tralac’s Daily News Selection
Diarise: Canada Africa Business Conference (26-27 March, Gaborone)
Nigeria’s PEBEC launches innovative public service feedback, complaints platform to drive Ease of Doing Business. Access the App here
Featured global trade policy commentaries:
Clara Brandi, Wallace Cheng: The disputed status of developing countries in the WTO
Dirk Willem te Velde, Maximiliano Mendez-Parra, respectively: The economic costs of a no-deal Brexit for the poorest countries; UK tariff schedule will hit poorer countries preferences
France’s Macron pledges to invest $2.8bn in Africa
French President Emmanuel Macron who is touring East Africa, with stops in Djibouti, Ethiopia and Kenya, has pledged to invest $2.8bn in Africa by financing and supporting startups and small- to – medium-sized enterprises by 2022. Macron, who started his trip to East Africa Monday, said the French government would support about 10,000 enterprises across the continent by providing credit, technical support and equity financing. The funds will be mobilized via the French Development Agency, AFD, and its private sector financing arm, Proparco. In his stop in Ethiopia, Macron said France will provide about $96m to support the East African nation’s economic openness. The amount should be complemented with a $16mtechnical assistance provided by the AFD.
Kenya: French firms reap from Macron tour (Business Daily)
Three French companies signed business deals worth Sh226 billion (2bn euros) during President Emmanuel Macron’s two-day visit to Kenya, making them the biggest beneficiaries of France’s renewed bid to deepen economic ties with Nairobi. A consortium led by French infrastructural firm Vinci secured a 30-year concession contract worth Sh180 billion to build and operate the Nairobi-Nakuru highway. Another consortium led by French aviation giant Airbus won a Sh22.6 billion defence deal for coastal and maritime surveillance. This will see the firm use big data and predictive analysis to boost surveillance along the Indian Ocean. Paris stock exchange-listed French company, Voltalia, an international player in the renewable energy sector, also inked a Sh7.9 billion deal to build a solar power plant in Kenya. [The Africa Report: Macron and the Chinese ghosts at the feast]
Angola may join SADC Free Trade Zone in 2020 (Angola Press)
Angola may enter the free trade zone of SADC by June 2020, the trade director of the Ministry of Commerce, Rui Livramento, said in Luanda. Speaking to journalists, on the sidelines of the seminar on tariff classification and customs assessment, he stressed that the country is currently preparing the first tariff offer for the dismantling of the customs tariff, in order to negotiate with the other members on the positions of national interest. “The negotiable process initially is taking a year, but the dismantling takes 12 or 15 years depending on the sectors of interest of each country.”
Alec Erwin: An industry pact is key to Africa’s auto ambitions (The Citizen)
The auto industry is so complex that a regional automotive pact is required before it can succeed in Africa, says former politician and now consultant, Alec Erwin. Erwin, who was the trade and industry minister in the Mandela government, said only the aircraft and nuclear industries were more complex than automotive manufacture. This meant industrial policy and regional agreement were vital to overcoming barriers and building partnerships. Erwin told the National Association of Automotive Component and Allied Manufacturers of South Africa show in Durban on Thursday that worldwide, with few exceptions, successful auto industries had emerged to turn on regional axes. He cited Korea-Japan agreements in South-East Asia and Mexico-Argentina in the Americas as examples of regional cooperation that Africa should learn from.
Making African cross-border trade cheaper, easier and faster: highlights from the first African Forum for National Trade Facilitation Committees (UNCTAD)
The key to regional integration is transit coordination and customs cooperation. This is especially true in the context of the AfCFTA. New technologies such as Blockchain can be useful tools for the exchange of information. Mutual recognition of controls, inspections, standards conformity can generate savings for both traders and governments and help ensure security, safety, and protection of society. Also, the role of information and transparency could be added in trade facilitation reforms through the Trade Portals. Customs are the drivers for many concrete solutions. These include coordinated border management solutions and coordinated interventions which have proved to be very good solutions for TFA implementation. [The authors: Pamela Ugaz, Sijia Sun. Download the final report of the African Forum: pdf Empowering public-private partnership for trade facilitation (412 KB) ]
Zimbabwe and South Africa set-up a joint technical committee for One-Stop Border Post (African Daily Voice)
The joint technical committee agreed to share and exchange information on the work that has already been done by both countries which would serve as a basis for the negotiations of the One-Stop Border Post. The Commission noted that Zimbabwe submitted proposals to the bilateral agreement for the border post and operational manuals. Other issues that came up for discussion during the BNC included the non-recognition of vehicle third party insurance from South Africa by Zimbabwe and that the fees for the same were significantly increased without notification. As such, it was agreed that meetings should be held in South Africa by the end of April 2019 where the respective players and stakeholders would identify solutions.
Nigeria: FG to implement ECOWAS biometric identity card (The Nation)
The Minister of Interior, Lt.- Gen. Abdulrahman Dambazau (rtd), said the Federal Government would implement the use of the ECOWAS biometric identity card. He noted that it was part of efforts of the government to curb influx of foreigners into the country. The ministry may sign a concession agreement on the implementation of the ECOWAS biometric identity card with Euphoria Press Limited on Friday. The minister explained that ECOWAS Free movement protocol would be accompanied by passports and proper documentation. “We will ensure that we implement the ECOWAS Biometric Identity Card in Nigeria. We will launch it three Months after the signing.” [The implications of the new ECOWAS currency on travel between West African countries]
Rwanda Country Program Evaluation FY09-17: an independent evaluation (IEG, World Bank)
Rwanda has emerged as a top Doing Business reformer, but political economy factors affect the business environment. The country has implemented a number of regulatory reforms, leading to positive developments in the business environment in recent years. In global terms, Rwanda now ranks 41 in Doing Business 2018, up from 62 in 2016 and 150 in 2008. Yet foreign direct investment levels remain low (3% of GDP in 2016) and the private sector’s contribution to the economy is still small. A complex political economy environment has been cited as limiting fair competition and effective implementation of regulatory reforms, with holding companies closely affiliated with the government, the ruling party, and the military playing a dominant role in the private sector.
Despite its impressive achievements, Rwanda faces multiple challenges to its quest for upper MIC status by 2035. Structural transformation is still at an early stage. The private sector remains underdeveloped with a narrow manufacturing base, limited diversification of exports, a small financial sector, and an underdeveloped services sector. Sustaining growth and poverty reduction—from already impressive achievements—will require significant structural change in the economy. Most importantly, in the face of declining foreign aid, limited public resources, and increasing government debt, the sustainability of the public investment–driven growth model of the past two decades is in doubt. As discussed in chapter 4, a new growth paradigm based on dramatically increased outward orientation—including higher, more diversified export growth—will be needed.Extract (pdf):
Revitalizing and sustaining progress will now require a paradigm shift. Rwanda’s growth model for the past two decades depended largely on public investment backed by donor support. The government has in effect taken on the role of catalyst of growth, often seeding business development. Although some increases in private investment were observed in recent years, party- and military-affiliated companies continue to play an important role in the economy (in the views of some, this can have a deterrent effect on private investment). As Rwanda approaches MIC status and the terms of external support progressively “harden,” driving up public debt, the sustainability of this model will come increasingly under strain.
The Bank Group is uniquely positioned to help Rwanda manage the shift to a new, private sector–led growth paradigm. Its current engagement with the Future Drivers of Growth study to help shape Vision 2050, a new long-term plan for Rwanda’s development currently under preparation, has given it a role of trusted development partner. The road map toward a new growth model will need to embrace an ambitious reform agenda that addresses key issues and constraints to attain MIC status and sustain progress thereafter. The most important issues include improvements in nutrition and basic education; appropriate pacing and sequencing of urbanization; dramatically stronger outward orientation—including stronger, more diversified export growth—in part through closer regional integration and cooperation; a more strategic and transparent approach to fostering an enhanced role for the private sector in the economy; increased domestic resource mobilization; and better exercising of expanded local government functions and responsibilities. The Bank Group program can make strategic contributions to help Rwanda follow the road map and realize the vision. [Companion volume: Appendixes]
Nigeria’s ratification of illicit trade protocol is commendable: ERA/FoEN tells govt (ThisDay)
The Environmental Rights Action/Friends of the Earth Nigeria has commended the federal government for ratifying the protocol to eliminate illicit trade in tobacco products. With Nigeria’s depositing of the instrument of ratification at the WHO, it becomes the 51st country to ratify the treaty which was initiated in 2012. The ERA/FoEN boss said that beyond the ratification, the eighth National Assembly should act fast to approve Regulations for the full enforcement of the National Tobacco Control Act, 2015 as a legacy achievement.
The most comprehensive and rigorous assessment on the state of the environment completed by the UN in the last five years was published today, warning that damage to the planet is so dire that people’s health will be increasingly threatened unless urgent action is taken. The report advises adopting less-meat intensive diets, and reducing food waste in both developed and developing countries, would reduce the need to increase food production by 50% to feed the projected 9-10 billion people on the planet in 2050. At present, 33% of global edible food is wasted, and 56% of waste happens in industrialized countries, the report states. [Note: Various downloads are available]
Today’s Quick Links:
SWAC/OECD: West Africa Brief (6-28 February)
Mauritius does not feature on EU’s blacklist of non-cooperative jurisdictions for tax purposes
Malawi: IMF statement at conclusion of staff visit
AfDB EOIs: Tracking Africa’s progress in figures, The Africa Tourism Monitor 2019
AfDB releases highlights of 2019 African Economic Outlook in 7 African languages
Developing countries would benefit from improved tax collection: what can help
Rabat Conference on the Bali Fintech Agenda: remarks by IMF’s Tobias Adrian
The role of public-private partnerships in innovation for development: lessons from Africa