tralac’s Daily News Selection
tralac’s March 2019 newsletter is posted: the newsletter carries a comprehensive report of debates at tralac’s annual conference, convened recently in Nairobi
Diarise: The Africa Women Innovation and En-trepreneurship Forum (29-30 October, Cape Town)
COMESA Intergovernmental Committee: Fresh push for states to ratify the Tripartite FTA as deadline draws near
The deadline set by the Tripartite Council of Ministers for member states of three RECs to sign and ratify the TFTA lapses this month. So far only four countries in the COMESA, EAC and SADC tripartite bloc have signed and ratified the agreement. These are Kenya, Egypt, South Africa and Uganda. A total of 22 out of 26 countries in the tripartite bloc have signed the agreement. Delegates attending the 7th extraordinary meeting of the COMESA Intergovernmental Committee that opened in Lusaka earlier this week, were informed that eight of the 19 countries that had ratified the AfCFTA were Tripartite Member/Partner States. Zambia’s Minister of Commerce, Trade and Industry Hon. Christopher Yaluma, who opened the meeting, said it was time for the remaining countries to sign the tripartite given that is was supposed to the building bloc to the continental FTA. “I cannot overemphasize the absolute importance of all of us ratifying the Tripartite Agreement so that it enters into force immediately. After years of negotiation, the Tripartite FTA is ready for implementation. It is very much a low hanging fruit.” Currently, 93% of the work on Rules of Origin has been completed, providing the basis for trade to begin. In addition, the legal texts have been concluded and adopted.
AfDB’s East Africa regional economic outlook: East Africa’s economy races ahead of its African peers
Despite these drivers and opportunities, progress in regional integration has been limited. What are the major challenges of regional integration in East Africa? Lack of complementarity in trading, low competitive position of countries to supply goods in the region (which is related to lack of structural transformation, low productivity, and a wide infrastructure gap), institutional capacity weakness to advance regional integration, and failure to address political issues related to regional integration. Several policy directions aimed at boosting regional integration in East Africa emerge from this analysis. Extract (pdf):
Fourth, since increased intra-Africa trade is a major policy instrument for advancing regional integration, it is imperative to capitalize on the high political goodwill associated with the CFTA. The agreement establishing the CFTA also came with an implementation action plan that tackles constraints on intra-Africa trade by holistically addressing trade policy, trade facilitation, productive capacity creation, trade-related infrastructure provision, trade finance, trade information, and factor market integration
Fifth, the lesson from East Asia on the policy direction of structural transformation and process integration is instructive: deliberate and conscious state action—in the form of unilateral tariff reductions, the establishment of export processing zones and duty drawback arrangements, and entry into sectoral trade agreements (especially in information and communication technology and in the context of value chain creation) - are the foundation for success. East African policymakers may draw an important lesson from this experience and tune their own country policies along this line. These policies also require building the capacity of regional and national institutions tasked with these issues
The London Court of International Arbitration ordered the African nation to pay $385m (Dh1.41bn) plus interest for breach of the Doraleh Container Terminal holding company’s exclusive rights. The ruling states that the 2006 concession remains valid despite the government of Djibouti taking over the terminal in February after cancelling DP World’s operating rights the previous year. The ruling gave DP World the right to claim further damages if Djibouti continues with plans to develop the container port with any other operator, the ruling said. Executives said it was the fifth legal ruling that upheld ownership rights against the government of Djibouti since the battle for control began. “In respect of the development of the Djibouti Multipurpose Port facility, the facts are clear,” the ruling said. “At no stage before the decision was made to go ahead with that facility with China Merchants did Djibouti offer DCT the right to develop the proposed container facilities at the DMP.” [Aboubaker Omar Hadi, chairman of Djibouti Ports and Free Trade Authority tells In Business Africa how Djibouti plans to turn itself into a key port for East Africa]
Blockchains in trade logistics – implications for developing country integration in global supply chains. “With any technology disruption, I think labour force is one area we need to look at closely,” said Ziyang Fan, head of digital trade at the WEF. Mr Fan said trade logistics technologies have traditionally hurt ‘blue-collar workers’ but that this is changing with the ‘fourth industrial revolution’. “With blockchain, with artificial intelligence, the ‘white-collar’ workers will face more disruption in terms of job loss,” he said, citing the examples of port clerks and supply chain middlemen. Alvaro Cedeno, Costa Rica’s former ambassador to the WTO, worried that technologies like blockchain will leave worse off those who still don’t even enjoy access to basic technologies. “There are literally billions of human beings that still haven’t even received the benefits of the third industrial revolution – and in some cases even the second industrial revolution,” he said, citing the 1 billion people who don’t have electricity and the 4 billion who lack access to the internet. Are we thinking about including the excluded?”
Business models worldwide face radical change: ILO-IOE study (ILO)
The skills gap is a major issue, with 78% of corporate executives saying schools are failing to meet future employers’ needs, according to the research conducted by the ILO’s Bureau for Employers’ Activities and the International Organisation of Employers. More broadly, the report identifies five trends that are radically altering global business models regardless of size, sector or location: technological innovation, global economic integration, climate change and sustainability, demographic and generational shifts, and a global shortage of skilled labour. Note: At least 30 respondents were selected from each of the following countries: Tanzania, Nigeria, Morocco, South Africa, Haiti, Bolivia, Brazil, USA, Nepal, India, China, Indonesia, Malaysia, Russia, and Germany. Extracts (pdf):
Businesses in Africa, Asia and Latin America reported that automation has already affected low skilled jobs, with 53%, 49% and 47% of executives respectively saying they have already experienced a noticeable impact. In Europe the same was true for 47% of businesses. Survey respondents from the manufacturing sector were, as expected, the most affected by this trend, with 33% reporting large impacts compared to 7% from the retail sector (Figure 2.2).
Globally, employers and businesses are increasingly encountering challenges in locating, hiring and retaining talent. However, skills requirements and ease of recruiting varies widely across regions, defying any obvious patterns of developed vs. emerging economy. As illustrated below (Figure 6.1), a large proportion of businesses in the USA (61%), Brazil (70%), India (66%) and Germany (65%) agreed that businesses are looking for quite different skills in new recruits than three years ago. In a similar vein, executives across Bolivia (60%), Haiti (53%), China (47%), South Africa (51%) and Malaysia (63%) agreed in similar proportions that it is becoming harder to recruit people with the skills needed. The USA (31%) resists the trend slightly as the nation where fewest businesses report recruitment difficulties, with Nigeria (41%) in a similar position. [UNECA: Are Africa’s education systems adapted to the needs of tomorrow? The answer is probably no, presently]
From transport to growth corridor: do communities benefit from the Central Railway Transit Corridor in Tanzania? (IGC)
This present study builds on a previous IGC funded project that surveyed enterprises and households along the central railway route. The current project examines the potential for a rehabilitated central railway in stimulating socio-economic transformation of communities in the transit corridor. Based on the above findings, we recommend the government to: (i) Focus on the need for complementary infrastructure linking train stations to the production areas to improve access to markets and bring about expected transformation. This includes roads and other railway lines linking potential ‘value’ sites (farms, production sites, industries, etc.) to the train stations; (ii) Put more emphasis on strategies for supporting production activities along the corridor, which would potentially increase cargo volumes for the SGR in future. That is, in addition to current emphasis on physical infrastructure, efforts should be put on promoting investment in economic activities which have potential to generate future cargo volumes and stir local economic development; (iii) Manage expectations around SGR by collaborating with Local Government Authorities to develop proactive strategies for amplifying the benefit of transport infrastructure to the communities along the corridor. This involves two levels of interventions: [The author: Josaphat Kweka]
Karen Bosman: The four Brexit scenarios for South African exports (Daily Maverick)
So what does Brexit mean for South African exports? Well, there are a number of variables. These include, first, what happens between the UK and EU, and second, what happens between the UK and South Africa.
“This summit will provide an opportunity to build on the last two summits. More South African companies have the Kenya market and penetrated Kenya and expanded their businesses. We supported more outbound missions to South Africa in the areas of manufacturing and services,” said Kenya High Commissioner Jean Njeri Kamau said speaking at the Kenya Trade Investment Summit held in Bryanston North of Johannesburg on Thursday. Cabinet Secretary Foreign Affairs of the Republic of Kenya, Monica Juma added that the summit presents an excellent opportunity for networking and forging of strategic partnerships aimed at exploring the investment opportunities available in both Kenya and South Africa. She said that the summit would hear information about the Kenya government’s priorities in the next five years, which present an excellent attraction for foreign direct investment.
Vice President Yemi Osinbajo has disclosed that the major focus of the federal government is to move Nigeria into the top 100 in the 2020 World Bank Doing Business Index. Osinbajo, who disclosed this during the 2019 Presidential Enabling Business Environment Council (PEBEC) Awards held at the old Banquet Hall of the State House, Abuja said in the past three years, Nigeria has implemented more than 140 reforms to make doing business in Nigeria easier. This is even as the senior special assistant to the President on Industry, Trade and Investment, Dr. Jumoke Oduwole, said states in the country adopted PEBEC model in 2017, adding that five states have been recognised by the World Bank. Osinbajo said the World Bank also reported in 2018, that 32 states of Nigeria improved their Ease of Doing Business environment led by Kaduna, Enugu, Abia, Lagos and Anambra States.
Nissan made this appeal through its Director of Sales and Operations, Jim Dando, who said instead of allowing every country in the sub-region own a vehicle assembly plant, which might not be economically viable, some countries should rather concentrate on their areas of proportional advantage. “We would rather strategically create opportunities, that some might specialise in providing tyres, others batteries and shock absorbers, while those countries who do not ultimately assemble vehicles won’t all make the same vehicles because it doesn’t make sense to compete against each other.”
Today’s Quick Links:
The OECD and Sahel and West Africa Club report, Women and Trade Networks in West Africa, is now available online
World Economic Forum on the Middle East and North Africa (6-7 April): preview
Chinese tech investors are turning towards MENA: here’s why
Indonesia’s growing influence in Africa
More educated, less paid: what’s behind the gender gap in Mauritius?
World Health Statistics Overview 2019: Women outliving men ‘everywhere’, new UN health agency statistics report shows
Bangladesh’s fifth Trade Policy Review concludes today at the WTO: access the documentation here
Europe and Central Asia Economic Update, Spring 2019: financial inclusion