tralac’s Daily News Selection
Diarise: Next year’s 2020 Conference of African Ministers of Finance, Planning and Economic Development will take place in Addis Ababa, 18-24 March, on the theme The future of Africa: industrialization in the digital era
Important AfCFTA updates:
President Buhari has announced that Nigeria will sign the AFCFTA agreement during this weekend’s extra-ordinary AU Summit in Niger. Extracts from a twitter thread by @NGRPresident: Nigeria is signing the AfCFTA Agreement after extensive domestic consultations, and is focused on taking advantage of ongoing negotiations to secure the necessary safeguards against smuggling, dumping and other risks/threats. Let me state unequivocally that trade is important for us as a nation and to all nations. Economic progress is what makes the world go around. Our position is very simple, we support free trade as long as it is fair and conducted on an equitable basis.” [Note: Benin and Eritrea are the two outliers wrt signing the agreement]
- The objectives of today’s AfCFTA Civil Society Forum, held in Niamey: to improve regular information flow on trade issues; suggest a framework for the establishment of AfCFTA National Committees; improve co-ordination among relevant government ministries and agencies including through clear mandates and assigning of responsibilities; improve participation opportunities for stakeholders in the work programme of the AfCFTA; and to strengthen the culture of dialogue and inclusiveness. tralac’s Trudi Hartzenberg chaired the panel on Promoting inclusive trade across Africa: the role of women entrepreneurs
Important AGOA updates:
The 2019 AGOA Forum will take place in Abidjan (3-6 August) on the theme “AGOA and the future: developing a new paradigm to guide US-Africa trade and investment”.
The Office of the US Trade Representative has initiated the annual eligibility review of Sub-Saharan countries on AGOA country eligibility for calendar year 2020. Important dates to note (pdf): 14 August, for filing requests to appear at the 27 August public hearing, and for filing pre-hearing briefs, statements, or comments on sub-Saharan African countries’ AGOA eligibility; a public hearing will be convened on 27 August.
- A related commentary by CGD’s Sarah Rose: Prosper Africa promises to double two-way trade and investment between the US and Africa; but what’s the starting point?
The WTO’s 7th Global Review of Aid for Trade began today: selected highlights
Welcoming remarks by WTO DG Roberto Azevêdo: “Since it was launched just over a decade ago, over $409bn have been disbursed under the Aid for Trade initiative, reaching 146 countries or territories”
Aid for Trade at a Glance 2019: Economic diversification and empowerment
Using development aid to build trade capacity in poor countries is helping to improve economic diversification and to economically empower marginalised groups, yet progress remains geographically uneven, according to the latest OECD-WTO report on Aid for Trade. The report says 47 developing countries (mostly in Africa), out of the 88 surveyed, report progress in diversifying their economies since the OECD-WTO Aid for Trade Initiative was launched in 2006, a picture backed up by trade statistics. Most progress has been seen in agricultural sectors followed by services and industry. Countries still struggling to use international commerce to diversify their economies are the least-developed countries or those that are small islands, landlocked, resource-dependent or ravaged by conflict. The 2019 report says $409bn in official development assistance and $346bn in concessional loans has been used since 2006 to boost trade in developing countries by investing it in areas like infrastructure, regulation or providing access to technical assistance. Another $100bn in ODA and loans from donor countries was committed in 2017, and assistance between developing countries provided another $9bn. Every US dollar invested in aid for trade has been found to generate $8 worth of exports in developing countries and nearly $20 of exports in least-developed countries, depending on the country and the type of investment. [Downloads include a 40-page summary, pdf]
In terms of sub-regional distribution of Aid for Trade to Africa, the highest proportion in 2017 was directed to projects in East and North Africa (Table 1). In 2017, 30% of the disbursements went to East Africa, amounting to $4.5bn, an increase from $4.3bn in 2015. The amount to North Africa also increased, this time significantly, from $2.7bn in 2015 to $3.5bn in 2017, marking an increase of 32.2%. Aid for Trade is now higher in the North that in the West of Africa, although figures for the latter region also rose to approximately $3.5bn (23% of total, Figure III).
In North Africa, the increase was mainly driven by rising Aid for Trade to Morocco (+ $756.4m) and to Tunisia (+ $300.9m). A decline in Aid for Trade to Sudan (- $148.3m) and Egypt (-$75.9m) was also registered. In West Africa, considerable increases were experienced by Niger (+ $174.2m) and Nigeria (+ $105.3m), whereas the largest decreases were to Senegal (- $51.2m) and Ghana (- $47.8m). In East Africa the largest gains were to Rwanda (+ $186.6m) and Ethiopia (+ $146.3m), whereas the largest decrease was experienced by Tanzania (- $65.8m).
Aid for Trade disbursements decreased to Southern Africa and Central Africa, to $1.5bn and $300m, respectively, representing a decline of 28.7% and 24.9%. In Southern Africa, Aid for Trade disbursements to Malawi increased (+ $198.2m) between 2015 and 2017; this was offset by the decreases to South Africa (- $404.8m) and Angola (- $215.2m). In Central Africa, the Aid for Trade disbursements decreased to Chad (-$54.4m) and Gabon (-$58.5m), which contributed to the region-wide decrease in flows.
The largest recipients of Aid for Trade disbursements have remained the same since 2013: Morocco, Kenya, Ethiopia, Egypt and Tanzania (Figure III). In 2017, Morocco accounted for 11.5% of all Aid for Trade to Africa. Altogether, the top five countries represented 34.2% of the envelope to the continent. These same countries also accounted for 24.0% of ODA disbursements. From the perspective of the smallest recipients of flows, the situation also remained largely unchanged; these countries included Equatorial Guinea, Libya, Seychelles and Botswana.
Aid for Trade flows should be considered in relation to the size and population of the recipient country and as a percentage of the overall ODA it receives (Figure IV). In Seychelles, for example, the 45% proportion of Aid for Trade to ODA received was higher than the average for Africa (25.5%). The same applies to other small-sized countries, such as the Comoros (32%), Mauritius (47%) and Djibouti (29%). In Benin and the Gambia, Aid for Trade represented about 28% of ODA, in Mauritania 32% and in Liberia 36%. On the other hand, in larger countries, disbursements represent a smaller share of the ODA they received, as was the case in Ethiopia (21%), Nigeria (20%) and Mozambique (25%) respectively).
Project-level data are available for 13,051 projects in Africa in 2017. It is, therefore, of interest to observe the share of projects which have a non-zero gender indicator as an indication of incorporation of gender dimension in the project. For 2017, out of the available projects, 4,145 projects (representing 32% of the projects) had a non-zero gender marker. Only 455 projects, or 3.5%, had gender equality as a principal objective (Figure XIII). Given the commitment assigned to women’s economic empowerment, the low level of gender mainstreaming indicates room for improvement in the design of Aid for Trade projects.
Some variations are apparent between categories of Aid for Trade. In productive capacity, a relatively higher share of projects are assigned a gender marker of 1 or 2, with 35.3% 4.4%, respectively. Projects with gender equality as a principal objective are more prevalent in banking and financial services (7.3%). The largest number of projects are included in agriculture (241 or 4.3% for principal and 2,049 or 36.4% for significant objective). The highest share of non-zero gender markers falls in business and other services (47.1%). Economic infrastructure projects include a large share of projects with a zero gender marker. In particular, transport and storage is clearly considered a gender-neutral area, as only 7.8% have a non-zero marker. In 2017, two out of a total of 1,322 projects were assigned a gender marker of 2. In energy generation and supply, only 16% of the projects included gender equality as an objective, and in communication, the figure was 25%.
There are only six projects categorized as trade-related adjustment, with none of them incorporating gender equality. Similarly, in trade policy and regulations, only six projects have gender as a principle objective. This represents less than 1% of all projects. Even when projects that have gender as a significant objective are considered, nonzero projects represent less than 15% of trade policy projects. When considering subcategories, some differences emerge. Trade education projects are relatively speaking more gender mainstreamed, with nearly 44% including gender as a principal or significant objective. Trade facilitation, a subcategory in which projects potentially offer many benefits for women, included 17.2% of non-zero projects. [Note: This report was prepared by the African Trade Policy Centre, in collaboration with WTO, in the context of the 2019 Global Review of Aid for Trade]
Finland’s Minister for Foreign Trade and Development, Minister Ville Skinnari: “The recent entry into force of the African Continental Free Trade Agreement is a great achievement and could generate important development benefits in the future. Together with our EU partners, we are ready to support African economic integration processes with a vision to form an EU-Africa Free Trade Agreement in the future. Our new government will also prepare a comprehensive Africa strategy, which will be based on the 2030 Agenda with an aim to expand our political and economic interaction with African countries. Africa is and will also be in the future the main focal area of our development cooperation.”
Trade finance and the compliance challenge: a showcase of international cooperation
Facilitating trade through regulatory cooperation: the case of the WTO’s TBT/SPS agreements and committees