Building capacity to help Africa trade better

tralac’s Daily News Selection


tralac’s Daily News Selection

tralac’s Daily News Selection
Photo credit: IFC

The AU has posted the TOR for the proposed African Labour Migration Advisory Committee (pdf). It is one of the agenda items at next week’s Specialised Technical Committee on Social Development, Labour and Employment (1-5 April, Addis Ababa)

South Sudan kicks off World Trade Organisation membership negotiations (WTO)

At the first meeting of the Working Party on the Accession of South Sudan on 21 March, WTO members expressed support for working with the world’s youngest nation in order to advance its accession negotiations. Mr Aggrey Tisa Sabuni, Chief Negotiator and Presidential Advisor on Economic Affairs, led a 13-person delegation in Geneva. He stressed that apart from oil (pdf), which currently accounts for nearly 90% of budget revenues, 60% of its GDP and 95% of exports, South Sudan does not export many products. However, studies have shown that South Sudan has significant potential in agriculture, mining, fisheries, forestry and tourism. “Accordingly, we believe opening up to the rest of the world is critical to attracting foreign investment, which is needed to develop and realize South Sudan’s potential in other sectors, including jump-starting an industrial and manufacturing sector, not only to diversify the country’s export basket but also to generate high productivity employment for our people, who are mostly young.”

CoM2019 draws to a close today in Marrakech. Selected updates:

  1. pdf Report of the meeting of the Committee of Experts (629 KB) : extracts from the recommendations for agenda item 5. ECA should: Work with African countries to finalize the terms of reference of the centre of excellence on digital identity, trade and economy; Regularly monitor the opportunities and threats brought about by digitization of the economies of African countries; Conduct analysis and hold expert group meetings and policy dialogues on digitization and its contribution to the achievement of the goals of the 2030 Agenda and Agenda 2063; Conduct studies on the impact of digitization on tax performance, including quantifying the benefits of digitization, to support evidence-based policy formulation. ECA, in collaboration with the AUC , should: Urgently finalize development of the strategy for digital identity, digital trade and digital economy for Africa, taking maximum advantage of the positive experiences of African countries; Assist countries to develop a common position on multilateral frameworks to tackle base erosion and profit shifting; Pursue, expand and strengthen South-South cooperation, including capacity development in the application of digitization in revenue mobilization and expenditure.

  2. The 2019 Annual Adebayo Adedeji Lecture, delivered by Dr Omobola Johnson: pdf Digital transformation of Africa – hype or reality? (384 KB)

CEMAC Conference of Heads of State (20 March, Ndjamena): communiqué

Taking cognizance of the state of progress of the process of rationalization of the economic communities, the conference congratulated His Excellency Paul Biya, President of the Republic of Cameroon, President dedicated to the Rationalization of RECs for the significant advances recorded in this process of rationalization RECs in Central Africa under his Dedicated High Presidency. In order to speed up this process and capitalize on the results thus recorded, the Dedicated President of this Program informed the Conference of the organization of an Extraordinary Joint ECCAS/CEMAC Summit in the near future.

On the state of the implementation of the free movement of persons in CEMAC zone, the Conference of Heads of State adopted the Common Policy on Emigration, Immigration and Border Protection of CEMAC, In this regard, it instructed the President of the CEMAC Commission, on the one hand, to accelerate the application of the Additional Act for the abolition of visas for all CEMAC nationals circulating in the Community area, and, on the other hand, to take vigorous action for the implementation of the said Common Policy.

With regard to the issue of repatriation of export earnings, especially of large companies, the Conference gave the CEMAC Commission the task of defending the common and mutually supportive position of the six Member States in order to bring them into compliance strictly the exchange regulations in force. In this regard, the Heads of State and Delegations gave specific guidelines for the conduct of the said mission.

The two keynote documents released during the recent CII-EXIM Bank Conclave on India Africa Project Partnership:

  1. pdf India-SADC trade and investment relations: harnessing the potential (14.62 MB) (prepared by Exim Bank)

    With the increasing diversification of India’s global trade towards other developing countries, SADC has emerged as important partner for India, both as an export destination and an import source. During the last ten years, India’s total trade with SADC countries nearly doubled from $13.7bn in 2008 to $25.5bn in 2017. While India’s total exports to SADC has risen moderately from $6.3bn in 2008 to $9.1bn in 2017, India’s total imports from SADC have more than doubled during the same period, from $7.5bn in 2008 to $16.4bn in 2017. India’s trade balance with SADC has been in favour of SADC throughout the decade with an exception in 2014. Over the years, India’s trade deficit with SADC has widened from $1.2bn in 2008 to $7.3bn in 2017.

    The increasing importance of India as SADC’s trading partner can be assessed from the fact that India accounts for a respectable 5.4% of SADC’s global imports in 2017, as compared to 3.5% recorded in 2008. Further, India accounts for around 7.3% of SADC’s total exports in 2017, increasing from 2.3% in 2008, depicting the rising importance of India as SADC’s export destination.

    While mineral fuels and pharmaceutical products dominate India’s export basket to SADC, together accounting for 46.7% of India’s total exports to SADC in 2017, the share of mineral fuels witnessed a fall while that of pharmaceutical products more than doubled during the last ten years. Other important items of India’s exports to SADC include vehicles other than railway, machinery and equipment and plastic and its articles.

    South Africa is India’s largest export destination in SADC, accounting for around 44.9% of India’s total exports to the region in 2017. Other major export markets in SADC include Tanzania, Mozambique and Mauritius. The share of SADC in India’s global imports has increased from 2.4% in 2008 to 3.7% in 2017. India’s imports from SADC was largely dominated by mineral fuels, oils and its products and pearls and precious stones, which together accounted for 78% of imports from the region in 2017. South Africa is the largest import source, followed by Angola, Botswana, Tanzania, Mozambique and Zambia.

    Table of contents. Chapter 1: Background and economic profile of SADC; Chapter 2: International trade of SADC countries; Chapter 3: India’s bilateral trade relations with SADC countries; Chapter 4: Foreign investment in SADC countries; Chapter 5: India’s investment relations with SADC Countries; Chapter 6: SADC’s trade - key observations; Chapter 7: Potential sectors for Indian investments in SADC; Chapter 8: Export-Import Bank of India in SADC Region

  2. pdf India in Africa: developing trilateral partnerships (437 KB) (prepared by the CII)

    The continent of Africa has been the focus of development assistance and cooperation from a host of countries in Europe and North America for several decades. Over a period of time India, China Japan, Turkey and many others joined the efforts to engage Africa economically. At the same time the traditional development partners adjusted their engagement to make it more partnership oriented to develop business and entrepreneurial connections. The significance is that the number of partners Africa now has is large; the depth comes from the intensity of the engagement with traditional partners of Africa and their reorientation to trade and investment over only aid and assistance. In this several countries have reached out to India to start a dialogue, develop ideas and seek commonality of programs in Africa. As this idea fructifies, it will lead to trilateral cooperation in Africa between India and another willing partner. It is thus important to know what potential partners aim for and do in Africa as a way to develop a business-like approach keeping in view their programs and preferences as well. This paper focuses on five main partners: Germany, Japan, USA, France, UAE. [The authors: Amb. (Rtd.) Gurjit Singh, Ms Jhanvi Tripathi]

Trends in trade in counterfeit and pirated goods (OECD)

Trade in counterfeit and pirated goods has risen steadily in the last few years – even as overall trade volumes stagnated – and now stands at 3.3% of global trade, according to a new report by the OECD and the EU’s Intellectual Property Office. Trends in Trade in Counterfeit and Pirated Goods puts the value of imported fake goods worldwide based on 2016 customs seizure data at $509bn, up from $461bn in 2013 (2.5% of world trade). For the European Union, counterfeit trade represented 6.8% of imports from non-EU countries, up from 5% in 2013. These figures do not include domestically produced and consumed fake goods, or pirated products being distributed via the Internet. The majority of fake goods picked up in customs checks originate in mainland China and Hong Kong. Other major points of origin include the United Arab Emirates, Turkey, Singapore, Thailand and India. The countries most affected by counterfeiting in 2016 were the United States, whose brands or patents were concerned by 24% of the fake products seized, followed by France at 17%, Italy (15%), Switzerland (11%) and Germany (9%). A growing number of businesses in Singapore, Hong Kong and emerging economies like Brazil and China are also becoming targets. Small parcels sent by post or express courier are a prime and growing conduit for counterfeit goods.

CDC’s investments in low-income and fragile states: new ICAI review

CDC is the primary vehicle through which DFID invests development capital and plays a key role within DFID’s Economic Development Strategy. It aims to “support the building of businesses throughout Africa and South Asia, to create jobs and make a lasting difference to people’s lives in some of the world’s poorest places”. ICAI is publishing a review of CDC’s investments in low-income and fragile states, which found the UK’s multi-billion pound development finance institution did not do enough to maximise the impact of its UK aid investments. Profiled findings (pdf): CDC has significantly scaled up its human resources in support of its work but has been slow to expand its country presence beyond India. In order to accelerate the scale-up of investment and achieve broader development impacts in more challenging markets, CDC should have prioritised much earlier on in the process its country presence expansion in Africa, the development of its geographic and sectoral plans, strengthened its links with DFID country offices and improved its monitoring and evaluation systems. CDC’s new investments have been concentrated in a small number of larger economies within low-income and fragile countries, as well as in the financial services and power sectors. CDC has faced challenges in finding viable direct investment deals, particularly in Africa.

Corporate taxation in the global economy: opening remarks by Christine Lagarde (IMF)

Advanced economies have long shaped international corporate tax rules, without considering how they would affect low-income countries. IMF analysis shows, for example, that non-OECD countries lose about $200bn in revenue per year, or about 1.3% of GDP, due to companies shifting profits to low-tax locations. These countries need a seat at the table. The Platform for Collaboration on Tax, a joint effort by the IMF, World Bank, OECD and the UN is helping on this front. Third, an impetus for rethinking international corporate taxation stems from the rise of highly profitable, technology-driven, digital-heavy business models. These business models rely heavily on intangible assets, such as patents or software that are hard to value. They also demonstrate that assuming a link between income and profits and physical presence has become outdated. This in turn has sparked fairness concerns. Countries with many users or consumers of digital services find themselves with little or no tax revenue from these companies. Why? Because they have no physical presence there. So, we clearly need a fundamental rethink of international taxation. [Related event downloads: The PIIE Policy Paper, presentations by Michael Keen, Mindy Herzfeld, Gary Clyde Hufbauer]


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