Building capacity to help Africa trade better

tralac’s Daily News Selection


tralac’s Daily News Selection

tralac’s Daily News Selection

The Bus King of Africa (Moneyweb)

Having conquered the South African bus market, Busmark CEO Pat Nodada is now partnering with the Industrial Development Corporation to build bus factories across Africa, starting with Zimbabwe, Kenya, Nigeria and Ghana. It’s a bold move that will increase Busmark’s monthly output from 100 to 500 buses over the next five years. The IDC is taking a R2bn bet that Nodada can pull this off by replicating the same formula that turned Busmark into the dominant bus maker in SA, with an estimated 40% of the local and 20% of the Zimbabwean market. Nodada bought into the company a decade ago, retooled its Randfontein factory to supply city transporters such as Metrobus and MyCiti and promptly won a contract to supply the Gautrain fleet. This month 30 buses left the Randfontein factory destined for Kenya, part of an order for 90 units. This is a prelude to the opening of a new bus assembly plant in Nairobi later this year in a joint venture with Mercedes Toyota Tsuscho that will turn out 20 units a month. A similar-sized factory will open up in Harare in July this year. A much larger factory with the capacity to churn out 250 units a month will open in Nigeria next year, followed by a fourth factory in Ghana by 2022. Smart factories are also in the works for Port Elizabeth and Durban. [South Africa: Navara spearheads Nissan’s African expansion plans]

Business Barometer: Africa CEO Survey (Oxford Business Group)

As part of its second survey on the African economy, the global research and consultancy firm asked 787 C-suite executives in eight countries across the continent a wide-ranging series of questions on a face-to-face basis aimed at gauging business sentiment. More than four-fifths (84%) of executives said they felt positive or very positive about local business conditions in the year ahead, with 78% telling OBG that they expected their company to make a significant investment in the months ahead, up from 74% in 2018’s survey. A similar number (72%) of interviewees were confident that the African Continental Free Trade Area would have a positive or very positive impact on intra-regional trade levels. Commenting in her blog, Souhir Mzali, OBG’s Regional Editor for Africa, said the reasons for optimism among business leaders were multiple, ranging from rising interest in the continent from China and beyond, and the investments that have ensued to the rollout of public investment programmes for infrastructure. The AfCFTA, she added, while far from challenge-free, had the potential to significantly boost trade volumes. [Related blog from Souhir Mzali: The AfCFTA has crossed the ratification threshold – what’s next?]

Nigeria and the AfCFTA: highlights from yesterday’s briefing by the Minister of Industry, Trade and Investment, Okechukwu Enelamah (Premium Times)

The Minister of Industry, Trade and Investment, Okechukwu Enelamah, has said Nigeria does not lose anything by not signing the AfCFTA agreement. He said Nigeria’s priority is to conclude the series of consultations with various interest groups on the impact the agreement could have on Nigeria’s national interest and the economy. “We are working on the African Continental Trade Agreement, which will come into force soon,” the minister said during a media briefing in Abuja on Thursday on the activities of his ministry in the last four years. “We are working on putting our house in order by discouraging trade malpractices, dumping, smuggling, bringing sub-standard goods into Nigeria and the things that are inimical to the progress of the country’s industry, economy, and trade. But, the issue is not a question of the first country to sign. The important thing to Nigeria is that, what is worth doing at all is worth doing well. The consultation is important. Nigeria will sign the agreement when it has finished doing its homework. Nigeria will be going into the agreement stronger, having finished the consultations. Countries that have signed the agreement are now doing their stakeholders consultations. But, Nigeria chose to do its consultations first before signing. We hope that in the end, we will all be in the same place,” he said. According to the minister, the country’s priority concern about the agreement is its proper implementation “that will be good, not only for Nigeria, but for Africa.”

Key recommendations from the recent EABC-UNECA conference on the AfCFTA and the role of the private sector: extracts

EAC Partner States, in collaboration with the private sector, should identify and address existing impediments at national and regional to the full implementation of the AfCFTA...should enhance capacity building to strengthen its institutions to enable them to discharge new mandates derived from AfCFTA…should embark on compressive awareness creation on opportunities and challenges presented by AfCFTA…should work together in addressing supply-side constraints to enhance the competitiveness of EAC Producers in the AfCFTA.

EAC Partner States, in collaboration with the private sector, should work together in addressing supply-side constraints to enhance the competitiveness of EAC Manufacturers in the AfCFTA; There is a need to have an EAC CET structure that recognizes the different levels of integration at the continental and drives down the cost of regionally manufactured products; Development of rules of origin regime at AfCFTA level that reflect the already existing at EAC level; Fully implement the existing regional initiatives in selected services sectors such as Tourism, in order to accrue the gains and make the EAC services providers in these sectors, more competitive at the AU level e.g. EAC Tourism Bill, Single Tourist Visa; Gender-responsive private sector representation at all levels of negotiations; Sensitize private sector on challenges and benefits/opportunities of Trade in services liberalization at Continental level. [Download: pdf Highlights of the EABC-UNECA Conference on the AfCFTA (853 KB) ] [Diarise: German–EAC Business and Investment Expert Dialogue, 14 May, Arusha]

UNIDO publishes new Competitive Industrial Performance Report

UNIDO’s Competitive Industrial Performance Report 2018 is based on the analysis of eight indicators of industrial performance which are used to construct a composite index, widely known as the CIP Index. Countries are ranked by the index score indicating their relative position in global manufacturing. An upward shift in rank over time indicates a gain in competitive industrial performance in comparison to others. The CIP Index is a widely used by international development agencies to rank countries in the context of their development priorities. The CIP Report also presents the ranking of countries according to each of the eight indicators as well as by country groups and regions. The best performing three counties according to the CIP Report 2018 are Germany, Japan and China. Germany has been on top of the ranking for many years, followed by Japan and the United States. However, now China has overtaken the United States and occupies third position. The 2018 report covers 150 countries (pdf), more than any previous report. For the first time, the CIP Report includes a new dimension to the index reflecting the effect of industrial production on the environment. Section 2.3.8: Sub-Saharan Africa (p57). Figure 2.17 shows that the performance of sub-Saharan African countries in CIP Dimensions 1 and 3 is particularly poor. Yet some countries have made some advances in technological deepening and upgrading. This result is driven by comparatively sophisticated manufacturing production systems in Swaziland and South Africa. [See Table 2.8: Regional and global 2018 CIP rank, sub-Saharan Africa]

How economic transformation happens at the sector level: evidence from Africa and Asia (ODI)

This paper explores the factors that shape the prospects of success in economic transformation at the sector level. It provides an evidence base on the factors and conditions that drive or hold back economic transformation by focusing on examples where changes at a sector level triggered economic transformation, and the roles different actors played throughout this process. Extract (pdf): In several of the successful cases, favourable balances of political and economic interests supported transformation because they resulted in credible commitments to investors. In Ghana, this took the form of cross-party political support for the cocoa sector and the key sectoral institution. In Mauritius, high-level political backing for a consensus view on the desired future direction of the economy was important. In Ethiopia, state investments in air transport were backed by a long-term policy vision designed by a regime that is relatively secure. In South Africa, multi-year policy visions provided a credible platform for long-term planning in the automotive sector. In failures, such commitments were typically uncertain, undermining investor confidence. For example, the government’s credibility in the case of cashews in Mozambique was undermined by poor communication, the perception that the policy reforms were World Bank-driven and the knowledge that processing could be profitable only with government protection. In Tanzania, the power of food-importing businesses undermined the credibility of the presidential rice initiative and the East African Community’s tariff rules. [The authors: Neil Balchin, David Booth, Dirk Willem te Velde]

Made in Ethiopia: challenges in the garment industry’s new frontier. This report from the NYU Stern Center for Business and Human Rights assesses the arrival of the global apparel industry in Ethiopia, identifies problems related to low wage levels, and makes recommendations for a way forward that benefits the industry, Ethiopia, and Ethiopian factory workers.

Fostering sustainable development through Chinese overseas economic and trade cooperation zones: status quo and practical guidelines for the way forward (pdf). The author is Moritz Weigel (China Africa Advisory). View other presentations delivered during the recent Sustainable Industrial Areas conference (8-10 April, Addis Ababa).

Arab-Africa Trade Bridges Programme: Dubai Exports in bid to boost Arab-Africa trade (Zawya)

The two-day Agri-Food Forum was attended by 40 companies from 15 African countries, witnessed over 200 business-to-business meetings on building mutual relations and enhancing agri-food exports. Mohammed Ali Al Kamali, deputy CEO of Dubai Exports, said the forum primarily sought to enhance relations between the private sector in Africa and the UAE so that they are well-positioned to take advantage of existing and emerging opportunities in both regions. “A key element of the Dubai Exports strategy is to support and create platforms for buyers and suppliers to share information on new and emerging markets,” Al Kamali said.

Today’s Quick Links:

The documentation, presentations from this week’s Commission on Science and Technology for Development in Geneva

Bloomberg: Trump shatters trade truce in big 2020 gamble

16 developing countries to participate in India’s WTO Ministerial Meeting (13-14 May)

IGAD conference on forced displacement and mixed migration: Horn of African states pledge support for regulated migration

Africa Blue Economy Forum (25-26 June, Tunis): African businesses urged to dive into Blue Economy

Wandile Sihlobo: Zimbabwe’s land reform and white farmer compensation

13th Asia/Africa IFA Conference 2019 (pdf): Mauritius remains a great place to grow businesses, states Minister Sesungkur

Egyptian-Francophone cooperation to support Africa

New report highlights continued threat to African elephants from poaching


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