News

tralac’s Daily News Selection

tralac’s Daily News Selection

30 Sep 2019

Olu Fasan: Farewell Chiedu Osakwe, Africa’s consummate trade diplomat (BusinessDay)

Hardly has any other African, achieved anything close to what Osakwe did to develop international trade negotiations, including through support for policy reform and capacity building. In his 19 years’ spell at the WTO, from 1998 to 2017, Osakwe held, at the most senior level, all the major development-oriented roles. For example, he was: special coordinator for the LDCs, heading the inter-agency working group for the integrated framework for LDCs; director of the Technical Cooperation Division; director of the Textile Division; director of the Doha Development Agenda, leading the DDA negotiation process; and director of the WTO Accession Division, helping several developing countries through the difficult accession process to become WTO members. Osakwe oversaw the accession of several former communist countries, such as Estonia, to the WTO, actively supporting their domestic reform processes. In 2005, Osakwe was on the verge of becoming a Deputy Director-General at the WTO but apparently paid a price for Nigeria’s negative image.

Later this week, in Harare: A workshop to validate Zimbabwe's strategy on the implementation of the AfCFTA.  The ECA, AUC, GoZ workshop (2-3 October) under the theme Expanding Industrial and Trade Growth through the AfCFTA, will be preceded by a day-long meeting to sensitise the country’s private sector on the AfCFTA. The workshop will also review the proposed TOR for Zimbabwe’s AfCFTA Committee to ensure they provide a solid foundation for the required leadership that will lead the implementation of the AfCFTA in the country.   

Diarise: (i) 23rd Conference of the ICE of Senior Officials and Experts for Eastern Africa (5-7 November, Asmara). The theme: Leveraging new opportunities for regional integration in Eastern Africa; (ii) Global Gender Summit (25–27 November, Kigali).Under the theme Unpacking constraints to gender equality, the summit will dig deep into three dimensions in which gender equality and women’s empowerment can be achieved. 

Report of the EAC High Level Conference on Trade Integration (EAC)

The conference was held to commemorate 20 years of the EAC and 15 years of the East African Customs Union. The overarching goal of the conference was to have an open, honest and critical self-examination as a region, with regard to what has been achieved, what has worked and what needs to be done to move the regional integration forward as well as improving the EAC trade policy and other instruments. To enhance competitiveness, the EAC needs to reduce the cost of production, and stop relying on duty exemption arrangements like AGOA. Cost of production can be lowered by managing labour, energy, logistics and cost of inputs, like raw material. Partner states should play complementary roles in ensuring that the region does not continue being the market of finished goods from other regions, but also a producer of goods for export. Profiled conference recommendations:

Promotion of intra regional/continental trade should remain the core objective of integration. In light of this the EAC Common External Tariff should be reviewed to enhance internal trading environment and promote value chains for regional industrial development.

Operationalize the Trade Remedies Committee as a regional mechanism for dispute resolution.

Key determinants of negotiating new agreements should focus on value chains, export diversification and addressing supply chain. In addition EAC should undertake comprehensive assessments of future impact on domestic economies, including industrial and tax implications, resulting from implementation of new agreements. 

The EAC should re-visit EAC integration process to establish what is working and what is not working; Additionally, there is need for improved and more strategic engagement between the public and private sectors to enable the private sector to contribute effectively to the integration process. [Note: The EAC One Stop Border Post Performance Measurement Tool was launched during the conference] 

South Africa: Trade Statistics for August 2019 show a R6.84bn surplus (SARS)

The South African Revenue Service has released trade statistics for August 2019 recording a trade surplus of R6.84bn. The trade surplus is attributable to exports of R122.02bn and imports of R115.17bn.  Exports increased from July 2019 to August 2019 by R9.46bn (8.4%) while imports decreased by R1.11bn (1.0%). The year-to-date (1 January to 31 August) trade deficit of R0.85bn is a deterioration from the R4.67bn surplus for the comparable period in 2018. Exports increased by 6.9% year-on-year whilst imports for the same period showed an increase of 7.6%. Top 5 countries for exports: China (11.0%), Germany (10.5%), US (6.9%), Botswana (5.7%), UK (4.7%).  Top 5 countries for imports: China (17.3%), Germany (11.3%), US (6.9%), India (5.3%), Saudi Arabia (3.5%). 

Western Cape trade profile: Provincial Economic Review and Outlook 2019

Western Cape exports expanded by an average of 8.8% per year over the last 10 years. Over the same period, import growth was slower at 4.6% per year. In 2018, exports rose by 3.9% following a 0.3% decline in 2017. Import growth surged by 19.5% in 2018 after contracting for the three years prior. The increase in overall imports was driven by a 42.5% rise in imports of the oil and related products category, i.e. mineral fuels, mineral oils and products of their distillation; bituminous substances; and mineral waxes, while exports of this category rose by just 10%. This was the province’s biggest import category and constituted about half of total imports in 2018. As a result of the sharper increase in import growth compared to exports, the Western Cape’s trade deficit rose to R90.0bn in 2018 from R59.1bn in the previous year. This compares to an average deficit of R80.1bn recorded over the last 10  years with imports outstripping exports in all of these years. However, excluding oil imports, the Western Cape recorded a trade surplus of R20.6bn in 2018. Extract (pdf):

The Western Cape and South African export profiles are very different. The Western Cape export picture is dominated by agricultural and agri-processed goods, which made up 36.1% of exports in 2018. In contrast, the agriculture value chain makes up just 7.7% of national exports. The national export picture is dominated by mining (27.1% of exports), wholesale and retail trade (12.7%) and metals, metal products, machinery and equipment (12.2%). The fastest growing export sectors in the Western Cape were Agriculture (26.9% growth), Metals, metal products, machinery and equipment (17.5%) and Communication (17.2%). In contrast, Radio, TV, instruments, watches and clocks saw the biggest decline (-43.3%), followed by Textiles, clothing and leather goods (-19.7%). Given the volatility of trade data, it is also insightful to look at a longer-term picture. Over the last five years, the other Non-metal mineral products sector saw the fastest growth (9.4% on average per year), followed by agriculture (8.3%).

In 2018, 45.7% of South Africa’s agriculture and agri-processing exports originated from the Western Cape. This means that the Western Cape has a significant revealed comparative trade advantage (RTCA) in agriculture and agri-processing (captured in the Agriculture, forestry and fishing, and Food, beverages and tobacco subsectors in Table 3.4). Subsectors with an RTCA above one have a larger share of exports in the Western Cape compared to the rest of South Africa, and are thus relatively more important for the Province in terms of overall export performance. In addition to the agriculture value chain, many of the services subsectors also show a comparative advantage. The Communication subsector stands out as one where the RTCA has improved considerably during recent years – although its share of Western Cape exports remains relatively small at 2.6% in 2018.  [Companion report:Municipal Economic Review & Outlook 2019(pdf);  CNBC multimedia: Tshwane Trade and Investment Summit]

Mozambique: New logistics corridor in north to ‘revolutionise’ trade, travel (Club of Mozambique)

The overland journey between Quelimane, on the Indian coast, to Tete, in the interior, takes more than two days and, if the schedule for implementing the new corridor (railroad and deep-water port) is met, by 2024 the journey time should be reduced to 10 hours. In addition to cargo transport, which is at the heart of the investment, projects are planned with immediate social impact on the daily lives of the population, said Orlando Marques, CEO of Thai Mozambique Logistics (TML). One of these is the creation of a passenger rail link. The $3.2bn investment will transport minerals, agricultural and other products from Mozambique, Zambia and Malawi to the deepwater port to be built in Macuze, Quelimane, on the Indian Ocean coast. The same line will have two passenger trains, one in the morning and the other at the end of the day, a service that will revolutionise traffic, the CEO said. There will be 22 stations along the line whose location is being studied to connect with local development projects. At the peak of the construction work, 12,500 workers should be employed, most of them Mozambicans. The construction of the corridor should start in 2020 and is the responsibility of a consortium of the Portuguese Mota-Engil and the Chinese CCEC.

Hospitality Report Africa 2019: selected highlights (Jumia) 

Africa’s travel and tourism remains one of the key growth drivers of the continent’s economy, contributing 8.5% (or $194.2bn) of the GDP in 2018; from 8.1% and 7.8% in 2017 and 2016 respectively. This growth record placed Africa as the second-fastest growing tourism region in the world, with a growth rate of 5.6% in 2018 after Asia Pacific and against a 3.9% global average growth rate. In 2018, the continent received 67 million international tourist arrivals (+7% increase), as compared to 63 million in 2017 and 58 million in 2016. Africa received only 5% share of international arrivals in 2017. Morocco and South Africa were the top tourism destinations, with approximately 11 and 10 million arrivals per annum respectively. Ethiopia’s visa relaxation policies combined with improved connectivity as a regional transport hub placed the country as Africa’s fastest growing travel country, growing by 48.6% in 2018 to be worth $7.4bn. The travel and tourism sector directly and indirectly provided employment for about 24.3 million people in 2018, accounting for approximately (6.7%) of total employment. In terms of room revenue, it is expected that in the next five years, Nigeria will be the fastest-growing market with a projected 12% compound annual increase. It will be followed by Tanzania and Kenya, with a projection of 8.2% and 7.4% compound annual increases respectively. [Visualizing the importance of services in the world's economy

New ACP-EU Partnership: Chief negotiators agree on economic priorities for future agreement (EU)

Meeting in New York (last week) in the margins of the UN General Assembly, the chief negotiators Commissioner Mimica and Togolese Minister Robert Dussey further specified the economic framework of future relations between African, Caribbean and Pacific countries with the European Union after 2020. Negotiations will continue on the remaining parts of the agreement in the coming weeks. Discussions on the so-called “common foundation” for all countries cover the general provisions, international cooperation, the means of cooperation, the institutional framework and the final provisions. At the same time, talks on the three partnerships with each region will intensify. The chief negotiators are expected to discuss progress on the three regional pillars at their next meeting, scheduled for October. 

Today's Quick Links:

Bloomberg: Zimbabwe clamps down on mobile money in new currency directive

Zimbabwe: IMF staff concludes Article IV Consultation visit

Victor Bhoroma: Can an undervalued currency boost Zimbabwe's exports

UNIDO, EU move to boost Ghana’s export competitiveness

Digital connectivity in sub-Saharan Africa: a comparative perspective

The Platform for Collaboration on Tax: draft toolkit on implementation of effective transfer-pricing documentation requirements

UNCTAD's latest Transport and Trade Facilitation Newsletter is posted

Economic and distributional impacts of Free Trade Agreements: the case of Indonesia

World Bank: GRI Index 2019

Subscribe

Sign up to receive email notifications when the Daily News selection is posted online

Sign up to receive email notifications when the Daily News selection is posted online.

tralac’s Daily News archive

View previous editions of the tralac Daily News selection.

Archive

This post has been sourced on behalf of tralac and disseminated to enhance trade policy knowledge and debate. It is distributed to recipients across Africa and internationally, serving in the AU, RECs, national government trade departments and research and development agencies.

Your feedback is appreciated. Send us your comments HERE.

Share on