tralac’s Daily News Selection
Applications for UNCTAD’s online course on Trade and Gender for COMESA (pdf) close on 28 April. The course will be held from 20 May to 14 July.
Today, in Cairo: The road to Niamey – taking the agenda of regional integration forward. “The meeting will deliberate on matters of regional integration that will enrich the process of developing a proposal on an effective division of labour among the AU, the RECs, the Member States, and other continental institutions.”
Ethiopia, yesterday, deposited its instruments of ratification for the AfCFTA. Comment from the AU: “Deposits of ratification are expected from Sierra Leone, Zimbabwe and The Gambia whose Parliaments have approved ratification of the AfCFTA Agreement. The Agreement will enter into force one month after receipt of the 22nd instrument of ratification. Currently, the ratification processes are at advanced stages. It is hence expected that more AU member states will deposit instruments of ratification by the time the Assembly convenes in July this year in Niamey, Niger.”
tralac’s AfCFTA Ratification Barometer: updated infographic
On 1 April, the Board of the AfDB approved an institutional support grant of $4.8m to the AU to accelerate the momentum of the AfCFTA. The Bank’s grant is targeted at laying the institutional foundations for the AfCFTA implementation secretariat and the roll out of the implementation programmes. “The momentum is now in full swing”, said Andoh Mensah, Manager, Trade and Investment Climate Division at the AfDB. “It is now crucial to establish a robust, efficient, purpose-driven secretariat, capable of addressing improved stakeholder engagement, inclusiveness and ownership in the AfCFTA implementation”.
In addition, the session discussed the results of a new global survey on financial inclusion, released by BNY Mellon with support from ICC. The survey, Overcoming the trade finance gap: root causes and remedies (pdf), examines the causes of the global trade gap and asks participants for strategies to address it. The results reveal that trade finance rejection rates are continuing to increase across institutions and that regulatory revision and technology are considered the most effective ways of narrowing the trade gap. Finally, the panel turned its attention to regional perspectives from Africa. Panellists provided an overview of emerging solutions for improving access to finance in these regions, including the introduction of an intra-African payment system to encourage local bank intermediation for trade finance. [ODI: Blended finance in the poorest countries – the need for a better approach, pdf]
IMF staff and the Zimbabwean authorities have reached agreement on macroeconomic policies and structural reforms that can underpin a Staff Monitored Programme. The SMP, which will be monitored on a quarterly basis, aims to implement a coherent set of policies that can facilitate a return to macroeconomic stability. Successful implementation will assist in building a track record and facilitate Zimbabwe’s reengagement with the international community. The policy agenda to be monitored under the SMP is anchored on the authorities’ Transitional Stabilization Program and emphasizes fiscal consolidation, the elimination of central bank financing of the fiscal deficit, and adoption of reforms that allow market forces to drive the effective functioning of foreign exchange and other financial markets. In addition, the agreed policies—both macroeconomic and structural—can be expected to remove critical distortions that have held back private sector growth and to improve governance. The SMP also includes important safeguards to protect the country’s most vulnerable people. [Reuters: Zimbabwe seeks $613m aid from donors after drought, cyclone]
Shedding light on Mozambique’s informal economy: a different methodology and new data (World Bank)
Following this methodology, our estimates reveal the significance of the informal sector to the economy of Mozambique. In each of the three cities, the number of informal firms far outweighs the number of formal firms. In the capital city of Maputo, there are four times as many informal as there are formal firms. In Beira and Nampula, the ratios of informal to formal are much higher: in Beira, there are 17 times the number of informal firms as there are formal firms, and a dramatic 36 times the number in Nampula. Our estimates also underscore the importance of the informal sector as a source of employment. In Maputo City there is approximately one informal business for every 10 working age people. In Beira and Nampula, the informal sector is an even greater source of potential employment, with one informal business for every 5 and 6 working-age individuals respectively. We have posted similar data for the city of Harare, Zimbabwe, and are in the final stages of finishing data collection in two cities in Lao PDR. We are preparing to implement the same methodology in Somalia and Zambia. It is our hope that researchers and policy makers will make use of this data.
Zambia: Digital Financial Services State of the Industry Report (pdf, Bank of Zambia)
The 2019 Report demonstrates some of the true strengths of the emerging Zambian Digital Economy. This is exemplified by the tremendous growth in the number of agents and active DFS accounts or wallets that have been activated. As you will be told by the presenters, the number of agents has increased by 104% from about 23,000 in 2017, to 47,000 in 2018. The report also shows that, as at December 2018, there were 4.3 million active DFS customer accounts, representing 89% growth in active DFS accounts compared to 2.3 million in 2017. The report further indicates an increase in the number of employees that are dedicated to DFS activities with most of them focusing on the distribution channels. [Download: executive summary presentation]
In this country profile, ITC uses data from its SME Competitiveness Surveys to assess the international competitiveness of Zambian enterprises. Under the aegis of the Ministry of Commerce Trade and Industry, the International Trade Centre, the Zambia Development Agency and the Zambian Central Statistical Office conducted 242 in-depth, face-to-face enterprise surveys in 2018 using the ITC SME Competitiveness Survey methodology. This report focuses on firms in three sectors: agri-food, manufacturing and business support services – all considered as priority sectors in Zambia’s Vision 2030, and key in building a strong export base. Manufacturing enterprises dominated the survey, with 30.6% of the sample engaging in the sector. About 23% and 15% were active in the agri-food and business support service sectors, respectively. Profiled findings (pdf). Agri-food sector: 57% of agri-food firms rated good logistics positively. As a result, an average of 74% of the goods dispatched to clients arrived on time. Most surveyed agri-food firms (55%) held an internationally recognized certificate, and 65% appreciated the quality of the certification infrastructure. While only 31% of surveyed firms in the sector exported their product directly (16%) or indirectly (15%), 64% of the firms expressed their interest in starting to export. Manufacturing sector: Being in a value chain helped firms reduce their dependence on one single supplier: 31% of the enterprises that were part of a value chain did not rely on a single supplier, against 16% for firms outside value chains. [Standard Bank: Zambia’s foreign reserves could fall to $1bn by June]
West Africa Competitiveness Programme: update on the joint ITC/ECOWAS project, funded by the EU’s 11th European Development Fund
Launched, during the Spring Meetings: The Country Diagnostic Platform – a joint database of published country diagnostics by EBRD, EIB, IFC, WB, DFID and Sida
From currency depreciation to trade reform: how to take Egyptian exports to new levels? (World Bank)
Egypt is yet to meet its exports potential, which has been historically hampered by several domestic market distortions and multiple barriers, resulting in weak export performance and modest regional and global integration. Although the liberalization of the exchange rate in November 2016 was a necessary step to correct the exchange rate misalignment and ease the ensuing shortages in foreign currency, it has not been sufficient to guarantee a notable improvement in export performance. This paper analyzes Egypt’s exports along three dimensions that are key for export performance and future growth: (i) composition and relatedness of exported products; (ii) geographic and product concentration; and (iii) relatedness to globally traded products.
Rwandan officials will this week join their Djiboutian counterparts on the drawing table to develop a 10-hectare land in Rwanda that belongs to Djibouti, ADV learns here Tuesday. The exercise will include developing several project proposals that would be examined and potentially endorsed by experts of the two countries with the view to fully develop the land, sources told ADV. “Together, we are going to develop infrastructure, advance factory units on the 10 hectares. In the next few months or years, we should see something on the land,” Emmanuel Hategeka, RDB’s Chief Operating Officer told the press during the signing. Aboubaker Omar Hadi, the Chairman of Djibouti Ports and Free Zones Authority indicated that this was part of the bigger plan for the two countries to work together. “We want to take Rwanda to the ocean and we want Rwanda to take us to the heart of Africa,” the Chairman said, emphasising the importance of the partnership.
Nigeria announced on Wednesday a target to double its manufacturing output to 20% of GDP within six years and will set up production hubs across the country in partnership with regional aid banks. Nigeria is Africa’s biggest economy but it lacks a strong manufacturing base, which contributes less than 10% to its total GDP. The country has maintained a strong currency to ensure it can keep imports pouring in, with a growing proportion coming from China. “Project MINE’s (Made in Nigeria for Export) strategic objectives are to increase (the) manufacturing sector’s contribution to GDP to 20% and generate over $30bn annually by 2025,” the ministry of industry, trade and investment said in a statement. The government has set up Nigeria SEZ Investment Company, which will finance industrial parks in special economic zones in the commercial capital of Lagos, southeastern state of Abia and northern state of Katsina. The government is currently raising capital of $250m for Nigeria SEZ Investment Company. It plans to double its equity to $500m over four years, the ministry said.
UNIDO, in cooperation with the AUC, convened the first ever International Quality Infrastructure Forum (4 April, Brussels). The forum focused on the contribution of QI to the achievement of the SDGs and to the implementation of the African Continental Free Trade Agreement. The Forum brought together around 140 participants from across Europe and Africa, including representatives of international quality infrastructure governance bodies and practitioners as well as stakeholders representing international, national and regional authorities, industry, civil society and academia. [Rwanda: Standards body to introduce anti-counterfeit innovation]
EU, China sign a Mandate of Trade Heaven (Asia Times)
Sparks did fly in Brussels, but in the end the European Union and China managed to come up with an important joint statement at their summit this week, signed by Chinese Premier Li Keqiang, European Commission President Jean-Claude Juncker and head of the European Council, Donald Tusk. In theory, there’s agreement on three quite sensitive fronts: a complex, wide-ranging EU-China investment deal to be signed “by the end of next year, or earlier”, according to Li; Beijing to increasingly commit to erasing industrial subsidies and the obligation of technological transfers; and a substantial opening-up of the Chinese market to EU companies. [China set to increase imports from Belgium]
Today’s Quick Links:
Mauritius lifts ban on Kenyan farm produce
Zimbabwe to implement ‘use it or lose it’ mining policy
Francois Baird: Brazilian chicken producers are running scared
State Bank of Mauritius (India) envisions 16 new branches by 2022
EU initiates WTO dispute complaint against Indian tech tariffs
Investment policy related to national security: notification to the OECD by Hungary