tralac’s Daily News Selection
Trade policy pointers:
Togo’s AfCFTA forum: @komitsowou tweets: This week @ECA_OFFICIAL and @ATPC2 join the government of Togo to organize a national AfCFTA Forum in Lomé and Kara. Sensitizing private sector, CSOs, academia, govt officials and journalists is very important to make the AfCFTA work. “Domestication of the AfCFTA at all levels is essential to maximise its gains”: M. Adedze, Trade and Industry Minister of Togo, during the national sensitization forum.
Rwanda and the AfCFTA: Thursday’s tralac digest will carry highlights of the EPRN Rwanda Annual Economic Research Conference, convened yesterday
The US Department of Commerce is seeking applications for membership on the 2019-2021 term of the President’s Advisory Council on Doing Business in Africa
African Cotton, Textiles & Apparel Monitor (#6/2019): articles and commentary on Ethiopia, Rwanda, Mauritius, Nigeria, South Africa
The 16 presentations and keynote speeches from the recent Organic, Fair and Ethical Trade Event (organized by the EU, and co-hosted with AFASA, 19 February, Cape Town) are now available for download. Extracts from the Discussion Paper: pdf Opportunities for South African emerging farmers in the European sustainable agricultural market (755 KB)
The EU is South Africa’s main trading partner, accounting for 26% of all South Africa’s trade. The EU is also the country’s most stable post-apartheid partner, with exports to the EU systematically above 19% of South Africa’s exports. South Africa’s exports to the EU are also far more diverse than to other partners, with raw materials accounting for less than half of the total. Machinery and vehicles alone account for 36% of South Africa’s exports to the EU, followed by agriculture at 13%. The deficit in favour of the EU has also been shrinking. It is now at R76bn (down from R88bn in 2016), though this is subject to yearly fluctuations. In agriculture, South Africa has a surplus balance with the EU of almost €1bn. South Africa ranks 11th in the EU’s top agricultural importing partners.
Zimbabwe, South Africa Bi-National Commission
Joint communiqué (The Presidency): The two sides emphasized the importance of expanding trade and investment to drive the strategic engagement forward. In this regard, the Heads of State directed their Finance and Trade Ministers to work together to achieve these goals. Zimbabwe highlighted the key initiatives taken by Government to improve the ease of doing business in the country and further informed on the country’s efforts to simplify and rationalize investment rules with the view to attract foreign direct investment. The relevant Ministries agreed to consider options for expanding the standing Facility arrangement between the respective Central Banks. Other Financing Options beyond this are also being explored (for example a facility from South African private banks to the Zimbabwe private sector and guaranteed by the South African Government, with an appropriate counter-guarantee from the Zimbabwe Government). They also agreed to work together on re-engagement with the International Co-operating Partners in support of Zimbabwe’s economic reform and Debt Arrears Clearance Agenda.
Opening remarks by President Cyril Ramaphosa: I am encouraged by the participation of South African business in various sectors of the Zimbabwean economy, such as in engineering, construction, banking, retail, hospitality, mining exploration and services, among others. There are undoubtedly good prospects for both of our countries, but there is a need to ensure ease of doing business and elimination of trade barriers. This should include the urgent conclusion of all outstanding work on the Beit Bridge One Stop Border Post for facilitation of free movement of persons, goods and services.
Mauritius-Madagascar: MoUs to enhance cooperation in political, economic and cultural fields (GoM)
Prior to the signing ceremony, Prime Minister Jugnauth and President Andry Nirina Rajoelina had a Tête-à-Tête followed by a working session whereby various issues of mutual interest were discussed namely: agricultural development; fisheries; air connectivity; maritime corridor and cabotage; visa facilitation; commerce; and bilateral agreements as regards employment. Speaking about agricultural development, the Prime Minister highlighted that the Indian Ocean Commission is presently financing feasibility studies to finalise a model of development for maize and soybean, in collaboration with the private sector of Mauritius. Both countries, he pointed out, are determined to provide assistance to their respective private sectors for the implementation of the project, which lies in the context of the regional programme for food security and nutrition of the IOC. As regards air connectivity, the Mauritian Prime Minister highlighted that discussions focused on the agreement for an additional weekly flight of Air Mauritius on Antananarivo. Currently six flights are operated. To facilitate a vibrant Mauritius-Madagascar commercial flux, the Prime Minister expressed his commitment to facilitate trade between the two countries through the establishment of administrative procedures aimed at enhancing the business climate, in particular by offering a modern and efficient custom service.
The study maps the key dimensions of the illicit cigarette trade in Zimbabwe and South Africa, including the key actors, the pathways of trade and the accompanying ‘modalities’ of criminality, as well as other important dimensions of the illicit cigarette market in southern Africa. It identifies “good-faith actors,” primarily in South Africa, whose positions could be strengthened by policy and technical interventions, explores opportunities for such intervention, and assesses the practical solutions that can be applied to combat illicit trade and tax evasion in the tobacco industry. [The author: Simone Haysom] [Related: Tobacco in Africa: production and trade (Ron Sandrey)]
Uganda: Chinese supermarkets shun local goods – traders (Observer)
When Dorothy Kimuli started her company Kims Natural Chilli Sauce some years back, her dream was to capture the local market. Her first target was supermarkets whose shelves were full of imported chilli. Kimuli explained that her goods were first rejected by supermarkets because they were not certified by Uganda National Bureau of Standards and, therefore, did not meet standards. “Actually at first, I did not have any certification but I worked with Uganda Small-Scale Industries Association, and UNBS, and I was certified. Some supermarkets later accepted and put my goods on their shelves. The demand has been good but the Chinese have completely refused to take on most local products. Those who pretend to buy just buy a dozen or two which they put on their shelves; they will pay you when all the stock is completely finished, this becomes costly to small-scale traders and I think it’s a way of putting local goods at bay.” Her complaints came up during ‘Make BUBU work for the growth and competitiveness of Uganda’s small and growing businesses‘ (pdf) conference organised by SEATINI, USSIA and Federation of SMEs–Uganda. Veronica Namwanje, the executive secretary, USSIA, said although the BUBU policy provides an important regulatory foundation for the support of production, purchase, supply and consumption of locally made goods and services; it is non-binding.
President Donald Trump’s proposed budget issued on Monday calls for deep cuts in aid to Kenya as part of an overall rollback in US funding for many Africa-focused programmes. Support for development initiatives in Kenya will fall from the $102m provided in 2018 to $43.5m in accordance with Mr Trump’s spending plan for the 2020 US fiscal year that begins next October. A similar reduction of more than 50% is sought in US economic and development assistance for sub-Saharan Africa as a whole. It will plummet from $1.5bn approved by Congress for 2018 to $665m in 2020. In its State Department budget proposal, the White House justifies these cuts as ways of “reducing dependency on US assistance and increasing self-sufficiency” on the part of African nations.
Testimony by USTR Robert Lighthizer to the US Senate Committee on Finance: Approaching 25 – the road ahead for the WTO
First, the negotiating process at the WTO has largely broken down. Under the old GATT system, from 1947 to 1994, there were eight negotiating rounds – each of which led to lower tariffs and fewer trade barriers among all GATT members. To this day, the basic rules that govern global trade were negotiated under the GATT. But in the 24 years since the WTO began operation, there has been no new significant multilateral market access agreement. Second, much work remains to be done in terms of lowering tariffs – primarily in countries that consider themselves developing. Numerous WTO members continue to have very high “bound” tariff rates that allow them to maintain tariffs significantly above the bound rates that apply to the United States. For example, the average bound tariff rate for all goods in the United States is 3.4%. In Brazil, it is 31.4%. In India, it is 48.5%. In Indonesia, it is 37.1%. Third, too many WTO members are not living up to current obligations. For example, members take on significant commitments to provide regular notifications of subsidy programs and other information critical to trading conditions around the world. Despite the clear obligation to make such notifications, many of our trading partners – including significant economies like China and India – have a very poor track record of providing this critical information.
Today’s Quick Links:
AfDB Governors, Alternate Governors, as at 28 February 2019 (pdf)
AfDB, APRM EOI: The size and sectoral distribution of state-owned enterprises in Africa (pdf)
South Africa: TIPS Real Economy Bulletin Q4 2018 (pdf)
OECD’s Working Party on Measurement and Analysis of the Digital Economy: Determinance and impact of automation (pdf)
World Bank Chief Economist, Pinelopi Goldberg: Why we need a research department