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tralac’s Daily News Selection

tralac’s Daily News Selection
Photo credit: Simon Davis | DFID

14 Feb 2019

Negotiating African trade policy:

Event reminders

  1. Expert meeting on Non-Tariff Barriers (NTB) Reporting, Monitoring and Elimination under the AfCFTA (concluded today in Nairobi)

  2. 11th meeting of the AfCFTA TWG on Rules of Origin (starts Monday in Addis)

  3. Experts’ session for the 5th meeting of the Ministerial Working Group on the Single African Air Transport Market (starts Monday in Addis)

Ethiopia’s WTO Accession

  1. Tweeted updates by WTO DG Roberto DG Azevêdo: Great to meet with Ethiopia’s Finance Minister Ahmed Shide, along with Commissioner for Investments Abebe Abebayehu, Senior Advisor to the PM and Chief Trade Negotiator Mamo Mihretu and Deputy Finance Minister, Mr Eyob Tekalign, in Addis Ababa. We continued discussions on the country’s accession to the WTO. I look forward to building on this momentum and to supporting Ethiopia’s continued integration with the global economy.

  2. Ethiopia’s WTO Accession status: further details can be accessed here

  3. WTO Accessions Rules seminar. Deputy DG Alan Wolff welcomed 29 participants from 15 acceding governments attending the first Seminar on WTO Accession Rules (4-15 February, Geneva). “Some accessions are more complex than others. For China, by far the largest country to accede to the WTO, there were thousands of regulations and statutes that needed to be amended. It was an immense task. For a few acceding countries, they were already in close economic relationships with countries that were already WTO members, so they knew many of the rules and lived by them already. Thirty-six countries have joined the WTO since it was founded 24 years ago. Several of their chief negotiators for accession have talked with you already. Last Thursday, the Inaugural Session of the Accession Negotiators’ Network took place in the meeting with you. I was very happy to see how the original idea behind the establishment of this Network had become reality. Dialogue and experience-sharing are powerful tools for advancing accession negotiations. The former accessions negotiators’ enthusiasm and their stories are marvellous. I listened with interest. Clearly for many, maybe for all of them, working for their countries’ WTO accession was a high point of their professional careers. Why? Because they got to know their economies intimately, including what its needs were. They got to know what other governments wanted of them. They played one of the most important roles for their countries that few have the opportunity to experience.” [Details on WTO Accessions in progress can be accessed here]


Economic integration in the Maghreb: an untapped source of growth (IMF)

Individual countries of the Maghreb have achieved substantial progress on trade, but, as a region they remain the least integrated in the world. The share of intraregional trade is less than 5% of their total trade, substantially lower than in all other regional trading blocs around the world. Geopolitical considerations and restrictive economic policies have stifled regional integration. Economic policies have been guided by country-level considerations, with little attention to the region, and are not coordinated. Restrictions on trade and capital flows remain substantial and constrain regional integration for the private sector. Extract:

Trade within the Maghreb suffers because of restrictive trade policies. Maghreb countries face lower tariffs with Europe than when trading among themselves. In general, the simple average of applied tariffs in Maghreb countries is significantly higher than in the Group of Twenty countries or emerging market and developing economies (Figure 6). For example, the simple average tariff duty in Maghreb countries was about 14% in 2016, compared with 5% in the European Union, 4% in the United States, and 10% in China. Algeria is the most protected market, with an average tariff rate of 19%, while in other countries the rates are about 12%. Furthermore, selected sectors are heavily protected even in countries relatively open for trade. For example, the import duty on agricultural products is 28% in Morocco and 31% in Tunisia. Algeria tariff and nontariff barriers were hardened in early 2018 with a temporary ban on the import of about 850 categories of goods, the extension of the list of goods subject to a 30% excise tax, and significantly increased customs duties (up to 60%) for some other products. In addition to tariff barriers, intraregional trade also faces multiple nontariff impediments. For example, the average cost to export is one of the highest in the world and varies substantially across the region, between the most efficient exporters (Morocco and Tunisia) and the least efficient (Algeria, Libya, Mauritania).

Namibia, eSwatini most exposed to slow revenue pool growth in SACU (Moody’s)

Namibia and eSwatini are most exposed to the impact of only modest growth in the revenue of SACU, Moody’s Investors Service says in a new report. Weaker growth in South Africa (Baa3 stable) since 2011 has reduced the revenue pool available to all SACU member countries. “Although we anticipate a modest acceleration in South Africa’s economy in 2019 and 2020, we do not expect a material increase in SACU revenue,” said David Rogovic, a Moody’s Assistant Vice President - Analyst and co-author of the report. “Our expectation of only modest growth in SACU revenue has implications for eSwatini (B2 negative), Namibia (Ba1 negative), and Botswana (A2 stable) as it accounts for a sizeable proportion of their fiscal revenue and current account receipts.”

Zimbabwe not yet ready for full AfCFTA (The Herald)

Zimbabwe should ramp up value addition and beneficiation of its products so that the country can benefit from the full implementation of the AfCFTA once it comes into fruition, Speaker of the National Assembly Advocate Jacob Mudenda has said. The call comes at a time when members of the AU are intensifying efforts for the realisation of the AfCFTA. But, while addressing parliamentarians at an awareness workshop on the AfCFTA, Advocate Mudenda said Zimbabwe is currently losing out billions from exporting raw products, and that the introduction of the AfCFTA could make the situation worse. “Zimbabwe currently does not have a trade policy in place and the Industrial Development Policy expired in 2016 and up to now it is still in draft form. Thus the Portfolio Committee on Foreign Affairs and International Trade, and on Industry and Commerce have their work cut out and should play their oversight role in ensuring that the trade policy is put in place at the earliest possible convenience and possibly translating it into a law. As a country, it is imperative that we put our house in order first for us to be able to benefit from the free trade area outside our borders.”

Ghana: Importers’ capital shrinks after cedi slumps by 9% in a year (GhanaWeb)

Importers have said their capital has shrunk significantly over the past one year as the cedi continues to weaken against major trading currencies, especially the US dollar. The Ghana cedi has depreciated against the US dollar by 9% to GH¢4.92 from GH¢4.43 in February 2018, the fastest rate of depreciation in four months. The Deputy General-Secretary of the Ghana Union of Traders Associations, Richard Amamoo told the B&FT how the cedi-depreciation has affected his business. “Last year [August], a full container of speakers cost me $20,000 at the rate of GH¢4.7 to the dollar, making it GH¢90,000. But that same quantity of products will cost me GH¢103,000 using the current interbank rate of GH¢5.16. This means I need an additional GH¢9,200 to import that same container today.”

Ghanaian-German Business Council: update (GhanaWeb)

Ghana has signed a MoU with the Federal Republic of Germany to establish the German-Ghanaian Business Council. The council will facilitate the exchange of information and views on economic cooperation, trade and investment; promote industrial cooperation on Small and Medium scale enterprises; collaborate on matters of mutual interest in respect of multilateral trade negotiations.

Songwe: Africa’s health and wellness sector has potential to create millions of jobs (UNECA)

Africa should stop exporting much-needed jobs to other continents and invest in its pharmaceutical industry, in particular, to provide for its people and create jobs for its unemployed youth, ECA Executive Secretary, Vera Songwe, said Tuesday. Speaking at the Africa Business Health Forum for 2019, Ms. Songwe said Africa could create more than 16 million jobs if the public and private sectors collaborated and invested enough in the drugs industry. Africa, she said, currently imports $14bn worth of its pharmaceuticals from outside, a situation she said can be curtailed. “The health and wellness sector has the potential to create 16 million jobs. We should no longer export those jobs. We should bring back those jobs,” said Ms. Songwe. “By 2030, an estimated 14% of all business opportunities in the health and well-being sector globally will be in Africa, second only to North America with 21%. This is a huge opportunity for the private sector.” [Devex: Africa’s $66B health financing gap requires private sector power]

First International Food Safety Conference: updates

  1. On Tuesday, the conference, organized by the FAO, WHO, WTO and the AU, shone a light on the need to root out dangerous food, which is also hampering progress towards sustainable development everywhere. “Safeguarding our food is a shared responsibility. We must all play our part”, said FAO Director-General José Graziano da Silva. “We must work together to scale up food safety in national and international political agendas.” Unsafe food-related illness overloads healthcare systems and damages economies, trade and tourism. Moreover, the impact of unsafe food costs low- and middle-income economies around $95bn in lost productivity each year. Food safety must be a paramount goal at every stage of the food chain, from production to harvest, processing, storage, distribution, preparation and consumption, conference participants stressed. [ pdf Chairperson’s Summary (536 KB) ]

  2. Hunger on the rise in Africa. The joint UN  pdf 2018 Africa Regional Overview of Food Security and Nutrition Report (5.67 MB) reveals that the prevalence of undernourishment continues to rise and now affects 20% of the population on the continent, more than in any other region. After years of decline, recent statistics from the joint report of the ECA and the FAO show that there are 821 million undernourished people in the world. Of these, 257 million are in Africa, of which 237 million in sub-Saharan Africa and 20 million in Northern Africa. Compared to 2015, there are 34.5 million more undernourished people in Africa. Nearly half of the increase is due to the rise in the number of undernourished people in Western Africa, while another third is from Eastern Africa.

  3. WTO DG Roberto Azevêdo: “We will be hosting the second part of this event at our headquarters in Geneva on 23-24 April: the FAO-WHO-WTO Forum on Food Safety and Trade. It will be an opportunity to explore the deeper inter-linkages with trade issues. The WTO underpins global trade – complemented by important regional initiatives like the AfCFTA. In this context, the WTO’s Trade Facilitation Agreement can play a positive role. It aims at streamlining border processes to help goods move more smoothly and more quickly. Reducing the time needed for goods to cross borders can make all the difference when your exports are perishable products, such as cut flowers or green beans from Kenya and animal products from Ethiopia. And reducing trade costs is important for everyone. Of course, the safety of imported products also needs to be ensured, and the Agreement recognizes that cooperation among different border agencies plays a fundamental role.” [OECD’s Joint Working Party on Trade and Environment: report on a set of policy indicators on trade and environment (pdf)]


World Employment and Social Outlook: Trends 2019 (ILO)

Africa regional finding: Only 4.5% of the region’s working age population is unemployed, with 60% employed. However, rather than indicating a well-functioning labour market, this is because many workers have no choice but to take poor quality work, lacking security, decent pay and social protection. The labour force is projected to expand by more than 14 million per year. Economic growth rates until 2020 are expected to be too low to create enough quality jobs for this fast-growing labour force. Extract: Ultimately, labour productivity growth is expected to remain too slow and population growth too fast to allow African countries either to reduce poverty rapidly or to increase average incomes (ibid.). Working poverty continues to be widespread: almost one third of workers (32%) were living in extreme poverty in 2018 and a further 22% were living in moderate poverty. Overall, around 250 million workers in Africa were living in extreme or moderate poverty in 2018 – a number that is expected to increase by almost 5 million by 2020 as a result of the rapid expansion of the population and an inadequate level of inclusive economic growth (table 2.1).
 

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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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