tralac’s Daily News Selection
Nigeria’s funding of the AU: FEC approves implementation of new import levy (Daily Post)
The Federal Executive Council, yesterday, approved the rate of 0.2% as the new import levy of Cost, Insurance and Freight (CIF) on goods coming into Nigeria. The Minister of Finance, Mrs Zainab Ahmed, disclosed this while addressing the State House correspondents after the FEC meeting presided over by Vice President Yemi Osinbajo. “Council approved a rate of 0.2% as the new import levy of CIF that will be charged on imports coming to Nigeria but with some exceptions. The exceptions include goods originating from outside the territory of member countries that are coming into the country for consumption. It also includes goods that are coming for aid and also it includes goods that are originating from non-member countries but are imported through specific financing agreement that ask for such kind of exemptions. It also exempts goods that have been ordered and are under importation process before the scheme is announced into effect."
Ahmed said that Nigeria knew that what would accrue from the new levy would be more than what was required as subscription to the AU, that the balance would be put in a special account. The special account would be used to finance subscriptions in multilateral organisations such as the World Bank, African Development Bank and the Islamic Development Bank. She said the second approval by the PEC was for the setting up of the Steering Committee, to be chaired by the vice president for the design and implementation of a National Single Window.
Egypt looking forward to hosting AfCFTA's executive office: Prime Minister (Ahram)
During a meeting with a delegation from the AUC on Monday, Egypt's Prime Minister Mostafa Madbouly said that President Abdel-Fattah El-Sisi is giving priority to the AfCFTA agreement under Egypt's current chairmanship of the AU, affirming that Egypt is looking forward to hosting the headquarters of AfCFTA's executive secretariat. Madbouly stressed the importance of the African AfCFTA agreement due to its positive role in promoting cooperation and integration in the African continent, pointing out that Egypt's capabilities, including logistic and infrastructure ones, enable it to be the seat of the head office of the agreement.
Egypt: 3.7% growth in trade exchange with South Africa (Ahram)
The trade exchange between Egypt and South Africa has achieved a growth of 3.7% in 2018, registering $287.8m, compared to $277.5m in 2017, the Egyptian Commercial Service said on Monday. Egypt's exports to South Africa increased to $105.4m during 2018 compared with $98.7m in 2017, with an increase of 10%, according to a report submitted by the ECS office in South Africa's capital of Pretoria. Despite some logistic problems, Egypt's exports to South Africa country met the targeted increase planned for Egyptian exports by the Ministry of Trade, the report said. Asphalt, or bitumen, topped Egypt's exports to South Africa with a notable increase of 512% followed by non-woven fabric that stood at 128 percent, according to the report. [Egypt launches trade shipping line from Ain Sokhna to East Africa]
PwC Global Economy Watch: improvements to public governance could boost Africa’s continental economy by $23bn
The latest edition of PwC’s bimonthly Global Economy Watch has found that African economies could receive a windfall of £23bn if each economy applied similar governance reforms equivalent to those made by Cote d’Ivoire since 2013. The continent-wide economic analysis modelled the performance of each country across six of the World Bank’s Worldwide Governance Indicators (2013-17), which covers aspects such as regulatory quality, rule of law and government effectiveness. The analysis has found that if each African economy made an improvement to governance equivalent to that made by Côte d’Ivoire over the past four years, these gains would be worth around $23bn if realised across the continent. The countries with the largest potential gains are those with a comparatively high GDP per head but a poor track record on governance. Accordingly, oil-rich Libya and Equatorial Guinea would see the greatest increase, with each person gaining an additional $400 and $200, respectively. Those with lower GDP per capita, such as Niger and Malawi, would see a smaller improvement, despite their governance rank being below the average for the region. By contrast, economies like Rwanda, which have made similar improvements to Côte d’Ivoire, would also only realise a small benefit, with greater gains made through further diversification of their economies. The forecast also notes strong regional differences in economic growth across the continent.
Trade integration and growth: evidence from Sub-Saharan Africa (World Bank)
This paper examines the growth effects of different dimensions of international trade integration - notably, volume, diversification, and natural resource dependence - in Sub-Saharan Africa. First, the paper documents the recent trends in these foreign trade dimensions for the region and the traditional sources of growth. Second, it empirically estimates the impact of trade integration on growth per worker and the sources of growth; that is, growth of capital per worker and total factor productivity growth. To accomplish this task, the analysis uses a sample of non-overlapping five-year period observations for 173 countries from 1975 to 2014. [The authors: César Calderón, Catalina Cantú]
Measuring progress: Financial inclusion in SADC - 2018 (pdf, FinMark Trust)
By design, this first-year monitoring and evaluation report in the selected implementation countries (Botswana, Eswatini, Lesotho, Malawi) in the SADC region does not include all of the elements of the National Financial Inclusion Roadmaps and Strategies, in order to allow them to be developed with additional collaboration and engagement of the participating donors and agencies along with private sector consultation. Despite relatively high levels of financial inclusion, mostly achieved over the last 10 years, FinScope demonstrates large numbers of people that remain excluded from financial services and a trend of more people (45%) making use of informal financial services. Formal inclusion has remained at 54% between 2015 and 2017, while those that have been banked has actually reduced. While the headline numbers show that more than half the population in SADC countries are included, the underlying data shows we still have a long way to go in formal inclusion, with figures remaining constant as people have not migrated to the formal sector. [Related: Understanding remittances from Botswana to Zimbabwe (pdf), Amadou Sy: Going up the value chain of fintech in Africa]
EAC states waver on a freely convertible currency regime (The East African)
Efforts by central banks in East Africa to ensure full convertibility of regional currencies and reduce reliance on the US dollar are facing hurdles even as it emerges that banking regulators had planned to implement the project in September. Member countries are still reluctant to pay as well as receive payments in regional currencies — a move likely to hinder regulators’ efforts to set up a system of tradeable currencies ahead of a single currency regime in 2024. Latest data from Kenya’s Central Bank shows that the country has dominated transactions in the East African Payment System which allows citizens of member countries to make and receive payments in the Kenyan shilling, Ugandan shilling, Tanzanian shilling, Rwandan franc and Burundian franc. [Central Bank of Kenya: Annual Report 2018 (pdf): During the period under review, 16,161 messages were sent (via EAPS) worth about $2.413bn. Kenya was leading in the EAPS utilisation with 8,053 messages worth $2.377bn which represents 98.4% value utilisation and 49.8% volume utilisation.]
ECOWAS moves to ensure biosafety in the region
The preliminary draft regulations on biosafety in West Africa have been validated by ECOWAS Ministers in order to address the challenges related to the use of modern biotechnologies and their potential impacts on the environment, human and animal health and socio-economic and food security in the region. The representatives of the Ministers who met on 17 May in Abuja, called on member states to effectively implement the regulations when adopted by the ECOWAS Parliament and the statutory Council of Ministers. Furthermore they urged the ECOWAS Commission to collaborate with member states and other regional organizations to develop information mechanisms on the regulations and contribute towards the mobilisation of funds necessary for its implementation.
From bilateral trade to centralised markets: a search model for commodity exchanges in Africa (IGC)
Several African countries have recently centralized their agricultural markets by launching a commodity exchange. What would be the impact of such a move? Who will be the winners and the losers? This paper develops a simple search model for understanding the impact of a commodity exchange in a market where traders and farmers search and bargain to trade. We study the efficiency gains from moving from the status quo trading regime to trading under a commodity exchange system. [The authors: Yaw Nyarko, Heitor S. Pellegrina; Kenya to embrace technology to boost rice production]
Selected perspectives on global trade dynamics
(i) Trade weakness to extend into second quarter, WTO indicator suggests. World trade growth is likely to remain weak into the second quarter of 2019 according to the WTO’s latest World Trade Outlook Indicator (pdf). The new WTOI reading is 96.3, exactly as it was in the previous release in February this year, maintaining the weakest level since 2010. The latest result of the WTOI was driven by declines in all but two component indices. Indices for international air freight (92.3), automobile production and sales (92.2), and agricultural raw materials (92.4) fell further below trend. The index for container port throughput (101.0) also declined but remained above 100, suggesting growth in line with recent trends. Indices for export orders (96.6) and electronic components (96.7) appear to have bottomed out, even as both remained firmly below-trend.
(ii) WTO's Dispute Settlement Body: items proposed for 28 May meeting (pdf)
(iii) US seeks to join Japan-India consultations on IT product tariffs
(iv) Philip Lowe (Governor, Reserve Bank of Australia): The economic outlook and monetary policy
(v) DIT's Liam Fox: City Week address
(vi) Richard Baldwin: Globalisation, automation and the history of work - looking back to understand the future
TFTA update: Countries fail again to agree on trade access
EAC consultative meeting on air transport concludes
Expedite climate change Bill, EALA legislators tell EAC Ministers
Zambia: Car inspections increase prior to importation
India's apparel exports to UAE decline 33% on higher import duty
The New Economy: The challenges facing blockchain adoption in global trade
AfDB EOI: Technical assistance for capacity building of Zambia Revenue Services Customs Division Services
UNIDO: Certification of measuring instruments (pdf)
Exploring carbon pricing in developing countries: a macroeconomic analysis in Ethiopia
OECD: Analysis of long-term challenges for agricultural markets (pdf)