tralac’s Daily News Selection
Uganda-Tanzania Business Forum (4-5 September, Dar es Salaam). The business forum, to be presided over by President Museveni and Tanzania president John Magufuli, will raise awareness about investment and business opportunities, address residual non-terrify barriers hindering trade and investment, as well as opening dialogue for interaction between the two countries.
On 30 November, 2019 the EAC will celebrate 20 years of existence. Lest we forget, it was on 30 November, 1999 at Sheikh Amri Abeid Memorial Stadium in Arusha, that the heads of state of the Republic of Uganda, the Republic of Kenya and the United Republic of Tanzania, put pen to paper to sign the treaty reviving the EAC. Again, to jog our memory, the EAC had earlier been established in 1967 and it collapsed 10 years later in 1977. The current EAC 20-year journey has been remarkable, the inevitable challenges notwithstanding.
The Second Intra-Africa Trade Fair (1-7 September 2020, Kigali). The organisers of the IATF2020 expect it to surpass the achievements of the inaugural trade fair, held in Cairo in 2018, by attracting 10,000 participants and generating intra-African trade and investment deals worth more than $40bn, Prof. Benedict Oramah, Afreximbank president, has said. Key features will include an IATF2020 Conference, a Creative Africa initiative to showcase Africa’s creative economy, Country Days dedicated to specific African countries, and an interactive online Virtual Trade Fair.
Tripartite Free Trade Area update by South Africa’s foreign minister, Dr Naledi Pandor (DIRCO)
“Our country appended her signature on the Agreement establishing the TFTA on 7 July 2017 in Kampala. To date, the Agreement has been signed by 23 member countries and requires 14 ratifications to enter into force. To date, only Kenya, Egypt, Uganda, and South Africa have signed and ratified the agreement. South Africa will intensify its diplomatic efforts aimed at urging other TFTA members to sign and ratify this important trade facilitation instrument in order for it to become operational. To this end, a TFTA Summit is scheduled to take place in January 2020 in Rwanda. We hope that the ratification threshold would have been achieved by that date.”
Nigeria’s membership of the African Continental Free Trade Area: perspectives from a debate, yesterday, in Nigeria’s Senate
Senate wants Nigeria’s business community to explore benefits of AfCTA. The Senate on Thursday asked the federal government to enlighten the Nigerian business community on how to leverage on the immense benefits of the AfCTA agreement, signed by President Muhammadu Buhari on Sunday. Barau Jibrin and 40 other senators sponsored a motion on Nigeria’s membership of AfCTA. Mr Jibrin, in his motion, complained that not many Nigerians understand the profound benefits of the agreement “in the light of the rather intricate interplay of economic theories and their applications as they affect the common man”.
The Senate Leader, Abdullahi Yahaya, said “it is one thing to sign a free trade agreement and another thing to yield opportunities from the agreement”. He added: “We have had a lot of failed signatures of so many international conventions and so many trade agreements. Global trade, whether bilateral or multilateral is the foundation of global peace and prosperity. Nations that don’t have good foundations of global relations across the seas and across the nations, have a tendency of becoming markets for other nations making their economy vulnerable. Yes, we are the largest country but we are the largest consuming economy because we fail to take advantage of the trade agreement that we sign with other countries.” [NANTS urges FG to boost MSMEs funds]
Why Nigeria has become a dumping ground. Senator Orji Uzor Kalu, the Senate Chief Whip, has blamed the high cost of goods as reasons Nigeria is a dumping ground for goods from African countries and beyond. Kalu spoke during the debate on a motion on “Nigeria’s membership of the African Continental Free Trade Area”. The debate was sponsored by Senator Jibrin Barau representing Kano North Senatorial district. [Related: Rwandan MPs urge government to do more to facilitate trade]
Nigeria: Customs generates N203.3 billion in Apapa (The Guardian)
The Nigeria Customs Service, Apapa Area Command, has racked in revenue of N203.26 billion for the half-year period January 1 to June 30, 2019, which represents 54.5% of its annual revenue target of N372.56 billion in the year. Controller of the Command, Comptroller Mohammed Abba-Kura, who disclosed this in Lagos, Tuesday, said the Command also recorded a high level of compliance in export trade within the period, which saw it generate approximately $46.6 million (N14.3 billion) FOB from a total of 95,229.15 metric tonnes of exported goods.
State of food and nutrition security and vulnerability in Southern Africa 2019: SADC RVAA synthesis report (pdf, SADC)
According to the SADC 2019 Synthesis Report, 41.2 million people in 13 countries are estimated to be food insecure in the 2019/20 year. Comparing the 11 member states that provided data last year, food insecurity has increased by 28% and is 7.4% higher than it was during the severe El Niño-induced drought of 2016/17. The countries with the most significant increase in food insecurity compared to last year are Zambia, with a 144% increase; Zimbabwe, with a 128% increase; Eswatini with a 90% increase; Mozambique, with an 85% increase; and the DRC with an 80% increase. Extract (pdf): A strong drought affected central and western parts of the region during the 2018/19 rainfall season. Large parts of southern Angola, northern and southern Botswana, northern Namibia, north-western South Africa, southern and western Zambia, and north-western Zimbabwe received their lowest seasonal rainfall totals since at least 1981, when regional, comparable records began. The severe El Niño-induced drought of 2015/2016 had primarily affected the south-central and east-central parts of the region.
Drivers of cross-border banking in Sub-Saharan Africa (IMF)
As highlighted in a recent IMF paper, the number of pan-African banks has increased significantly in recent years, and seven groups from the region now dominate the landscape. Banks based in South Africa, Morocco, Nigeria, and the West African Economic and Monetary Union, have emerged. Ecobank (Togo and WAEMU) has the most widespread presence, with operations in 33 SSA countries, while Standard Bank (South Africa) is the largest group by asset size. Three Moroccan banks (Attijariwafa, BMCE/Bank of Africa, and GBCP) have emerged with a large footprint especially in francophone west and central Africa. In addition, about 50% of the subsidiaries of Attijariwafa, BMCE/Bank of Africa, Ecobank, and Standard Bank are systemically important in their home countries. Despite the importance of these developments for the economy of the region, to date the determinants and impact of their growth and the impact they may have on the regional financial sector development have not yet been explored in depth. This paper aims to address this gap by documenting and analyzing the pattern of growth of pan-African banking, collecting new quantitative evidence, and exploring the drivers of these changes. We update the map of cross-border lending in SSA countries by assessing recent changes and by estimating annual cross-border flows in the eight major SSA cross-border banking groups with the aim of identifying the main drivers of these flows. [The authors: Paul Henri Mathieu, Marco Pani, Shiyuan Chen, Rodolfo Maino]
Jacques Morisset: How can Côte d’Ivoire escape the curse of cocoa? (World Bank)
While the current situation for cocoa producers in Côte d’Ivoire is hardly cause for celebration, emerging trends suggest that the future could be bleaker still. On the demand side, new social and environmental concerns among consumers (opposition to child labor and the destruction of forests) will increase costs for producers, who must now certify their cocoa through increasingly sophisticated monitoring mechanisms. Consumer tastes are also shifting toward luxury chocolate, which is not good news for Ivorian producers, whose cocoa beans are generally not of the best quality. On the supply side, recent changes also point to an even less favorable situation for Ivorian producers. Depletion of the available arable land and the labor force (the typical cocoa farmer is over 45) will prevent them from clearing new land, which has traditionally been their response to increases in demand in recent decades. Furthermore, it is estimated that one third of existing cocoa orchards will have to be replaced because of the aging of trees and the spread of epidemics in coming years. In addition, the effects of climate change, which have already begun to be felt, threaten the fertility of many farms, especially in the eastern part of the country. However, these upheavals could turn out to be good news for Côte d’Ivoire, as they will force farmers and policy makers to react. The World Bank’s ninth economic update for Côte d’Ivoire suggests several approaches that could make the cocoa sector a driver of the economic transformation that the country is entitled to expect. [Côte d’Ivoire Economic Outlook: Urgent actions needed to modernize the cocoa sector]
Sierra Leone: Economic update (World Bank)
The special topic of the 2019 Update focuses on deepening the financial sector for inclusive economic growth and development. The report notes that usage of the financial system is low in Sierra Leone with only about 5% of adults using formal savings products and about 54% saving money within the past year. Access to finance for enterprises is a significant barrier to growth of the private sector with 40% of firms indicating lack of credit as their biggest constraint. Only 11% of Sierra Leoneans have mobile money accounts compared to 20.8% in Liberia, 38.9% in Ghana and 72.9% in Kenya.
Central African Economic and Monetary Community: Common policies in support of member countries reform programs (IMF)
The regional strategy has helped stabilize the regional economic position, but challenges remain. Facing these challenges, the CEMAC authorities reiterated their full commitment to the regional strategy and their readiness to implement additional corrective measures if needed. At their 24 March 2019 meeting in N’Djamena, CEMAC Heads of State urged each member state to adhere to the fiscal adjustment targets agreed under IMF-supported programs; encouraged Congo and Equatorial Guinea to conclude IMF-supported programs as soon as possible; and, among others, supported a strong implementation of the CEMAC foreign exchange regulation. The CEMAC authorities also decided to set-up a Tripartite consultative forum to bring together country authorities, regional institutions, and IMF staff to discuss further policy responses in case of new emerging challenges or weak program implementation. At the first meeting of this forum on April 2nd, the authorities agreed to high-level policy actions to keep the strategy on track (see Annex 1).
Current challenges to developing country debt sustainability (UNCTAD)
Section II examines the debt indicators for 145 developing and transitional countries on a regional basis (pdf). The data are limited in scope but provide a useful point of departure for forming a picture of debt at the regional level. More specific data for emerging markets as a subcategory of developing countries show increasing exposure of emerging markets to spillover debt from advanced countries. Financialization has not delivered on its promises of growth and, in the context of persistent downward pressure on aggregate demand, income and employment, together with systemic financial fragility and recurrent instability, a new development agenda must be found.
ASYCUDA marks 30 years of helping customs agencies boost revenue (UNCTAD)
The ASYCUDA journey began 35 years ago with Mauritania. The software has been regularly updated and upgraded over the years. It’s now being improved to offer single-windows environments, bringing together various parties that interact with customs during import and export procedures, such as ministries of health, agriculture and defense, as well as chambers of commerce and banks. “A key value of the ASYCUDA programme has always been the collaborative network of administrations, partners and experts,” said Shamika N. Sirimanne, UNCTAD’s director of technology and logistics. She added: “The collaborative spirit is what makes ASYCUDA truly unique, allowing it to adapt to the ever-changing needs of customs officials.” ASYCUDA is UNCTAD’s largest technical assistance programme. In 2018, it was active in 72 countries and signed 29 new projects worth around $24m. Beneficiary countries and regional organizations provided about two-thirds of the funds in 2018. The remaining amount came primarily from institutional donors. [Download: A compendium of ASYCUDA case studies 2019]
Today’s Quick Links:
South Africa: Citrus industry hopeful for resolution to port crisis as operator takes action
Investments in the Ogun Guangdong Free Trade Zone exceed $2bn
Africa50 outlines investment projects
Harnessing technology for agricultural development in Africa: Lessons from Tanzania
ECOWAS, China sign implementation agreement for the Commission’s new HQ
OECD: Fostering participation in digital trade for ASEAN MSMEs (pdf)