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tralac’s Daily News Selection

tralac’s Daily News Selection
Photo credit: Dominic Chavez | World Bank

05 Jul 2019

Today’s featured commentary, David Pilling (Financial Times Africa Editor): Are tech companies Africa’s new colonialists?

Ghana appears to have won the bid to host the AfCFTA Secretariat. A Reuters preview of the decision: African leaders will decide on Sunday which nation will host the headquarters for a continental free-trade zone that aims to eventually unite the continent’s 1.27-billion people and its $3.4-trillion nominal GDP. Under the Addis Ababa-based AU’s rules, all of its 55 members may bid to host the headquarters. Kenya, Ghana, eSwatini, Madagascar and Egypt are all in the race. Ethiopia and Senegal have pulled out.

The 35th Ordinary Session of the Executive Council concludes today. It will consider and adopt the AU’s budget for 2020 and the legal instruments pertaining to the AU Development Agency (formerly known as NEPAD), as well as reviewed the proposed new organisational structure of the AU Commission which is to be finalised by February 2020. The Council will elect four board members of the AU Advisory Board on Corruption and prepare the draft agenda and decisions for the 12th Extraordinary Assembly (Sunday) that will launch the AfCFTA. Additionally, it will discuss the scale of contributions to the AU Peace Fund. The Chairperson of the Commission announced that $120m out of the expected 400m for the Peace Fund has so far been received, and he expressed the Commission’s appreciation to member states for their contributions. The Executive Council will also review the preparations for the 1st mid-year coordination meeting (Monday) between the AU and the RECs.

Tweeted highlights, by @AU_Economy, from the official opening of the RECs and African Central Banks Consultative Meeting on the establishment of the African Central Bank to support the AFCFTA: The AU reaffirmed to RECs and African Central Banks its commitment to establish the African Monetary Institute by 2021. The AMI will serve as a transitional organ responsible for the creation of a common currency to facilitate trade under the AfCFTA. The outcome report will be sent to RECs for final validation on the convergence criteria of the African Monetary Cooperation Programme. [Context to this meeting]

Reactions to President Buhari’s decision that Nigeria would sign the AfCFTA agreement:

  1. Andrew Mold (Acting Director of UNECA’s Eastern Africa Sub-regional office): “Without them [Nigeria] on board it wouldn’t have worked. Benin will sign up now too. The only issue is going to be Eritrea – and we are holding our annual meeting in Asmara in a few months’ time.”

  2. CNBC interviews: Muda Yusuf (Director General of the Lagos Chamber of Commerce and Industry) and Mansur Ahmed (President of the Manufacturers Association of Nigeria)

ECOWAS Summit: commentaries and updates

  1. Quartz: West Africa’s “Eco” single currency ambition has a slim chance of success

  2. Another ECOWAS summit ignores Morocco’s bid to join the trade bloc

  3. West Africa to introduce regional visa to boost tourism

Cape Town and the Western Cape: Trade and Investment into Africa 2019 (Wesgro)

Out of the top 15 Western Cape destination markets (pdf), almost half of them (7) are African markets. The African market with the highest growth in 2017 was Swaziland with 28% growth, followed by Kenya (24.1%) and Zambia (15.1%). The largest increase in USD value terms out of the African countries was Kenya, with a growth of $42.8m from 2017, followed by Swaziland with a growth of $40.6m. The top African destination countries for Western Cape exports were Namibia ($864m), Botswana ($518m) and Kenya ($225m). Top source African countries were Angola ($1.07bn), Nigeria ($678m) and Namibia ($204m). The services sector attracts 53% of FDI projects: The best performing sectors in terms of inward FDI into the Western Cape by projects between 2008 and September 2018 were: business services accounting for a 20% share of projects; software and IT services accounting for 18% of projects and communications accounting for 8.6% share of projects.

Africa is the Western Cape’s largest global destination region for outward FDI both in terms of projects (54%) and capex (54%) between 2008 and September 2018. This was followed by Western Europe accounting for 17% of projects and 17% capex. Over the past 10 years, outward FDI from the Western Cape had an annual average growth of 95% in terms of capex and 54% in terms of projects. Most outward FDI from the Western Cape into Africa in terms of projects were in the food and beverages sector; followed by the software and IT sector; financial and business services sector; and consumer products together accounting for 79% of all investments.

East Africa regional private sector consultative workshop (24-25 June, Nairobi) on AfCFTA tariff offers and engagement on trade in services negotiations:  pdf Key recommendations (372 KB)

EAC Partner States should adequately involve the private sector in the negotiating process of AfCFTA instruments to ensure regional private sector interests are taken on board. The private sector should accompany government delegations during negotiating rounds; EABC to seek for ITC’s support in the forthcoming AfCFTA negotiation preparations, roundtables and consultative meetings;Implementation of AFCFTA programme for the elimination of NTBs to include a sanctions regime within the AfCFTA NTB framework that addresses failure by member States to resolve NTBs in a timely manner; EABC to advocate for harmonized regulatory frameworks as regards trade in services (sectoral directives and regulations, protocols, trade-related regulatory principles and reference papers); Need for EABC to undertake evidence-based and to develop position papers that have the capacity to influence policy; EABC to present private sector positions on the AfCFTA and how the private sector should be organized to benefit from the AfCFTA during the Niger African Business Forum due in July 2019;EABC to mobilize resources for capacity building to address legal, institutional and regulatory capacity gaps at the national and regional level in order to facilitate the implementation of AfCFTA

EAC trade policy events to note. (i) Concluding today, in Arusha: EAC’s 8th Sectoral Committee of Industrialization; (ii) Ongoing, until 15 July: EAC trade mission to selected borders to assess the elimination of customs and standards related NTBs

Uganda, Rwanda sued in East Africa court over trade spat (Daily Monitor)

A coalition of East African citizen groups announced they were suing Uganda and Rwanda in a regional court for financial losses resulting from a border dispute between the feuding nations. Sheila Kawamara-Mishambi, executive director of the East African Sub-regional Support Initiative for the Advancement of Women, one of the complainants, told AFP the attorney generals of both countries had been served with court papers “over the continued arbitrary border closure”. In a statement, the coalition said the blockade contravened the treaty terms of the EAC concerning freedom of trade and movement over the border. “The court should declare that this impunity must not be allowed to happen anywhere else within the EAC,” the statement read. The closure has “far reaching effects on the lives and livelihoods of the business community, and has caused social and emotional distress among the local people, anguish and dislocation of families, deaths among others”,

Industrial development, construction and employment in Africa: SOAS research challenges perceptions of Chinese firms’ labour practices

The project led by SOAS University of London’s Dr Carlos Oya, Reader in the Political Economy of Development, shows that national, sector and economic context are more important in understanding labour conditions in Africa than the country origin of the firm itself. The findings are based on 4 years of fieldwork-intensive research on employment patterns and outcomes in the infrastructure construction and manufacturing sectors in Angola and Ethiopia, where large-scale surveys of workers and extensive qualitative research were conducted between 2016 and 2018. In terms of job creation the project found that the proportion of national (Ethiopian and Angolan) workers in the labour force is substantially higher than usually assumed in media perceptions. In Ethiopia these rates were 90% of all workers (and 100% for low-skilled workers) and in Angola, where rates are usually much lower due to skill shortages, estimated rates were 74%. In Angola the project found that localisation had grown significantly in the previous 10 years as Chinese firms settled in that market context. [Various downloads, including the country reports, are available here]

Chinese contractors to complete Kenya-South Sudan highway in 2020 (Xinhua)

Julius Korir, principal secretary in Kenya’s Ministry of Transport, Infrastructure, Housing and Urban Development said three Chinese contractors won the tender to upgrade about 248km of road to bitumen standards on the Kenyan section of the road that links to South Sudan. “So far the project is about 30% complete and we expect the road to be commissioned in 2020,” said Korir. “Kenyan traders are forced to travel through Uganda in order reach South Sudan, a process that could take up to three days. With the new road, travel time will be cut by at least two days.”

African Development Fund 15 replenishment meeting: address by AfDB’s President Adesina

Fragility must not be seen as an end state. Nations may go through fragility, but they can exit and become stable, dynamic, prosperous and resilient to debilitating shocks. That’s our goal for the ADF- a powerful instrument to help build resilience of low-income countries. For at the end of the day, for the AfCFTA to work, we cannot integrate fragile states; we can only integrate resilient states. The ADF has shown its capacity to help achieve this. On ADF impact: Just see the recently inaugurated impressive Senegambia Bridge, connecting Senegal and The Gambia, a dream since 1974, realized in January 2019 because of the ADF; Visualize the Addis-Ababa-Nairobi-Mombasa road corridor that’s helped to increase trade by 400% between the two countries; Spend a moment and take in the Kazungula Bridge that’ll connect Botswana and Zambia, Namibia and the Democratic Republic of Congo, and reduce waiting time from 14 days to just one hour! [Delivered on 2 July, Antananarivo]

Related: The AfDB has posted its 2019 – 2021 Work Programme and Budget Document. Figure 3: 2019 financing operations distribution by High 5s priority areas: Light up and Power Africa (16%); Feed Africa (18%); Industrialize Africa (19%); Integrate Africa (15%); Improve Quality of Life for the People of Africa (32%).

GlobalData: Nigeria to lead transport construction with $9.8bn investment in Africa (Guardian)

Nigeria will lead other Sub-Saharan African countries in transport construction with an investment portfolio rising from $7.6bn in 2019 to $9.8bn in 2020. Moreover, investment in transport (road, bridges and railway) construction in Africa, is set for rapid growth from $47.1bn this year to $69bn next year (in nominal terms), based on projects being tracked by a leading data and analytics company, GlobalData. This investment is poised at accelerating the economic and trade integration process on the continent with the entry into force of the Agreement on the AfCFTA. GlobalData’s latest report, ‘African Transport Networks’ reveals that growth in transport construction in Africa is being driven by increasing investment in railway projects. Spending will be led by Nigeria, Kenya and Egypt where transport investment will increase from $7.6bn, $9.5bn and $5.6bn, respectively, in 2019 to $9.8bn, $8.5bn and $7.5bn in 2020. GlobalData is currently tracking 448 large-scale transport projects across Africa worth $430.3bn in both the public and private sectors at all stages from announcement to execution.

West Africa targets $57bn investment, integrated ports, rail sector (Guardian)

West African countries will later this month meet at the West African Ports and Rail Evolution (22-23 July, Lagos) to chart path to integrated ports, road and rail transport sector, with new investments in excess of $57 billion for the region. Experts, at a roundtable meeting yesterday, were unanimous that the West African transportation corridor is arguably the least integrated passage in the world, despite enormous opportunities that abound. Managing Director, Grolla Port Services, Graham Lawal: “But in order to unlock the West African hinterland, ports and rail authorities are working together to set up new logistics infrastructure where investment figures of single projects in the sector go up to $10bn. With 50% of ports and terminal operators wanting to expand their port facilities and over $57 billion worth of infrastructure projects being rolled out for the region, all eyes are on West Africa to make it a more integrated transport corridor as it is with its Southern African neighbours, and as it sits on the cusp of an infrastructure boom.”

Today’s Quick Links:

Ben Crawford: Is the internet a ‘silver bullet’ for Africa?

Victor Bhoroma: Revisiting the Beitbridge-Harare highway

Reuters: Vedanta appeals to South African court to protect Zambian business

Mozambican president Filipe Nyusi: Mozambique committed to international law after ‘tuna bond’ ruling

3rd Africa Energy Market Place: Africa needs bolder private financing models for power transmission lines

Ghana: Akufo-Addo considers dual Citizenship Bill

Tanzania: Govt invites Vietnamese investors to buy cashewnuts

Civil society criticizes secretive Asia-Pacific free trade negotiations

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