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tralac’s Daily News Selection

tralac’s Daily News Selection
Photo credit: World Bank

26 Jun 2019

The role of rules of origin in boosting intra-African trade: a CNBC interview with Junior Davis, chief of UNCTAD’s Africa Section

AfDB voting powers, as at 31 May 2019.

Key regional members: Nigeria (9.347%), Egypt (5.667%), South Africa (5.094%), Algeria (4.279%), Morocco (3.621%).

Key non-regional members: US (6.672%), Japan (5.532%), Germany (4.191%), Canada (3.870%).

Strengthening the gender dimension of Aid for Trade in the Least Developed Countries

Gender-responsive aid for trade committed by bilateral donors to LDCs has increased from $921m in 2006-07 to $3.7bn in 2016-17 – an increase from 17% to 40% of total aid for trade. These sums and relative shares differ greatly by sector. In 2016-17, the sector with the highest amount of gender-responsive aid for trade was agriculture at $1.7bn; followed by transport at $1bn and energy at $441m. When looking at the proportion of gender-marked assistance in total aid for trade commitments to different sectors in LDCs, agriculture was also the highest in 2016-17 at 71%; followed by trade policies at 48%. However, the share of gender-responsive aid in the infrastructure sectors was only 33% in transport, 20% in energy and 5% in communications. In terms of recipient countries, the majority of LDCs with the highest share of gender-responsive aid for trade in 2016-17 were located in Africa – varying greatly from 88% in Yemen, down to 41% in Rwanda. Given that 60% of total aid for trade directed at LDCs is not gender-responsive, there is considerable scope for improvement. [The authors: Marianne Musumeci and Kaori Miyamoto, are attached to the OECD]

Namibia, SACU review FTA with the European Free Trade Association (NBC)

The Ministry of Mines and Energy has called on trade experts to find innovative ways to contribute to the success of the review process of the EFTA Free Trade Area agreement (with Iceland, Liechtenstein, Norway, Switzerland). The agreement was entered into on 1 May 2008. The agreement covers trade in goods by providing duty-free market access for most industrial goods, including fish and other marine products, and provides for concessions on processed agricultural products. The ministry’s policy analyst, Jeanetha Tjitaura, said Namibia plans to increase the beef quota under Article 2 of the Protocol on Beef from 500 to 1 500 tonnes. Namibia is also requesting the transposition of the 400 tonnes of sheep meat currently under the GSP scheme into the main agreement and to seek an additional 600 tonnes to increase it to 1 000 tonnes.

Lesotho: Rapid eTrade Readiness Assessment (UNCTAD)

How could Lesotho grow its trade potential by leveraging its current economic performance and the promise of e-commerce? Conducted at the request of the Lesotho government, the assessment identifies ways in which the nation could improve its ability to trade online, leveraging off its more than decade-long impressive annual growth rate of 3.6%. These include measures to improve its telecommunications infrastructure, trade logistics, payment solutions, laws and regulations, skills development, and financing, which can accelerate e-commerce and spread the benefits throughout the economy. The goal is also to help Lesotho graduate from the LDC category. Lesotho can tap the digital economy if it focuses primarily on two important areas: affordable access to connectivity and improved legislation. Lesotho is connected to the region, via South Africa, through three main submarine cables. The 3G coverage network is almost 100% and mobile usage is widespread. But the use of the Internet, even mobile Internet, remains limited – only 37% of the population has an active mobile broadband subscription and the costs are prohibitive, the report finds.

Central African Economic and Monetary Community: Deepening regional integration to advance growth and prosperity (World Bank)

The study is organized as follows. Chapter 1 (pdf) takes stock of recent economic developments in CEMAC and documents low levels of intra-regional trade and convergence; this is a concern as economic convergence is both a prerequisite for a successful economic and monetary union and the expected outcome of the regional integration process itself. These structural constraints are further explored in Chapter 2 which identifies unreliable electricity, weak governance and corruption, unfair competition from the informal sector, taxation and access to finance as the top five binding constraints for the CEMAC business environment. While most improvements to the business climate require national policy reforms, there is also scope for regional interventions to promote regional financial stability and integration to deepen access to finance (Chapter 3) and to ensure a level playing field for investment and taxation across CEMAC through a simplified and transparent corporate income tax framework, countering harmful tax competition, and by strengthening investment into regional supply chains (Chapter 4).

Chapter 5 analyses current trade patterns in CEMAC and explores the role of trade policy in deepening integration. While CEMAC has a common external tariff, there are significant divergences at national level. Furthermore, there are significant non-tariff barriers and behind the border restrictions that prevent intra-regional trade. Non-tariff barriers and non-compliance with CEMAC transit agreements is particularly visible in regional agricultural trade. This is explored in Chapter 6 which looks at constraints to agricultural productions and barriers to regional agricultural trade in CEMAC. Chapter 7 complements the analyses in previous chapters by bringing a political economy perspective to regional integration in CEMAC. It underlines the importance of a political commitment to integrate and coordinate, but also to comply with regional directives and surveillance.

Central Africa: Inaugural meeting of the Boosting Intra-African Trade regional taskforce (UNECA)

Central African countries were recently urged to align their external trade data classification system, with the 2017 World Customs Organization’s Harmonized System (HS17) for clearly identifying products which will be categorized as ‘free,’ ‘sensitive,’ and ‘excluded,’ within the AfCFTA regime. The experts examined and validated a list of 379 products termed sensitive (7% of tradable products as per the HS17), 172 products considered excluded (3% of tradable products) and rest of products termed free (90% of tradable products), to be presented to the next AfCFTA negotiating rounds, as the consensual taxonomy for free and restricted items to be traded in Central Africa. Examples of excluded goods proposed are meat, fish and cocoa; while some goods considered sensitive include live poultry, crude palm oil and milk.

The meeting noted that the situation is complex for Central Africa, given that many countries in the subregion have based their inventory of free, sensitive and excluded goods on a template called HS12 (The 2012 World Customs Organization’s Harmonized System) which is no longer in force as per the latest advice of the African Union Ministers of Trade. The trade ministers recommend that product categorization must be based on the template code-named HS17, hinged on their external trade records from 2015 to 2017. Due to tight deadlines, the Douala meeting advised that CEMAC member States (who are also members of ECCAS) having the same tariff regime, to propose a collective list of products while the other countries belonging exclusively to ECCAS, present their bids of product categorization, individually, in the meantime.

Chad’s AfCFTA strategy: update (UNECA)

At the retreat, co-organized by Chad’s National AfCFTA Negotiation Committee and ECA’s Subregional Office for Central Africa, bringing together state officials and members of the private sector, the main worries raised were Chad’s readiness to compete with Africa’s industrial giants and the fate of customs revenue for the country. ECA’s experts – Adama Coulibaly and Simon Yannick Fouda – quickly comforted their Chadian interlocutors, referring them to recommendations of a recent subregional stakeholder meeting in Douala, Cameroon, in which key points for a Central Africa AfCFTA strategy were mooted to cushion the effects of competition and the short-term challenges countries may face on customs revenue. The masterplan, in the offing, lays emphasis on energy supply, agribusiness (especially meat and leather products), construction works and the digital economy.

Participants called for coherence between Chad’s AfCFTA strategy and all other development strategies including PDIDE, a point which the country’s Minister of Mines, Trade and Industry Development and Private Sector Promotion, Ahmat Mahamat Bachir, insisted on. Participants also called on the Chadian Government to use the advent of AfCFTA as an opportunity to quickly strengthen its standards, norms and measurers institutions, improve on official statistics and to avail the National AfCFTA Committee with the requisite resources to enable it prepare a solid national strategy for the common market. The stakeholders also requested that ECA conducts a SWOT analysis on the Chadian economy, making the necessary linkages with its existing macroeconomic framework, production structure and trade flows; and to propose detailed measures to mitigate the risks that would come with the continental trade agreement and indicates pathways for Chad to finance its participation in it.

Nigeria: NEPC, MAN partner on improved market access under AfCFTA regime (The Guardian)

With the ratification of the AfCFTA, the Nigerian Export Promotion Council and Manufacturers Association of Nigeria have urged local producers to embrace voluntary certification in order to increase their access to new markets that will be created under the deal. Already, the NEPC has commenced training on international certification for members of the Organised Private Sector in line with its Go Global, Go for Certification initiative. Speaking at a training session recently, the Director General of MAN, Segun Ajayi-Kadir, urged members of MAN Export Group to take advantage of voluntary certifications to explore new markets. Ajayi-Kadir, who was represented by Adeyemi Folorunso, said manufacturers should be ready to compete globally, adding that with the implementation of the AfCFTA which will provide new markets in the continent, it is imperative that Nigerian manufacturers are prepared to take advantage of the opportunities that the trade deal will offer. The council said it had engaged a reputable Indian-based certification expert, TopCertifier, to provide certification awareness training to manufacturers and exporters.

COMESA: Experts identify priorities for capacity building to enhance market access for Kenya’s agriculture exports

Upgrading and accreditation of laboratories for testing agricultural products for export has been identified as one of the priority areas that could benefit through the new COMESA-led project on mainstreaming Sanitary and Phytosanitary Standards capacity building into national policy frameworks. This is according to industry experts attending a three-day training course this week in Nairobi on using the Prioritizing SPS Investments for Market Access framework. The training is being conducted by COMESA and the Standards and Trade Development Facility, a WTO agency. [New SPS project to increase market access of agricultural products]

Byte by Byte: Policy innovation for transforming Africa’s food system with digital technologies (Malabo Montpellier Panel)

This report summarizes the key findings of a systematic analysis of what seven African countries (Côte d’Ivoire, Ghana, Kenya, Morocco, Nigeria, Rwanda, Senegal) at the forefront of progress on digitalization of the agriculture sector have done right. It identifies interventions that work and benefit famers and other actors in the value chain and recommends options for policy and program innovation that allow countries to develop a “digitalization ecosystem” in which digital technologies and services can be developed and used to foster growth and competitiveness in Africa’s agriculture value chains. Highlighted recommendations (pdf): Placing digitalization at the core of national agricultural growth and transformation strategies and policies; Creating a transparent and smart regulatory environment that promotes the development and confident use of digital technologies and services and limits the risks; Expanding university curricula to spur digital innovation and the development of an African agtech sector; Introducing fiscal incentives to spur digital innovation and to facilitate market entry and the import of technologies until local markets are developed; Developing digital agriculture innovation hubs to create an innovation ecosystem for young people to develop locally suitable technologies and digital solutions. [Noble Banadda: Africa’s next “leapfrog” opportunity – digital agriculture; Food Systems Action Platform for West Africa conference (20-21 June, Abidjan): accelerating food transformation in West Africa through technology]

Progress of the World’s Women 2019-2020: Families in a changing world (UN Women)

UN Women’s flagship report, “Progress of the world’s women 2019–2020: Families in a changing world”, assesses the reality of families today in the context of sweeping economic, demographic, political, and social transformation. The report features global, regional, and national data. It also analyses key issues such as family laws, employment, unpaid care work, violence against women, and families and migration. The study notes that women continue to enter the labour market in large numbers, but marriage and motherhood reduce their participation rates along with the income and benefits that come with it. Half of married women between the ages of 25 and 54, two-thirds of single women and 96 per cent of married men, participate in the global labour force, according to new data. The fact that women continue to do three times as much unpaid care and domestic work as men, is a major driver of these inequalities.

Today’s Quick Links:

Should Kinshasa be fast-tracked to EAC?

Ten reasons why we should welcome DR Congo to the EAC

IATA Regional Aviation Forum for West and Central Africa (pdf): Ghana’s Vice President outlines why Africa needs single air transport

Launch of the African Women Leadership Fund Online Platform

The impact of mobile money on poor rural households: experimental evidence from Uganda

Cautionary tale of tax incentives for cigarette makers from Zambia

Mozambique: Overview of tobacco use, tobacco control legislation, and taxation

Dr Liam Fox: Future of Trade and Export Forum speech

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