tralac’s Daily News Selection
The AfDB’s 2019 Annual Meetings opened today in Malabo on the theme Regional Integration for Africa’s Economic Prosperity. AfDB President Akinwumi Adesina said the bank had invested around $1bn through various initiatives, including cross border infrastructure, to move trade across African borders. “If we get our integration right, Africa will be more competitive, will be able to create a massive amount of jobs and, more importantly, Africa can develop in dignity and confidence.”
Trade Kenya’s training for technical staff expected to run the Kenya Trade Remedies Agency entered its second day today in Nairobi. The agency is expected to implement laws on anti-dumping, subsidies, countervailing measures and safeguards according to WTO agreements.
tralac Trade Brief: Africa in the Digital Economy
This Trade Brief provides an update on the situation of Africa’s progress in assimilating into the global digital economy, addressing the most pressing current challenges and reviewing several of the most exciting current initiatives underway. Although many challenges remain, much progress has been made over the space of a few years in the mid 2010s. The digital economy, and especially e-commerce, offer a means not only for greatly extending Africa’s trade with the rest of the world, but also trade within the continent. Never before have so many initiatives been in place with the goal of both digitalising Africa’s trade and bringing African markets closer together. [The author: John Stuart]
Innovation Africa Digital Summit: update
Speaking at the Innovation Africa Digital Summit on the theme National Agenda Acceleration in Addis Ababa, Oliver Chinganya, Director of the ECA’s African Center for Statistics, said technology and innovation have been the backbone of African economic success over the last two decades but internet and internet-related penetration remained limited. “This relatively low level of the ICT maturity is limiting the government’s plans in many economic sectors, including its ability to deliver on the planned digitalization of the public administration services like censuses, health and education.”
He added: ”In an era marked by intense competition, globalization, and increased importance of knowledge as an economic driver, it is important for organizations and governments to understand the dynamic and significant role that ICT play in enhancing competitiveness in the context of AfCFTA implementation. Therefore, there is a need for governments to establish and implement strategies and policies taking into consideration the effects of economic, social and technology factors on ICT maturity as well as relationship between ICT maturity and global competitiveness.”
In his appeal to a UN panel of experts led by philanthropist Melinda Gates and Alibaba founder Jack Ma, Secretary-General António Guterres called on its members to reflect on the risks and benefits of our digital age – the so-called Fourth Industrial Revolution. Created at the express wish of the UN chief in 2018, the high-level panel is a relative rarity – only 20 or so have been convened in the organization’s more than 70-year history. The panel’s diverse membership – which includes US internet pioneer Vint Cerf, and South Korea-based digital marketing mastermind and CEO of Adriel, Sophie Eom – fulfils the UN chief’s wish to include input from industry and the private sector, as well as governments, academia, civil society and inter-governmental organizations. The discussions will result in a final report, to be published in the summer. The Panel’s online call for contributions, which is open until 31 January 2019, has already yielded close to 100 written submissions from 33 countries.
The future of women at work: Transitions in the age of automation (McKinsey Global)
ECA, AU updates on the weekend’s AMOT discussions:
African Ministers of Trade pave way for the operationalisation of the AfCFTA. Addressing the ministers, Ms Giovanie Biha, the Deputy Executive Secretary of the ECA said: “AfCFTA legally entered into force but for it to deliver its transformative economic potential, the signatory countries – and the few countries that have not yet signed – must rapidly join and ratify the Agreement to ensure that the continent moves forward together as one entity.” Noting the issues on the agenda of the ministers, including the scheduling of tariff offers and finalization of the Rules of Origin, she added, “difficult decisions must yet to be made and compromises sought, as we transform the AFCFTA legal text into an operable instrument.” Ms. Biha also stated that following the operationalisation of the Agreement at the Niamey Summit, progress must be made with the AfCFTA implementation roadmap. The ECA African Trade Policy Coordinator, David Luke, confirmed that the ECA flagship report Assessing Regional Integration in Africa (ARIA IX), focusing on the Next Steps for the AfCFTA will be launched during the Business Forum.
The Ministers of Trade considered the report of the STO and adopted the following decisions: Customs unions to maintain the integrity of their Common External Tariff in accordance with the adopted modalities; 90% of non-sensitive tariff lines to be communicated to the AUC ahead of the NF, STO and AMOT meeting which will take place in Niamey before the Summit. The remaining 10 per cent sensitive and excluded products will be tabled to the AU Summit in January 2020 for clearance; The agreed Rules of Origin, the Online Tariff Negotiation Portal, the African Trade Observatory, the Pan-African Payment and Settlement platform, and the Non-Tariff Barriers mechanism will be tabled for clearance at the Niamey summit in July.
Ministers of trade deliberate on the operationalization of AfCFTA ahead of Niamey Summit. Uganda’s Minister of Trade, Industry and Cooperatives and Chairperson of the African Union Ministers of Trade, Amelia Kyambadde, emphasized that with the entry into force of the AfCFTA, the focus is now on how Africa can strategize to take advantage of the huge market opportunities and Africa’s demographic dividend to boost intra Africa trade. “A united Africa will be powerful, attractive to investment and a solid negotiating force. We still have outstanding work on product rules of origin, finalization of tariff offers, trade in service market schedules and trade remedies, but I think this is an opportunity for us to transform Africa for the benefit of future generations”, she noted. She further highlighted five key priorities areas member states should focus on: boosting of Intra-Africa Trade; Infrastructure interconnectivity and trade facilitating logistics; Industrialisation and development of regional value chains; Employment; and Beneficiation of minerals and natural resources.
Our aim is to further extend the production space of Mauritius beyond our frontiers in partnership with other African countries. Africa Rising calls for massive investment, quality expertise and more trade. With regards to creating new assets in Africa, we will: First, build on the agreement with Mozambique towards the setting up of a regional value chain for Liquefied Natural Gas. Second, develop a Textile City on the 80 hectares of land in Moramanga, which the Malagasy Government has agreed to allocate to Mauritius. Third, develop projects to take advantage of the Industrial and Technology Park in Naivasha, Kenya. And fourth, consolidate our ongoing initiatives in the Special Economic Zones in Senegal, Côte d’Ivoire and Ghana. As regards cross-border financing, the Mauritius-Africa Fund will further expand its strategic partnerships with Pan-African and international multilateral development financial institutions, such as the Trade and Development Bank, AFREXIM Bank and Fonds de Solidarité Africain to mobilize project finance for the benefit of Mauritian enterprises willing to expand in Africa.
Logistics are the backbone of Trade. Good logistics reduce trade costs and help countries compete globally. In the 2018 Logistics Performance Index, Mauritius scored of 2.72 out of a maximum of 5 points. To improve the score under the Logistics Performance Index, a series of other measures will be implemented, namely: Cargo Handling Corporation Ltd will implement an electronic payment system to expedite the payment process; Working hours of MRA Customs and other port operators and agencies will be harmonized; and, MPA will reduce the cut-off time from 24 hours to 12 hours for compliant traders for export consignment. [The full set of budget documentation can be accessed here]
Ethiopia’s economy is projected to grow by 9% in 2019/2020, finance minister Ahmed Shide told lawmakers on Tuesday as he presented plans to raise spending. Ahmed proposed 386.9 billion birr ($13.48 billion) in government spending for 2019/2020, which if approved will be 12% higher than 2018/19’s 346.9 billion birr figure. Lawmakers from the ruling coalition, who dominate parliament, are expected to approve the plans over the next few weeks. The International Monetary Fund projected the country’s growth for 2019 at 7.7% in April.
China ready for trade talks with East Africa bloc: ambassador to Kenya (Reuters)
China is ready to negotiate a trade deal with the six-nation EAC to address Kenya’s complaints about a huge trade imbalance in favor of the Asian economic giant, China’s ambassador to Nairobi told Reuters. Kenyan officials said the government was not ready to discuss a free trade agreement as it fears a surge of imports from China but that a partial deal might be possible. Chinese ambassador Wu Peng said Beijing was ready to open trade talks with Kenya via the EAC, which also includes Uganda, Tanzania, Rwanda, Burundi and South Sudan, guided by World Trade Organisation rules. Chris Kiptoo, the principal secretary in charge of trade at Kenya’s trade and industrialization ministry, said Nairobi feared a free trade agreement with China would lead to a surge of imports. He added that the government was seeking a preferential, non-reciprocal trade deal, giving Kenyan exports duty free access to China. Such a scheme could be modeled on the Africa Growth and Opportunity Act, which allows African exports like apparel and textiles duty free access to the U.S. market. [Kenya launches 2nd phase of China Trade Week amid positive reception]
The Chinese in Gikomba (Business Daily)
Small-scale traders in Gikomba, Nyamakima and Kamukunji markets in Nairobi have new competitors - the Chinese. Tens of Chinese traders have opened shops in the crowded, informal markets that have for decades served as the entry points for second-hand clothes and cheap Chinese imports. Backed by strong financial muscle, the traders who have taken strategic control of the supply chain from import to wholesale and down to the retail level, are giving local traders a run for their money. The teeming Gikomba market has for decades been a magnet for traders from neighbouring countries, including Tanzanians, Rwandese and Congolese, but local traders say the Chinese businessmen have posed a new threat to their survival given their deep pockets.
Efforts to reach the Chinese embassy in Nairobi to respond to the claims of unfair business practices were not successful. The Director of Immigration Services, Alexander Muteshi, blamed Kenya’s lax laws that have allowed the influx of Chinese nationals involved in small businesses and asked us to direct our questions to Parliament instead. “You have raised a very valid concern. The challenge however for us is to review our laws to raise the investor amount threshold and also not to act contrary to World Trade Organisation requirements of locking out investors. It is a matter that needs to be addressed by our Members of Parliament to give us guidance.”
Today’s Quick Links:
South Africa: Truck attacks could see companies shunning Durban
UN trade cluster sets sights on creation of multi-donor trust fund
Eritrea: World Bank’s country engagement note
Sierra Leone’s tax reform: World Bank’s engagement note