tralac’s Daily News Selection

tralac’s Daily News Selection

22 May 2019

AfCFTA negotiations update, from @AUTradeIndustry:  The 15th meeting of the AfCFTA Negotiating Forum kicked off Monday at the African Union, Addis Ababa. The meeting will consider, among others, the AfCFTA post- launch implementation plan and the organogram of the AfCFTA Secretariat.

Details of the AU-CoDA AfCFTA implementation policy dialogue (27-28 May)

OECD Economic Outlook May 2019

The outlook remains weak and there are many downside risks that cast a dark shadow over the global economy and people’s well-being:   First, the mediocre growth outlook is conditional on no escalation of trade tensions, which cut across the Americas, Asia and Europe. Simulations in this Outlook’s first chapter show that renewed tensions between the United States and China could shave more than 0.6% from global GDP over two to three years. Second, manufacturing and services do not work in isolation. While services have remained buoyant, providing a buffer, it is unlikely that they decouple for long from manufacturing. More than a third of manufacturing gross exports comes from services, and services contribute, directly or indirectly, to more than half of global exports. In addition, manufacturing crucially depends on investment, which is not only an engine of growth and employment today but also shapes tomorrow’s growth and living standards.

Third, China remains a source of concern, as the deployment of monetary, fiscal and quasi-fiscal tools not only has uncertain effects on activity, but might continue to fuel non-financial corporate debt, already at a record high level. We estimate that a 2-percentage point reduction in domestic demand growth in China, sustained for two years and combined with heightened uncertainty, could reduce global GDP by 1¾ per cent by the second year. Finally, private sector debt is growing fast in major economies. The global stock of non-financial corporate bonds has almost doubled in real terms compared with 2008, at close to USD 13 trillion, and the quality of debt has been deteriorating, including a heightened stock of leveraged loans. A new bout of financial stress could erupt.  Looking ahead, trade tensions are not only hurting the short-term outlook but also medium-term prospects, calling for urgent government action to reinvigorate growth. The global economy was expanding in sync less than two years ago, but challenges to existing trade relationships and the multilateral rules-based trade system have now derailed global growth by raising uncertainty that is depressing investment and trade. The post-World War II process of globalisation driven by multilateral agreements that allowed ever-increasing trade openness is being challenged.  [OECD slashes SA's growth forecast to 1.2%]

Rwanda becomes the 55th member of the OECD Development Centre (New Times)

The Minister for Trade and Industry, Soraya Hakuziyaremye, is representing Rwanda at the ongoing OECD meeting in Paris. In a recent interview with The New Times, the Minister for Foreign Affairs and Cooperation, Dr Richard Sezibera, said that Rwanda seeks to learn from the OECD Development Centre especially with regards to business standards and trade ethics to help improve its business environment.

SADC Industrial Energy Efficiency Programme: update from Windhoek conference

The First Industrial Energy Efficiency Conference organized in SADC welcomed over 150 southern African and international experts to take stock of the status of industrial energy efficiency, share results and best practices, identify policy recommendations and outline investment prospects. The two-day event was organized by the SADC Centre for Renewable Energy and Energy Efficiency, in partnership with the SADC Secretariat, UNIDO and the Austrian Development Cooperation. On 22 May (today), the SIEEP programme will be presented to the SADC Energy Ministers for adoption in Windhoek. It will further on be submitted to the Ministerial Task Force in June 2019 who will thereafter table it at the SADC Summit in August 2019.  [Download:  Overview of the conference agenda, pdf]

Lesotho:  Performance and learning review of the Country Partnership Framework, FY16-FY20 (pdf, World Bank)

A private sector diagnostic that examined the impediments to investment and growth, focusing on manufacturing, horticulture, and the digital economy  - three of the key priorities of the NSDP-II -  was delivered. This work influenced the design of the smallholder agriculture development project phase II, the Agriculture Productivity Program for Southern Africa project and is helping refine activities under the private sector competitiveness project. A digital economy (DE4A) diagnostic is underway. A further knowledge output related to a trade integration strategy and advisory work on trade facilitation, particularly electronic transactions, is now being used to modernize border systems as a part of the private competitiveness project. The IFC has advisory products in helping implement the WTO trade facilitation agreement and raise Doing Business scores, which contribute to scaling up impact under the private competitiveness project. A climate smart agriculture profile was developed to guide policies in this area and will be followed by an investment plan. These are vital inputs into the second phase of the smallholder agriculture development project.

Focus Area 2: Promoting private sector job creation. In the first strategic objective, improve the business environment and diversify the economy, the emphasis will shift towards the digital economy.11 In line with NSDP-II priorities on technology and WBG corporate priorities on maximizing finance, the WBG will step-up assistance on digital technologies and e-governance, an essential pillar of competitiveness and the fight against corruption, and critical to raising both business productivity and the quality of public services. Clearly, such a development agenda will need to span two or more CPF periods; only a beginning can be made in the remaining two years of the current CPF period that focuses on diagnosis and the initial steps of delivering a digital service economy. The country has to contend with low ICT literacy and skills and the need to develop laws and regulations to facilitate electronic governance and establish a seamless, open access cross-border fiber optic backbone managed under high governance standards. The WBG will help unlock dividends from digitalization whilst mitigating risks, through advisory work on digital platforms, identity and literacy and legal and regulatory adaptations. It will review the adequacy of the telecom infrastructure. IFC will explore opportunities to develop or improve the quality of digital infrastructure through PPPs and promote digital technology in financial services.

Sierra Leone, Zimbabwe, Guinea:  AfDB commissions value chain study into jewelry manufacturing, jobs for women, youth (AfDB)

The initial $1.4m project will entail a value chain analysis study examining the sector’s contributions to value addition and job creation. It will be financed under the Bank’s Transition Support Facility and implemented over 24 months, in coordination with the relevant ministries and agencies in all three countries. The initial study will directly help to address the lack of skills and create a better understanding of adding value in the industry, with the ultimate goal of reducing fragility in all three countries and building resilience.

Nigeria: NEPC re-introduces AGOA visa stamp to exporters (The Guardian)

The Nigeria Export Promotion Council has re-introduced the African Growth and Opportunity Act visa stamp to non-oil exporters. This, according to the NEPC, was to ensure that exporters in the country participate and benefit more from the AGOA Act before it expires in 2025. Speaking at the NEPC workshop on AGOA Visa Stamp utilisation in Lagos, the NEPC Executive Director, Olusegun Awolowo, who was represented by the Deputy Director, National Office on Trade, Saave Nanakaan said AGOA is also meant to forge stronger commercial ties between Nigeria as well as other qualified African countries and the United States; while it helps to integrate these African countries into the global economy.

Kenya:  New strategy can deliver agricultural industries (Business Daily)

The recently published 2019-29 Agricultural Strategy (pdf) comprehensively details key drivers for agriculture, a sector which has been intensely studied, talked about, but never prioritised with enough budgetary resources or political focus. It is a strategy that is 20 years too late. My key take on the strategy is agro-processing, an area that has always interested me. The report says that agro-processing contribution to GDP in Kenya is only 3.2%; with 2.4% contribution to national employment; and 8.5% of exports. Egypt, a “desert” country, has far higher agro-processing metrics.  For those of us who were around in 1960/70s, we can confirm that former President Jomo Kenyatta had delivered a high level of agro-industries, which unfortunately collapsed in the subsequent leadership of his successor Daniel Moi. The just launched strategy for agro-processing is achievable. All we need is to revisit the successes of yester years. The strategy promises 10 agro-processing feasibility studies to be undertaken in the next five years, with five of them actually accelerated for design, construction and operation. If we shed off the bureaucracy and lethargy that is characteristic of our government systems and allocate sufficient budgetary resources, it is possible to deliver ten feasibilities and five industries in five years. [The author: George Wachira]

Frontiers of economic policy communications (IMF)

The role of communications is increasingly recognized in all policy areas, but the journey communications has made in central banking over the past 30 years is especially impressive: from secrecy to vagueness to transparency and accountability. The growing popularity of inflation targeting, in which communications play a central role, and increased use of forward guidance in the aftermath of the global financial crisis are important factors behind the greater attention to communications. Long gone are the days when central banks sought to “keep the press out of the bank and the bank out of the press,” and there is no going back. However, there is room for one policy area to draw from experiences in the others. The paper discusses current and prospective developments in communications on monetary, financial stability, fiscal, and structural policies. It also considers the role that communications can play in helping to strengthen public trust in institutions. The country examples have been chosen to highlight issues that arise and recur in a wide range of political systems and economic policy frameworks.  [The author: Olga Ilinichna Stankova]

Today's Quick Links:

Zimbabwe: Vision 2030 should be anchored on value added exports

USGC seeks export opportunity in South Africa

Kenya seeks assistance from development partners to transform agriculture sectors

MTN Nigeria shares show appreciation of R24bn in value in four days

Istanbul Africa Trade Company: Africa Economic Report

Free trade deal to benefit Chinese companies in Africa, Egypt