tralac’s Daily News Selection
Our profiled International Women’s Day feature: Women are at the heart of African cities. The continent needs urban policies that empower them (CityMetric)
Growing evidence suggests that when women serve as political leaders, governments are not only more inclusive but also better at delivering public services. When women are represented in local government, they are also more likely to ensure topics important to women are actively considered. For example, Florence Dillsworth, a previous mayor of Freetown, launched a number of projects both around education and income generation specifically for women. African cities, like Kampala and Freetown, are currently undergoing immense changes in their economic, social, and political fabric. The positive role women play in Africa’s urbanisation process is clear and evidenced. We need to continue fighting for women’s voices to be heard and ensure that they can reach their fullest potential within our cities. [The authors: Yvonne Aki-Sawyerr (mayor of Freetown), Jennifer S. Musisi (Bloomberg Harvard City Initiative), Astrid R.N. Haas (International Growth Centre)]
Christine Lagarde: A Global Imperative (IMFBlog)
Trade and gender training, new research and EIF initiative announced on Women’s Day at WTO. Director-General Roberto Azevêdo announced new efforts for women’s economic empowerment through trade, including a training module and new research on trade, gender and the environment, at an event at the WTO celebrating International Women’s Day on 8 March 2019. He also reviewed the organization’s broader efforts towards gender balance and inclusivity.
Expert group meeting on trade finance: informal report by WTO Secretariat. Trade finance support by multilateral development banks in the poorest countries was a mirror of trade finance gaps. Demand remains high for multilateral support, notably in view of the reduced network of international banks and a heightened perception of anti-money laundering and know-your-customer regulatory risk. The AfDB and Afreximbank regretted that upstream correspondent banks in Africa had been cutting links temporarily or permanently, leaving significant US dollar shortages. Africa had suffered a reduction of at least 12% of the number of foreign banks ready to confirm letters of credit. Afreximbank’s objective was to link itself to 550 African banks by 2021, and to become one of the “hubs” for African trade banks in their relations with the rest of the world. Local banks faced difficulties in meeting the cost of compliance and the need for training was immense. Afreximbank had introduced its repository on customer due diligence information. The AfDB had provided trade credit totalling $1.3bn in 2018 ($8bn in cumulated support since the beginning of the programme in 2013). The AfDB partnered with the ITFC to offer 500 scholarships for trade finance staff of African banks, to take on the qualifying trade finance course delivered by the International Chamber of Commerce. The Africa Trade Finance Gap study will be updated in 2019. [DDG Wolff: More institutional cooperation is needed to address shortages of trade finance]
South Africa notifies WTO’s Committee on Safeguards of a safeguard investigation on threaded fasteners of iron or steel
Brazil, Australia initiate WTO dispute complaints against Indian sugar subsidies. Times of India commentary, by Ritesh Singh: India’s steel industry is a standing example of how protectionism harms the economy
- A reminder of the forthcoming EAC Trade Policy Review (20, 22 March)
African trade finance updates:
ABSA restructures investment bank to sharpen African focus. ABSA has overhauled the executive management of its corporate and investment banking unit as part of an ongoing group-wide revamp to draw more revenue from operations in Africa. The team of eight, which includes former joint-chief executive officers of the division, Mike Harvey and Temi Ofong, now have a mandate to drive business across the entire African continent, ABSA CIB CEO Charles Russon said in an interview in Johannesburg. As ABSA seeks to boost growth, it will target clients in mining and minerals, agriculture, power and utilities, natural resources and consumer businesses, Russon said, adding that the lender wants to grow more in commercial property finance and structured-trade finance. It will also look to accelerate the expansion of its existing business in Nigeria where it has had a limited presence, and in countries where it has no presence like Angola and Egypt, he said. “We need to be very clear and deliberate in terms of our Nigerian strategy and then execute,” he said. “Nigeria is such an important country in the African economy.”
Boost for Kenya, UK trade as UBA bank opens in London. Kenyan exporters to the United Kingdom will benefit from reduced trade barriers following the launch of United Bank of Africa-UK. UBA, now the only Sub-Saharan African bank to conduct banking activities in London and 20 other African countries including Kenya, officially unveiled its London subsidiary following regulatory approval from Prudential Regulation Authority, an agency of the Bank of England, to offer wholesale banking activities in the UK. UBA Group Managing Director Kennedy Uzoka said UBA-UK will strengthen the bank’s abilities in meeting the growing cross-border financing needs, while positioning the bank as the prime conduit for trade and foreign investments into and across Africa, as well as export flows to the United Kingdom.
- Putting markets to work: How Ghana will fund development projects through carbon finance. Ghana is hosting the Africa Climate Week in March, which will showcase proven climate solutions to attract private investment and introduce entry points for private sector engagement. The Ghana NDC Investment Forum taking place during the Climate Week - organized by UNDP Ghana and the Ministry of Environment - will bring together international high-level participants from public and private sectors to discuss ways to attract private sector investment at scale. With Ghana’s country-wide clean energy programme close to implementation, the timing of the Africa Climate Week and the NDC Investment Forum couldn’t be better, as the innovative finance mechanism underpinning the programme provides a number of incentives for both investors and the public sector actors. Using carbon finance generated from investors’ sales of ITMOs to boost the share of the national green fund is a concrete way for developing countries to reduce their dependence on bilateral climate finance, which is currently not available at the extent needed to achieve the goals of the Paris Agreement or Agenda 2030. [Mauritius needs assistance of development partners to concretise its climate action plan]
Nigeria: Value of mobile transactions crossed N30bn in February 2019 (TechNext)
Mobile banking apps have continued to grow as important financial tools. According to February statistics released by the Nigeria Interbank Settlement System, the volume of transfers via mobile apps has reached an all-time high. Statistics show that 932,355 mobile transfers were completed in February 2019, representing a huge 80.8% year on year increase. It is also a 28.6% increase over the 724,803 recorded in January 2019. The value of mobile transfers has also hit a new all-time high. While the value stood at N26.8 billion in January 2019, February transactions grew to N30.028 billion, representing 12.1% growth. Meanwhile the February figure is a 34.4% growth over the N22.4 billion recorded in February 2018.
At least 7.6 million Kenyans have multiple loans from mobile lenders, credit history data has revealed. This translates to about 40% of the 19 million Kenyans who have borrowed mobile loans, Metropol Corporation MD has said. Sam Omukoko said every borrower has a loan from at least six out of 10 lenders on average. While there is an acceleration of loans acceptance rate, the CRB notes that the default rate currently stands at 2% of the total accounts. This means that there are currently more than 380,000 borrowers who have defaulted on their loans, this even as most borrow to bet, pay school fees and settle other loans. Yesterday, Parliament’s Information, Communications, and Technology committee asked the Central Bank of Kenya to introduce regulations to control interest rate charged by the lenders. “ The increase is attributable to the introduction of credit reference bureau’s in the country which has seen the number of mobile borrowers increase from 5 million eight years ago to an excess of 19 million,” Omukoko said. [Kenyan banks give the tough anti-money laundering laws seal of approval]
Jacqueline Musiitwa: Banking on Refugees (Project Syndicate)
There is little reason to distinguish refugees from the rest of the world’s unbanked. Contrary to popular belief, refugees are not a higher-risk demographic: the Kiva Refugee Impact Report found that, when it comes to loan repayment, refugees are on par with non-refugees. Moreover, thanks to facial-recognition and artificial-intelligence technologies, banks can now instantly verify users’ identities, using, for example, a quick iris scan run through an open-source identity-verification application programming interface. As a result, refugees’ lack of an identity card, loan collateral, and/or a fixed address is becoming irrelevant. This will be all the more true with the introduction of ID2020, a collaboration among Microsoft, Accenture, and the UN that will use biometric data and the blockchain (distributed ledgers) to create an encrypted, permanent, and shareable means of identification for all refugees.
OECD-WTO Handbook on Measuring Digital Trade (version 1, draft, pdf). In response to growing demand for coherent and comparable data on digital trade, in 2017 the Inter-Agency Task Force on International Trade Statistics created an Expert Group, drawn from international organisations, national statistics agencies and central banks, to develop a Handbook that provided: a conceptual framework to define digital trade, around which national efforts could be targeted; and mechanism to bring together and share existing national and international efforts on measuring digital trade and/or dimensions of it, that could be used to identify and develop best practice. This Handbook reflects the current outcome of the efforts of that group. As it shows, in many areas, work is still very much in its infancy and in some (for example with respect to the measurement and valuation of many forms of data) it can best be described as embryonic.
A new look at Trade in Value-Added and Global value chains: a view from the consumption perspective. Global input-output tables have significantly transformed our ability to interpret global production. However, because they value transactions at basic, and not market, prices, many of the related analyses are, in part, revealing only some of the story. At the heart of the debate, and indeed confusion, is that input-output tables in basic prices are in essence a mechanism to provide a view of production and because they remove significant distribution margins at the end of the chain, they are less well equipped to provide a perspective from the consumption point of view. This paper explores the development of a complementary accounting framework in ‘market’ prices and tries to illustrate the insights that can be gained through such an approach.
Today’s Quick Links:
A Bloomberg QuickTake: Why a closed border has Uganda, Rwanda at loggerheads
The Conversation AU: Introducing gender lens investing: it’s more than pink-washing
Workshop on International Humanitarian Law for ECOWAS judges opens in Abuja