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tralac’s Daily News Selection

tralac’s Daily News Selection

25 Feb 2019

African trade events to diarise:

  1. South Africa’s Portfolio Committee on Trade and Industry will, on Wednesday, be briefed by the Department of Trade and Industry on ongoing negotiations, and implementation, of existing international and regional trade agreements.

  2. 3rd SADC-Japan Business and Investment Forum, in preparation for TICAD VII, takes place in Osaka, Japan, on Thursday.

  3. The AU’s STC on Transport, Infrastructure, Intercontinental and Inter-regional Infrastructure, Energy and Tourism holds its second session, 14-18 April, in Cairo

Ethiopia’s Abiy Ahmed: Africa’s new talisman (Financial Times, Irish Times)

Describing himself as “capitalist”, he nevertheless cites Meles as saying it is the government’s job to correct market failures. “The economy will grow naturally, but you have to lead it in a guided manner.” Still, unlike Meles, Abiy is less wedded to the idea that the state must control the economy’s commanding heights. He is moving swiftly towards privatisation of the telecoms sector in an exercise that should raise billions of dollars, as well as modernising a network that has fallen badly behind African peers. Here too there are risks. “I need to realise the privatisation with zero corruption,” he says, adding that people who have stashed money abroad want to launder it back into the country. [The authors: David Pilling, Lionel Barber]

SADC-IISD Investment Facilitation Workshop: report of the August 2018 meeting (pdf, IISD)

Workshop participants concluded that, at the SADC regional level, facilitation measures should focus on information sharing, intra-regional cooperation, use and strengthening of SADC institutions, and capacity building and technical assistance. In particular, they indicated 41 options for possible facilitation measures at the regional level (as set out in Appendix B, Section B.3.2). Participants recognized the important role that already-existing regional Internet platforms on national investment laws can play as a central feature of regional support. This should be built on best-practice standards in such tools, and experience at the national and regional levels should be used to provide such best-practice standards.

The ability of SADC to develop regional best practices and standards - for example, for ensuring responsible corporate behaviour through the investment-making process - was seen as important and likely to generate more relevant standards for countries from the region. While legally binding approaches were not supported, SADC was seen as the most appropriate level for developing, on an incremental basis, standards for service delivery by governments in facilitating investment, and for incorporating standards for maximizing the sustainable development benefits in the investment-making process. Maximizing the value of regional opportunities through such types of measures was seen as a priority for participants. The ability to generate regional best practices from experience and collective research was an important element of this. There was a strong direction among participants that SADC could assist with technical assistance that supports sustainable development goals related to attracting FDI. Participants noted, for example, the absence of technical support to evaluate and assess investment proposals, to set standards for the economic development aspects of proposals and to identify pipelines of positive proposals. A related issue was the capacity to identify and attract high-level investors with a commitment to being partners in development, as opposed to investors who may have track records that are less supportive of such goals. Conversely, the ability to ensure strong anti-corruption and money laundering was also seen as important.

Bitter aftertaste? Food companies could face costly disputes over land in Africa (Reuters)

Food companies doing business in Africa risk becoming bogged down in decades-long legal disputes over land that could cost tens of millions of dollars, according to a report released on Monday. From sugar to coffee and palm oil, agribusiness firms could find that the land they are using is already claimed or occupied by local people, researchers said. Such disputes, already common, can tie up businesses for years and halt trade - and could cause up to $101m in losses over the next 25 years, said the report from the Overseas Development Institute and TMP Systems. The report, which collected data from nearly 80 firms, is part of a wider initiative to encourage responsible investment in African agriculture and develop trust between companies and communities. Almost half of all land disputes between sugar companies and local communities in Africa lasted more than 10 years, the report found.

AFDB extends funding to Tripartite Capacity Building Programme (COMESA)

The AfDB has provided $2.9m supplementary funding for the Tripartite Capacity Building Programme. The funds will be used to complete critical activities that are essential to the smooth operationisation of the TFTA. Among them is the completion of the industrial and Non-Tariff Measures databases, training of border staff and women traders in risk based sanitary and phytosanitary measures, finalization of the manual on use of Tripartite Rules of Origin and implementation of the Value Chain action plans that are outstanding. AFDB President, Akinwumi Adesina, confirmed the extra funding when he met Secretary General of COMESA Ms Chileshe Kapwepwe in Abidjan on 4 February 2019. The two discussed the TCBP and other areas of regional integration that the Tripartite Task Force needs to pursue.

SADC, Germany identify areas of continued cooperation (SADC)

The purpose of the consultations (19-20 February) was, amongst others, to agree on areas of cooperation in preparation for the next bilateral negotiations between the SADC Secretariat and the Government of the Federal Republic of Germany, to be held in November 2019.

Kenya in spat with Iran over Sh4bn tea exports (Business Daily)

Kenya has protested against a price cap that the Iranian government has imposed on tea exports to the country, putting the Sh4 billion market at the centre of a diplomatic tiff with Tehran. Iran has instructed Kenya to set the maximum price per kilo of tea that it sells to the Asian country at $3 (about Sh300), with anything above the amount attracting a punitive tax. The move has seen Kenya’s Ministry of Foreign Affairs write to the envoy in Tehran, asking him to seek clarification and lobby for easing of the new requirement. Kenya’s tea gets to Iran at about Sh400 per kilo, making it pricier than other teas sold in the country, mainly from India and Sri-Lanka. The quality of Kenyan tea is however superior compared to the others, which makes it highly sought after by the Iranians. Mr Muriithi said market factors make it difficult to sell at Sh300 per kilo in Iran. [Kenya: Exporters hold tea to beat low auction prices]

Controller of Budget says Kenya in debt crisis as loans gobble up Sh1.1trn tax (Business Daily)

The Controller of Budget has raised the red flag on Kenya’s ballooning public debt, warning that the country stands to spend more than Sh61 billion out of every Sh100 billion collected by the taxman for debt repayment this financial year. The Treasury has projected expenditure of Sh1.1 trillion on debt repayment in the 2019/20 financial year which starts in July, an equivalent of 61 percent of the total projected tax collection of Sh1.87 trillion. The Treasury says the public debt will only become unsustainable if it hits 70% of GDP. In the 2019 medium-term debt management strategy, Mr Rotich however proposed a cutback on foreign loans to ease the repayment fears.

Lacina Koné: Safeguarding Africa’s cyberspace (New Times)

Orange Cyber defense estimates that the African market for cybersecurity itself will expand from $1.7bn in 2017 to more than $2.5bn in 2020. Clearly, the opportunities are vast. Safeguarding Africa’s digital prosperity requires everyone to understand the role they play in cybersecurity – from a father using Mpesa (a mobile phone-based money transfer) to pay his child’s school fees to a Chief Technology Officer at a multinational corporation deciding on his/her company’s budget priorities. Governments can support this process by introducing strict laws through reforms, putting in place robust regulatory and legal frameworks and cooperating across borders through clusters of regional CERT (Cyber Emergency Response Team) agencies to identify threats and respond in real time. Cybercriminals move fast, but by working together and giving cybersecurity the attention it deserves, Africa can counter any attack and reap the benefits of the digital economy. [The author is Director General of Smart Africa]

India: E-commerce policy for data protection may further annoy US (Mint)

The stringent norms for data protection and online trade, proposed under the draft e-commerce policy released on Saturday, may further annoy the US, which has raised concerns over growing trade barriers in India. The proposed policy seeks to treat anonymized data collected in the country as a “national asset”, suggesting that such data generated by Indian users on e-commerce platforms, social media and search engines needs to be kept within the country. A business entity, which collects or processes any sensitive data in India and stores it abroad, needs to share such data with Indian authorities when required. Besides, such data must not be shared with a third party, including a foreign government, even with consumer consent. However, there is no restriction on cross-border flow of data among commercial entities if the data has not been collected in India. To break the data monopoly of a few technology giants that creates barriers for new entrants, the policy also proposes that startups be given access to their anonymized data. [Download: India’s draft national e-commerce policy]

Exports to jobs: boosting the gains from trade in South Asia (World Bank)

South Asia’s economy has grown rapidly, and the region has made a significant reduction in poverty. However, the available jobs for the growing working population remain limited. Policy makers are contending with lingering concerns about jobless growth and poor job quality. Exports to Jobs: Boosting the Gains from Trade in South Asia posits that exports, could bring higher wages and better jobs to South Asia. We use a new methodology to estimate the potential impact from higher South Asian exports per worker on wages and employment. We find that increasing exports per worker would result in higher wages, mostly for the better-off groups - like the better-educated workers, men, and the more-experienced workers - although the less-skilled and rural workers would benefit from new job opportunities outside of the informal sector.

Today’s Quick Links:

Anzetse Were: Africa should target FDI from emerging markets

China’s Xiaomi unveils $680 5G smartphone, sees growth in Africa

Attention shifts to ICJ as Kenya stands ground on Somalia border dispute

World Finance: Top 5 countries with the highest trade tariffs

Debt build-up in frontier Low-Income Developing Countries since 2012: global or country-specific factors and way forward?

Eastern Caribbean Currency Union: discussion on common policies of member countries; Selected Issues Paper

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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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