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tralac’s Daily News Selection

tralac’s Daily News Selection
Photo credit: Kevin Sutherland | Bloomberg

19 Mar 2019

A reminder of the call for papers for the TMEA, University of Portsmouth, Centre for International Trade and Investment Law (India) conference: Inclusive and sustainable participation and empowerment of women in trade (29-30 May, Nairobi)

South Africa and its neighbours fail to clinch a post-Brexit trade deal with UK (Daily Maverick)

Amid the continuing uncertainty about when and how Britain will leave the EU, Davies outlined three basic scenarios for future trade between the SACU-Mozambique and the UK: Scenario 1. If British Prime Minister Theresa May managed to persuade parliament to accept her EU withdrawal deal (which has already twice been rejected) then Britain would leave the EU on March 29, but all Britain’s trade arrangements with the EU would remain in place until the end of 2020. This would include the EPA with SACU-Mozambique. That would give the SACU-Mozambique group enough time to negotiate a future separate trade deal with the UK. Scenario 2. If the EU agrees to the UK parliament’s decision to extend the deadline for leaving the EU until the end of June, this will also give SACU-Mozambique time to negotiate a separate trade deal with Britain. Scenario 3. The worst-case scenario. If the EU fails to extend the Brexit deadline until the end of June and the UK Parliament fails to endorse May’s withdrawal plan, Britain will “crash out” of the EU on March 29. In that case, the SACU-Mozambique countries will be subject to a set of import tariffs which Britain published last week for all countries. [The author: Peter Fabricius]

Africa’s continental free trade area: a stepping-stone to integration? (ERF Policy Forum)

Down the road, the biggest challenge will be handling the ‘regional value chain’ motto: how to participate in supply chain trade by moving to downstream activities. So far, with the exception of ‘factory Asia’, other regions have barely participated in supply chains. Exports from Africa, for example, have lower shares of foreign value added while their exports are mostly embodied in exports of other regions, a sign of low downstream activity. A successful industrial policy will require agreement among partners in customs unions to select short lists. ECOWAS, for example, has five tariff bands in its common external tariff (CET) and a long list of exceptions, while the EAC, which currently has three bands, is contemplating a move to a four or five-band CET in the 0-35% range also with an exception list. These difficult choices are compounded by the fact that the new technologies are skill-intensive with few possibilities of substitution with unskilled labour, leaving little room for low-income countries to offset their technological disadvantage in manufacturing activities with low-cost labour. By raising the debate about integration to the continental level, the AfCFTA has, at the very least, made explicit the challenges that lie ahead. Steps along the road are now well defined. [The author: Jaime de Melo]

AfCFTA ratification update: Zimbabwe’s parliament ratifies the AfCFTA

Kenya’s High Court declares the Kenya-Mauritius DTAA unconsitutional (Tax Justice Network)

In reading the judgement, Justice W. Korir granted Tax Justice Network Africa’s submission by declaring void Legal Notice No. 59 of 2014 which renders the Kenya/Mauritius DTAA void and unconstitutional. The long-awaited judgement is in reference to TJNA’s challenge of the constitutionality of the Kenya-Mauritius DTAA signed in May 11, 2012 on the following grounds: The government failed or neglected to subject the Kenya-Mauritius Double Taxation Avoidance Agreement to the due ratification process in line with the Treaty Making and Ratification Act 2012 as a contravention of Articles 10 (a), (c) and (d) and 201 of the Constitution of Kenya; That Legal Notice Legal Notice 59 of 2014 is therefore invalid and that the Cabinet Secretary for Treasury should immediately commence the process of ratification in conformity with the provisions of the Treaty Making and Ratification Act 2012. TJNA calls on the Kenya government to revisit all other recently signed DTAs including those with UAE, Netherlands, China and South Korea and those under negotiation to ensure that they are compliant with this new ruling.

Factoring Promotion Conference: Afreximbank proffers factoring to ease access to financing for African SMEs

Kanayo Awani, managing director of the Intra-African Trade Initiative at Afreximbank, noted that despite its huge opportunities factoring had not yet taken off fully in Africa, with the region accounting for less than 1% of global factoring volumes in 2017. Notwithstanding that, the region had demonstrated strong growth in recent years, with factoring volumes growing from Euro 14.9 billion in 2009 to approximately Euro 22.3 billion in 2017, although most of those volumes were concentrated in South Africa, Tunisia, Morocco, Egypt, Mauritius and Kenya. She said that Africa’s factoring volumes were projected to reach about Euro 200 billion by 2021, resulting mostly from new market entrants supported by the sustained economic growth; rapid rise of Africa’s middle class; emergence of innovative industries supported by technological advancements; rapidly expanding trade and economic relations between Africa and major economies in the South; and increasing focus on regional integration and intra-regional trade under the African Continental Free Trade Agreement. The Factoring Promotion Conference, held under the theme Domestic and international factoring: alternative tools for SME financing in Africa (pdf) (12-13 March, Gaborone), was organized by Afreximbank and FCI.

AfDB, Portugal and Mozambique sign MOU for “Lusophone compact” to accelerate private sector development (AfDB)

The Lusophone Compact is a financing platform, involving the Bank, Portugal, Angola, Cabo Verde, Guinea Bissau, Equatorial Guinea Mozambique and Sao Tome and Principe, which provides risk mitigation, investment products and technical assistance to accelerate private sector development in Lusophone African countries. Projects eligible under the Compact must align with the Bank’s High 5s, the relevant Country Strategy Papers and national development plans, have the involvement of the host country and at least two other Compact signatories, and be in sectors which cover renewable energies, agribusiness and agricultural value chains, water and sanitation, infrastructures, tourism and ICT.

West African Economic and Monetary Union: IMF executive board concludes regional consultation (IMF)

Directors emphasized the need to intensify the pace of structural reforms and regional initiatives to improve competitiveness and inclusiveness, including through continued efforts to promote cross‑border infrastructure projects, and ease custom procedures. Directors also encouraged the authorities to sustain the progress made in improving the quality, coverage, and timeliness of regional data. The views expressed by Executive Directors today will form part of the Article IV consultations with individual member‑countries that take place until the next Board discussion of WAEMU common policies.

South Sudan: IMF staff completes visit (IMF)

On the management of oil revenues, the mission urges the authorities to immediately stop contracting oil advances that are expensive and nontransparent. This measure will also help to ensure that oil revenues will be fully available for financing budgetary spending. Meanwhile, the central bank should continue tight monetary policies and refrain from lending to the government, to keep inflation on a decelerating path and gradually replenish foreign exchange reserves. Fiscal conditions for the remainder of 2018/19 will be constrained by large repayments of oil advances. With a tight resource envelope, the authorities should strictly prioritize core peace-related spending and payment of civil servant salaries. With the clearance of oil advances in the current fiscal year, the 2019/20 budget can be based on a predictable revenue stream.

South Africa will export a record 137 million boxes of citrus this year: and other countries are getting upset (Business Insider SA)

Following bumper lemon and mandarin plantings, South Africa is expected to export a record 137 million boxes of citrus fruit to more than 100 countries this year – the second record year in a row. This is despite a 3% fall in plantings of Valencia oranges, which represent almost 40% of the citrus export market. Last year’s export crop yielded nearly R19 billion in sales across the world. More than 92% of the total income of the local citrus industry comes from exports.


BAPA+40: updates

  1. The African, Caribbean and Pacific Group of States (2019): extract on the Technical Aid Corps of Nigeria. The Nigerian Technical Aid Corps (TAC), established in 1987 as a foreign policy tool, is Africa’s only sustainable technical aid programme for development, and it is a practical demonstration of effective South-South cooperation. Since the inception of the programme, several thousand Nigerian volunteers have been deployed, growing from a first round of 102 volunteers in the period from 1987 to 1988, to up 1,500 for the period from 2014 to 2016. These professionals currently provide assistance to more than 30 ACP countries in a range of fields including engineering, agriculture, law, medicine, architecture, accounting, radiology, meteorology and education.

    Under the programme, development efforts in countries such as Belize and Jamaica have benefited from the deployment of Nigerian health professionals including nurses and pharmacists to assist their health ministries. In Fiji, TAC volunteers have contributed to the drafting of its new Constitution. In Africa, TAC has made contributions to the national development of neighbouring West African countries such as the Gambia, Senegal and Sierra Leone as well as elsewhere on the continent, including the Congo, Ethiopia, Mozambique, Namibia and Uganda. As outlined in the Nigerian Technical Aid Corps Act, ACP countries make specific technical assistance requests to the Government of Nigeria according to their needs, challenges and national priorities. Nigeria finances and deploys skilled technical experts in these areas for a mandatory period of two years, with host countries also providing free medical care, tax exemptions, repatriation costs, and other payment and facilities as agreed. The scheme is the only one of its kind operating in Africa and has been recognized as a model by leading South-South cooperation institutions. Its comparative advantage lies in the fact that Nigeria shares similar development issues with recipient countries, leading to more relevant experience, appreciation and sensitivity in responding to the challenges.

  2. Cooperation beyond convention: independent report on South-South and Triangular Cooperation. Extracts from 2.4: concluding remarks. At the regional level, as BAPA recommended, it is essential to establish a regional policy forum/committee for dialogue, consultation and consensus-building on SSC and TrC – one that is managed by regional institutions. This policy forum should include representatives from government, development partners, the private sector, CSOs, think tanks and others. These regional forums and their relevant regional institutions should be the drivers to generate data on SSC and TrC. The objective is to drive evidence-based policy discussions around key SSC priorities, including on interregional development problems, relevant sectors with SSC and TrC opportunities, key SSC regional priorities, key SDGs, and other specific regional objectives. The proposed policy forum should also discuss ways to bring about uniform administrative and legal arrangements, technical standards on procurement, and trade rules at the regional level.

    Another feature of the new SSC is what we might call its outward orientation. At a time when Northern countries are raising barriers to a variety of trans-border flows and have made international economic sanctions and embargoes an everyday tool of their international policy kit, much of current SSC goes to improve international connectivity and communications, both through physical and digital infrastructure and building the required digital capacities required. Forty years ago, delinking from the global economy was seen by some theorists and governments as the best way for developing countries to achieve both development and autonomy. Today, it is the opposite, with the most successful emerging economies realizing that the shortest path to sustainable development lies in interacting more, not less, with the global economy. SSC and triangular cooperation focus on the implementation of the sustainable development goals in developing countries. The United Nations is at the core of this global governance framework. [South-South Cooperation in a Digital World: 2018 Annual Report in South-South Cooperation]

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