress achieved, lessons learned, and recommendations regarding further strengthening illicit trade control. In response to demand from government officials and other partners, this report provides practical input and guidance on how to address illicit tobacco trade based on diverse country experiences.
Sub-Saharan chapters: Southern African Customs Union (Botswana, Lesotho, Namibia, South Africa, and Eswatini) and Zambia: Addressing the illicit flow of tobacco products (pdf); Botswana, Lesotho and South Africa: An analysis of alcohol and cigarette prices in Maseru, Gaborone, and neighboring South African towns; Kenya: Controlling illicit cigarette trade (pdf); Senegal: Addressing illicit tobacco trade (pdf)
As the first effects of Secretary-General António Guterres’s ambitious organizational reform plans become apparent, former and current officials of the UNDP see the future of the internationally influential agency as uncertain if not in peril. Fears center on aspects of the reform plan for development that would allow more political interference by host governments in the work of the UNDP, as it’s called. The plan could also deter the agency from factoring in human-rights issues in country programs, after rights were stripped earlier from the Sustainable Development Goals. The reform agenda was formally approved by the General Assembly in May 2018. Its most radical departure is the separation of the development program’s resident representative in a given country from a “resident coordinator” overseeing the UN’s work more broadly in the country, in close cooperation with the national government. Until now, the two functions were often combined in one person, with the development program’s representative — the “res-rep” — serving like a UN ambassador. Deputy Secretary-General Amina Mohammed, a former Nigerian cabinet minister, has been a driving force behind changes in how UNDP functions. She is now in charge of the UN’s development work, whose main job is to eradicate poverty. The resident coordinators will report to her and not, as in the past, to the UNDP administrator, the top official of the development agency, Achim Steiner.
India: Top advisory body on foreign trade to discuss policy for goods, services (Devdiscourse)
The Board of Trade will seek views of stakeholders including various government departments, exporters and industry members on 15 February to frame a new foreign trade policy and boost shipments of goods and services, an official said. The 70-member board, a top advisory body on external trade, is chaired by Commerce and Industry Minister Suresh Prabhu. “Views would be taken on the new foreign trade policy, which is scheduled to be released later this year,” the official said. The objective of BoT is to have continuous discussion and consultation with trade and industry. It advises the government on policy measures related to the foreign trade policy in order to boost the country’s trade. The Board’s last meeting was held in June 2017.
India must join WTO members in e-commerce talks (editorial comment, Hindustan Times)
In opposing discussions on e-commerce rules at the WTO, India continues a quixotic trade policy that further marginalises it in the international political economy. New Delhi’s opposition has accomplished little. As many as 76 WTO members have decided to separately begin a process that will frame rules governing cross-border e-commerce. Since this group includes the four largest trading nations — the US, China, EU, Japan — as well as nearly half the WTO’s membership, the breakaway faction is well on its way to becoming the mainstream. India wants a 1998 agenda to be the basis of any conversation about e-commerce. The agenda is from an age when the name Amazon was still associated with a South American river. New Delhi’s stance is no surprise. It continues to have relatively restrictive policies on foreign multi-brand retail. It has now added a convoluted and protectionist rulebook for its domestic e-commerce market. It would be par for the course for India to try and obstruct any attempted moves towards an international free market for e-commerce. India’s posture will, in time, prove to be the worst of both worlds. India will not be able to stop the main trading nations from moving forward with an e-commerce agenda at the WTO. Even if one supported New Delhi’s position, it would be better placed to obstruct if it was sitting at the table rather than sulking on the pavement. Once the other countries set the agenda, India would find itself in the onerous position of having to decide on a set of parameters that it will have no means to modify or dilute. [E-comm talks: India must stand firm. Note: The statement on e-commerce, signed by 76 WTO members, can be accessed here]
Today’s Quick Links:
Nigeria’s Manufacturing Index rises for 22nd consecutive month
Eromosele Abiodun: Dilemma of Nigerian exporters
Senegal: Fiscal transparency evaluation
US imposes visa restrictions on Ghana