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tralac’s Daily News Selection

tralac’s Daily News Selection

17 Sep 2019

Underway, in Moscow: VI BRICS International Competition Conference

Diarise: The JSE SA Trade Connect (22-23 October, Johannesburg)

AfCFTA updates

from Cape Town, Nairobi, Kinshasa, Lagos

  1. AfCFTA under the spotlight at ISO assembly. Support for the AfCFTA agreement formed part of discussions at the 42nd General Assembly of the International Organization for Standardization (ISO), currently underway in Cape Town. “It is expected that with the reduced barriers to trade, the growth in intra-Africa trade, of an estimated $2 trillion, will be traded internally within the next year,” said the South African Bureau of Standards. Speaking on the first day of the gathering, SABS acting CEO, Garth Strachan, said standards bodies across the region should develop common systems and standards that sustainably support social, economic, trade and industrial integration. “For South Africa, the benefits of enhanced access to regional markets could significantly boost our economy, ignite industrialisation and foster regional harmony. The opportunities for capacity building, job creation, sharing of resources and technologies could be the elixir for our economic challenges.”

    SABS statement: African standards for Africa – regional harmonisation. This was first meeting of African standards bodies outside of an ARSO engagement. Hermogène Nsengimana, secretary general of ARSO: “The development and harmonisation of African standards and best practices must serve the needs of African member countries and that of the region. The harmonisation of technical regulations, standards, conformity assessment procedures, enforcement protocols and a dispute settlement process need to support the African free trade agreement. African standards bodies have an important role to play in developing their nations to become active and inclusive members of this new regional market, through the promotion of standards to ensure that maximum benefits can be derived.”

    ECOWAS WAQSP update: The EU says it has provided development assistance of over €1bn to support the standardisation of goods and services produced in ECOWAS countries to ensure that goods produced within the sub-region met the global market standard, particularly for Europe and the Americas. The EU Project Manager for the West Africa Quality Systems programme, Mr Frank Okafor, gave the amount at the extended meeting of the steering committee of the WAQSP. The objective of the meeting was to assess the progress of countries for certification purposes.

  2. Kenya’s AfCFTA strategy. Andrew Mold, Acting Director of ECA in Eastern Africa, explained the ambitious nature of the AfCFTA, saying that AfCFTA is not, as its name denotes, simply a ‘free trade area’: “It encompasses ambitions to proceed to a single unified continental market, with a lot of implications for business – whether that is on investment, on competition, on intellectual property, or free movement.” Gladys Kinyuah, the Deputy Director for International Trade in the Kenya Ministry of Industry, Trade and Cooperatives, clarified that in 2018 Kenyan trade with the rest of the continent accounted for 38% of exports and just 11.6% of imports. Ahmed Farah, the Kenya Country Director of TradeMark East Africa, stressed the need to look at the bigger picture, including the handling of existing regional agreements, like the Tripartite between COMESA, SADC and EAC, as fundamental building blocks towards the completion of the AfCFTA.

  3. DRC conducts national consultation on the AfCFTA. The two-day forum, starting today in Kinshasa, will provide information to representatives of government agencies, the private sector, civil society and academia about the expected effects of the AfCFTA, and will shed light on the strategic orientations envisaged by the Congolese government in its implementation. [Note: The DRC signed the Agreement establishing the AfCFTA in March 2018 but has not yet deposited its instruments of ratification with the African Union]

  4. Nigeria and the AfCFTA: Thriving in a new Africa. This article is the second part (pdf) of a three-part series from PwC. In the first part (pdf), we discussed the current state of intra-African trade, the AfCFTA and its importance, and highlighted businesses that have successfully leveraged regional integration in ASEAN. Since the publication of the first part of this article, Nigeria has joined the CFTA. With Nigeria in the CFTA, Nigerian businesses have direct access to a market of over one billion people. Therefore, they must prepare to take advantage of the new markets that the AfCFTA grants access to. However, the Nigerian market is now directly open to intra-African competition from businesses in countries with comparative advantage. In this part, we discuss the current state of trade in Nigeria, and highlight African countries with businesses with the capacity to compete with Nigerian businesses in the Processed Agriculture, Retail and Trade, and FMCG sectors.

ECOWAS Parliament appeals to Nigeria to reopen borders (The Punch)

The ECOWAS Parliament on Monday appealed to the Nigerian government to reopen its closed borders as it hampers on the implementation of free trade movement within the ECOWAS region. Speaker of the Parliament, Moustapha Cisse Lo, made the call in a statement at the opening of the 2nd Extra Ordinary Session of the ECOWAS Parliament in Monrovia. He added that the border closure poses a threat to the implementation of the Protocol on the Free Movement of Persons at a time when Africa need to intensify efforts for effective abolition of barriers within the Community. Cisse Lo, however, urged the government to find a permanent solution to the challenge of smuggling, rather than closing the borders, which was not a lasting solution. “In the same vein, the closure of the Nigerian borders with Benin more than a month ago and Niger more recently is a hindrance to the achievement of the Community’s main objective, which is to achieve the creation of a prosperous, borderless West African region where peace and harmony prevail. The ECOWAS Parliament calls for compliance with Community provisions and thus calls for the reopening of borders and a coordinated fight against smuggling in the region. The root causes of this recurrent situation must be studied with a view to finding a permanent solution.”

East Africa Business Council engages President Paul Kagame (The Standard)

The meeting called for the establishment of a mechanism to implement the agreed Summit directives that have stalled. The meeting observed the need to review the EAC Customs Management Act to better facilitate trade and address NTBs. The role of public-private dialogues was emphasised as a critical tool to address issues and restrictions to trading across borders. Further, the meeting reiterated the urgent need to fast track the actualization of the AfCFTA and the full involvement of the private sector in AfCFTA negotiations. Among other issues raised was the need to enforce resolutions made to liberalize EAC air space, implement the One Network Area, and quicken the issuance of work permits. The meeting called upon the Summit to conclude the comprehensive review of the EAC CET. Peter Mathuki, the Executive Director of the EABC, said that with the help of President Kagame and other regional leaders, they are seeking to raise intra-regional trade levels from the current 12% to about 30%. The business community invited the President to a business summit to be held on the sidelines of the Heads of State Summit scheduled for November this year in Tanzania. The business summit will convene over 300 regional corporations.

Rwanda: 2Q updates

  1. GDP National Accounts (Q2, 219). In the second quarter of 2019, GDP at current market prices was estimated to be Frw 2,255 billion, up from Frw 2,001 billion in Q2 2018. In this quarter, services sector contributed 47% of GDP, agriculture sector contributed 28% of the GDP, Industry sector contributed 17% of the GDP and 8% was attributed to adjustment for taxes and subsidies on products. In this quarter, estimates calculated in 2014 prices show that GDP was 12.2% higher compared to the same quarter of 2018. Agriculture growth was 5% and contributed 1.5 percentage points to overall GDP growth. Industry growth was 21% and contributed 3.6 percentage points to GDP growth. The service sector grew by 12% and contributed 5.7 percentage points to overall GDP growth. The growth in Services sector is due to an increase of 23% in wholesale and retail trade activities of locally made and imported products, 17% in transport services, 13% in financial services, 13% in hotel and restaurant services, 12% in Public Administration, 13% in professional, scientific and technical activities, 11% in administrative and support service activities, and 1% in telecommunication services. [Rwanda records double-digit growth]

  2. Formal external trade in goods statistics report (Q2, 2019). In the second quarter of 2019, Rwanda’s total trade was $1,073.6 million, an increase of 13.31% over the second quarter of 2018. Exports were $149.26m, imports were $822.6m and re-exports were $101.73m. In this quarter, total domestic exports decreased by 21% when compared to the second quarter of 2018 ($149.26m and $188.93m respectively) but increased by 25.73% when compared to the first quarter of 2019. Total imports of Rwanda increased by 21.09% in the second quarter of 2019 when compared to the same quarter of 2018 ($822.60m and $679.31m respectively) and by 11.17% over the first quarter of 2019. Re-exports, increased by 28.41% in the second quarter of 2019 over the same quarter of 2018 ($101.73m and $79.22m respectively) and also by 28.41% compared to the first quarter of 2019. The top five export destinations were: UAE, Uganda, the DRC, Kenya and Switzerland. They accounted for 64.51% of total value of domestic exports ($96.29m).

Tanzania: Pushing beyond the trade walls to unite nations (The Citizen)

Although some cross border traders are successful, most women who dominate this business are struggling with low education and low value of goods if what was presented at the UN meeting in collaboration with TradeMark East Africa and TWCC on “prospects and challenges for women cross-border traders” on the sideline of last week’s Uganda Tanzania business forum is anything to go by. According to the USAID, some 30-50% of sub-Saharan trade involves cross-border traders who are mostly women. And according to Tanzania Women Chamber of Commerce, 75% of cross-border traders are women. They keep goods and foodstuff moving from one country to the other despite complex obstacles and tough conditions at the border posts they face in the course of their work across the 11 border points in nine regions of Tanzania. Paying heavy customs, being at the mercy of customs officials, sexual harassment, poor basic infrastructure and facilities and weak trade associations are some of the obstacles standing in their way to success. A few Tanzanian women who navigate the borders share their experiences and how they overcome these challenges and calls for removal of these obstacles to facilitate trade while promoting regional integration and reducing marginalization of women.

Tanzania Ports Authority car handling capacity to rise 270% (The Citizen)

The number of vehicles handled by the Tanzania Ports Authority (TPA) annually is set to rise by 268% following completion of the expansion of Berth Two at Dar es Salaam Port. The TPA director general, Mr Deusdedith Kakoko, said in Dar es Salaam yesterday that TPA’s area now has the capacity to handle 600,000 vehicles per year, up from 163,000 vehicles that were handled last year. He was briefing journalists on the ship ‘Grand Duke of Panama’ which docked at Berth Two in Dar es Salaam harbour for the first time since expansion of the berth was completed recently. The Grand Duke of Panama is carrying 1,347 assorted vehicles from Japan and China. Berth Two is one of the eight landing points at Dar es Salaam port. Its expansion was financed by the World Bank through the Dar es Salaam Maritime Gateway Project.

New WTO indicator finds services trade weakening into second half of 2019

World trade in commercial services lost momentum through the second quarter of 2019 according to the WTO’s new Services Trade Barometer (pdf), launched on 16 September. The index’s reading of 98.4 is below the baseline value of 100, suggesting that services trade continued to face strong headwinds leading into the second half of the year. Despite the overall loss of momentum since the start of 2019, services trade has generally held up better than goods trade since the latter is more directly affected by recent trade tensions. The importance of services trade to the global economy will be explored in greater depth in the forthcoming World Trade Report, slated for release on 9 October.

India: Digital platform launched to give single point access to exporters (Herald Globe)

Minister of Commerce and Industry Piyush Goyal and his junior colleague Hardeep Singh Puri on Monday launched a common digital platform for the issuance of electronic certificates of origin (CoOs). “The platform will be a single access point for all FTAs and PTAs. The CoO will be issued electronically, which can be in the paperless format if agreed to by the partner countries,” said Goyal. “We are scheduled to start with the India-Chile PTA,” said Goyal. “Once the partner countries agree to electronic data exchange, the CoOs will be electronically sent to the customs of the partner countries. After this, there will not be any need for physical CoO copy, saving transaction cost and time for the Indian exporters.” India has 15 FTAs and PTAs with various partner countries under which Indian exporters avail reduced import tariffs in the destination country.

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