tralac’s Daily News Selection
Starting tomorrow, in Niamey: Lake Chad Basin Governors Forum 2019. The forum (16-18 July) will assess cooperation and firm up plans for the region’s stabilization.
tralac’s latest Newsletter: Dispute settlement in trade agreements and an update on the AfCFTA
Egypt’s trade balance deficit rose to $3.87bn in April 2019 compared to $3.63bn in April 2018, marking an increase of 6.8%, the Central Agency for Public Mobilization and Statistics (CAPMAS) said on Thursday. Egypt’s exports increased by 0.5% in April 2019, recording $2.58bn compared to $2.57bn in the same period the previous year. The agency attributed the boost to the increase in exports of some products like petroleum products by 231%, crude oil by 35%, garments by 4.8% and plastics by 8.8%. The report showed that Egypt’s imports increased by 4.2% to reach $6.46bn during April 2019. Iron and steel, wheat, plastics and pharmaceutical drugs accounted for most of Egypt’s imports during April.
Kenya: Traders protests over delays at Taveta one-stop border (Daily Nation)
The government’s move to allow traders to import duty free maize to avert a looming shortage has been slowed down by delays at the Taveta OSBP. Maize traders importing the produce from Tanzania are stuck at the post along the Taveta-Holili border due to what they term as delays occasioned by Kenya Revenue Authority officers. The traders said their trucks, ferrying tonnes of maize, have been stuck at the border for one week due to the extended delays by rogue KRA officers. On Sunday, the traders protested outside the KRA offices, demanding the transfer of one officer whom they alleged has been frustrating the clearance of their cargo. Operations have been paralysed at the border point as hundreds of trucks carrying assorted goods, including agricultural produce, are stuck.
Mozambique: Substitute imports by reactivating paralysed industries (AIM)
Mozambique’s Minister of Industry and Trade, Ragendra de Sousa, on Thursday called for substituting imports by reactivating industries that have been paralysed for years, or even decades. Speaking in Maputo, at a meeting of the Coordinating Council of his ministry, Sousa pointed out that Mozambique imports about $15m worth of tyres every year, yet it has its own tyre factory, Mabor, on the outskirts of the capital, which is producing nothing. “The glasses from which we drink our water are all imported, yet we have the glass factory Vidreira”, he added. He pointed out that, with the exploitation of the enormous natural gas fields in the Rovuma Basin, “in about eight years time, the income of Mozambicans will grow, and when that happens the type of goods citizens want changes to the goods that are supplied by light industries”. The country would need to produce refrigerators, batteries, radios, among other products, and the first step towards this would be to ensure that the existing factories are all working again.
Exporters should leverage on Zimbabwe’s central location: a commentary by Allan Majuru, CEO of ZimTrade
The current trade figures show that Zimbabwe has not fully using its competitive advantage to become Zambia’s top trade partner. Statistics from Trade Map indicated that although Zambia is amongst the top five export markets for Zimbabwean products, Zimbabwe accounts for less than 2% of Zambia’s total import bill. With the short distance of around 500km between Harare and Lusaka, there is room for Zimbabwe to grow exports to Zambia from the current $66m recorded in 2018. This is against a total import bill of $177m from Zambia, creating a trade deficit of $111m. To close the current trade deficit, local industries can leverage on current major exports into Zambia to expand and introduce new commodities into that market. In 2018, Zimbabwe’s major exports to Zambia were fish, tea, unprocessed tobacco, cement, sugar cane, among others. Through taking advantage of these products already in the Zambian market, there is a huge potential for Zimbabwe to supply processed FMCGs to the Zambian market at low tariff rates riding on the COMESA and SADC trade agreements that the two countries are signatories to.
We must not be trade partners only, but production partners: an interview with Issa Aremu, GS of the National Union of Textile, Garment and Tailoring Workers of Nigeria
We must improve on the training and retraining of the workforce because if we are going to trade with fellow Africans, apart from making the goods and services competitive, the workers must also be competitive. The Organisation of Trade Union Unity and the trade union centres must look at the labour components of the agreement and ensure that workers are not put at risk. Yes, we must produce in Africa, yes we should trade with ourselves, but African workers must produce the products. There must be minimum acceptable conditions for work, just as there are in the EU and we must replicate that here so that the trade does not worsen poverty. Secondly, the type of technology we are going to apply for production must absorb more workers. It is fine to talk about the fourth industrial revolution with Artificial Intelligence at the base of it, but with the massive youth unemployment confronting Africa, what kind of technology are we going to apply for production? Will it be labour-intensive or capital intensive so that we can realise the objectives of full employment we are looking for? For me, what will solve these problems for us?
Liberation of financial services in Africa (Bloomberg)
First and foremost, to succeed in delivering on the AfCFTA, African governments will need to provide tangible support for the liberalisation of trade and services. However, there is some doubt as to the capacity of many governments to provide the level of support required. Due to the novelty of the changes proposed under the agreement, there will be a steep learning curve. Governments must make a commitment to being involved in the learning process and to make adjustments along the way, based on real-time feedback and results. In making this commitment, governments must engage private businesses and incorporate their approaches and perspectives into the implementation of the AfCFTA. Emphasis will need to be placed on human capital by training individuals to be valuable assets to the formal sector. This should include both government and business policies that encourage technical, skill-specific training, which will provide individuals with the skills they need to quickly and successfully enter the workforce and provide the support required for sophisticated businesses to thrive. Local businesses will also need to play an active role in the development of the implementing framework for the agreement. Sound technical capacity is an essential element for successful implementation. Businesses will have to insert themselves into the process, providing technical support to governments. Strategic planning on the part of both governments and businesses will be essential.
How Africa is setting an example for Arabs (Gulf News)
Arab leaders and citizens do not often look at Africa for inspiration. This month something remarkable happened that promises to change the fate of African nations for good. The AfCFTA pact aims are creating a single market for goods and services, facilitate free movement of people and investments, and eventually introduce a single-currency union. The Arab world, of over 300 million citizens, should have moved to integrate its economies and create a viable free trade zone long ago. Ironically, the legal frameworks and agreements within the Arab League charter and beyond do exist and references to intra-Arab free trade have been made since the mid 1950s. But a quick look at intra-Arab trade reveals that it only makes less than 10% of total external Arab trade estimated at $1.75 trillion dollars. Interestingly, trade among GCC countries makes up more than 70% of total intra-Arab trade and more than 80% of total Arab external trade, the bulk being oil and related products. It is incumbent upon the GCC countries to take the lead in integrating other Arab economies since they have the infrastructure, wealth and experience.
Rwanda Country Programme Evaluation FY09-17: an independent evaluation (World Bank)
Trade and gender-related issues
East Africa: Women cross-border traders compendium. The USAID Hub trained 391 women cross-border traders on trade regulations, business management and entrepreneurship. This effort led to improved policy advocacy and increased formal trade in the form of trade commitments for 17,509 metric tons of staple foods valued at $5,651,285,laying a foundation for future trade. This was achieved through two grants, one to the Agricultural Market Development Trust (AGMARK) which focused on building the capacity of traders at the Eastern border points of Busia, Malaba, Isebania, Namanga, Taveta, Mutukula and Gatuna, and one to the Agribusiness Focused Partnership (AGRIFOP) which focused on the Western border points of Gisenyi, Kagitumba, Rusumo and Nemba
Oxfam: Gender inequalities and food insecurity. Ten years after the food price crisis, in a context of climate change and increased conflict, new policies are needed to rebalance the global agri-food system to meet smallholder communities’ needs, with a renewed focus on women. To help achieve this, Oxfam recommends (pdf):
Ghana loses about $200m of tax revenue due to the smuggling of petroleum products and other nefarious activities in the petroleum sector every year. Chief Executive of the National Petroleum Authority, Mr Alhassan Tampuli, said those activities also cause the country to lose about $12m from the unified petroleum price fund annually. Describing the activities as lucrative, Mr Tampuli mentioned Takoradi port, Tema main Port, Prampram, Aflao and the eastern coastline as the unapproved offshore routes used for the smuggling. He was speaking at the opening of the Ghana International Petroleum Conference (GhipCon) 2019 on the theme “Regional Collaboration: A Catalyst for Transformation”. [Local producers say lower tariffs threaten agri-businesses; Ghana seeks support from Burkina Faso to fight Planting for Food and Jobs fertilizer smuggling]
Today’s Quick Links:
5 questions for Michael Mabasa, CEO of the National Association of Automobile Manufacturers of SA
Turkey to sign double taxation avoidance agreement with Kenya by end of 2019
DR Congo joins EAC electronic cargo tracking initiative
(Still) Made in China: how tariff hikes may trigger re-routing circumvention
Brazil’s exports to Arab markets surge 15.1% during first half of 2019