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tralac’s Daily News Selection

tralac’s Daily News Selection

25 Jun 2019

Concluding today, in Geneva: Seventh IMF-WB-WTO Trade conference. WTO Director-General Roberto Azevêdo delivered the opening speech.

AfCFTA updates:

  1. Morocco’s MPs, yesterday, passed a bill on joining the AfCFTA: the same bill was adopted by the government on 21 February and by the Council of Ministers on 4 June

  2. South Centre Policy Brief: ‘Phase 1B’ of the AFCFTA negotiations. Profiled statistics from the report (pdf): Table 9 - Share of ECOWAS LDCs’ extra-ECOWAS imports from Africa; Table 10 - Share of ECOWAS LDCs’ extra-ECOWAS imports from selected African countries and customs unions; Table 11 - Share of EAC LDCs’ extra-EAC imports from Africa

  3. Sensitize Ghanaians about the AfCFTA. Executive Director of the Africa Centre for International Trade and Development, Mr Isaac Hubert Arthur, said businesses in Ghana, as well as citizens, did not know much about the agreement, the opportunities and challenges it posed to them. He said government must educate and popularize the agreement so that more businesses, including SMEs would have knowledge about the continental free trade area. Mr Arthur made these known during a three-day capacity building workshop in Accra for women entrepreneurs, organised by the International Trade Centre in partnership with ACINTaD, under the ‘SheTrades in the Commonwealth’ Initiative.

  4. CNBC interview with Oby Ezekwesili: AfCFTA creates a big market with less entry barrier

  5. EABC-ITC-TMEA regional workshop: AfCFTA tariff offers and engagement on trade in services. EABC Chairman, Nick Nesbitt: “If we embrace intra-trade, there will be regional value addition by improving the manufacturing sector which will open up markets across the region advancing Africa’s economy and living standards. Doing business in Africa is difficult due to physical, travel, telecommunication, political and non-tariff barriers. We need to deal with these issues together as the private sector and the policy makers to boost trade in Africa.” [Note: Updates on presentations at the workshop, which concludes today, can be followed by #EABCAfcfta]

  6. Rwanda’s trade with the DRC set to increase by $56m under the AfCFTA. When the AfCFTA is implemented, the UNECA estimates an increase of intra-African exports of Eastern Africa by over $1bn. For Rwanda, much of that would be explained by increased trade with its neighbour, the DRC. On Friday 21 June, in collaboration with ECA and Trademark East Africa, Rwanda’s Private Sector Federation organized a meeting to discuss the potential benefits from the AfCFTA and how Rwandan companies could take advantage of the new opportunities. Andrew Mold, Acting Director of ECA in Eastern Africa, stressed that the beneficiary sectors would principally be the employment-creating sectors like processed foods, light manufacturing and textiles, creating an additional two million jobs in Eastern Africa. According to Mold, Africa currently has 512 Bilateral Investment Treaties with other countries, of which 44 are Intra- African. Each one of these has different terms and conditions and often are formulated in a way that defends the interests of high-income countries. “That is a problem because there is a lack of coherence between many of the existing Bilateral Investment Treaties. The AfCFTA Protocol of Investment talks about harmonizing investment treaties across the continent to have a unified approach.”

COMESA’s Ministerial Committee on Industry clears industrial strategy for implementation

The implementation of the COMESA Industrial Strategy has officially begun following the approval of an Action Plan and Regional Guidelines on Local Content Policy. Ministers responsible for industry from the 21 Member States and their representatives adopted the two instruments during the closure of the 3rd COMESA Ministerial Committee on Industry last Friday in Nairobi. The ministers urged Member States to integrate activities of the Regional Action Plan into their National Industrial Development Plans for implementation. Regarding the Regional Guidelines for Local Content Policy, the ministers noted that that these enable the formulation of Local Content Policies amongst member states in order to maximize local benefits from industrialization. They however agreed that the Regional Guidelines are not binding but was a tool to simply guide Member States when formulating policy, laws and regulations on local content. When developing the local content framework, the ministers advised Members States to take into consideration the commitments made under bilateral and multilateral agreements, bilateral investment treaties, and the existing regional and continental Free Trade Agreements to avoid the breach of those commitments.

Rwanda Economic Update: Lighting Rwanda (World Bank)

Contribution of net exports to GDP growth was negative in 2018 as export momentum ebbed. After growth of about 34% in real terms in 2017, exports of goods and services almost stagnated in 2018, growing by only 0.8%, highlighting the risk associated with Rwanda’ external volatility. In contrast, imports grew by 9.4% in real terms, driven by construction and manufacturing demand for intermediary and capital goods. Services generally performed quite well in 2018, but with considerable variation by subsector. Accounting for 47.8% of GDP, services grew by 8.8%, up from 7.9% in 2017. Double digit growth rates were recorded in trade services (15.2%), transport (18.3%), and ICT (17.9%). The hospitality sector (hotels and restaurants) also performed quite well as Rwanda continued to successfully position itself as an emerging destination for international conferences and exhibitions, while the sector continued to attract both private and public investment.

Nacala Road Corridor development project Phase V: appraisal report (AfDB)

The Multinational Nacala Road Corridor Development Project Phase V will involve: (i) Rehabilitation of a 55 km road between Nsipe and Liwonde in Malawi; and (ii) construction of a OSBP between Malawi and Mozambique at Chiponde. The total project cost estimate is UA 45.289 million. The AfDB will contribute UA 26.6 million (59%), the EU UA 15.121 million (33%), and the Government of Malawi UA 3.658 million (8%). The project shall be implemented over a period of 5 years starting in July 2019 and ending in June 2024. Extract (pdf): The main drivers for high transportation costs in Malawi can be itemized as follows: (i) long distances to the seaports, (ii) poor road infrastructure, (iii) excessive delays due to lengthy clearing processes at ports and border crossings, (iv) poor logistics supply chain, (v) small trucking market, (vi) and low trade volumes due to the small size of the country’s economy. Malawi’s current total volume of exports and imports is just slightly above 2 million tons per year, transported through four main international corridors: Beira (20%), Nacala (15%), Durban (60%), and Dar es Salaam (5%). The distances to the seaports for these corridors and the current indicative transport costs per ton are presented in Appendix VI. [See Appendix VI: Transport costs for exports/imports by commodity USD/ton for Nacala, Beria, Durban (2016). Exports of tobacco, sugar, tea, cotton, food, crops; Imports of fuel, fertilizer, cement, wheat]

2019 Annual Development Effectiveness Review: Integrating Africa, Connecting People (AfDB)

In this report, we explore first what progress Africa has made towards greater regional integration and how the Bank’s operations are contributing to this progress. We then review progress on the other High 5s and our cross-cutting priorities of governance, fragility, gender and climate change, highlighting their contribution to our Integrate Africa objectives. We also explore the progress the Bank has made under the third and fourth levels of the Results Measurement Framework: improving the quality of its portfolio and building its own capacity to deliver results for clients and stakeholders. In the final section, we look forward to what we expect the Bank to contribute to Africa’s development in the coming years. Extract from Chapter 1: Integrate Africa (pdf): Over the next seven years, the Bank will require an estimated $12.4 billion to support its regional integration activities. Guided by the Regional Integration Strategic Framework, the Bank is working to develop Regional Integration Strategy Papers (RISPs) that will steer our Integrate Africa activities in each of the five regions. The East Africa RISP (2018–22), approved in September 2018, focuses on regional infrastructure development and strengthening policy and institutions for market integration, investment and value chain development. The Central and North RISPs are in draft, and the RISPs for other regions are still being developed.


Agricultural trade analyses:

  1. South Africa: National Agricultural Marketing Council’s Trade Probe (pdf): this issue of covers the agricultural trade analysis under President Ramaphosa’s administration, the AfCFTA agreement, the US-China trade war, and Brexit trade implications on South Africa’s agricultural sector

  2. The West African Cashew Sector in 2018: general trends and country profiles (pdf). Cashew cultivation is spread all over the region, with three main producing areas: the Central area (Côte d’Ivoire, Ghana, Burkina Faso, Guinea, Mali, Togo), the Eastern Area (Nigeria, Benin), the Western area (Guinea Bissau, Senegal, The Gambia). An important part of the cashew produced in West Africa is traded through land borders between the producing countries. As most of this trade is unofficial and no reliable data are available about it, we had to estimate it on the base of local trader’s information and monitoring of the entire cashew season with N’Kalô Service.

  3. Strengthening the US-Kenya trade relationship: growing US agricultural exports to East Africa. Kenya relies heavily on imported food and farm products, much of which the United States produces competitively. In 2018, Kenya imported $2.5bn of agricultural products from the world. While the country’s global imports of food and agricultural products has trended upwards, its imports from the United States have remained steady, resulting in a reduced US market share as other nations increase exports to Kenya. Indonesia is currently the top agricultural exporter to Kenya. The United States is looking to strengthen its trade relationship with Kenya and increase its agricultural exports to the country. Kenya currently boasts a growing middle class, rapid modernization, and a progressive government, all which make it an opportune time to explore increased trade between the United States and Kenya.

WTO’s 21st Monitoring Report on G20 trade measures

The report, released on Monday, shows that the trade coverage of new import-restrictive measures introduced during the period (October 2018 to May 2019) was more than 3.5 times the average since May 2012 when the report started including trade coverage figures. The report found that trade coverage of $335.9bn during the period is the second highest figure on record, after the $480.9bn reported in the previous period. Together, these two periods represent a dramatic spike in the trade coverage of import-restrictive measures, leading WTO Director-General Roberto Azevêdo to call on G20 economies to work together urgently to ease trade tensions. In terms of numbers, G20 economies implemented 20 new trade-restrictive measures between mid-October 2018 and mid-May 2019, including tariff increases, import bans and new customs procedures for exports. While fewer measures were introduced during this review period than in previous periods, the scale of those measures is much increased in terms of their trade coverage and the level of tariffs imposed. A total of 29 new measures aimed at facilitating trade, including eliminating or reducing import tariffs, export duties and eliminating or simplifying customs procedures for exports were also applied by G20 economies. The trade coverage of the import-facilitating measures implemented during the review period is estimated at USD 397.2 billion, which is 1.8 times higher than in the previous G20 Report. [Note: Various downloads are available]

Today’s Quick Links

Microsoft’s Africa development centers

Reuters: Jumia Food looks beyond Africa’s middle class for growth

OECD: Public policy reforms to further improve Portugal’s export performance (pdf)

Full text: Address by US Assistant Secretary of State for African Affairs, Tibor Nagy, at the University of the Witwatersrand

EABC-KEPSA-ITC training on WTO Trade Facilitation Agreement (27 June, Nairobi)

WEF’s Annual Meeting of the New Champions (1-3 July, Dalian, China) on the theme Leadership 4.0: Succeeding in a New Era of Globalization

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This post has been sourced on behalf of tralac and disseminated to enhance trade policy knowledge and debate. It is distributed to recipients across Africa and internationally, serving in the AU, RECs, national government trade departments and research and development agencies.

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