Building capacity to help Africa trade better

tralac’s Daily News Selection


tralac’s Daily News Selection

tralac’s Daily News Selection
Photo credit: Bloomberg

The 39th Ordinary Summit of the Heads of State and Government of SADC, and preceding meetings, starts tomorrow in Dar es Salaam, ending on 18 August

Funding the AfCFTA Secretariat: AU, AfDB sign $4.8m institutional support grant

AGOA Forum 2019: Closing remarks by the Assistant Secretary Tibor Nagy. Non-oil trade under AGOA increased more than 300% since 2001, and the growth of these non-oil industries has spurred an estimated 300,000 direct jobs in beneficiary countries. AGOA has led to many more indirect jobs. To put a real face on AGOA’s successes, look at the Alafia company in Togo and Ghana. With AGOA, Alafia created 14,000 jobs for Africans, most of whom are women. The company also won the US Secretary of State’s Award for Corporate excellence in 2018. Meanwhile, Ethiopia only started using the AGOA program for footwear in 2007. However, in the last six years, Ethiopia’s exports through AGOA have increased over forty-five-fold! Ethiopia is now the first substantial AGOA footwear supplier to the United States. What a great achievement! Kenya is now the second-largest exporter of non-oil products under AGOA. 70% of its exports fall under AGOA, with the majority coming from the agriculture sector. There clearly is a strong demand for Kenyan produce in the United States. It is estimated this sector contributes to approximately 36% of GDP, and exports of these products support over 100,000 farmers in Kenya!

JETRO Global Trade and Investment Report 2019: The fluctuating international economic order and global business in the future

The total number of free trade agreements in force in the world (including customs unions and preferential trade agreements) as of the end of June 2019 was 314, up from 307 in the same period of last year (research by JETRO). The coverage ratio of Japan’s enacted FTAs has increased significantly from 23.4% in the previous year to 36.7% with the entry into force of TPP-11 and the Japan-EU EPA.

Global venture capital (VC) investment reached $254.3bn in 2018. When comparing VC investment as a percentage of GDP, that for the US (0.4%), and Israel (0.378%) is more than 10 times higher than other major developed countries like Japan (0.036%). While the ratio for major developed countries overall has been climbing, it has only seen minute growth in Japan. [Download the Key Points version, pdf]

Related, from African Business: Japan expands its trade and investment in Africa. “The big challenge will be diversifying the range of the country’s trade partners in Africa beyond the handful of countries that currently dominate Japanese trade relations with the continent – South Africa, Morocco, Kenya, Egypt, Ghana and Nigeria. In 2017, Japan exported goods worth $7.5bn to Africa, including $2.5bn to South Africa, and imported $8.3bn, of which 57% came from South Africa, including iron ore and platinum.”

South Africa’s Standard Bank says focus on rest of Africa is paying off (Business Day)

Standard Bank Group said on Thursday that a better contribution from banking in the rest of Africa helped the lender grow profits in the first half of 2019, even as loan write-offs climbed and its joint venture with ICBC was hobbled by a client going bankrupt. “Standard Bank Group’s African-focused strategy has delivered continued headline earnings growth, driven by the strong underlying momentum in our core operations,” the continent’s biggest lender said. The rest of Africa contributed 34% of banking headline earnings, from 32% in the first half of 2018. Group CEO Sim Tshabalala said the proportion of profit from the rest of Africa would probably continue to rise. [African telecoms group MTN says divestment plan on track after first-half sales]

Cameroon’s cocoa bean exports up 26% this season (Nasdaq)

Cameroon’s 2018/19 cocoa bean exports jumped 26% to 214,825 tonnes from 170,981 tonnes, National Office of Cocoa and Coffee data seen by Reuters showed on Thursday. Bean grinding in the central African country rose to 58,552 tonnes this season, against 53,403 tonnes last season, the regulator said. Cocoa bean arrivals at Cameroon’s main port of Douala stood at 264,254 tonnes by the end of the 2018/19 season on July 15, up 4.2% from the previous season’s 253,510 tonnes, the ONCC data showed. Cameroon is the third-largest cocoa producer in Africa - behind Ivory Coast and Ghana - and the world’s fifth-largest.

Ethiopia earns $142m in exports from Chinese built industrial parks (Xinhua)

Hana Arayaselassie, Deputy Ethiopia Investment Commissioner, said $142m in export value was earned during the Ethiopian fiscal Year 2018/19, which ended on 7 July, reported state media outlet Ethiopia News Agency. Arayaselassie, said the construction and commissioning of the Chinese built Ethiopia-Djibouti electrified rail line in January 2018 has contributed to boosting landlocked Ethiopia’s export ambitions, by transporting speedily and efficiently cargo from industrial parks in mainland Ethiopia to ports in Djibouti. Ethiopia is constructing or has commissioned around 12 industrial parks across the country, part of a broad economic strategy to make the country a light manufacturing hub in Africa by 2025. Nine of the industrial parks are located in close proximity to the 756 kms Ethiopia-Djibouti electrified rail line, which since being commissioned in January 2018 has been hailed for boosting landlocked Ethiopia’s foreign trade. [Ethiopia grants first financial services licence to foreign firm]

Ethiopia-Djibouti transport corridor: AfDB, Ethiopia sign agreement for first phase (AfDB)

The government of Ethiopia and the African Development Bank Group have signed a $98m grant agreement from the African Development Fund to help finance phase one of the Ethiopia–Djibouti Road Transport Corridor Project. The total cost of the project is $255m, comprising an ADF grant of $98m to the government of Ethiopia, an ADF grant of $5.3m to the government of Djibouti and a co-financing contribution of $151m by the government of Ethiopia. The project will kick off in 2020 and be implemented over a five-year period.

The East African Business Council held their 20th AGM in Nairobi today: tweeted perspectives by CS Adan Mohamed. The EAC is a strong regional bloc that is the most integrated on the continent, that has seen a lot of growth over the years. The private sector in the region continues to play a critical role in economic development. The journey of East Africa so far is positive. We need to stick together as EAC in order to compete at the global stage. Our combined market size is an important tool in negotiating on trade and investments. We must make ourselves attractive on our Ease of Doing Business agenda, infrastructure development and other enablers that support business growth. The future role of the East African Business Council should usher in a more dynamic and strengthened self regulation mechanism for the private sector, that focuses on critical issues that will be game changers for the region.

Related: Kenya’s CS for Industry, Trade and Cooperatives, Peter Munya, wants the National Trading Corporation to set up regional trading houses in the EAC on a pilot basis to boost exports.

Hong Kong pursues trade, investment deals in Kenya (The Star)

The Hong Kong Trade Development Council is leading a delegation of 10 top companies, which arrived in the country on Monday,on a six-day business mission with a key focus on Nairobi and Mombasa. On Tuesday, the delegation led by its regional director of Middle East and Africa, Daniel Lam, held talks with the Kenya National Chamber of Commerce and Industry on possible areas of collaboration and investment. Meanwhile, Lam has noted that this year, trade between Kenya and Hong Kong has grown by 16% and exports ratings have risen by 12% respectively.

UNCTAD’s port Liner Shipping Connectivity Index: Shanghai tops ranking of world’s best-connected ports. The Chinese port garnered a connectivity score of 134 points, followed by the ports of Singapore (124.63 points), Pusan (114.45 points) in Korea and Ningbo (114.35 points), also in China. The index is set at 100 for the best-connected port in 2006, which was Hong Kong, China. Besides the Asian ports, the other ports on the top 10 list are those of Antwerp (94 points) in Belgium and Rotterdam (93 points) in the Netherlands. None of the ports in the top 20 list are from Africa, Latin America, North America or Australasia. “A container port’s performance is a critical factor that can determine transport costs and, by extension, trade competitiveness,” said UNCTAD’s director of technology and logistics, Shamika N. Sirimanne. The port LSCI, which now provides data on more than 900 ports dating back to 2006, is generated using the same methodology as that for the recently released country-level LSCI produced by UNCTAD in collaboration with MDSTransmodal. Africa – Both geography and port reforms matter:

The best- connected ports in Africa are those located at the north-eastern, north-western and southern edges of the continent, i.e. ports in Morocco, Egypt and South Africa. In comparison, western African ports display relatively lower connectivity levels given their location outside the trajectory of major north-south and east-west shipping routes. Mombasa (Kenya) and Dar es Salaam (Tanzania) connect Burundi, Rwanda and Uganda to overseas markets through dedicated corridors; however, they remain highly congested. [What can be done to improve a port’s connectivity? The following seven policy measures are key to enhancing port connectivity]

Zimbabwe: Analysis of spatial patterns of settlement, internal migration, and welfare inequality (World Bank)

This report aims to assess the spatial dimensions of settlement, internal migration, and welfare inequality in Zimbabwe, explore their relationship and implications, and identify policy options for addressing spatial disparities in social outcomes. It is exploratory in nature and identifies areas for further research to continue to unravel the drivers of the pattern that is observed. The study (pdf) looks at where people are today (chapter 2), unpacks urbanization trends, and reviews population density and connectivity (chapter 3). Chapter 4 assesses the reasons behind the spatial settlement patterns and looks at Zimbabwe’s historical land allocation, land reform, and economic crisis in the 2000s. Chapter 5 discusses the consequences of this spatial distribution of the population in terms of poverty, nonfarm employment, and service delivery outcomes. Chapter 6 discusses policy implications.

Exploring accessibility to employment opportunities in African cities: a first benchmark (World Bank)

This paper presents an analysis of transit accessibility to employment for 11 African cities. The use of identical methodologies and similar data sets allows for the creation of the first benchmark to compare accessibility across urban areas in Africa through different metrics and visuals. The study shows how the spatial pattern of land use and transport systems perform in connecting people to employment opportunities in these various settings. This first comparable benchmark is achieved by overcoming two significant data hurdles that are common in many developing country cities and in Africa in particular: (i) the scarcity of information on the distribution of employment and (ii) the lack of information on transit routes and travel times.

The relationship between international connectivity and economic activity: World Bank, LinkedIn research (World Bank)

Using a combination of LinkedIn and World Bank data, we’ve found that global value chain participation is strongly correlated to the number of international relationships between employees in a sector. What that looks like in our data: a 1% increase in a sector’s international connections on LinkedIn is associated with 0.8-0.9% increase in exports, imports, and other measures of global value chain participation. While this isn’t a causal link, it does tell us that that growing professional networks are complementary to the expansion of global value chains. These findings raise an important point for the policy community: there is a strong case for investing in infrastructure that facilitates information flow across workers, firms, and countries -- whether it is expanding broadband access or investing in training workers with digital literacy skills.

Today’s Quick Links:

Nigeria: In five years, palm oil imports gulp N504bn

Zambia, Rwanda propose a business summit for Africa’s great lakes region

Peace consolidation in West Africa: statement by the President of the Security Council, Poland’s Joanna Wronecka

Minister Ayorkor Botchway: Ghanaians with ordinary passports need visas to enter South Africa

Mauritius: Action plan for low carbon and resource efficient accommodation launched

IPCC’s special report on climate change and land


Email This email address is being protected from spambots. You need JavaScript enabled to view it.
Tel +27 21 880 2010