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tralac’s Daily News Selection

tralac’s Daily News Selection

25 Apr 2019

African trade policy events taking place today:

In Maseru: SACU Council of Ministers meeting

In Arusha: EABC-UNECA workshop on the role of the private sector in the AfCFTA

In Abuja: ECOWAS, AU, GIZ workshop on African trade policies and ECOWAS regional trade policy

In Nairobi: John H. Jackson Moot Court Competition – ATPC supporting empowerment of Africa’s future trade negotiators

In Cape Town: AviaDev conference

Concluded yesterday, in Addis Ababa: UNECA inception meeting for a project on strengthening the capacities of selected African countries to counter trade misinvoicing

African trade events to diarise:

  1. East African regional ministers’ summit on agriculture and trade (2-4 May, Kampala).

  2. AU training workshop on the settlement of disputes and the AfCFTA (13-17 May, Cairo). One of the main objectives of the AfCFTA under Article 4(f) of the Agreement aims to establish a mechanism for the settlement of disputes concerning the rights and obligations of State Parties. The AfCFTA Dispute Resolution Protocol stipulates a State-to-State dispute mechanism to resolve differences arising out of the AfCFTA. As set out in Article 27, Arbitration is one of the dispute settlement mechanisms that could be mutually agreed upon by the parties. This system is similar to that of the WTO. But the experience of African States at the WTO Dispute Settlement Body is minimal. African States have not had any case as respondents or complainants at this body; there have been only five cases where African States have participated as third parties, two of which as part of the ACP group. Furthermore, AU Member States are signatories to over 900 Bilateral Investment Treaties, which prescribe Investor-State Dispute Settlement as a means of resolving disputes between investors of the home State and the host State. This has yielded in numerous Investor-State disputes, where African States have been respondents. According to the 2018 data of the UNCTAD, there are 101 known ISDS cases concerning African States within international arbitral tribunals. It is therefore of paramount importance to provide capacity in both ISDS and State-to-State dispute to Member States as they embark on the road to greater Intra-Africa trade as well as increased trade activities with third countries outside the continent.


AviaDev conference updates:

  1. Inter-connected African aviation industry valued at $29bn in direct revenue. AviaDev, Africa’s premier event dedicated to developing connectivity to, from and within the African continent, with partners, MIDAS Aviation and Futureneers Advisors have estimated the potential revenue from new African aviation routes could yield $29bn in direct revenue. This revenue, which is more than the individual GDP’s of 70% of the countries in Africa, could be realized if the largest airports in each African country are connected with one another. Currently, only 33.7% of this huge market is served, meaning that there is over USD $19bn in untapped annual revenue.

  2. Better air links needed to unlock Africa’s potential – Wesgro CEO. In 2018, six other African countries were among the top-15 source markets for international arrivals by air to Cape Town, especially from Zimbabwe. Wesgro sees the top African growth markets for Cape Town international air arrivals to include Rwanda, Zimbabwe, Egypt and Morocco. RwandAir starting to fly to Cape Town last year played a big role in the growth in arrivals from Zimbabwe and Rwanda, said Harris. The airline has decided to increase its frequencies to the Mother City. Furthermore, the growth in arrivals from Egypt and Morocco took place despite the lack of of non-stop connectivity to Cape Town at present. “This shows that we need better connections between Cape Town and North Africa and the unserved markets in West Africa,” said Harris. Since 2015, four new African airlines started flying to Cape Town, namely Ethiopian Airlines, TAAG, Kenya Airways and RwandAir.

  3. Related post: The African aviation sector will become one of the fastest-growing aviation regions within the next 20 years, with an average annual expansion rate of almost 5%, International Air Transport Association has said. Currently, there are 731 airports and 419 airlines on the African continent, with the aviation sector supporting around seven million jobs and generating $80bn in economic activity. In terms of passenger numbers, 47 million passengers departed from Africa’s top five airports, which included Cairo, Addis Ababa and Marrakesh in 2018, according to the latest Airline Network Knowledge Expertise & Research report, produced by Ralph Anker. Africa’s aviation potential will be explored at the inaugural CONNECT Middle East, India & Africa event, taking place at the Dubai World Trade Centre on April 30 and May 1, 2019.

Kenya: Economic Survey 2019 (KNBS)

Extracts from Chapter 6: International trade and balance of payments (page 87). Table 6.15 presents information on trade between Kenya and African countries for the period 2014 to 2018. Within the EAC, exports to Tanzania and Rwanda rose by 4.3% and 4.2% to KSh 29.8 billion and KSh 17.8 billion, respectively, while those to Uganda remained nearly constant at KSh 61.9 billion in 2018. Similarly, exports to South Sudan declined by 22.6% from KSh 16.7 billion in 2017 to KSh 13.0 billion in 2018. Total exports to COMESA member states declined by 3.8% from KSh 166.4 billion in 2017 to KSh 160.0 billion in 2018. Exports to the DRC decreased by 19.6% from KSh 18.9 billion in 2017 to KSh 15.2 billion in 2018. However, export earnings from Egypt grew by 5.8% to KSh 20.1 billion in 2018. Export earnings from South Africa improved significantly by 59.0% to KSh 4.4 billion in 2018, largely on account of re-exports of machinery to the country. Exports to Somalia declined from KSh 19.7 billion in 2017 to KSh 15.1 billion 2018.

Expenditure on imports from Africa rose by 2.7% from KSh 200.5 billion in 2017 to KSh 205.9 billion in 2018, accounting for 11.7% of total imports. Imports from the EAC increased by 12.4% to KSh 68.5 billion in 2018 and contributed 33.3% of the value of imports from Africa. The value of imports from Uganda rose by 17.6% to KSh 49.4 billion, largely driven by increased imports of maize, sugar, milk and animal feeds. Imports from Tanzania rose from KSh 17.2 billion in 2017 to KSh 17.8 billion in 2018. In 2018, expenditure on imports from Egypt and South Africa grew by 2.7% and 4.6% to KSh 36.3 billion and KSh 64.7 billion, respectively. However, the value of imports from Zambia, Mauritius and Eswatini (formerly Swaziland) declined by 11.0, 16.6 and 23.2% to KSh 6.9 billion, KSh 6.1 billion and KSh 8.6 billion, respectively, in 2018.

Mauritius: IMF, World Bank reports

  1. IMF executive board concludes 2019 Article IV Consultation. Directors highlighted the widening external imbalance. While international reserves have improved significantly on the back of strong financial inflows, given the large size of the offshore sector, Directors agreed that the foreign exchange intervention policy should continue to build reserves buffers as conditions permit, to strengthen resilience to shocks. Directors appreciated the authorities’ efforts to bolster competitiveness by introducing effective and efficient initiatives to improve the business climate, build innovation capacity, reduce the skill mismatch, and increase female workforce participation. Maintaining strong and independent institutions is essential to ensure the country remains an attractive investment and employment destination. Directors stressed the importance of implementing the outstanding FSAP recommendations for further strengthening financial stability. They also welcomed the steps taken to comply with the international anti‑tax avoidance initiatives and the efforts to strengthen the AML/CFT framework. In this context, they underscored the need to expeditiously implement the remaining recommendations of the Eastern and Southern African Anti Money Laundering Group (ESAAMLG). Directors also encouraged the authorities to continue to improve data quality.

  2. World Bank report on earnings mobility and inequality of opportunity in the labor market. Lower-paid workers in Mauritius are to some extent catching up to their higher-paid counterparts over time, according to Mauritius: Earnings mobility and inequality of opportunity in the labor market, a new World Bank report released this week. Inequality remains high, however, and the characteristics that drive earnings inequality also keep individuals from benefitting from earnings mobility, and therefore women, young people, and less-educated workers not only face lower initial earnings, they also face more difficulty in catching up with high-paid workers during their time in the work force. The report makes three key recommendations to equalize earnings and job opportunities, especially for those left behind: Continue with women-friendly social policies; Strengthen policies targeted at developing skills that are in high demand; Consolidate employment programs, connect them with demands from employers, and integrate them with education policies.

Tanzania to establish e-border management system to intensify security (IPPMedia)

The government is finalising plans for the establishment of e-border management control system aimed at improving security at border points and increase revenues, the House heard yesterday. Minister for Home Affairs, Kangi Lugola told the lawmakers that the new system will be operational from July, 2019. He also noted that the government will in the 2019/2020 start using e-passport-permit and e-visa in all Tanzanian embassies outside the country. Tabling the 2019/2020 ministerial budget estimates, the minister said the electronic immigration services has shown great success both locally and internationally, citing recent recognition of Tanzanian passport by the International Civil Aviation Organization.

Nigeria: Committee designs agric produce export template (NAN)

Mr Olayemi Abass, Chairman of the Inter-Ministerial Committee for Produce Export, on Wednesday said the committee had set up a workable template to support agricultural produce export. Abass made this known in an interview with the News Agency of Nigeria in Lagos. He said that the difficulty exporters went through at ports necessitated the emergence of the committee to prevent administrative delays at ports with regard to export. “We have carried out consultations with concerned agencies and we have arrived at a workable template to facilitate exports. The issue of delay at ports has been taken care of because the operatives involved in the delay have been co-opted into the operations of the committee to make exports seamless. Logistics matters and proper storage at ports have to be taken care of in order to make the produce retain its quality up to the port of destination.”

Today’s Quick Links:

Maya Forstater: 2.7% of GDP – another big number to take with a huge pinch of salt on multinational tax avoidance in Africa

Fostering sustainable development through Chinese overseas economic and trade cooperation zones along the Belt and Road

Belt and Road Forum session on financial connectivity: opening remarks by Christine Lagarde

The KAZA Uni-visa: Zambia, Zimbabwe push for a single visa in Southern Africa

Tanzania: Stiegler’s Gorge contractors get 688bn/- advance payment

Nigeria: Unlocking $6bn annual potential of a dying textile industry

OECD: The potential economic impact of Brexit on Denmark (pdf)

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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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