Building capacity to help Africa trade better

tralac’s Daily News Selection


tralac’s Daily News Selection

tralac’s Daily News Selection
Photo credit: Reuters | Akintunde Akinleye

AfCFTA here at last: is Africa ready to embrace it? (Editorial comment, New Times, Kigali)

Global trade growth loses momentum as trade tensions persist (WTO)

Main points. World merchandise trade volume is forecast to grow 2.6% in 2019, accompanied by GDP growth of 2.6%; Trade growth should pick up to 3.0% in 2020 with GDP growth steady at 2.6%; Trade growth in 2020 is expected to out-pace GDP growth due to faster GDP growth in developing economies; Trade tensions still pose the greatest risk to the forecast, but a relaxation could provide some upside potential; Weak import demand in Europe and Asia dampened global trade volume growth in 2018 due to the large share of these regions in world trade; The value of merchandise trade was up 10% to US$ 19.48 trillion in 2018, partly due to higher energy prices; The value of commercial services trade rose 8% to $5.80 trillion in 2018, driven by strong import growth in Asia.

UNCTAD’s eCommerce Week: selected highlights

  1. Panel: From Digitalization to Development. Session highlights: Digital poverty needs to be a development priority. While some speakers thought the connectivity gap was the core issue, David Porteous, founder and chair of global consulting firm BFA, said the real challenge was the growing divide between consumers and producers in the digital economy. “Many people in most continents will be users of social media,” he said. “What’s not certain is whether they’ll be able to generate incomes that will sustain them and their livelihoods in the future.” Mr Porteous said that although the internet has made it easier for people to create businesses, only 20% or so succeed. “So the question about the digital divide is: how do you deal with that really long 80% tail? How do we make digital a tool of livelihood and production and not merely a tool of consumption?”

  2. Ministerial roundtable on trade, data and digitalization. The AU’s infrastructure and energy commissioner, Amani Abou-Zeid, said aside from physical infrastructure, mobile money, and a better understanding of the informal economy, one of the biggest challenges in Africa is data. The lack of it, how it differs, and the inability to analyze it when it does exist, are all concerns. “When we talk about data for trade, there is an assumption that this data exists,” Ms Abou-Zeid said. “Lack of up-to-date data is recognized as one of the impacts of lower intra-African trade. When there is data, it can differ from agency to agency and sometimes even within agencies.” The AU is working to address the data issue, she said, saying it would establish a trade observatory located within the AU Commission with funding from the International Trade Centre and the EU. The observatory would deal with the issue of not having a central trade data repository at a continental level and quantitative information to make decisions. Pedro Mancuello, Paraguay’s vice minister of trade, said while more that 86% of people in Paraguay have internet, only 14.3% buy online. This connectivity is a testament to its investment in digital infrastructure, but also a portend of what’s required to get entrepreneurs selling, and consumers buying, online.

  3. Africa’s online entrepreneurs target the final digital frontier. Yet entrepreneurs face a number of challenges, says Cedric Atangana, WeCashUp chief executive, whose journey to ensure Africans can trade and consume online has seen him develop a continent-wide payment solution and some early precursors to policy. “In Africa, there are over 155 different payment solutions that are running isolated from one another. We have built a tool to aggregate these payment solutions,” said Mr Atangana. “Since we are trying to build a pan-African payments gateway, we deal with over 44 central banks across Africa. To operate, we realized that we had to build a pan-African rulebook so when we do a transfer from Kenya to Cameroon, we respect both banks. This didn’t exist before, so we, as entrepreneurs, had to build it.” Building it does not mean they will come. The African online marketplace is still small. “African businesses don’t produce what the market wants yet. The bigger merchants have a bigger value to bring, so naturally our consumers want to buy from them,” said Mr. Atangana. “The question is, what we are going to do as Africans to help our local businesses grow and export products and services,” he asked the eCommerce Week audience, adding that Africans must help each other. This point was reiterated by UNCTAD secretary-general Mukhisa Kituyi who called on African politicians and billionaires alike to support the growth of the African digital economy.

Nigeria and the IMF

  1. IMF Executive Board concludes 2019 Article IV Consultation with Nigeria

  2. pdf 2019 Article IV Consultation report (3.18 MB) . The reelection of President Buhari to another four-year term should provide new impetus to faster implementation of the authorities’ Economic Recovery and Growth Plan. Key priorities under the ERGP – including advancing on revenue mobilization, power sector reforms, and accelerating anticorruption efforts – remain consistent with staff’s past recommendations (Annex I) and should be accelerated now and not await the appointment of a new Cabinet (expected to be sworn in by late May 2019). The parliamentary majority obtained by the governing All Progressives Congress party should also help the government advance more forcefully the key legislative reforms - notably in taxation and the oil sector – currently underpinning the ERGP.

    Spillovers from links between Nigeria and neighboring countries will likely be contained. The CBN’s continued preference for naira stability will help sustain partners’ exports, which is particularly important as Nigeria accounts for 70% of ECOWAS exports. Current growth projections for Nigeria imply neither a shock to Nigeria’s neighbors nor a lift (1 ppt increase in Nigeria’s growth is estimated to increase regional growth by 1/3 ppt). Remaining FX restrictions continue to increase food imports in neighboring countries, a good part of which is reportedly smuggled into Nigeria.

  3. pdf Selected Issues report (1.36 MB) . Contents include: Macro-structural obstacles to firm performance – evidence from 2640 firms in Nigeria; Governance in Nigeria: focus on the oil sector and aml/cft; Fuel subsidies: latest increase and implications of a change in the regulated gasoline price; Assessing the cost-risk of increasing Nigeria’s external debt; Human capital and gender equality.

Uganda takes lion share of trade at Port of Mombasa (Business Daily)

Talks between Kenya and Uganda when President Yoweri Museveni came visiting last week mainly focused on the Standard Gauge Railway and operations at the Port of Mombasa. The main reason the two facilities took centre stage is obvious to see; the 2018 port transit report places Uganda as the biggest user of the port where it had imported 7.4 million metric tonnes of goods last year. It was an increase from 6.5 million tonnes of goods compared with the previous year. The country’s transit market share in 2018 was a massive 82.1%. Between 2017 and 2018 cargo imports into Uganda increased by 0.9 million tones. According to the report, Uganda was followed by South Sudan that had imported 563,663 tonnes which represented 7.6% of the transit market share. DRC Congo came third with 413,249 imports representing 4.9%. The rest of the imports were Tanzania s 229,652 (2.6%), Rwanda’s 219,650(2.4%), Burundi’s 20, 610 (0.2%). Other countries including Somalia, Ethiopia and Burundi had 0.1% imports through the port. In total the Mombasa port handled 8.8 million metric tonnes of transit goods.

Museveni visit puts Northern Corridor plan back on track (Business Daily)

The East African dream of achieving a seamless Northern Corridor transport network is back on course after Uganda agreed to start construction of the Standard Gauge Railway from Malaba to Kampala after years of uncertainties. Kenya was considering terminating its section of the SGR line at Kisumu should Uganda, which had indicated that it would build its line to connect to Tanzania, stuck to its guns. President Yoweri Museveni’s move comes as a boost to Kenya, whose financing prospects for the second phase had apparently been pegged on Uganda agreeing to put up a line from Malaba to Kampala. Kenya is now certain of extending the facility to the Ugandan border following the commitment by President Museveni that his country will construct a line to Kampala. “We have had great progress on these discussions. It will be a game-changer, especially for movement of cargo from Mombasa to Kampala,” said President Museveni.

George Wachira: Kampala destination a boost for SGR viability (Business Daily)

Yes there will now be two SGRs running parallel along the central and northern corridors respectively from the Indian Ocean into the Great Lakes hinterland with Dar and Mombasa ports competing for western-bound cargo. Specifically, when the SGR enters Uganda, it will present opportunities for extensions to Juba in South Sudan and also to towns nearer the Eastern DRC border. In the meantime, “low hanging fruits” await Naivasha later this year when the SGR reaches the location. Thousands of tonnes of imported materials and equipment destined for the oilfields developments in both western Uganda and Turkana in Kenya will need to be moved. Construction works in both Uganda and Turkana are planned for next year. A sufficiently-sized Naivasha Inland Container Depot will be the ideal location for oilfield materials and equipment import clearance and consolidation for onward transfer to trucks. Longer term, Naivasha will be the ICD of choice for western Kenya imports/exports including tea. The location will decongest Nairobi ICD; lighten the traffic on the escarpment route; while also opening up commercialisation and industrialisation of Naivasha.

Gold importers in Uganda now tasked to classify country of origin (Dispatch)

Companies and individuals importing gold for refining in Uganda for re-exportation, must classify its origin in an effort to stop the trade in conflict minerals. According to the Central Bank, the order is one of the efforts to understand the source of the country’s bulging gold exports. Gold exports have expanded enormously since the opening of African Gold Refinery in 2016. A year before, the country had only exported gold worth $35.7m (Shs 132 billion). It immediately jumped to $339.5m (Shs 1.2 trillion) when the refinery opened. In the 12 months to February 2019, the country exported gold worth $549m (Shs 2 trillion), according to BOU records. This is the first time the country has exported more gold than coffee, a key cash crop. However, a week ago, the Uganda police seized a gold consignment from Venezuela at the African Gold Refinery in Entebbe. The consignment has since been returned after Uganda’s attorney general William Byaruhanga said AGR had lawfully imported the gold. Venezuela is under USA sanctions. The order also comes on the backdrop of a report by the UN which said that the UN had confirmed Kampala was a recipient of smuggled gold from the DRC, an accusation that has hang over Uganda’s neck for decades.

Rwanda, Israel unveil Horticulture Centre of Excellence in Kigali (New Times)

Billed as MASHAV’s biggest sponsored project in Africa, the initiative is expected to deploy modern technology and improve the wellbeing of farmers. It could add impetus to Rwanda’s efforts to diversify its export revenues, currently dominated by traditional exports such as coffee, tea and minerals. Rwanda targets 46,314 tonnes of horticulture output and an annual export revenue of $130m by 2024, according to the Ministry of Agriculture and Animal Resources. The horticulture industry has been growing steadily. For instance, the Minister said, in 2015 Rwanda generated $5m from horticulture exports before the figure sharply increased to $23m in 2018.

India sets up institute in Africa to augment agrarian economy (Economic Times)

In order to complement the efforts of the Government of India to enhance capacity in the areas of agro-financing and entrepreneurship development for African countries, Ministry of External Affairs signed an MoU on Tuesday with National Bank for Agriculture and Rural Development Consultancy Service for setting up India-Africa Institute of Agriculture and Rural Development in Malawi. IAIARD will be a Pan-African Institute wherein trainees, not only from Malawi but also from other African countries, will receive training to develop their human resources and build their capacity. IAIARD will develop training programmes in the areas of micro-financing and agro-financing, among others. The entire expenditure on faculty from India, the travel, logistics and training course expenses for students from other African countries will be borne by the Government of India for an initial period of three years.

Today’s Quick Links:

Africa auto sector updates. Kenya: Munya seeks more power to ban select car imports; South Africa: Biggest vehicle-exporters from SA in March 2019, Ford adopts dual-port strategy, moves exports through Durban, PE

China imports first consignment of beef weighing 21 tonnes from Namibia

UNCTAD’s Investment Monitor #21

Posted by the OECD: Summary Record of the DAC Senior Level Meeting (22 February, pdf); Summary Record of the 1056th DAC meeting (21 January, pdf)

Carlo Perrotta (Italy’s Ambassador to Zimbabwe): Human rights must not be forgotten from EU-African dialogue


Email This email address is being protected from spambots. You need JavaScript enabled to view it.
Tel +27 21 880 2010