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tralac’s Daily News Selection

tralac’s Daily News Selection

11 Mar 2019

Diarise:

  1. The 14th CII-EXIM Bank Conclave on India-Africa Project Partnerships (17-19 March, New Delhi). The programme can be viewed here.

  2. The African Day of Standardisation will take place on 21 March (to mark the signing of the AfCFTA Agreement on 21 March 2018, in Kigali)

  3. tralac Annual Conference 2019 (21-22 March, Nairobi). Download the draft programme here.


Adam Elhiraika (Director of the ECA’s Macroeconomic Policy Division) commenting on deliberations during the AU STC on Finance, Monetary Affairs, Economic Planning and Integration:My take from this meeting is that there is need for better coordination among our African institutions to the extent that we would have common and coherent narratives on Africa’s development challenges and what needs to be done to address these challenges as well as concerted action to support the continent deliver the “Africa we want”.

African standardization updates:

  1. New ARSO label system boost for traders. Speaking on Friday during the launch in Nairobi, African Organisation for Standardisation President Eve Gadzikwa said the new mark of quality came at a time when the continent was preparing to welcome the Continental Free Trade Area which is expected to significantly boost Africa’s position in international trade. “The African certification system comes when the branding and positioning of African goods and services is very weak, but with the coming of EMA, our goods will soon be labelled and positioned accordingly,” said Dr Gadzikwa. She said the new system positioned Africa to vet and certify goods and services coming into the continent. This could see a significant reduction of counterfeit, substandard and dangerous goods that have plagued the continent for years. ARSO Secretary-General Hermogene Nsengimana said all businesses, including hotels, food production systems and markets were required to be certified by the standards body. “This will be done through the national standardisation bodies of respective countries.”

  2. A preview of ARSO’s African Day of Standardisation: “We recall that the celebrations give us an opportunity to raise awareness on the impact of corruption in realising the AfCFTA and how the implementation of standards through effective quality infrastructure can be used to create opportunities for the fight against corruption. We call on the ARSO members to work with local manufacturing industry toward improving the quality of locally produced goods through value addition; there is also a need of having a structured cooperation to fight corruption comprising of NBS and customs officials with respect to border post management and inspection of imported goods and the counterfeits, and sensitize the Government of their roles in the establishment and maintenance of effective mechanisms for fighting corruption including effective National and regional Quality Infrastructure, guidelines, laws and information procedures based on the UN and AU Conventions for fighting Corruption. The logical leap from standards development and adoption to compliance and enforcement is the way to go in winning the war of Corruption through standardisation.”

  3. “Porous borders source of substandard products”. Tanzania Bureau of Standards director general, Dr Ngenya Yusuf, said porous borders were a source for the flooding of substandard products in the country, saying they have started taking measures to control the illegal routes. Dr Ngenya said this recently when speaking shortly after Prime Minister Kasim Majaliwa made his first visit at the Bureau. He also said the organisation is facing other challenges which need government interventions to enable it to run its activities smoothly. Dr Ngenya said one of the most challenges include shortage of staff: whereas the bureau has a total of 470 workers, against the demand of 750 workers. He said the shortage of staff contributes into TBS failing to post officers at all the borders. He also said that with the TBS standard marks, Tanzanian-made goods are likely to compete in internal and external markets. “We have so far provided a total of 440 standard marks worth 341m/- to small and medium entrepreneurs across the country.”


Zambia: Country Partnership Framework, FY19 - FY23 (World Bank)

In addition to supporting the government’s goal to help poor, rural communities become more climate resilient, the CPF more specifically aims to: (a) Expand market opportunities for Zambian firms through increased economic integration with neighboring countries and an adequate rural road network; (b) Reduce the infrastructure gap, increasing access to electricity, and water and sanitation, particularly in rural areas; (c) Support financial inclusion, improve the delivery of basic health and education services, and increase the pro-poor focus of fiscal policy, which includes specific interventions under social protection that are meant to further increase disadvantaged girls’ participation in secondary education and poor women’s livelihood opportunities; (d) Create a concrete plan to address the current debt situation through enough fiscal consolidation and reserves.

Nigeria: Report on the implementation of the Investment Policy Review (pdf, UNCTAD)

Since 2009, Nigeria has had to overcome a series of political, security and economic challenges that has affected its capacity to undertake reforms. As a consequence, the degree of implementation of IPR recommendations remains rather low. Notable exceptions are the recent reforms sponsored by PEBEC, though for many of them, it is too early to assess impact. Another exception is the positive transformation of the National Investment Promotion Commission into a pro-active investment promotion agency. The main findings are described in more detail in the investment policy review implementation matrix (see section 4).

Exerting internal competitive pressure: A competition law is long overdue, as the level of market concentration is high and acts as a de facto entry barrier for smaller, local or foreign, investors. Nigeria remains one of the few African economies without antitrust legislation. Although the Competition Bill adopted by the Federal Executive Council in 2005 could have been improved (by notably clarifying several of its provisions), the IPR recommended to enact it and address its shortcomings by formulating adequate application guidelines. However, the Bill was rejected by the National Assembly. The Federal Competition and Consumer Protection Bill, comprising provisions in line with the recommendations of the IPR, was passed by the National Assembly in November 2017. However, it is still awaiting presidential assent to become law.

Exerting external competitive pressure: The IPR recommended that Nigeria tap the potential of its regional market and become a base for pan-African sourcing. This could be achieved by playing a more prominent role in moving forward the ECOWAS agenda and accelerating integration in the region. It also recommended the establishment of an international trade commission to design a consistent and well-timed process to open up markets to trade. The process, incremental in nature, suggested taking into account the cost and productivity improvements achieved through better infrastructure and regulation. Although Nigeria started applying the ECOWAS Common External Tariff (CET) in early 2015, the level of implementation remains unclear, and an import adjustment tax is still being applied. In addition, the country continues to ban the import of several products, and access to foreign currency is forbidden for 41 categories of imports. Nigeria has not signed the European Partnership Agreement with the European Union, nor has it signed the African Continental Free Trade Area Agreement. An international trade commission was not established, but a Nigerian office for trade negotiations was established in 2017 as an interministerial agency of the Government with the mandate to “align domestic trade policy priorities to changing global reality”.

What would an AfCFTA strategy look like for Botswana?

With the advent of a continental free trade area, Botswana’s trade policy is soon to experience transformational change, shaped by global and regional events. If we are to have effective trade relations and a booming manufacturing sector, we must position ourselves to predict the change. But the image of African trade itself hasn’t been all glorious. To start it off, the already existing regional economic communities do not trade enough amongst themselves. The SADC Free Trade Agreement, which was signed 10 years ago, is essentially defunct. Free trade deals have been an ideal that only exist on signed protocols, but never ratified and implemented. Botswana has recently signed the AfCFTA but hasn’t made public any timelines on ratification. The regional power dynamics are as problematic.

The government of Botswana must put out a valid position beyond the generic fact sheets with statistics of African GDP and trade statistics. A National AfCFTA strategy, if you will, will have to set out a comprehensive framework to advance the country’s economic prosperity in the contested and competitive space of African trade. What are our interests in a continent-wide trade bloc? How do we view the African continent, the AU and the evolving power dynamics? [The author: Bakang Ntshingane]

Kenya eyes wider Horn of Africa market, starting with Ethiopia

Kenya is wooing Ethiopia to open up its market further for Nairobi after a high-level trade and investment forum that Prime Minister Abiy Ahmed hosted in Addis Ababa last week. It is understood that the two countries reviewed the progress of implementation of a Special Status Agreement, which the two countries signed in 2012 to enhance economic partnership. Cabinet Secretaries Peter Munya and Monica Juma for Trade and Foreign Affairs respectively, were the key players in reviewing the agreement that will see different sector leaders commence visits to Addis Ababa to negotiate and sign deals with their counterparts. The Special Status Agreement focuses on trade, investment, infrastructure and food security. Kenya is wooing Ethiopia into joining the EAC in order to extend integration to the Horn of African countries, among them Eritrea, Somalia and Djibouti.

New road could derail Kenya’s Lapsset plan

Somaliland will build a 250km road, from its port city of Berbera to Ethiopian border, in what is likely to provide a mixed bag of fortunes for Kenya. The groundbreaking of the dual carriageway is set to deepen trade relations between Somaliland and Ethiopia, particularly following the upgrading of the former’s port to handle containerised cargo. It comes just days after President Uhuru Kenyatta and Ethiopian Prime Minister Abiy Ahmed presided over the official opening of a two-day Kenya-Ethiopia Trade and Investment Forum in the Ethiopian capital Addis Ababa. The two leaders committed to the implementation of the Lamu Port-South Sudan-Ethiopia-Transport (LAPSSET) Corridor, also known as the Lamu Corridor. The proposed road is expected to increase trade volumes between Ethiopia and Somaliland by 30%. However, Somaliland, which is keen to win Kenya’s support in its bid for recognition, says its upgraded Berbera Port would work in collaboration with the port of Mombasa.

Kenya’s creative sector yet to weave into global boom

Creative goods exports from Kenya stood at Sh4 billion ($40.9m) in 2013 compared to Sh19.5 billion ($195m) in imports, latest available data by UNCTAD shows. According to the UNCTAD report, Kenya’s top export partners for creative goods are Uganda, Tanzania, Sudan, US and Italy. Others include Burundi, Somalia, the DRC, Rwanda and the UK. Kenya has gained ground to be among the top 10 export partners for countries such as Botswana and Ethiopia. The value of both imports and exports to Botswana was $0.02 million (Sh2 million) each. The value of Kenya’s exports to Ethiopia was $0.51 million (Sh51m), 1.76 times the value of imports from the country. However, it also lost its position among the top 10 export partners for Malawi and Mauritius. [Jen Snowball, Amy Shelver: Arts and culture were given money in SA’s budget – why it matters]

Martin Schäfer: Don’t make investment in SA an ideological issue (News24)

When I talk to German entrepreneurs and investors, they tell me what’s crucial to them when it comes to making their long-term investment plans – and get them approved at corporate headquarters at home. One key topic is certainty. Decision-makers here and back home look for fair and dependable conditions to do business, for an unequivocal commitment to the rule of law, the independence of the judiciary and to honest and ethical business practices. They also seek a fair playing field and comprehensive guarantees for their investment. The years leading up to 2018 were a difficult period in South Africa, and many abroad shared this sentiment. It is no secret that these years were marked by much scepticism as to where South Africa was heading. That has changed. It has changed a lot. [The author is German ambassador to South Africa]

Today’s Quick Links:

USITC enquiry: Uncovered innerspring units from China, South Africa, and Vietnam

Nigeria yet to meet $2bn textile targets 4yrs after policy

Foreign rice threatens Nigeria’s rising domestic production

Namibia: Government should protect local manufacturers

Museveni: The crisis in Africa is we buy and do not produce

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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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