Building capacity to help Africa trade better

tralac’s Daily News Selection


tralac’s Daily News Selection

tralac’s Daily News Selection
Photo credit: Kevin Sutherland | Bloomberg

African trade policy events to note:

An EAC experts meeting on the AfCFTA takes place today (by video conference)

Botswana Competition Policy Peer Review Report dissemination events (20-23 May, Gaborone)

EAC trade in services meeting; export promotion strategy meeting (both on 24 May, by video conference)

Mauritius hosts first ACP private sector development information, knowledge sharing event (ACP)

The ACP Secretariat has launched a series of regional meetings aimed at boosting ACP private sector information, developing knowledge sharing and networking. As an integral activity of the Joint ACP-EU Private Sector Development Framework, these events are organised with technical support from Business ACP - the ACP Private Sector Development Platform and the European Commission. This is particularly useful at this point in time, as several new intra-ACP projects and substantial private sector financing facilities are being launched or expanded, namely under the 11th European Development Fund and the European External Investment Plan. Mauritius hosted the first information and knowledge sharing workshop (14-16 May).

EALA approves key report on agriculture, demands additional funds for sector (EALA)

The regional Assembly has again reiterated the need for partner states to implement the Malabo Declaration as a means to ensuring food security and transformation of the sector. With that, the Assembly at its sitting late yesterday approved the report of the Committee on Agriculture, Tourism and Natural Resources on budgetary enhancement in the agricultural sector. The report presented to the House by the Chairperson of the Committee, Mr Mathias Kasamba, states that despite its potential, the agriculture sector has been growing slowly over the years and continues to attract limited funding from governments, far below the continental benchmark of 10%. Moreover, partner states are yet to put in place action plan(s) for attaining the 10% budgetary allocation to the sector. The report reveals a number of challenges within the Partner States, while saying that many Partner States can address some of the challenges given the fact they are at an advanced stage of preparation of their 2019/2020 national budgets. [Rwanda: Could Bank of Kigali’s intervention turn agriculture sector around?]

Ethiopia Economic Update: Poverty and household welfare in Ethiopia 2011-2016 (World Bank)

Ethiopia’s real GDP growth, while still strong, decelerated to 7.7% in FY2018. A slowdown in industrial growth, mainly driven by lower growth in construction due to foreign exchange shortages and higher prices of imported construction materials, coupled with weaker performance of the manufacturing and the agriculture sectors, explains to a large extent the growth deceleration. Services sector exhibited strong growth in FY2018 while manufacturing underperformed. In addition to the prevailing structural- and trade logistics–related challenges, severe foreign exchange shortages and political unrest affected the manufacturing sector over the past three years, with the magnitude of the effect peaking in FY2018. As a result, manufacturing growth has dropped drastically, from 24.7% in FY2017 to 5.5% in FY2018. Large and small-scale industries underperformed dramatically. By contrast, growth of services increased from 7.5% in FY2017 to 8.8% in FY2018, with real GDP growth driven mainly by services (3.4%). Agricultural growth decelerated from 6.7% in FY2017 to 3.5% in FY2018, mainly due to slower growth of crop production. On the demand side, government and private consumption declined by about 1 percentage point each.

Integrating Kenya’s micro and small firms into leather, textiles and garments value chains: Creating jobs under Kenya’s Big Four agenda (ODI)

This study (pdf) aims to support Kenya’s Executive Office of the President by suggesting ways to better integrate leather, textiles and garments MSMEs into value chains, economic zones and industrial parks. It concludes that Government should focus on three priorities, including restructuring MSME institutional support structures, introducing dedicated MSME incubator programmes and involving county governments in MSME support. We suggest three priority actions for the Executive Office of the President: Restructure MSME support structures such as MSEA by feeding into current reviews by the Government of Kenya; Introduce more and better-dedicated incubator and accelerator programmes; Involve county governments:

Creative industries in Rwanda: digital paths to global markets (ITC)

Developing countries may not be the first thing that comes to mind when the topic of digital trade arises. Exports of products such as music and film are seen to be dominated by wealthy economies. But Rwanda’s creative industries are actively exporting to the international market, showing that digital pathways offer new avenues in the global economy. That is a key finding of a new International Trade Centre report that examines how music and film companies in Rwanda are exploring ways to expand sales at home and abroad. The report Creative industries in Rwanda: digital paths to global markets (pdf) offers case studies that illustrate how micro, small and medium-sized enterprises in the Rwandan music and film sectors are overcoming challenges and selling digitally to a global market. In Rwanda, cultural and creative industries represented 5.3% of the gross domestic product in 2016. This share is above the regional average of 1.1%, and exceeds the roughly 3% share in both the United States and the European Union. [Rwandan government agencies, ITC to strengthen capacity of small businesses to use e-commerce]

Nigeria: CBN inaugurates committee to revive textile industry (ThisDay)

The Central Bank of Nigeria has set up a committee for the revival of the country’s cotton, textile and garment industry, with the mandate to revive a minimum of 50 textile firms by 2023. However, in the short-term, the apex bank plans to revive 20 textile firms within the 2019 fiscal period. Citing the whopping $4bn spent annually on importation of textile materials into the country, the apex bank had in March, added all forms of textile materials to the list of items that are not eligible for foreign exchange from the official windows, thereby restricting the sale of forex to textile importers. The CBN Governor, Mr Godwin Emefiele, while inaugurating the committee in Abuja, yesterday, further expressed concern that the country loses $2bn annually to textile smuggling and export, stressing that it was time the country revived the sector in order to take advantage of the massive opportunities therein.

Kenya: Beauty firms blame port delays for stock-outs (Business Daily)

Importers and manufacturers of high-end cosmetics have reported biting stock shortages in recent months attributed to delayed clearance of goods and raw materials at the port. Global cosmetic firms Yves Rocher and Madora - the importer of Chanel and Dior products - are among those hard hit by the delays, which have seen them suffer huge financial losses as well as attrition of customers who have opted for alternative products. Shipments for retailers that would ordinarily take two to three weeks to clear are now taking as much as two-and-a-half months to three months as the government enforces a crackdown intended to net counterfeit products as well as catch tax evaders. “In the last year, Kenya has become one of the most difficult jurisdictions in the world for clearing international goods. We apologise for the temporary stock-out of some of our products, while we navigate this unprecedented regulatory uncertainty,” said a notice to customers by Yves Rocher.

South Africa: Truckers blockade Durban container terminal (IOL)

Hundreds of truck owners blocked roads leading to the Durban Container Terminal yesterday morning causing huge traffic backlogs in the south of Durban. Truckers embarked on a blockade limiting access to both Bayhead and Langerberg roads in frustration over several issues, including the long hours they have to spend waiting to enter the terminal. Truck owner Adhil Chunder said they wanted a 90-minute turnaround time for trucks. He said the turnaround time frame was stipulated in an agreement that had been in place for the past 10 years, but had not been adhered to. Chunder added that truck drivers had to contend with deplorable conditions while waiting to load.

Mozambique and the IMF: Request for bisbursement under the Rapid Credit Facility, Staff report, Debt Sustainability Analysis

The damage to infrastructure has severely impacted productive capacity in key economic sectors in the central region of Mozambique. Preliminary projections suggest that real GDP growth in 2019 would decelerate to a range of 1.8% to 2.8% - down from a pre-cyclone projection of 3.8% - owing mainly to significant losses to agricultural production and disruptions to transport, communications and services. Given the adverse supply shock to food availability in Beira and neighboring districts, end-of-period inflation is now projected to pick up to 8.5% in 2019 - up from a precyclone projection of 5.5% - as the metropolitan region of Beira accounts for about one-fifth of the national CPI.

Emergency assistance and reconstruction efforts will add pressures to an already tight budget. The authorities are committed to reallocate resources to emergency, critical spending in cleanup, quick-wins in the reconstruction effort, and increased social assistance to the most vulnerable, including shelter, clean water and food. The fiscal primary deficit after grants is projected to rise to 2½ percent of GDP in 2019 - one percentage point of GDP higher than earlier projected. The adverse effects of the cyclone will affect the fiscal accounts both through lower tax collections and higher spending related to emergency relief and reconstruction. The bulk of the needed additional spending, however, will have to be covered by external grants. A large gap in the BOP is expected. The non-megaproject current account deficit is estimated to narrow less than projected before the cyclone, to around 13¼ percent of GDP in 2019, from 15¼ percent of GDP in 2018. Replacement for locally-grown foodstuffs, such as rice and maize, and reconstruction materials along with expected decreases in export receipts, including from Beira port services, will create a very significant BOP gap. While external grants are expected to cover most of the external financing shortfall, the authorities aim to close the remaining BOP gap projected for 2019 with the requested RCF disbursement.

AfDB hosts pan-African dialogue on achieving climate change goals for adaptation and mitigation

The AfDB hosted (15-16 May, Abidjan) the first-ever conference for exchange and cooperation between national and local authorities in Africa to address climate issues and support decentralization territorial approach of Nationally Determined Contributions. Ministers, mayors and heads of African municipalities explored opportunities for cooperation and mutual assistance in a “Structured Dialogue” conference convened by the Climate Task Force of the United Cities and Local Governments of Africa, in partnership with the European Commission and the AfDB.

Today’s Quick Links:

WBG releases Little Data Book on Gender

World Bank: Combining growth and gender diagnostics for the benefit of both

Implications of E-commerce for Competition Policy: OECD posts two documents summarising debate at its June 2018 roundtable


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