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tralac’s Daily News Selection

tralac’s Daily News Selection

04 Jul 2019

Today, in Geneva: “The AfCFTA – From Dream to Reality”: tralac and the Sidley Emerging Enterprises Pro Bono Program organised an AfCFTA Breakfast Event this morning in Niamey for high-level policymakers to discuss and assess what must be done for the AfCFTA to become fully operational and implemented successfully.

Discussants recognised the substantial promises made by the AfCFTA in terms of boosting intra-Africa trade, but also highlighted the challenges that will inevitably be faced along the way – from reaching an agreement on trade in services to negotiating rules of origin.

The event was attended by, among others, Dr. Mukhisa Ktuyiu (UNCTAD Secretary General); Patrick Low (tralac Advisory Board and former Chief Economist to the WTO); Rajesh Aggarwal (Director, International Trade Center); Frank Matsaert (CEO, Trade Mark East Africa); Edwini Kessie (Director, Agriculture and Commodities Division, WTO); Xolelwa Mlumbi-Peter (South African Ambassador to the WTO); and Tom Pengelly (Saana Consulting and Tralac Advisory Board).

Global Review of Aid for Trade: selected updates

  1. Audio recordings of concluded plenary sessions and side-events have been posted

  2. Linking trade facilitation with sector development and investment policy to promote industry and services in Africa: tralac and the Tony Blair Institute for Global Change (TBI) organised a side event at the Aid for Trade Global Review this afternoon. tralac Advisory Board member Patrick Low presented on the topic: The role of services in industrial development and regional value chain development in Africa.
  3. More work needed to tackle barriers women entrepreneurs face in trade. The WTO and the World Bank launched a joint research project to deepen the understanding of the linkages between trade and gender. The final report resulting from this research will shed light on issues such as: challenges and opportunities of women traders, and policies that can best help women gain from trade. Over the past few months, the WTO has also been working in partnership with the South Asian Women Development Forum and Trade Mark East Africa. Together, we have conducted two regional surveys, one in South Asia and one in East Africa targeting women entrepreneurs. Over 200 women entrepreneurs working in the formal sector were surveyed. Let me highlight a few of the findings: First, results show that most women wanted to export and join global markets but were not sure where the opportunities were or how to access them. Second, more than half of the women entrepreneurs interviewed indicated that they had not received any training on trade regulations in the areas where they have set up their business. Third, over 90% of the interviewees, including those already running existing and well-established businesses, showed interest in receiving trade-related training.

  4. Digital trade in Africa – implications for inclusion and human rights. In February 2019, the AUC, ECA and other stakeholders were mandated to prepare a digital transformation strategy for the continent, to include effective means of securing a digital identity for all Africans. That initiative is complemented by the Digital Trade and Digital Economy Strategy that is being prepared by the Department of Trade and Industry of the AUC. The recommendations on the strategies are to be submitted in early 2020. It is hoped that insights from the various contributions to this publication will help to shape the ongoing discussions on those recommendations.

    pdf Executive summary and policy recommendations (1.82 MB) : Trade and development cooperation extract There is a need for a collaborative and consensus-based approach at the multilateral level to arrive at improved technology transfer-related provisions that cater for the unique situation of the least technologically advanced countries, which are latecomers to the use of digital technology. The least technologically advanced countries should be granted, under a global digital trade regime, the flexibilities and exemptions necessary to enable them to realize their right to development and achieve the Sustainable Development Goals. There is a need for a comprehensive aid-for digital-technology programme to facilitate digital technology transfer and enhance the absorptive and adaptation capacities of the least technologically advanced countries. Before signing any trade agreement, it is imperative to undertake a systematic audit of all its provisions (including those pertaining to digital trade policy) and their implications for human rights and development.

  5. Aid for Trade in Asia and the Pacific: Promoting economic diversification and empowerment. By AfT categories, gender equality is more strongly mainstreamed in aid for building productive capacity (35.1% of the total in 2009-2017), particularly banking and financial services, business and other services, forestry, agriculture, and tourism. This is followed by trade policies and regulations (22%). The proportion of gender-targeted aid is lowest in aid for economic infrastructure at only about one-tenth. Noting that aid for economic infrastructure comprises the largest shares of total AfT, increasing AfT’s impact on gender equality and women’s empowerment would entail increasing gender targeting of aid in these sectors. AfT that targets ICT-enabled services, however, remains a small fraction of total AfT. It accounted for just 8.5% of total AfT over 2002–2017, despite nearly doubling from an annual average of $375.3m over 2002–2005 to $646.2m for 2016–2017. Clearly, the potential for shoring up aid in ICT-enabled services is great, especially given the growing contribution these sectors make to diversifying product and export markets and encouraging more inclusive trade. [Thematic chapters: Regional trends; Promoting women’s economic empowerment; Integrated support for small firms promotes inclusive growth; The digital economy, diversification and empowerment; Conclusion - rational for targeted interventions. Downloads: Full report, Summary]

  6. Making e-commerce work for all: speech by DG Roberto Azevêdo. According to the latest data for 2017, e-commerce sales have reached an annual growth of 13%, reaching a value of around $29 trillion. In fact, a WTO study found that by lowering costs and increasing productivity, digital technologies could provide an additional boost to trade by up to 34% by 2030. The digital divide still poses a big barrier for countries’ ability to engage in e-commerce. You all know the figures. Across Africa, only one in four people uses the internet. In LDCs, it’s less than one in ten. And the gap is not only between developed and developing countries, but also between men and women, rural and urban areas, small and large firms. Over the past few years, at the WTO, we have witnessed growing interest in discussing e-commerce issues in more detail. This includes the work under the existing Work Programme on Electronic Commerce. And it includes the Joint Initiative on E-commerce. This initiative, which is open to all WTO members, now includes 78 members representing 90% of global trade. And they have now begun negotiations on e‑commerce issues, asthey relate to trade. We are seeing discussions touch upon a range of issues, including conversations related to development. Participants are interested in understanding the unique challenges faced by developing countries and LDCs and what kind of assistance they need to participate in e-commerce flows. This is encouraging. This effort should be as inclusive as possible. We can’t allow a fragmentation of the digital world. It would mean higher costs and higher barriers to entry, affecting developing countries and smaller businesses the most. In fact, this was a strong message that has also emerged from the G20 Summit in Osaka, where leaders launched the “Osaka track” to help guide these efforts.

NEPAD Infrastructure Project Preparation Facility Special Fund: update (AU)

NEPAD-IPPF Fund Manager, Mr. Mike Salawou, stated that cumulative contributions by donor partners including the African Development Bank amounted to $102m out of which $96.1m had been committed to approve 91 projects. As per June 2019, 60 studies have been completed. ”While disbursements on supported projects have reached a high level, beyond that and without any new contributions to the Fund, NEPAD-IPPF will no longer be in a position to support further project preparation activities,” Mr. Salawou affirmed.

Implementing the TFA: Trade facilitation activities in Zambia (SAIIA)

Zambia is an ideal case study for examining the political and economic challenges that landlocked lower-middle-income African countries face in driving trade facilitation reforms and improving their overall trade performance. The Zambian case study provides a snapshot of the challenges and status quo of trade facilitation reforms at four critical border posts (Chirundu, Kazungula, Kasumbalesa, Nakonde-Tunduma OSBPs). The paper concludes by highlighting potential best practices that have emerged from Zambia as takeaways for the broader Southern African region. [The author: Asmita Parshotam]

Rwanda and the IMF:   pdf Staff Report for 2019 Article IV Consultation, Debt sustainability analysis (1.90 MB)

Box 1: Macroeconomic framework for the DSA. The medium- and long- term framework underpinning the DSA assumes that Rwanda continues to enjoy robust growth, with low and stable inflation. A limited growth dividend is implied from the broad public investment in infrastructure to support greater export diversification, and to improve agricultural productivity and resilience. Mobilizing the private sector as the main engine for growth and job creation will be critical, along with sustained levels of investment - consistent with the NST or meeting the MDGs - and increased human capital. Key highlights include:

Growth: The near-term growth outlook maintains growth around 8 percent through 2022, declining to 7.2 percent by 2028, and to 6.5 percent by 2039. Relative to previous DSAs, this is a slight upward revision to growth in the near term, but a more conservative growth projection over the medium- to long- term, consistent with an economy where population growth is slowing over time. Upside risks around the long-term growth potential of the economy exist, particularly from faster TFP growth.

External sector: Exports of goods and services are expected to grow steadily (11% on average during 2019–39), roughly in line with historical rates, but below recent very rapid growth. This reflects, in part, strategic public investments and export promotion, and development plans. Import needs are expected to remain high, particularly in the near term as high public and private investment rates are maintained, declining slightly over the medium term. Consequently, while Rwanda’s current account is projected to remain in deficit, it is expected to narrow somewhat over the DSA horizon, reaching 7 percent by 2039.

The Seychelles and the IMF:  pdf Staff Report for the 2019 Article IV Consultation (1.29 MB)

Tourism-related sectors directly contribute about one-third of GDP, while tourism receipts and canned tuna exports represent over half of the exports of goods and services. The authorities’ “Blue Economy” initiatives have focused on diversifying and upgrading the tourism and fishery industries. The authorities recently finalized the National Development Strategy, which includes an updated diversification strategy in these two industries. Staff supported the authorities’ plans to deepen and diversify tourism and upgrade the value-chain of the fisheries sector under the Blue Economy initiatives. Box 5: Tourism and fisheries diversification and value-upgrading. Mixed results from plans to diversify the tourism sector and increase local content signal the need for further action. The Tourism Master Plan of 2012‒20 had identified environmental, historical and cultural holidays as avenues for diversification beyond the current beach destination model. Progress in these areas has been limited. Similarly, a high concentration of European tourists led authorities to push for newer markets in Africa and Asia. Recent data suggests some diversification has happened, as the share of European tourists in total arrivals fell from 75% to 65% between 2010 and 2018, offset by the increase in the share of Asian tourists. Another area of success has been local guest houses and self-catering establishments. [Selected Issues: pdf A Financial Conditions Index for Seychelles (292 KB) ]

Today’s Quick Links:

World Bank: New country classifications by income level, 2019-2020

Saweria Mswangi, Christian Vidal: Africa needs its own pool of trade policy advisors

An update on the World Bank’s Ghana Economic Transformation Project

OECD strengthens co-operation with Morocco: Renews Morocco country programme agreement

Reuters: Industry doubts remain over Ivory Coast, Ghana cocoa floor price

World Bank briefs: Estimating the impact of the Mojo-Hawassa Expressway, Measuring the impact of rural road rehabilitation in Nigeria

Andrew Robinson, Malcolm Hartwell: Africa free-trade pact gives hope amid bars to transport corridors

World Bank: Reducing stunting through multisectoral efforts in Sub-Saharan Africa

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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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