tralac’s Daily News Selection
AU Ministers of Trade, Industry and Mineral Resources: final declaration of STC meeting (11-12 January, Kigali) on the theme The entry into force of the agreement establishing the AfCFTA and its implementation
Adopt the African Union Strategy for SMEs Development in Africa; the Geological and Minerals Information Systems Strategy; the African Minerals Governance Framework; the Africa Mining Vision Private Sector Compact; Request the African Union Commission, in collaboration with all other Stakeholders to finalize work on the African Union Commodity and Trade Facilitation Strategies and present it to the next Meeting of our STC; Invite the Regional Economic Communities to align their Plans of Action with the AU strategies and to take appropriate measures to operationalize their implementation as mandated by the AU Assembly; Request the AUC to develop other Strategies to advance the work in the areas of trade, industry and minerals
Urge the African Union Commission together with AU Member States to work with technical partners to engage all key stakeholders such as Parliament, civil society and private sector to build a constituency of support for the AfCFTA for enhanced ownership and inclusiveness, to enhance prospects for unhindered implementation of the Agreement; Urge Member states to build and strengthen the capacity of all strategic institutions involved in industry and trade governance to enhance efficiency in the implementation of the AfCFTA Agreement; Note the ongoing digital trade and related initiatives on the continent, such as the Digital Identity led by AUC and UNECA and the African E-commerce Platform, which have the potential to contribute to boosting intra-African trade and transforming Africa and the proposed Ten Framework Principles on Good Digital ID.
On the Africa Continental Free Trade Area: Dr Donald Kaberuka’s keynote address to the East Africa Law Society Annual Conference
Let me end where I began. At the end of the day, it is by promoting economic growth through trade and investment that a fiscal space will emerge to meet the upcoming demographic challenges, while moving up the global value chains. That is the promise of the AfCFTA: a necessary first step to an eventual Continental Economic and Monetary Union. Through the AfCFTA, we will boost intra-Africa trade, increase market size, depth and diversity, increase opportunities for business, consumers, producers, diversify our economies to complex products; thereby expanding fiscal possibilities. It is only by doing so, that we can build resilience in the global system and avoid the demographic cliff. The adoption of the AfCFTA is not a technical choice Africa is making. It is a fundamentally, historic political choice which will have far reaching impact if successful. That is why everything must be done to ensure safe arrival at destination. It will not be easy, it will require astute political management and trade off at each juncture but there is no more choice. [Delivered on 30 November, 2018]
EAC: CET Review resumes amid trade disputes (The East African)
The East African has learnt that Kenya and Uganda went to the Kigali meeting with hard-line positions. Kenya wants the current CET regime that comprises a triple band reviewed to make it a four-band structure, a proposal that Uganda is opposed to. It argues that the three-band structure does not encourage backward and forward linkages in value addition to products, thus curtailing the growth of the manufacturing sector. On exemptions, Kenya is pushing for an end to the frequent tendencies of other member states to seek stays of application for products coming into the region, something the country blames for the problems facing local industry. On sensitive goods like wheat, rice, milk and sugar, Kenya and Tanzania want strict enforcement of duties that have been set at a rate of more than 25 per cent to discourage importation. “The process of reviewing the CET is coming to an end with the points of disagreements becoming fewer,” said Richard Kamajugo, TradeMark East Africa senior director for Trade Environment. The last time the CET was reviewed was in 2010, when the three-band structure was maintained.
Archie Matheson: For want of warm bodies, a trading kingdom is being lost (The East African)
And within the [COMESA] Secretariat there is a department that puts this responsibility into practice, an office small in size but large in mandate: the Directorate of Trade and Customs. Given the role of COMESA on the continental stage, it is perhaps the most important office related to African trade, active in three main areas. The Directorate helps to resolve trade disputes, relating to both rules of origin and non-tariff barriers, covering both trade in goods and trade in services. It is called upon to give official opinion, share recommendations, arrange dialogue between disputing parties, lead on-the-spot verifications, and, if necessary, refer cases to the Council of Ministers. In January 2019 alone, three full interventions were needed and successfully completed. It develops ideas and policies that are then presented to the Council for approval, seeking greater harmonisation and introducing trade facilitation measures.
For an office with such far-reaching responsibilities, it would be reasonable to expect an array of specialists, sufficient in number to cover the rules of origin, NTBs, and small-scale trade issues that arise under Trade in Goods, or the challenges posed within the 12 separate sectors that sit under Trade in Services; experts to drive improvement in trade facilitation; and negotiation specialists for the multitude of international trade agreements. Yet, staggeringly, the Directorate has only four full-time staff: a director, senior trade officer, senior Customs officer, and a senior research fellow. They are assisted by no more than a handful of shorter-term contract staff. Although through its Trade Facilitation Regional Programme, the EU will shortly fund two new project staff to deal with small-scale trade, total numbers are chronically insufficient. The consequences for COMESA members, importers, and exporters are costly – not through a lack of will or ability, but a lack of funding and corresponding capacity. [The author is head of policy and analytics at Botho Emerging Markets Group; Rwanda and Uganda: neighbors at loggerheads]
Kenya Commercial Bank, a regional financial institution, plans to open a representative office in China in order to lower cost of Sino-Africa trade, officials said Wednesday. Lawrence Kimathi, KCB Group chief finance officer told Xinhua in Nairobi they are currently in discussions with Chinese government officials and the office should be in place by June. “We hope to use the office to lower cost of transaction between the Chinese and East African business community by enabling payment for imports and exports in local currencies,” Kimathi said when KCB Group released financial results for the full year 2018. KCB Group has presence in Kenya, Uganda, Tanzania, Rwanda, Burundi and South Sudan. The regional bank also plans to introduce Chinese yuan in all its countries of operations by the end of the year.
South Africa: Economy edges up by 0,8% in 2018 (Stats SA)
The South African economy grew by 1,4%1 in the fourth quarter of 2018, contributing to an overall growth rate of 0,8% for the entire year. The latest set of GDP figures released by Stats SA provides an overview of economic performance in 2018. South Africa found itself in economic recession in 2018, its second since the early 1990s. The 2018 recession spanned the first two quarters of the year, with the economy shrinking by 2,7% in the first quarter and contracting further by 0,5% in the second. Despite the recession, positive growth in the third (2,6%) and the fourth (1,4%) quarters was just enough to push overall growth for the year into positive territory, with the real annual growth rate coming in at 0,8%. This is down from 1,4% in 2017 but up from 0,4% in 2016.
Removal of economic sanctions on Zimbabwe: ECOSOCC communiqué (AU)
Zimbabwe is under three categories of economic sanctions, i.e. three resolutions adopted by the United Kingdom, the United States and the European Union, which are under the acts ZIDERA, AGOA and OFAC. These sanctions have made it difficult for government to access lines of credit, debt relief and directly affects the country’s ability to meet its fiduciary obligations. Based on the matters contemplated above, we at ECOSOCC representing the Southern African Region: Call for the removal of economic sanctions against the Republic of Zimbabwe, its public and private institutions for the easing of the task ahead of solving the economic and humanitarian crises in the Republic; Request the formation of an Africa–Europe study group, through the AU-EU platform, to measure the impact of sanctions on Zimbabwe and to identify the opportunities for cooperation towards systemic economic reconstruction; Advise for a cooperative roadmap to be configured, through dialogues between the government of the Republic of Zimbabwe along with its people and well-meaning partners, for a comprehensive approach towards resuscitation of industry and economic channels for the achievement of a prosperous and peaceful Zimbabwe.
Kenya: Uhuru seeks forum to discuss public expenditure (Business Daily)
Currently, more than 50% of ordinary revenue goes into salaries of civil servants, 30% to recurrent expenditure and only 20% to development. The President said Tuesday the summit, whose date he did not state, would discuss how national and county governments would review their expenditure. “We shall invite all stakeholders to the summit so we find ways of rectifying this wrong so that most of the money will be going to citizens and not to pockets of a few individuals,” he said during the Sixth Devolution Conference in Kirinyaga. Mr Kenyatta said it makes no sense that a county with revenue of Sh9 billion to spend Sh6 billions on salaries and a paltry Sh3 billion on its people.
Nigeria: No more forex for textiles, garments import – CBN (The Tide)
Textiles and garments imports have joined the forex restriction list of the Central Bank of Nigeria, the Governor, Mr Godwin Emefiele, announced in Abuja, yesterday. Emefiele made the announcement during a meeting with textile industry stakeholders and added that the policy would take effect immediately. Nigeria spends an estimated $4billion on imported textiles yearly. Emefiele said that the restriction would rejuvenate the textile industry in Nigeria and ensure that the needed growth was actualised.
George Wachira: Who will be first to export oil – Kenya or Uganda? (Business Daily)
My assessment is that in terms of alignment of various participating parties; legal/institutional capacity development; and status of project design studies, Uganda is definitely way ahead of Kenya. The only hitch, which was encountered recently, is a serious disagreement on commercial terms (tariffs) in respect of the Uganda/Tanzania pipeline between the investors and the two governments.