Building capacity to help Africa trade better

tralac’s Daily News Selection


tralac’s Daily News Selection

tralac’s Daily News Selection

ESAAMLG from Arusha to Ezulwini: Looking back and looking ahead (ESAAMLG)

The report, ESAAMLG from Arusha to Ezulwini (1999-2019): Looking back and looking ahead (pdf), appropriately describes the long journey our Group, as well as the region covered by the Eastern and Southern Africa AntiMoney Laundering Group (ESAAMLG), have travelled over past 20  years. With 18 member countries and growing, this is quite a leap from the initial nine signatories at the launch in Arusha, Tanzania, in August 1999. Current member countries of ESAAMLG are: Angola, Botswana, Eswatini, Ethiopia, Kenya, Lesotho, Madagascar, Malawi, Mauritius, Mozambique, Namibia, Rwanda, Seychelles, South Africa, Tanzania, Uganda, Zambia and Zimbabwe. Mention should also be made of the State of Eritrea, which will have an observer status in the Group at the September 2019 meeting and likely to join ESAAMLG as a full member after wards. By signing the ESAAMLG Memorandum of Understanding, member countries endorsed the 40 Recommendations of the Financial Action Task Force (FATF) and affirmed the commitment to implement the international standards to combat money laundering and the financing of terrorism and proliferation at a national level.

Neal Rijkenberg, Eswatini's Minister for Finance: The Kingdom of Eswatini is most delighted to host the 38th ESAAMLG Task Force of Senior Officials and the 19th Council of Ministers meetings in Ezulwini (1-6 September 2019).  The participation of distinguished delegations from all the 18 member countries will reaffirm the commitment of the Group to fight money laundering and terrorist and proliferation financing in the Eastern and Southern African Region. This was a loud and clear political statement in support of the ESAAMLG and what it stands for. The Kingdom of Eswatini is honored to take over the Presidency of ESAAMLG at this point in time.

ESAAMLG's mutual evaluation reports:  Zambia (June 2019), Zimbabwe (April 2019), Mauritius (April 2019), Botswana (April 2019).  Other ESAAMLG reports can be accessed here.   [Mauritius compliant to FATF recommendations, states Minister Sesungkur]

The pharmaceutical industry in Sub-Saharan Africa: A guide for promoting pharmaceutical production in Africa (UNIDO)

There is now a wide-ranging consensus that local pharmaceutical production in sub-Saharan Africa in close proximity to where medicines are needed can reduce dependence and improve health outcomes for the population. Many African governments, regional economic communities and the African Union have recognized the need for active support to the development of the sector if these benefits are to be realized. However, concrete action on the ground has remained hesitant and piecemeal to date. This document contains advice for government policy makers, the private sector especially pharmaceutical manufacturers in sub-Saharan African countries, development partners and (development) finance institutions on how to promote pharmaceutical production. The guide focuses on the key areas competitiveness, market access, technology and access to finance. It further proposes a path of how governments could embark on and steer a policy development process as well as giving guidance on policy interventions. The document especially emphasizes the interconnectedness of key intervention areas and recommends that promotional measures from key areas should be combined to increase impact.

Lesotho:  How a foreign investor rattled a tiny African kingdom’s economy  (BloombergQuint)

Communications Minister Thesele Maseribane, who also leads a party in Lesotho’s ruling coalition, says Shi is one of the few foreign investors in the country and needs to be “protected.” He also says that having the wool sold by a company based in Lesotho is “good policy” because it would lead to more tax revenue and greater employment. Shi’s Lesotho Wool Centre, a few miles from Seqhee’s farm, consists of a 108,000-square-foot warehouse eerily empty but for a few bales of wool in one corner and a pile of mohair bales in another. There’s little visible equipment and few workers.

Malawi:  IMF statement following Staff visit (IMF)

Malawi’s recent economic performance has been favorable despite the impact of Cyclone Idai. Economic growth is expected to strengthen to about 4.5% in 2019 supported by a rebound in agriculture in most of the country and reconstruction of infrastructure that was damaged by the cyclone in the southern region. Over the medium-term, growth could rise further to 6-7%, backed by greater access to finance, crop diversification, an improved business climate, and more resilient infrastructure, including improved electricity generation. Inflation is expected to remain in single digits and gradually converge to 5% over the medium term. Performance under the program has been good. All but one of the quantitative performance criteria (QPC) for end-June were met.

A suite of recent IFC, World Bank reports in their Creating Markets Country Private Sector Diagnostics series:  

Creating Markets in Morocco

Creating Markets in Burkina Faso

Creating Markets in Kenya

Creating Markets in Rwanda

Creating Markets in Ethiopia

Creating Markets in Angola

Global trade protection and the role of non‑tariff barriers (Vox)

Since the inauguration of Donald Trump as the president of the US, the world has observed an unprecedented rise in border tariffs. This column shows that trade protection had in fact started much earlier, in the form of non-tariff barriers. An empirical analysis reveals that the average trade dampening effect of such barriers is comparable to that of trade defence instruments such as anti-dumping duties. However, this negative effect can be mitigated by free trade agreements. [The authors: Luisa Kinzius, Alexander Sandkamp, Erdal Yalcin]

Reinstate preferential trade treatment for India: 44 US lawmakers tell Trump administration (Scroll)

A group of 44 US lawmakers on Tuesday urged the Donald Trump administration to reinstate preferential trade treatment for India under the Generalized System of Preferences programme. The United States government had terminated the designation of India as a beneficiary developing country under the programme in June, claiming that India had not assured the US that it will “provide equitable and reasonable access to its markets”. Members of the US Congress, in a letter to US Trade Representative Robert Lighthizer, said the costs of the GSP termination were real for their constituents and only growing every day.

How India fares against other emerging markets (Mint)

As India’s economic momentum continues to slow, one key investor concern relates to India’s attractiveness vis-a-vis other emerging markets. Given India’s relatively high dependence on volatile portfolio flows to fund its chronic balance-of-payments deficit, this is also a big macro-economic concern. If foreign investors view other markets more favourably, this could trigger outflows from Asia’s third largest economy. If India is better placed compared to other emerging markets, this could attract more investments. Starting this month, Mint will track seven high-frequency indicators across ten large emerging markets to make sense of India’s relative position in the emerging markets league tables. The selection of the emerging markets is based on the International Monetary Fund (IMF) classification of emerging and developing economies. The ten emerging markets selected were the largest economies in this group for which consistent and comparable time series data were available.

India:  Export promotion councils chalk out strategy to meet targets (The Hindu)

In line with the Union Commerce Ministry’s target to triple India’s exports from $331 billion to $1 trillion in five years, export promotion councils have chalked out plans to achieve the same. “This means almost doubling exports of the sector in the next five years,” said R. Veeramani, president, Capexil. Capexil promotes the shipments of chemical and alliedproducts that contribute more than 7% of India’s total merchandise exports. “The export target fixed for Capexil products is $25.57 billion for the year 2019-20, which marks a substantial growth compared to $ 22.24 billion in 2017-18,” he said.

World manufacturing production statistics for Quarter II, 2019 (pdf, UNIDO)

World manufacturing production growth is expected to slow down in 2019 as a result of continued conflict over trade and tariffs between the world’s two largest manufacturers: China and the United States. Manufactured goods account for more than 80.0% of the total merchandise exports of both countries. Against the backdrop of falling global merchandise trade, the growth of world manufacturing value added is — according to the latest estimates — expected to drop to 2.7% in 2019, following 3.2% in 2018.  The pace of MVA growth has been slowing down both in the United States and China. While annual growth in the United States is likely to drop to 1.9% in 2019, following a rate of 3.0% in 2018, China’s manufacturing growth is also expected to fall to 5.6% from 6.1% in 2018. Trade and tariff frictions between the United States and Europe are also taking its toll. US restrictions on the import of several manufactured goods, compounded by uncertainties over Brexit, are contributing to a downturn in European manufacturing, which is expected to grow at slightly less than 1.0% in 2019. Growth in East Asia is expected to be moderate, at a rate of 1.6%. The overall growth of industrialized economies for 2019 is expected to drop to 1.3% from 2.1%in 2018.

Developing and emerging industrial economies (excl. China) are expected to achieve a slightly higher growth in 2019 at around 3.0% compared to 2.7 in 2018. This can be to some extent attributed to the improving situation in Latin America where negative growth is expected to ease to -0.9% in 2019 from -2.8% in 2018. The fast growing economies of Asia account for most of the developing countries’ growth. MVA is expected to rise by 8.2% in India and 5.6% in Indonesia. Least developed countries are expected to improve their production performance with a growth at 7.1% compared to 5.9%in 2018. Compared to the second quarter of the previous year, growth estimates based on limited data for African countries generally indicated a rise in manufacturing output of 2.0%. Among others, Egypt’s and South Africa’s manufacturing output expanded by 2.2 and 0.9%respectively.

Harvesting prosperity: Technology and productivity growth in agriculture  (World Bank)

Developing countries need to dramatically increase agricultural innovation and the use of technology by farmers, to eliminate poverty, meet the rising demand for food, and cope with the adverse effects of climate change, says a new World Bank report released this week.  The report (pdf) examines the drivers and constraints to agricultural productivity and provides pragmatic policy advice. It notes that while in East Asia, crop yields have increased six-fold in the past four decades, contributing to the dramatic reduction in poverty in China and other East Asian countries, it has only doubled in Sub-Saharan Africa and parts of South Asia, with corresponding disappointing reductions in poverty. However, the world is facing a widening research and development (R&D) spending gap, even as government funding for agriculture is reaching new heights. In developed countries, investment in agricultural R&D was equivalent to 3.25% of agricultural GDP in 2011, compared with 0.52% in developing counties. Among the latter group, Brazil and China invested relatively high amounts into agricultural R&D, while Africa and South Asia had the lowest spending relative to agricultural GDP. In fact, in half of African countries, R&D spending is actually declining.

Innovative China: New drivers of growth (World Bank)

China needs to foster new drivers of growth to address productivity challenges, intensify reforms and promote greater innovation in the economy, according to a new report jointly released by China’s Development Research Center of the State Council,  China’s Ministry of Finance and the World Bank Group.  The new report proposes that China address its productivity challenges by promoting the “three Ds” – removing distortions in the allocation of resources in the economy, accelerating diffusion of existing advanced technologies and innovations, and fostering discovery of new technologies, products, and processes so as to expand China’s productivity frontier. The report develops recommendations in seven areas to promote the “three Ds”.

Vietnam: New study offers pathways to climate-smart transport  (World Bank)

A two-volume study laying out a pathway to a low-carbon and climate-resilient transport sector in Vietnam was released at a workshop on Addressing Climate Change in Transport, held in Hanoi yesterday.  This analytical work comes at a critical time when the Government of Vietnam is updating its Nationally Determined Contribution on reducing carbon emissions and set out its next medium-term public investment plan for 2021-2025. The first volume demonstrates that by employing a mix of diverse policies and investments, Vietnam can reduce its carbon emissions in the transport sector up to 9 percent with only domestic resources by 2030, and 15-20% by mobilizing international support and private sector participation. The second volume provides a methodological framework to analyze critical and vulnerable points of the transport network, and presents a strong economic case for investing in building the climate resilience of Vietnam’s transport networks.



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