Building capacity to help Africa trade better

tralac’s Daily News Selection


tralac’s Daily News Selection

tralac’s Daily News Selection

PwC's The Africa Business Agenda 2019: Kenya is top destination for companies seeking expansion in Africa

The study by global audit firm PwC, conducted among chief executives around Africa also shows that the business leaders are doubtful of making growth plans outside the continent. Kenya ranked above China, UK, France and India. The US topped this list, beating Kenya by only one per cent. Dubbed the Africa Business Agenda Playing It Safe 2019, the survey ranked South Africa as the least important territory with confidence by African CEOs on the country falling sharply from 16% in 2017 to 5% in 2018.  The report projects optimism on increased intra-Africa trade, boosted especially by the AfCFTA recently signed by almost all states. This is even as the CEOs’ confidence about the growth of their own companies dipped from 79% in 2018 to 77% this year.

The Gambia and the AfCFTA:  "Barriers to trade continue to limit growth".  The Minister of Trade, Industry, Regional Integration and Employment, Lamin Jobe, has disclosed that barriers to trade will continue to limit the growth of trade throughout regional groupings by imposing unnecessary cost on exporters. He added that these barriers raise prices for consumers. Minister Jobe made these remarks at a two-day workshop on the ACFTA organised by the Ministry of Trade Industry, Regional Integration and Employment in collaboration with the Division for Sustainable Development Goals  of UNDESA and UNDP. Speaking at the event, Edrissa Mass Jobe, the president of GCCI, said that for The Gambia, the ACFTA, like ECOWAS before, “is purely a Senegambia problem as we have only one neighbour in Africa”.

Nigeria's internal consultations towards the ratification of the AfCFTA continued this week. The third stakeholders meeting on the Nigerian Draft Schedule of Specific Commitment on Trade in Services for the AfCFTA was held earlier this week. The meeting was hosted by the Nigerian Coalition of Services Industry (NCSI), in collaboration with the Nigerian Office for Trade Negotiations and chaired by Mrs Irene Robinson-Ayanwale, NSCI co-chair NCSI. The main objective of NCSI is to serve as a lobby group for Nigeria's services industry.

Mozambican employers' association urges SADC to act against xenophobia in South Africa (Xinhua)

The Confederation of Mozambican Economic Associations (CTA) has urged SADC to step in and play its role in defense of the region's free circulation of people and goods from the xenophobic violence in South Africa. Eduardo Sengo, Executive Director of CTA, the country's largest employers' organization, told reporters that it was SADC that had approved the free circulation of people and goods, "so it's important for SADC to act and not leave member states to react individually as we saw."  The CTA representative said that cargo transportation between Mozambique and South Africa is resuming but there is still fear among the vendors. He said that there is some uncertainty in terms of business relations and the private sector demands safety guarantees from the government.

Great Lakes Region Private Sector Forum has new leadership  (Business Daily)

Kenya National Chamber of Commerce and Industry President Richard Ngatia was Wednesday elected to chair the 12-nation trade body with a focus on easing restrictions on cross-border trade. He takes over from Laurent Yogo of the DRC who headed the lobby group on an interim basis. Mr Ngatia, who will head the Great Lakes Region Private Sector Forum for two years, said he is keen to lobby governments to ease cross-border movement of goods. “My priority, first of all, is markets, to instil corporate governance within the 12 countries in the region to provide a conducive environment and to make sure we increase the stability within our borders so that we can conduct businesses,” said Mr Ngatia who was in May confirmed unopposed as KNCCI President. The 12-nation regional lobby group comprises Kenya, Tanzania, Uganda, DRC, Burundi, Central African Republic, Angola, Sudan, Zambia, South Sudan, Rwanda and Congo Brazzaville.

Kenya calls on African labour organizations to champion continental integration

Kenya’s President Uhuru Kenyatta yesterday challenged African labour organizations to play a leading role in the ongoing efforts towards the full integration of the continent. Kenyatta asked the leadership of the labour organizations to help build bridges of unity and pan-Africanism, saying  that is the surest path to national and continental peace and prosperity. “As we usher in the AfCFTA under the auspices of the African Union, we must begin laying the groundwork for even closer cooperation and integration in Africa,” Kenyatta said. Kenyatta spoke in Nairobi when he presided over the official opening of the 42nd General Council of the Organization of Africa Trade Union Unity meeting attended by 73 affiliate unions representing all the 54 African countries. He asked African labour organizations to be at the forefront in advocating for the free movement of goods, persons, labour and capital across the entire African continent saying, “this free movement within Africa was a large part of the dream that informed the formation of Organization of African Trade Union Unity in the year 1973; and it should not be forgotten.”

Aviation holds the key to unlock Kenya’s economy, says IATA (International Airport Review)

IATA has presented its latest study on the economic value of air transport and tourism to Kenya at the IATA Regional Aviation Forum in Nairobi and identified opportunities for significant expansion over the next 20 years if key investments in infrastructure and policy reforms are made. In 2017, over 4.7 million passenger journeys were made to Kenya, with aviation and tourism representing  $3.2n in GDP. It accounts for 4.6% of Kenya’s GDP and supports 410,000 jobs. Over the next 20 years the Kenyan market could more than double in size, resulting in an additional 11.3 million passenger journeys, over 449,000 more jobs and a $11.3bn boost to GDP by 2037. IATA identified four areas where government action can promote aviation’s growth and bring even more value to Kenya:

Tanzania: August Monthly Economic Review (pdf, BoT)

The overall balance of payments was a deficit of $1,158.4 million in the year ending July 2019 compared to a surplus of $343.3 million in the corresponding period in 2018. This was on account of widening of current account to a deficit of $2,316.5 million from a deficit of $1,849.1 million, owing to increase in imports of goods and a decline in official current transfers (Table 5.1). Nonetheless, the current account deficit remained favourable at around 3.8% of GDP.  Exports of goods and services improved to $8,594.5 million in the year ending July 2019 from $8,534.6 million in the year ending July 2018, driven by services and non-traditional goods. Imports of goods and services increased to $10,473.5 million from $9,896.5 million in the year ending July 2018 on account of goods imports. [Tanzania exports and imports rise]

NTBs derail Uganda-Tanzania trade. Speaking during the first Uganda-Tanzania Business Forum held in Tanzania earlier this month, Tanzania’s President John Pombe Magufuli, wondered why trade between the two countries is disturbingly regressing irrespective of what he describes as the “common bond” and history of the two countries. “But how come we have more than 500 companies from Kenya that are operating here and only about 22 companies are from Uganda?”

Selected commentaries on President Muhammadu Buhari's Economic Advisory Council, constituted earlier this week

(i) The President's Economic Men: understanding the next phase of economic management.  So far, the best likely outcome of the Presidency's move to institute an economic advisory council is to rebuild confidence in the economic decision making process, but whether this is enough to turn the economic fortunes of the country around is as certain as asking whether Brexit will lead Britain to an economic tailspin. The answer, to the best of anybody's knowledge, is blowing in the wind.   As members of the President's economic team the erstwhile economic outsiders will now have a view from the inside, giving them a better nuanced appreciation of the economic challenges and the delicate political balance that constrain policy actions. The deeper understanding of the present difficulties in policy formulation and execution will give team members the opportunity to be creative and assertive in a new, hopefully, different policy direction. The economic experts will need to evolve tactics and strategies to do the following:

(ii) BusinessDay: New economic council must be more than a political chess game. Which brings us to the next question: what, practically, will the Economic Advisory Council do?  It would also appear that the creation of this advisory council puts an end to the existence of the Economic Management Team. For clarity, the Economic Management Team, chaired by Vice President Yemi Osinbajo, has membership from across government and comprises the ministers of finance, budget, industry and trade and includes core economic parastatals like the Central Bank of Nigeria, Budget Office of the Federation, the Debt Management Office and the Investment Promotion Council. It also has representation from the Office of the Chief of Staff. The EMT holds weekly technical sessions to ventilate economic issues, develop policy which is then referred to the Federal Executive Council. Policy issues discussed and addressed by the EMT include tax policy, developing the National Trading Platform to improve revenue at the ports, trade policy and the establishment of the Nigerian Office for Trade Negotiations.

(iii)  The Africa Report: The politics behind Buhari’s new economic team. With such a superstar team being assembled, there are fears that an ideological clash between the president and his economic team may not be too far off. “The bulk of Buhari’s economic advisory council are free-market capitalists”, says Cheta Nwanze, head of research at sociopolitical risk advisory firm, SBM Intelligence. “But will he listen to their advice, which is definitely going to go against his instincts?”

(iv)  Manufacturers Association of Nigeria Director General, Mr Segun Ajayi-Kadir: “The beauty of this team, apart from the members’ pedigree, is its composition of private sector citizens who we believe will operate independently and effectively. The team we believe will not be shackled with the bureaucracy of government and hopefully the political interference and correctness of our clime. They are more likely to be receptive to a wide range of opinions and innovations, even if deferring from the norm.”  [Premium Times: Emir of Kano lauds Buhari’s Economic Advisory Council]

Dr Nonso Ibikili: Shut the borders! There is too much rice in the land (BusinessDay)

Since the Lagos ports turned into the stuff of nightmares, the port at Cotonou has served as a viable alternative for people to import or export legally and easily. Let us also not forget that trade with Togo and Ghana and large swathes of West Africa also pass through those borders. What are the costs of effectively shutting down cross-border economic activity? Are those costs higher than the perceived benefits from trying to stop rice imports? I say “trying” because the border between Niger and Benin Republic is over 700 kilometres, and hundreds of border posts along the way; some official and some unofficial. As long as the rest of the world is able to produce rice, ship it halfway around the world and have it arrive at the Benin borders at half the price the same rice sells in Nigeria, there will be smuggling.

Somalia: IMF staff complete first review under the staff-monitored programme

Economic growth is projected to remain broadly stable at 2.9% in 2019. Inflation is projected to increase temporarily to 4.0% in 2019 due to higher food prices as a result of poor rainfall earlier in the year. Key risks to the outlook continue to reflect the difficult security situation and vulnerability to climate shocks. IMF staff welcomes the authorities’ ongoing commitment to reform under SMPIV. All the structural benchmarks for the first review - that is the reform measures critical for achieving the goals of SMP IV - have been met, and, although risks remain, progress is being made towards meeting those set for the second review. The fiscal policy framework continues to strengthen, with domestic revenue mobilization in the year to July 2019 exceeding the target set in the program.

UNDESA: International Migrant Stock 2019

The number of international migrants globally reached an estimated 272 million in 2019, an increase of 51 million since 2010. Currently, international migrants comprise 3.5 of the global population, compared to 2.8% in the year 2000, according to new estimates released by the UN today. The International Migrant Stock 2019, a dataset released by the Population Division of the UN Department of Economic and Social Affairs,  provides the latest estimates of the number of international migrants by age, sex and origin for all countries and areas of the world. At the country level, about half of all international migrants reside in just 10 countries, with the USA hosting the largest number of international migrants (51 million), equal to about 19% of the world’s total. Germany and Saudi Arabia host the second and third largest numbers of migrants (13 million each), followed by the Russian Federation (12 million), the United Kingdom (10 million), the United Arab Emirates (9 million), France, Canada and Australia (around 8 million each) and Italy (6 million). Concerning their place of birth, one-third of all international migrants originate from only ten countries, with India as the lead country of origin, accounting for about 18 million persons living abroad.  A majority of international migrants in sub-Saharan Africa (89%), Eastern and South-Eastern Asia (83%), Latin America and the Caribbean (73%), and Central and Southern Asia (63 %) originated from the region in which they reside. By contrast, most of the international migrants that lived in Northern America (98%), Oceania (88%) and Northern Africa and Western Asia (59%) were born outside their region of residence. [OECD International Migration Outlook 2019: Humanitarian migration falls while labour and family migration rises]

Today's Quick Links:

Uganda’s tourist arrivals grew by 7.4% in 2018, foreign exchange earnings by 10.1%

Rwanda steps into Africa's apparel sourcing mix

EAC keeps Europe guessing two months to crucial meeting on EPA

Minister orders Nigerian agencies to begin ISO standard certification to improve cybersecurity

BloombergQuint:  Attacks in South Africa slow region's free-trade pursuits


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