Building capacity to help Africa trade better

tralac’s Daily News Selection


tralac’s Daily News Selection

tralac’s Daily News Selection
Photo credit: Xinhua

African Union Department of Rural Economy and Agriculture:  pdf Continental strategy for Geographical Indications in Africa 2018-2023 (3.29 MB)

The protection of GIs could give African countries a natural competitive advantage since they apply mainly to agricultural and cultural products. However, it should be pointed out that unless African countries attach the requisite importance to the legal and institutional implications to geographical labelling in their individual countries, the anticipated gains and benefits will be reduced. Africa’s main challenge is to ensure that the appropriate and relevant institutional frameworks are put in place through the assistance and policy direction of the relevant state institutions and governments at large. The national regulatory frameworks of African countries on GIs are still evolving. Most countries have enforced a legal framework to protect GIs but, at the time of writing, policies and legal frameworks on GIs differ among countries (and even in countries among products).

A continental strategy should provide support to individual countries to develop appropriate systems through the drafting of a continental model law. Efforts need to be made to inform communities on the relationships among the various mechanisms so that everyone is able to understand the law. For example, confusion exists between the concepts of traditional knowledge and GIs. Furthermore, the difference between AOs and GIs is not always clear when provisions exist for both levels of protection. AOs and GIs should coexist and provisions made to understand the relationship between the two options as well as between GIs and traditional knowledge.

FinTech in Sub-Saharan Africa: a potential game changer (IMF)

While acknowledging the large potential gains from FinTech, there are concerns about new vulnerabilities that these technologies and business models may bring. New competitors without previous experience in the industry are providing innovative financial services. For instance, blockchain-based technology promises to enhance trust in economic exchanges. Its applications are designed to provide a secure digital infrastructure to verify identity, facilitate faster and cheaper cross-border payments, and protect property rights. However, these technologies may be rapidly creating new types of risks that are not well understood or covered by existing regulations. Against this background, a careful consideration of the potential of FinTech is needed to boost banking and financial development in sub-Saharan Africa.

pdf FinTech in Sub Saharan African Countries: A Game Changer? (803 KB)  – Extracts: Within sub-Saharan Africa, East Africa is the clear leader in mobile money adoption and usage. Despite the success of mobile money in sub-Saharan Africa, there is a wide degree of cross-country difference (see Figure 4). East Africa developed an infrastructure that uniquely built upon the latent demand for mobile financial services in sub-Saharan Africa:

(i) East African countries favored a telecom-led regulatory model. In this framework, the telecom provider works with the financial regulator to establish the infrastructure for mobile payments. The telecom-led model has proved more successful in attracting users than the bank-led model that other sub-Saharan Africa countries promoted. (ii) East African countries tended to have a single telecom provider with a large market share, which provided an initial critical mass of users needed to push mobile money past the niche level. In Kenya, Safaricom has a share of nearly 70% of the market; in Tanzania, Vodacom has a market share of close to half. Having a large market share allowed most mobile payment users to operate on a single platform without facing compatibility issues, though this raises concentration and potential stability concerns. (iii) East African countries, particularly in the East African Community, have national identification systems. These systems facilitate faster mobile payment adoption rates and enable more secure transactions.

West Africa: Stakeholders shown how to sustain customs union in AfCFTA implementation (News Ghana)

Mr Peter Joy Sewornoo, Trade Policy Directorate of the ECOWAS Commission, said a uniform customs union liberalisation scheme, ratifications and signatures was valid for the attainment of the AfCFTA framework agreement. He said the 90% level of ambition, which constituted the sensitive and exclusion clauses of the AfCFTA framework agreement, was okayed by all parties to liberalise trade. He said there was disagreement on the remaining 10% designation for sensitive products of 7% and exclusion list of 3% for liberalisation on import value limitation, which is an anticlimax for ECOWAS member states in the journey to actualize the AfCFTA. He said the ECOWAS common external tariff implications are that the 7% sensitive products would attract 429 tariff lines and an import value of 10.3%, which would directly affect Ghana, Cote d’Ivoire, Nigeria and Cape Verde while the other 3% would draw 184 tariff lines on import value of 7.1%.

DHL Global Connectedness Index: Mauritius is SSA’s most connected country

DHL has released the fifth edition of the pdf DHL Global Connectedness Index (14.51 MB) – a detailed analysis of globalisation, measured by international flows of trade, capital, information and people. The new report represents the first comprehensive assessment of developments in globalisation across 169 countries and territories since the Brexit referendum in the UK and the 2016 presidential election in the United States. The world’s top five most globally connected countries in 2017 were the Netherlands, Singapore, Switzerland, Belgium and the United Arab Emirates. Eight of the top 10 most connected countries are located in Europe, helping make it the world’s most connected region, in particular for trade and people flows. North America, the leader in capital and information flows, ranked second among world regions, followed by the Middle East and North Africa in third place. In sub-Saharan Africa, the highest ranking country was Mauritius, which featured in 40th position, while South Africa was named the highest ranking country on the African continent itself, with an overall ranking of 56th place.

pdf Sub-Saharan Africa: key issues and US engagement (1.77 MB) (Congressional Research Service)

What is the scope of US-Africa trade and economic relations? Africa accounts for a small share of overall US trade and investment activity, making up less than 1% of such U.S. global transactions in 2017. As it has over the past several years, the US ran a goods trade deficit with the region in 2017 (totaling $10.8bn), importing $24.9bn and exporting $14.1bn. US exports are diverse while imports are mostly in primary products (oil alone accounts for over 40% but has declined significantly in recent years). Motor vehicles (exclusively from South Africa) and apparel are the region’s only significant manufactured exports to the United States. Over half of US trade with the region is with the two largest economies, Nigeria and South Africa. US foreign direct investment in the region is also concentrated in a few countries, including Mauritius ($10.4bn in 2017), South Africa ($7.3bn), Nigeria ($5.8bn), Ghana ($1.7bn), and Tanzania ($1.4bn). The small stock of sub-Saharan African FDI in the United States comes almost exclusively from South Africa ($4.1bn in 2017). See Figure 3 for a snapshot of US-Africa trade and investment.

How does the Administration’s trade policy affect US trade with the region? US trade policy has been a key focus of the Trump Administration, particularly with regard to the US trade deficit, foreign trade barriers, and the effects of import competition on US manufacturing. While US trade with Africa may be of less concern to the Administration, as such trade is minimal and US imports mostly consist of primary products, US trade policy changes could significantly affect US trade with some African countries, notably South Africa.

Focus on reciprocal trade agreements. The Administration has made reciprocal trade negotiations a top priority of its trade policy with Africa. It is likely, however, to confront the same challenges that have dogged previous US pursuit of an FTA in the region, including concern among African countries over the extensive nature of US FTA commitments and concern over how an agreement with select countries may negatively affect African efforts toward regional integration. On the first issue, the Trump Administration may be more flexible in its approach than previous Administrations, as evidenced by announcements for limited-scope bilateral US negotiations with the EU and Japan. The Administration’s stated preference for bilateral agreements rather than agreements with larger regional blocs, however, appears at odds with the push among many African states for more regionally integrated trade policy, including via the African Continental Free Trade Area, signed by 44 African states in March. Congress is also expected to play a role in determining the scope of any new U.S. agreements in the region and would have to approve such agreements through implementing legislation. [Related CRS report: Generalized System of Preferences: overview and issues for Congress]

dti update: pdf Negotiations of a rollover EPA between SACU and Mozambique and the UK (375 KB)

Extract from a presentation to the Portfolio Committee on Trade and Industry: Immediate way forward: (i) Joint legal scrubbing of the Agreement to be undertaken on 18-21 February 2019 (ii) Ministers expected to sign the Agreement early March 2019 (iii) Parties to the Agreement will follow their internal legal processes to ratify the Agreement, after which it will enter into force once the UK leaves the EU and the EU-SADC EPA no longer applies to the UK.

Uganda: Concluding statement of the 2019 Article IV Mission (IMF)

The current account deficit increased to 6.1% of GDP in FY17/18. Imports of goods and services grew by 17% – mostly capital goods associated with the large infrastructure projects – outweighing the 9% growth of exports. Financing came from FDI, public-sector debt disbursements, and a decline in international reserves. Reserves amounted to $3.2bn at end FY17/18. Uganda’s external position is weaker than implied by medium-term fundamentals and desirable policies. The current account deficit is expected to widen further during the preparation phase for oil production. Therefore, it is important to ensure Uganda maintains an adequate level of reserves. At present, international reserves are equivalent to 4.1 months of next year’s imports which is a sound buffer against potential shocks. Bank of Uganda appropriately plans to continue to build reserves opportunistically to maintain this reserve coverage. The flexible exchange rate regime continues to serve Uganda well.

Ethiopia, Africa’s top coffee producer, may triple output in five years (Bloomberg)

Ethiopia is replacing old trees and cutting existing ones to allow new stems to sprout as ageing trees become less productive. That could help boost output to between 1.2 million tons and 1.8 million tons by 2024, up from an estimated 600 000 tons in the recent harvest, the Ethiopian Coffee and Tea Authority said. Old trees account for about 60% of the 1 million hectares (2.5 million acres) of trees in production, while another 1.5 million hectares aren’t yet yielding beans, according to the authority. New trees in the country, where smallholders account for almost all output, take about three to four years to start producing.

Kenya: Illicit cigarette trade denying KRA massive revenue – BAT (The Star)

700 million counterfeited cigarettes were traded in Kenya last year, according to a market research by leading manufacturer BAT. British American Tobacco announced yesterday (pdf) that the illicit trade has grown from 12.4% to 14.1%. It is higher in neighbouring Uganda at 22%. The firm’s financial director Sidney Wafula said the trade denies Kenya Revenue Authority Sh2.5 billion annually in tax revenue while the industry loses Sh900 million. “Our independent third-party research shows that the counterfeit cigarettes are either smuggled into the country, having been destined for a lower tax market that was never reached,” BAT managing director Beverly Spencer said.

Over 250 Made-in-Rwanda products receive RSB approval (New Times)

The locally made products got standards approval under the nationwide campaign dubbed, ‘Zamukana Ubuziranenge’, which focuses on helping Made-in-Rwanda products to gain consumer confidence among the public and increase the export volume. Launched in 2017, the five-year campaign targets more than 300 products and 93 small and medium enterprises across the country. The 2017/18 fiscal year saw 144 new products certified and 78 recertified while 115 new products were certified during the past six months of the current fiscal year (2018/19). Raymond Murenzi (Director General of Rwanda Standards Board): “As the standards body for Rwanda, we have harmonised 286 (EAC) standards equivalent to 70% of EAC standards to facilitate regional trade and this is why the S Mark certified products will find no difficulty to penetrate the East African market.”

WTO’s Trade Facilitation Agreement: update

Members considered a report from the WTO Secretariat, which found that 141 or 86% of WTO members have now ratified the TFA roughly two years since it entered into force on 22 February 2017 when the WTO crossed the required threshold of 110 member ratifications. Zimbabwe, Cameroon and Ecuador were the latest to ratify the TFA since the last Committee meeting in October 2018. Egypt, at the meeting, said it would soon ratify the Agreement. As of 12 February, the current rate of implemented commitments under the TFA stood at 61.3%. Broken down by level of development, this equates to a 100% rate of implementation by developed members, 60.3% among developing members and 22.8% among least-developed countries.


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