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tralac’s Daily News Selection

tralac’s Daily News Selection

28 Mar 2019

Diarise: SWIFT’s African Regional Conference (18-20 June, Accra) on the theme Enabling the Digital Economy

South Africa’s February 2019 trade balance will be released tomorrow, Friday

At CoM2019: Seeking the one pending AfCFTA ratification

EACJ rules that Uganda’s excise duty imposed over goods imported within East Africa is a violation of the Treaty (EACJ)

The court further ordered that implementation of the provisions of Sec 2(a) and (b) of the Excise Duty (Amendment) Act No.11 of 2017 by misconstruction and wrongful re-classification of the British American Tobacco Ltd Uganda’s Cigarettes as ‘imported goods”, contravene and infringe on Articles 1 and 75 (6) of the Treaty as well as Articles 1 (1) and 15 (1) (a) and (2) of the Customs Union Protocol and Article 6 (1) of the Common Market Protocol. The Court further ordered that the government’s misapplication of the provisions of the said Act by issuance of the payment registration slips for additional taxes in the sum of Ug shs 325,208,000 for the BAT’s 1,170 packages of soft cap cigarettes is illegal, null and void and the court ordered the government, with immediate effect, to rescind and withdraw the payment registration slips.

In addition the court ordered the government to ensure the interpretation and application of Excise Duty Act with due regard and in compliance with applicable Community Law and to align the Ugandan tax laws with Community Law applicable to goods from EAC Partner States. The court exercising its discretion ordered each party to bear its own costs on the basis that this case has canvassed matters of grave importance to the advancement of Community law and EAC intra-regional trade, which would be of significant public interest to across section of stakeholders within and beyond the EAC regional bloc. [Kenya, Uganda to continue on the integration path]

Earnings from East African ports improve (The EastAfrican)

The operation of East African ports to GDP grew between 2013 and 2017, as their Southern African competitors registered a drop, a new report shows. Dynamar’s East and Southern Africa Container Trades 2019 Report says East African ports’ contribution to GDP rose from 34% in 2013 to 40% in 2017 as South Africa experienced a 5% drop from $367bn to $349bn over the same period. Darron Wadey, a shipping analyst, attributes the improved performance of the ports of Dar es Salaam and Mombasa to increased business from the region’s landlocked countries, which has increased the number of containers handled by the ports. “Mombasa and Dar es Salaam are competing for hinterland cargo to Burundi, Rwanda, Democratic Republic of Congo and Uganda. State controlled ports are under increasing pressure to improve and develop their strained infrastructure,” reads the report.

African CEO Forum: selected highlights

  1. Businesses demand more say on EAC agenda to promote investment. Business leaders in the EAC say protectionism and differences between politicians are impeding efforts by companies to invest in the region. Tanzanian business magnate Ali Mufuruki accused politicians of failing to push policies that promote investment in the region. “We have never had the discussion on why there isn’t a single billion-dollar company in East Africa. If we have that conversation, people will start to ask whether it is going to be a Tanzanian or a Rwandan company. We need to be honest with each other and ask what we really want from this union,” Mr Mufuruki told the Africa CEO Forum in Kigali. Saying he had found difficulty in hiring workers in the region, he urged the EAC partner states to relax labour laws and abolish work permits. He asked politicians to let the business community - which is driven by profit and growth - to lead EAC integration. “If business leaders are allowed in the rooms where policies are made, then business can be put at the forefront and we will make more progress,” he said. His message was echoed by RwandAir chief executive officer Yvonne Makolo, who said that the lack of an open skies policy has continued to make air travel expensive for most people in the region and on the continent.

  2. Tshisekedi fronts DRC as key to Africa’s energy, water woes. Starting with the armed groups in his country which he has vowed to neutralise, Mr Tshisekedi, said their motives were more commercial than ideological. “The militias are petty business people and illegal peddlers of natural resources like minerals and timber. They are getting followers out of social realities like lack of jobs. We want to integrate these people into the society through the co-operation of other countries involved,” he told delegates at the Africa CEO Forum held in Kigali, on Tuesday. He said he would look to move the country forward with progressive policies such as those pursued by President Paul Kagame in raising Rwanda from the ashes of the Genocide Against the Tutsi to one of the world’s business and political success showcases in a short 25 years.

    He said the Great Lakes countries should concentrate on common interests such as exploitation of methane gas at Lake Kivu, which is on the Rwandan side close to the DRC border, and hydroelectric power at River Rusisi to help the countries diversify their economies. “These should be co-ordinated for development and peace,” he said. He said DRC was ready to offer its resources and opportunities to other African countries, pointing out that Congo River, in particular, could alleviate disputes on the River Nile, such as that pitting Ethiopia and Egypt over the construction of the Grand Renaissance dam.

  3. Regulators remain sceptical of cryptocurrencies. “Cryptocurrencies started out as really fantastic ideas, but as time went on, they now look like strong indicators of illicit flows. Even as we look at the potential, we have to look at the risks,” the Central Bank of Kenya Governor Dr Patrick Njoroge said on Monday at the ongoing Africa CEO Forum in Kigali. Regulators are concerned that with no guidelines the digital currencies could have an impact on financial stability. “There is no shared regulation for cryptocurrencies so far. It would be very dangerous for a bank to be part of any system that is not regulated,” warned Mr Alexandre Maymat, head of Africa, Asia Mediterranean Basin & Overseas at Societe Generale, a French-owned investment bank.

  4. Morocco’s Mohamed El Kettani emerged the 2019 African CEO of the Year at the 7th edition of the Africa CEO Forum. He has invested more than $1bn on the continent over the past seven years. He is a champion of south- south cooperation and is behind the pan-African development of Morocco’s leading bank, Attijariwafa Bank. Ethiopian Airlines won the accolade of ‘African Champion of the Year’ for their intra-African partnerships, reaching 40 countries on the continent. The award was received by the airline’s CEO, Tewolde Gebremariam.

  5. More inter-Africa trade at CEO Forum. Seen as the continent’s most influential networking platform for private sector actors, delegates participated in over 40 discussion sessions themed around how Africa can move from multi-lateral trade treaties to actual business opportunities. Deals estimated at worth over $1bn were also been sealed during the two-day summit.

  6. Africa Plastics Recycling Alliance launched (pdf). A number of international consumer goods companies operating across Africa including Diageo, Unilever, The Coca Cola Company, and Nestlé launched the Africa Plastics Recycling Alliance at the CEO Africa Forum in Kigali. This Alliance aims to turn the current challenge of plastic waste in Sub Saharan Africa into an opportunity to create jobs and commercial activity by improving the collection and recycling of plastics. The Africa Plastics Recycling Alliance has been established for companies to:

The productivity cost of illness in Africa: Diseases cost the African region $2.4 trillion a year (WHO)

The World Health Organization estimates that nearly 630 million years of healthy life were lost in 2015 due to the diseases afflicting the population across its 47 member states in Africa, now amounting to a loss of more than $2.4 trillion from the region’s GDP annually. Non-communicable diseases have overtaken infectious diseases as the largest drain on productivity, accounting for 37% of the disease burden. Other culprits for lost healthy years are communicable and parasitic diseases; maternal, neonatal and nutrition-related conditions; and injuries. Around 47%, or $796bn, of this lost productivity value could be avoided in 2030 if the Sustainable Development Goals related to these health conditions are achieved, WHO found. [Download: A heavy burden – the productivity cost of illness in Africa]

New report urges action to close Africa’s gender gaps in business performance (World Bank)

A new World Bank report proposes a menu of evidence-based solutions to address wide gender gaps in the performance and profitability of firms in sub-Saharan Africa. Drawing on rich survey data from several Sub-Saharan African countries including Ghana, Profiting from parity: unlocking the potential of women’s businesses in Africa finds that female entrepreneurs consistently lag men on several key indicators of business performance. Monthly profits and sales from female-owned firms are on average 34% and 38% lower, respectively, than those from male-owned firms. Bridging these business performance gaps is especially critical for African economies, where women are more likely to be self-employed -often out of economic necessity- than to engage in wage work and are more likely to be entrepreneurs than men.

Developing a “Pool of Customs Valuation Trainers” in Southern Africa (WCO)

Under the auspices of the WCO/JICA Joint Project, the Second Working Group Activity (sub-regional workshop) of the Master Trainers Programme on Customs Valuation was held in Maputo (18-22 March). The workshop was the second in a series of activities to be undertaken by these five Revenue Authority countries ( Botswana, Malawi, Mozambique, Zambia, Zimbabwe) to enhance their capacity related to the implementation of Customs Valuation.

The Global Alliance for Trade Facilitation has released its Annual Report 2018 (pdf)

At the close of 2018, 88% of Alliance global private sector stakeholders confirmed that the Alliance is effectively leveraging public-private partnerships to deliver trade facilitation reforms, while 95% of global businesses we work with said they believe Alliance projects are commercially relevant for their business and guided by evidence and global good practice. Ghana: We aim to see 75% of all shipments assigned to the green channel pre-arrival with 90% of all green channel shipments being released upon arrival. This has the potential to significantly reduce the cost of cross-border trade in Ghana. In 2018 the project team, comprised of representatives from the GRA and the business community, completed an analysis of international best practice, including a study visit to Germany, developed the new model and identified the necessary legal and regulatory changes that need to be made to support it. As we enter 2019, we are ready to begin delivering training and piloting the new pre-arrival process.

Paying across borders: can distributed ledgers bring us closer together? (World Bank)

These shortcomings make the cross-border payment industry ripe for disruption and innovation. Some see distributed ledger technologies (DLT) as having the potential to drive industry-wide change. Indeed, B2B cross-border payments, traditionally characterized by fragmentation and opacity, are a potential use case for the successful implementation of DLT. In 2018, Ripple, a FinTech company, piloted xRapid, a DLT-based cross-border payments solution, along the very competitive US-Mexico corridor. Financial institutions involved in the pilot saved 40%-70% in foreign exchange costs, and the average payment times was just over two minutes. The transfer of funds on xRapid took two to three seconds, with most of the processing time explained by domestic payment rails and intermediary digital asset exchanges. [Mauritius: 5th annual SIL e-Gov conference focuses on artificial intelligence, blockchain]

Looking forward: US-Africa relations (Brookings)

On 26 March, Brahima Coulibaly testified before the US House of Representatives Subcommittee on Africa, Global Health, Global Human Rights, and International Organizations. Extract from his written testimony: Second, the U.S. will benefit from leveraging USAID’s regional trade and investment hubs more to strengthen U.S. commercial engagement on the continent, and from a high-level White House coordinator for U.S. commercial policy in Africa. Currently, USAID has regional trade and investment hubs in three countries - Ghana, Kenya, and South Africa - with an objective to “deepen regional economic integration,” “promote two-way trade with the US under AGOA,” and “attract investment that drives commercial expansion within the region and to global markets.” Compared to some other external partners, US companies often lack an understanding of the African business environment, which is a barrier to entry. The mandate of the trade and investment hubs could be broadened to include collection of timely information on investment opportunities on the continent, guidance for US businesses looking to expand their activities on the continent, and assistance in identifying various risk mitigation and financing instruments available across US agencies or elsewhere. A high-level White House appointee on US-Africa commercial activities would supervise and operationalize the recommendations of the President’s Advisory Council on Doing Business in Africa, coordinate US commercial activities in Africa across US agencies, and help resolve problems, such as possible unfair competition, faced by US companies doing business in Africa.
 

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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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