News

tralac's Daily News Selection

tralac's Daily News Selection

27 Sep 2019

Reporting African trade and industrialization trends, dynamics:  media workshops in Johannesburg, Cape Town, Addis Ababa

(i)  Next week in Johannesburg: ECA's AfCFTA Media Hub Workshop (2-3 October).  “The workshop will bring together journalists from all corners of the continent and expose them to the essentials of trade economics; national and regional trade policy analysis, and global political economy. It will also focus on new strategies to gather and report African trade news and economic issues. As well as support participants in tackling news assignments that involve economics and business data with an emphasis on how to ensure media content is exciting and relevant to their audiences.”

(ii)  Reporting on the AfCFTA: a tralac training course for journalists (3-4 October, Cape Town). "We’ll discuss the state of the negotiations, providing an update on the ratification and entry into force of the Agreement, the ongoing negotiations on tariff concessions and rules of origin, as well as services sector commitments. We will also consider the second phase of the negotiations – on investment, competition and intellectual property rights. We’ll interrogate the potential of the AfCFTA to contribute to Africa’s development.  An introduction to trade data analysis to assess intra-Africa trade – with trade data visualisation techniques will also be included in the programme."

(iii)  Earlier this week: An AU Department of Trade and Industry media orientation workshop in Addis Ababa on the reporting of Africa's industrialization.  Mrs Esther Azaa Yambou Tankou (AU’s Department of Information and Communication): “In the media sector, it is arguably more difficult to report on economic and financial issues than ribbon cutting ceremonies. A lack of understanding and expertise can hamper economic, political and social issues reporting. Journalists, should therefore, have an aptitude to be research and analytics-oriented.”

South Africa’s Department of Trade and Industry convenes a workshop on Monday, in Johannesburg, to discuss the AfCFTA and Doing Business in Africa. The workshop will provide an opportunity for South Africa’s private sector to engage senior policy makers on aligning the agreement with the needs of business.  

A special feature on East African trade and regional integration, anchored on this week's EAC High Level Trade Integration Conference:

(i)  Mr Steven Mlote, EAC Deputy Secretary General in charge of planning and infrastructure, said the conference was a precursor to the commemoration of the EAC’s 20th Anniversary and the 15th anniversary of the Customs Union Protocol.

(ii)  EAC Secretary-General urges partner states to ratify the TFTA.  The Secretary-General of the EAC has lauded the EAC’s Customs Union which, he says, has registered a number of successes including application of a common customs law, operationalization of the Single Customs Territory, the establishment of One-Stop Border Posts, the Authorized Economic Operator Programme and interconnectivity of the customs business systems. Amb. Liberat Mfumukeko says the SCT has reduced the turnaround time and tremendously cut down the cost of moving goods in the region.  At the continental level, Mfumukeko opines that progress has been recorded towards realization of the Tripartite Free Trade Area. Three EAC partner states have ratified the Agreement, which was launched in June 2015. He urged the remaining partner states to also ratify the Agreement in accordance with the timelines that have been agreed upon so as to enable all the EAC partner states maximize on the opportunities offered by the TFTA.

(iii)  East African bloc urges removal of hurdles to cross-border trade (Xinhua)

Dr Richard Sezibera, chairperson of the EAC Council of Ministers, said in Nairobi that there are a number of impediments to trade, including tariff and non-tariff barriers, excessive regulation and inadequate infrastructure in border towns. "The need to address aspects related to trade costs, harassment and corruption, infrastructure efficiency, excessive regulation, and excessive requirements at borders and formalize the informal sector are important policy directions required to support informal cross-border trade and enhance regional integration," Sezibera said during the official opening of the high level conference on EAC trade integration. According to Sezibera, who is also Rwanda's Minister of Foreign Affairs and International Cooperation, the trading bloc has a lot of potential in informal cross-border trade. "Informal cross-border trade is estimated to be as high as 50% of formal trade in Africa and is a diverse source of livelihood for millions of people," he added. He noted that the EAC has considerable unexploited potential in trade, but intra-regional trade is far below its potential.

(iv)  EAC has made tremendous progress says Kenya Cabinet Secretary (East African Business Week)

Tremendous progress has been made in pursuing the EAC integration agenda notwithstanding any challenges on the path as any ambitious project will not be without challenges. This is according to the Cabinet Secretary in the Ministry of East African Community and Northern Corridor Development in Kenya  Adan Mohamed who was the Chief Guest during the official opening of the high-level conference on EAC Trade integration in Nairobi.  “I am aware of the progress made in the realm of trade facilitation including the transformation of the Customs processes, the introduction of technology in driving regional business, re-orienting the border operations under the coordinated border management concept, and the re-engineering of the immigration procedures. I am proud as an East African that today fellow citizens of East Africa can move around without any hindrances. The one network and one tourist visa for some Partner States is another bold step we have taken and I am hopeful that all the Partner States will soon be on board,” said Mohamed.

(v)  Kenneth Bagamuhunda, EAC's director general of customs and trade: "A single currency regime is expected to lower the cost of trading transactions among partner states and hence boost level of imports and exports within the region."

(vi)  EAC seeks to spur demand for local textiles (Anadolu)

An East African bloc’s decision to promote the wearing of locally made attire and annual exhibits in the member states will help the garments gain popularity, said experts. The optimism follows the EAC’s recent declarations of Fridays as Afrika Mashariki (East) Fashion Day, during which the people in East Africa will wear attires manufactured in the region. Afrika Mashariki Fashion Week would also be held annually in the first week of September for trade fair and exhibition of locally designed textiles and garments. The declarations are expected to get effected in all EAC member states - Rwanda, Uganda, Kenya, Tanzania, Burundi and South Sudan. According to Simon Peter Owaka, senior public relations officer at the EAC Secretariat, the declarations are part of strategies adopted by the region to stimulate demand for locally made textiles and garments, and to build brand identity. “The declarations would enhance local consumption of East Africa-made products and enhance our productive capacity in the textile sector. Imagine a foreigner moving in EAC countries on a particular Friday and finding people donning similar attire -- a strong message of an intact community,” Owaka told Anadolu Agency.

(vii)  Kenya: Declining quality of tea blamed on factory rivalry (Business Daily)

Stakeholders in the tea industry say the rapid growth in capacity of factories is compromising the quality of the beverage in the market, leading to falling prices of the commodity in the international market. The declining quality, say tea buyers, has negatively impacted the competitiveness of Kenya’s tea, hence reducing demand. “Factories are now competing for volumes and not quality. As such, the quality of our Kenyan tea that we used to enjoy some five or 10 years ago has been going down, affecting the price of the commodity,” said Peter Kimanga, a tea exporter with Global Tea Commodities. “Kenyan tea is of such a high premium in some consuming markets that the importers keep track of the auction trends on a weekly basis and will make purchase orders for a specific plantations or garden marks,” said East African Tea Trade Association managing director Edward Mudibo. The Tea Directorate says about five factories have been registered in the last three years while the existing ones have been expanding their production lines. Agriculture and Food Authority (AFA) director general, Anthony Muriithi said they have been addressing the issue of quality by carrying out of quarterly checks in factories.

(viii)  Uganda trade minister addresses UIOGS on local content and diversification (Oil Review Africa)  

Looking at the broader economic picture, Ms Amelia Kyambadde, said regional cooperation was important if the oil and gas industry was going to succeed in Uganda. She said it was vital that there is “harmonisation of framework in the region”, such as standards for oil and gas production. In particular, Ms Kyambadde said she was keen to collaborate with Kenya and Tanzania.  “We need regional consensus, we need to normalise methods and policies for the management of industry and ensure certification, recognition of our oil and gas, and think outside the borders,” she said. “We need to ensure benchmarks with other oil-producing countries to share knowledge, to share information, to share expertise.” She called for more “aggressive infrastructure development” such as the 1,440km pipeline between Uganda and Tanzania, called for rail projects to be fast-tracked with standard gauge tracks across neighbouring countries, and pointed out the opportunities in the marine transport sector because “we have a lake between us”. As well as regional harmonisation of relevant regulations, Ms Kyambadde said meeting international standards was important.

(ix)  Eritrea and the AfCFTA  (The East African)

While African customs officials say AU officials are working on persuading Eritrea to sign the agreement, chances of realising a breakthrough remain low. Eritrean government officials could not be reached for comment by press time. “Eritrea does not produce much, which could explain why it is not bothered about the AfCFTA. However, despite economic and financial sanctions imposed on some African countries, member states are still able to trade fairly well with each other. I visited Eritrea the other day and I noticed quite significant volumes of imports,” said Peter Malinga, a trade expert who attended the Kampala meeting of director-generals of customs, revenue authority officials and trade experts from AU member states.

ACTFA seeks to improve intra-Africa trade (World-Grain)

Although sub-Saharan Africa has potential key drivers for the growth in demand in cereal grains, such as being home to 13% of the world’s working age population, a rapid urban population growth at 3.5% annually and increasing consumer spending that surpassed the $1.4 trillion mark in 2015, the economic blocs in the region still face the challenges of completely eliminating import bans, protective tariffs and trade-distorting subsidies. Uganda and Rwanda, for example, have imposed a 75% import duty and value-added tax on all rice imports from Tanzania. This is because Tanzania, which produces 80% of East Africa’s rice, receives duty free importation of rice from Asia, which then is re-exported to other EAC countries

Rwanda: Volkswagen gambles on ride-hailing to break through African roadblocks (The East African)

When Volkswagen’s Africa boss Thomas Schaefer set out to conquer the continent, he quickly realized he needed more than a flashy new product. He needed a new business model. Study after study showed the same thing: there was no demand for new cars. Low purchasing power and a lack of financing put them out of the reach of most Africans, while competition from used imports gave buyers a cheaper alternative. So Schaefer is placing a $50m bet on a new business built around ride-hailing and car-sharing. And VW is using Rwanda as its laboratory. While VW sees Kigali is an ideal test ground, offering a data sample that’s statistically significant at a reasonable cost, critics say the city - where Uber and Bolt are absent - is not an accurate gauge of conditions in bigger markets.  Schaefer cautioned that the experiment was still in its early stages, adding he’d like to give the business model a two-year test run before assessing it.

Africa dreams of free trade as red tape rules on the ground (Reuters)

The speed limit is 110 km per hour on the new highway that Abadalla Chande uses to haul his truckload of animal feed from Tanzania to Kenya, two nations that share a common market often hailed as a model for the continent. But Chande is parked on the tarmac, caught up in a snarl of red tape. He is in a long line of trucks waiting for cargo to be scanned or for documents to be checked by officials. One of the most successful of Africa’s many trade blocs, it should be superseded by a continent-wide free trade area that will begin trading in July next year. But businessmen say the delays plaguing the East African union bode ill for the future of the unified market. “Sometimes we get to the border crossing and spend five, six days or even a week,” said Chande, who said he’d been waiting there more than a day. Behind him, police pried apart shouting drivers as hundreds of trucks slowly belched and groaned towards the Kenya-Tanzania border in Namanga town. Kenyan and Tanzanian officials say that even in a free trade area, goods crossing borders must be checked by multiple agencies including the tax authorities, plant health inspectorate, departments of human health, livestock control and forestry. This takes time.

Africa Risk-Reward Index 2019: reforms and resistance (Control Risks)

In the fourth Africa Risk-Reward Index, Control Risks and Oxford Economics analyse the impact of ambitious reform agendas in Angola, Ethiopia and South Africa. We also focus on relationships and rivalries in the East African Community, and the impact of geopolitical competition in a post-Bashir Sudan. The Africa Risk-Reward Index plots each country’s performance relative to its African peers, by comparing some of the continent’s largest and emerging markets, offering investors a comparative snapshot of market opportunities and risks across Africa. [Note: The report can be downloaded after registration]

Standard Chartered's Trade20 index: Mapping the rising stars of trade.  Côte d'Ivoire, Kenya and Ireland join India and China in the top five markets with the greatest potential for future trade growth.