Featured tweet, @Yadeyemi: The AU is developing a continental trade facilitation strategy with a concrete implementation plan involving ICT, logistics, SMEs, NTBs, etc, the AU told experts at the WCO workshop yesterday in Pretoria.

Selected AfCFTA updates:

1. Towards an AfroChampions fund to finance the AfCFTA. The AfroChampions Initiative has launched a private sector investment framework to secure financing for the AfCFTA. This has been launched on the occasion of a high-level meeting convened in partnership with Dr Mahamudu Bawumia, vice-president of Ghana, which brought together investors, financing institutions and sovereign and private funds. Albert Muchanga, the AU’s commissioner for trade and industry: “The AfCFTA private sector investment and financing framework is a very thorough approach: monitoring the AfCFTA agreement’s legal implementation, defining certification criteria qualifying projects eligible for funding, mobilising the private sector in Africa and a process to coordinate with the public authorities.” Ali Mufuruki, vice-president of the AfroChampions Club for the East Africa Region: “To address reluctance and concerns about the AfCFTA, we must demonstrate that it is a major and tangible opportunity for all stakeholders, whether states or companies regardless of size, civil society or individual citizens of the African continent.”

   The participants in the Accra session defined at the end of their workshop a detailed roadmap, including various milestones over the next 18 months. Among the major dates is the presentation of the dedicated fund, scheduled for the fourth quarter of 2019 for the next AfroChampions Boma, the first benchmark and a follow-up report on the AfCFTA implementation and the organization of an exhibition on ‘Made in Africa’ early 2020.

2. Four African trade unions advocate tighter rules to protect African markets. Trade unions from four African countries are advocating the adoption of tighter rules to safeguard African markets for local products in the implementation of the AfCFTA agreement. The Trade Union Congress (TUC) Ghana, the Nigeria Labour Congress, the Congress of South Africa Trade Unions and the Central Organisation of Trade Unions of Kenya, argued that the rules were necessary to deal with the risk of capture of the African market by the advanced countries which already have trade agreements with several African countries. Addressing a press conference in Accra yesterday, Dr Yaw Baah, Secretary General of TUC, said that the associations were committed to work with the various trade ministries and governments to ensure that the AfCTA increased intra-African trade and investment to promote economic growth and employment creation. The press conference followed a four-day Trilateral Trade Union Cooperation meeting between the four trade associations. [Ghanaian Times editorial comment: AfCFTA needs robust rules to safeguard African markets]

3. A twitter thread from @AUTradeIndustry on the AfCFTA and the private sector: During the 18th AGOA Forum 2019 in Abidjan, the AUC’s Commissioner for Trade & Industry, Ambassador Muchanga, discussed key issues with the private sector. The private sector will be able to participate in the AfCFTA process. Amb Muchanga informed the audience that African Ministers of Trade have decided that the Pan-African Trade and Investment Policy Committee (PAFTRAC) will transition to become the African Business Council. The private sector expressed the need to be involved in the discussion on rules of origin, development of schedules of tariff concessions for trade in goods, schedules of specific commitments for trade in services, harmonization to the extent possible of products to be liberalized.

4. US, AU statement on the development of the African Continental Free Trade Area: full text

5. The AU has announced that its AfCFTA app is now available for download from the Google Play Store

AGOA Forum 2019: a final set of postings

1. South Africa calls for digitisation as strategy to unify African economies. Africa can address the challenges of geography with a smart digital strategy that can connect economies and help industrialise the continent. This was the message from Minister of Trade and Industry, Mr Ebrahim Patel at a dialogue in Côte d’Ivoire. Minister Patel was co-chairing a session with the US Deputy Trade Representative, Ambassador CJ Mahoney. “Data is to the 21st century what oil and steel was to the 20th century. Africa must become more than a consumer market for digital services produced elsewhere. We must become innovators and producers too, exporting services and building capabilities,” he said. However, Patel noted that the process of digitisation was uneven as many countries, including those in Africa, lag behind and contribute to a digital divide: “Technology is a potential platform for leap-frogging. Securing its benefits and realising its promise, will require well-designed and purposeful public policy measures to promote data for development. It also requires a deep partnership with entrepreneurs and young people who develop the technologies that are changing our world.” Patel noted that governments needed to consider appropriate public policy, legislative and regulatory measures that may include competition, tax, labour market, SME-promotion, privacy and national security measures.

2. Virginia Blaser: AGOA’s positive impact felt in the Cape. Today, the US is the Western Cape’s top foreign direct investor and directly contributes to almost 100 foreign direct investment projects worth $2.3bn (R34.24bn). This US investment has created more than 8 000 jobs in the province. In the past six years alone, Western Cape exports to the US have doubled, reaching more than $688m of goods to the US in 2018. It is clear that, despite the geographic distance between us, our economies are growing together. Indeed, the US is the third largest export market for goods from the Western Cape, behind only Namibia and the UK. These exports are facilitated, in part, by the African Growth and Opportunity Act, which allows duty-free exports of more than 6 500 goods from Africa to the US. [The author is the US Consul-General (Cape Town)]

3. Ms Susan Muhwezi, the Ugandan president’s advisor on AGOA, has called for a more integrated infrastructural network, increased investment in green energy and reduction in the cost of financing for Africa to reap from trade with the United States: “Transport infrastructure is essential for movement of raw materials to production areas and conveying finished products to markets or consumption areas. Besides the roads, we must aim at interconnecting Africa within itself, Africa with America and Africa with the rest of the world using mainly the railway and air transport, as well as water transport.” Addressing the AGOA Forum, Ms Muhwezi cited some of the challenges underpinning the trade such as the cost of financing which “remains very high in most African countries and this inhibits private sector participation in the development initiatives on the continent.” Ms Muhwezi said investors would find it easier to penetrate and operate in Africa if they were able to find ready and capable business partners: “With many African companies falling short largely due to financing constraints orchestrated by the high cost of financing, this remains far from the reality.”

4. USTDA announces US industry partners for Access Africa initiative. Partners include Palo Alto Networks, Inc., the Corporate Council on Africa, Intel Corporation, Cisco Systems, Inc., General Electric Company, Symantec Corporation, and Adaptrum, Inc. Acting Deputy Director Todd Abrajano made the announcement at AGOA Forum 2019. “The commitment by these private sector leaders to partner with USTDA on Access Africa is a clear illustration of the interest and presence of U.S. industry in Africa’s ICT sector,” said Abrajano. “As our Access Africa partner list grows, so will America’s role as Africa’s most important ICT sector partner.”

5. Related: The US Grains Council is working to expand markets and programs into East and West Africa using resources from the Agricultural Trade Promotion program. Kurt Shultz, senior director of global strategies with the US Grains Council, says more than half of the global population growth will occur in Africa by 2050. “Africa and the Middle East will account for 57% of the growth in world coarse grain imports through 2026,” he says. “This is driven by changing demographics and urbanization. This all leads to increasing growth in demand for livestock products.” The US Grains Council is building on longtime programs in North Africa. Shultz says the U.S. Grains Council works where the market does not.

CFA Franc turning 75: Central African countries under pressure (Euler Hermes)

In 2020, the CFA Franc is turning 75 years old. The currency, used in two African regions, is backed by the French treasury and pegged to the Euro. Though the 2014 commodity price slump revealed vulnerabilities, the situation is not comparable with 1994, when the CFA Franc was devalued by -50% in Western (WAEMU) and Central (CEMAC) CFA Franc areas. Yet, divergence among members calls for cautious optimism about the stability of the currency. Looking at today’s trade integration, mobility of the workforce, currency misalignment, debt sustainability and buffers of foreign exchange reserves in the zone (Optimum Currency Area criteria), we find that (pdf):

The CEMAC area is under pressure. Our model shows intra-zone trade is -USD200mn below what common borders, language and currency should provide for. There is evidence of currency overvaluation in the region (mainly in CAR, Gabon and the Congo Republic) as a result of lower oil prices. This has led to an increase of public debt and a fall in the foreign reserves-to-M2 ratio below the 20% threshold in Congo Rep. and Chad. In spite of these fragilities, a breakup or devaluation in the next five years is unlikely. If oil prices were to fall to USD 30/bl for long, the area would not be able to avoid a devaluation, but a breakup will remain unlikely. CFA Franc membership is an institutional fix that grants price stability to its members. Any exit would be a political choice, not an economic one.

IOC, IORA updates:

1. Ministerial Retreat on the Future of the IOC: Several strategic decisions pertaining to the future and vocation of the Indian Ocean Commission that were taken during the ‘Ministerial Retreat on the Future of the IOC‘ were discussed during a press conference at the seat of the Ministry of Foreign Affairs, Regional Integration and International Trade, in Port-Louis. The Minister of Public Infrastructure and Land Transport, Minister of Foreign Affairs, Regional Integration and International Trade, Mr Nandcoomar Bodha, elaborated on the outcomes of the Retreat ( 1-3 August, Moroni, Comoros). Foreign Ministers and Heads of Delegation of the Member States attending the Retreat, decreed that the IOC must get closer to the concerns and expectations of the people of the islands; that the organisation’s development projects must ensure that they directly affect the life of the communities of the Indian Ocean region, and called for more connectivity between the islands and people in the area to advance regional integration. In addition to efforts to improve maritime, air and digital connections between the islands, they wished for citizens of the member countries to move freely within the region. The idea of transforming the IOC into the Indian Ocean Community was also discussed during the Retreat and will be subject to further reflection within the organisation with the help of experts.

2. Mauritius will lead a Working Group on Trade and Investment in September 2019, organised by the Indian Ocean Rim Association. Trade and Investment are important parts of the focus area of IORA as economic cooperation is one of its key areas and, as such, the working group will focus on strengthening collaboration among the 22 member states in the scaling of their economic interaction.

3. 3rd IORA Blue Economy Ministerial Conference (4–5 September, Dhaka): Promoting sustainable blue economy. The conference will adopt the Dhaka Declaration, and other outcome documents, illustrating the commitment of IORA Member States to strengthen and deepen cooperation on Blue Economy priority areas in the years ahead.

4. Related: The first session of the Joint Permanent Commission of Cooperation between Mauritius and Mozambique begins tomorrow, concluding on Friday.

Four women from Sub-Saharan Africa are among 20 female business leaders profiled in a publication by IFC for their professional success, despite facing formidable challenges. The SSA inclusions are Ghana’s Nora Bannerman, Kenya’s Wambui Mbesa, South Africa’s Soula Proxenos, Uganda’s Anne Kabagambe. The publication, Trailblazers – Portraits of female business leadership in emerging and frontier markets, highlights the personal and professional journeys of female business leaders from emerging and frontier markets. A recent IFC study of women on company boards in Ghana (pdf) found that more gender-diverse boards tend to demonstrate higher performance - reflected by returns on assets and growth in sales. Yet, nearly one quarter of Ghanaian companies have no women on their boards. Across Sub-Saharan Africa, women hold an average of 14 percent of board positions, while globally women hold only 15 percent of board seats and 4 percent of CEO and board chair positions.