Building capacity to help Africa trade better

tralac’s Daily News Selection


tralac’s Daily News Selection

tralac’s Daily News Selection
Photo credit: MFarms

On hosting the AfCFTA Secretariat: Eswatini walking tightrope to become Africa’s trade hub (Yenisfak)

At a breakfast meeting with the local business community, prime minister Ambrose Dlamimi said he had no doubt that Eswatini stands a good chance of winning the hosting rights for the AfCFTA Secretariat. “As a country, we have the advantage of having the best infrastructure and facilities in the continent and have been actively involved in the African trade revolution for many years.” He further said that winning the bid would create demand for the establishment of new diplomatic missions and commercial offices as well as supportive bodies such as research institutions, think tanks, audit firms and travel agents. “This is exactly where the business community comes in,” he said, adding “hosting the AfCFTA Secretariat comes with a lot of opportunities for entrepreneurs across many sectors of business in Eswatini”.

He said while the country awaits the arrival of the African Union’s evaluation team, between 10-12 May, there is a need to continue spreading the word among all Emaswati about the significance of the opportunity the country is presented with. However, considering the fight for dominance by African superpowers which in turn trickles down to the regional economic communities, Dlamini said still Eswatini stands a chance because the secretariat of the African Continental Free Trade Area will be a pan-African institution. In this regard, all the members of the African Union will have a collective ownership of this organ. “To this end, Eswatini is respectfully seeking support from all the regions in the continent. Eswatini has warm, cordial, fraternal diplomatic relations with countries from West and North Africa, and it is on this basis that we are seeking their support.”

Recent EALA reports on regional integration and trade issues (pdf)

  1. Report of the 4th EALA on the sensitisation activity held in the EAC Partner States (dated February 2019, uploaded to the EALA www on 7 March 2019)

  2. Report on the capacity building workshop for Members of the Committee on Communication, Trade and Investment in the area of trade (dated February 2019, uploaded on 20 March)

  3. Report of the Committee on Communication, Trade and Investment on the status of implementation of the Single Customs territory (report dated December 2018, uploaded on 2 April 2019)

Noah Smith: Africa’s only hope is industrialization (Bloomberg)

The question for the US and other developed countries is how they can help African industrialization continue. An industrialized Africa is in America’s best interests. First of all, with Chinese costs rising, African factories are necessary to keep the prices of clothes, electronics and other goods from rising too much. And while some may claim that African competition is taking jobs from American manufacturers, the truth is that if that manufacturing were done in the US, it would be mostly automated. In order to forestall this grim future and give hope and security to the world’s neediest people, the US and other rich countries need to encourage imports of African-made goods. The African Growth and Opportunity Act, passed in 2000, was a good start, but more can be done. Market access ensures stable demand, which provides an incentive for Chinese and other entrepreneurs to invest and build for the long term.

Gold worth billions smuggled out of Africa (Reuters)

Billions of dollars’ worth of gold is being smuggled out of Africa every year through the United Arab Emirates in the Middle East – a gateway to markets in Europe, the US and beyond – a Reuters analysis has found. Customs data shows that the UAE imported $15.1bn worth of gold from Africa in 2016, more than any other country and up from $1.3bn in 2006. The total weight was 446 tonnes, in varying degrees of purity – up from 67 tonnes in 2006. Much of the gold was not recorded in the exports of African states. Five trade economists interviewed by Reuters said this indicates large amounts of gold are leaving Africa with no taxes being paid to the states that produce them.

The customs data provided by governments to Comtrade, a United Nations database, shows the UAE has been a prime destination for gold from many African states for some years. In 2015, China – the world’s biggest gold consumer – imported more gold from Africa than the UAE. But during 2016, the latest year for which data is available, the UAE imported almost double the value taken by China. With African gold imports worth $8.5bn that year, China came a distant second. Switzerland, the world’s gold refining hub, came third with $7.5bn worth. Most of the gold is traded in Dubai, home to the UAE’s gold industry. The UAE reported gold imports from 46 African countries for 2016. Of those countries, 25 did not provide Comtrade with data on their gold exports to the UAE. But the UAE said it had imported a total of $7.4bn worth of gold from them. In addition, the UAE imported much more gold from most of the other 21 countries than those countries said they had exported. In all, it said it imported gold worth $3.9bn – about 67 tonnes – more than those countries said they sent out.

Why Kenya wants shipping lines to register by June 1 (Business Daily)

Kenya has ordered all the shipping lines that ply its waters to register with the industry regulator by 1 June in an effort to boost collection of fees and rid its maritime space of illegal activities. Ships that operate solely on the Kenyan territorial waters must register by 20 May while the foreign-flagged vessels have been ordered to furnish the Registrar of Kenyan Ships with their details by 1 June, the Kenya Maritime Authority says. The move comes amid rising concerns in the maritime fraternity that poor enforcement of existing laws has made it possible for foreign ships to frequently breach Kenya’s boundaries to engage in illegal fishing, smuggling of goods and dumping of harmful waste on the country’s territorial waters.

C-Trade’s Collen Tapfumaneyi: He’s bringing text message trading to Southern Africa (OZY)

For a country with sinking GDP, soaring inflation and a foreign currency crisis, successfully managing one’s financial life here can be difficult. Lining up is becoming a national pastime — for both banks and fuel. But the innovations forged by Collen Tapfumaneyi, who created C-Trade last year after launching Zimbabwe’s first alternative trading platform, the Financial Securities Exchange, could help lift Zimbabwe from its economic doldrums. Their popularity is spreading quickly around the region. Accessible to anyone with a Zimbabwe-based bank account who wants to swap shares in the 56 active listed companies on the country’s stock exchange, C-Trade has seen an average of $300,000 in trades each month since its launch last July.

AFCW3 Economic Update: Digitizing agriculture – evidence from e-voucher programmes in Mali, Chad, Niger, Guinea (World Bank)

The agricultural sector is a significant contributor to the economies of Guinea, Mali and Niger. In terms of share of GDP, agriculture represents 16%, 38%, and 40% respectively. It is also a primary source of employment for most of the population (68%, 57%, and 75% respectively). Hence the main article in the present volume (pdf) is devoted to the innovative effort of introducing e-vouchers schemes, supported by digital means, in Guinea, Mali and Niger. The e-voucher program is built around three key components: a digital platform for SMS messages, a reliable database of electronically-registered farmers in selected regions, and a directory of agro-dealers. In so doing, fertilizers (or seeds) distribution becomes transparent, ensures high quality and as it unfolds, fosters private sector participation. Based on pilot practices in the sub-region, four major lessons are learned:

Concluding today, at the WTO: International Forum on Food Safety and Trade

“Technological advances are revolutionizing the way we trade. And this has an impact on the way that food safety measures are designed and enforced,” DG Azevêdo said in his opening remarks to the Forum. To that end, he called for all the organizations to “collaborate to help build the necessary capacity and skills”. DG Azevêdo asked officials and experts to further look at digitalization and its impact on food safety and trade, ensuring synergies between food safety and trade facilitation, and promoting harmonized food safety regulations in a period of change and innovation. FAO DG Graziano da Silva pointed out the pivotal role that trade rules and regulations are playing along the food supply chain, particularly when new health issues such as obesity become a global challenge: “The international trade and the high consumption of ultra-processed food is a great concern that must be addressed properly, based on the fact that obesity is a public health issue and not merely a consequence of individual choices. The international community must advance the establishment of rules and regulations that encourage the consumption of healthy and nutritious foods.”

African Hotel Chain Development Pipeline survey (New Times)

The big chains, Marriott and Accor, are leading the way in African hotel development which overall has more than 75,000 rooms in 401 hotels in the pipeline, according to the 11th annual survey by W Hospitality Group. The figures represent a 1.5% decrease on the 2018 pipeline, but still more than 12% ahead of 2017. And data for deals which have been realized show almost 100 hotels opened in Africa in 2017/18 with a total of 16,000 rooms. The annual African Hotel Chain Development Pipeline survey had a record 43 international and regional hotel contributors covering 54 countries in north and sub-Saharan Africa, and the Indian Ocean islands. Marriott, the world’s largest hotel chain, has the biggest pipeline in Africa, 42% more hotels and 25% more rooms than second-placed Accor. But in absolute terms, Accor beat the pack in 2018, with a net increase of 3,400 rooms in 15 hotels. Hilton and Marriott signed around 2,000 and 3,600 rooms respectively, but saw a net reduction in their pipelines, due to openings and “cleaning”. Just over half of the rooms in the African pipeline are currently onsite and under construction, making them much more likely to open than those still “on paper”. Ranking the companies on this basis, Accor heads the list, followed by Radisson, then Hilton and, in 4th place, Marriott.

Rwanda: Parliament to launch inquiry into issues dogging agric sector (New Times)

The Lower House on Wednesday resolved to set up an ad hoc commission to examine issues in the agriculture sector. The resolution was made after the MPs were not satisfied with a presentation by the Minister for Agriculture and Animal Resources, Geraldine Mukeshimana, during a plenary session. Persistent post-harvest losses, importation of hybrid seeds (soybean, maize, and wheat), challenges facing milk collection centres and high taxes for marshland users were among the major issues that the minister failed to give convincing explanations for.

Trade wars: What do they mean? Why are they happening now? What are the costs? (World Bank)

How should economists interpret current trade wars and the recent US trade actions that have initiated them? This paper offers an interpretation of current US trade actions that is at once more charitable and less forgiving than that typically offered by economic commentators. More charitable, because under this interpretation it is possible to see a logic to these actions: the US is initiating a change from “rules-based” to “power-based” tariff bargaining and is selecting countries with which it runs bilateral trade deficits as the most suitable targets of its bargaining tariffs. Less forgiving, because the main costs of these trade tactics cannot be avoided even if they happen to “work” and deliver lower tariffs. Rather, the paper shows that the main costs will arise from the use of the tactics themselves, and from the damage done by those tactics to the rules-based multilateral trading system and the longer-term interests of the United States and the rest of the world. [The authors: Aaditya Mattoo, Robert W. Staiger]

Trading off the income gains and the inequality costs of trade policy (World Bank)

This paper characterizes the trade-off between the income gains and the inequality costs of trade using survey data for 54 developing countries. Tariff data on agricultural and manufacturing goods are combined with household survey data on detailed income and expenditure patterns to estimate the first-order effects of the elimination of import tariffs on household welfare. The paper assesses how these welfare effects vary across the distribution by estimating impacts on the consumption of traded goods, wage income, farm and non-farm family enterprise income, and government transfers. For each country, the income gains and the inequality costs of trade liberalization are quantified and the trade-offs between them are assessed using an Atkinson social welfare index. The analysis finds average income gains from import tariff liberalization in 45 countries and average income losses in nine countries. Across countries in the sample, the gains from trade are 1.9% of real household expenditure on average. [The authors: Erhan Artuc, Bob Rijkers, Guido Porto]

Today’s Quick Links:

Le nouveau livre de Carlos Lopes analyse les 8 défis de l’Afrique en transformation

Last week’s 2019 Forum on Financing for Development Follow-up: outcomes, summary of discussion

World Bank’s Commodity Markets Outlook (April 2019): forecasts prices for 46 key commodities. The commodity markets outlook in six charts.

Tanzania identifies, digitizes 274 new historical sites to spur tourism

South Africa: Fighting a losing battle in R859m illegal abalone trade

Nigeria: MAN seeks removal of barriers to industrialisation

Nigeria: FG to process mining licences in 15 days

EU investment rules leave over 80% of Chinese firms feeling discriminated against, survey says


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