tralac’s Daily News Selection

tralac’s Daily News Selection

08 Oct 2019

AfCFTA Ratifications Update, from @AmbMuchanga:  Good news. Mauritius has ratified the African Continental Free Trade Area Agreement. We are moving and growing. 27 more ratifications remaining to create One African Market.

Opportunities for women entrepreneurs in the context of the AfCFTAThis UN Women study identifies opportunities for women entrepreneurs with regard to the AfCFTA, focusing on three areas of interest: women in informal cross-border trade; gender and value chain analysis; and affirmative action/preferential public procurement. The study looked at inter-linkages between trade, public procurement, value chains and gender inequality. It assessed potential ways for improving regional integration frameworks from a gender perspective. It also analysed potential ways of integrating gender concerns into value chain development projects and programmes to help women maximize their profitability and competitiveness. Finally, the study analysed different preferential procurement schemes adopted in four countries, namely Kenya, Rwanda, Uganda and South Africa. Selected recommendations (pdf):

Improve the availability of relevant gender-disaggregated data; Conduct comprehensive gender analysis and studies to support evidence-based AfCFTA policymaking; Conduct advocacy and awareness raising on gender and AfCFTA issues; Monitor AfCFTA processes in responding to gender gaps in trade; Strengthen women’s trade associations and networks; Support capacity-building initiatives for SMEs on international and regional trade requirements.  Note:  While trade in services (as soft goods) is also included in the AfCFTA, it is not considered in this analysis, even though it holds great potential for employment and wealth creation by women. Note too that the discussion here on value chains is focused solely on agricultural value chains, although other chains, such as manufacturing, can provide similar avenues of opportunities for women.]  

AfDB announces new accountability index to measure institutional lending to womenA new tool to track the level of lending to women across the continent will be important for ensuring women get the critical financial help they need, AfDB president Akinwumi Adesina told attendees at a public event held on the sidelines of the UN General Assembly. The Women’s Financing Index, currently under development, will rate banks and financial institutions who apply for loans from the AfDB, against the amounts they have lent or are lending to women. Top institutions will be rewarded with preferential financing terms from the AfDB.  The Bank, through its AFAWA, initiative – Affirmative Finance Action for Women in Africa - aims to mobilise $3bn to bridge the financing gap for women on the continent.

AfDB Group approves loans of €209m for expansion of Kenya's ‘Great North Road’

The Board of Directors of the AfDB  Group has approved loans of around €209m to fund the expansion of a highway that links major economic hubs in Kenya.  The total project cost is €257.68m, of which €178.02m (69%) will be financed by the Bank Group, while 12% will come from the Africa Growing Together Fund, set up by the Bank and the People’s Bank of China in 2014. The remaining 19% will be financed by the Kenyan government. The five-year project will convert the 84km Kenol–Sagana–Marua Road in central and eastern Kenya from a two-way single carriageway into a dual bypass, and is due for completion in 2025. The new road will enhance traffic flow between the port city of Mombasa and major centres like Nairobi. It will also ease transport between Nairobi and the Mount Kenya region; and ultimately Ethiopia.  Kenol–Sagana–Marua Road is also part of the Trans-Africa Highway, commonly known as the Cape to Cairo route.

Tanzania: Transit motor vehicles at Dar port in sharp increase (IPPMedia)

The number of imported on-transit motor vehicles that pass through Dar es Salaam port to neighboring land-locked countries rose to 159,639 from January this year, the Tanzania Ports Authority says. TPA Director General Deusdedit Kakonko attributes the increased number of consignments to higher efficiency and interventions by the port authority to curb tampering of goods amongst port officials. Statistics indicate that the number of vehicles passing through Dar es Salaam port in the 2017/2018 financial year stood at 132,035 after having dropped to 93,000 in 2016/2017. About 164,000 cars were ferried through Dar port in 2014/15 and 127,335 in 2015/2016. “The drop was a shock. I had to go on a campaign to sensitize our neighbours to continue using Dar port after we successfully controlled such practices and improved efficiency. I met with stakeholders in Lilongwe (Malawi), Uganda, Zimbabwe and Lubumbashi in the Democratic Republic of Congo (DRC). Most vehicle importers complained of chaotic inspections by traffic police officers along with theft of goods and car parts,” he said. The traders also accused officials from both public agencies and private institutions of extortion especially at Kasumuro border post between Tanzania and Malawi. “Vehicle importers from Zimbabwe had already started to use a port in Mozambique, but they are mostly back to our port,” he said.

Kenya and AGOA: Trade PS @Kiptoock this morning chaired private sector stakeholder engagement meeting which focused on how to maximize exports to the USA before expiry of AGOA pact 6 years from now.

Kenya: Ngilu eyes international textile market (The Star)

The Kitui county government aims to sell locally made clothes in the international market. “We have an ambitious plan to ensure that Kitui apparel products are on international markets,” Governor Charity Ngilu said on Sunday. She said the dream was achievable if the county attained a high level of efficiency and deployed the latest technology at Kitui County Textile Centre. The governor is in Taiwan attending the 23rd edition of Taipei Innovative Textile Application Show. “From TITAS, we hope to see a better and more efficient Kicotec. We will utilize the lessons from TITAS 2019 to accelerate production of world-class apparels,” Ngilu said in a statement.

Rwanda launches first 'Made in Africa' smartphones (Reuters)

Rwanda’s Mara Group launched two smartphones on Monday, describing them as the first “Made in Africa” models and giving a boost to the country’s ambitions to become a regional technology hub. The Mara X and Mara Z will use Google’s Android operating system and cost 175,750 Rwandan francs ($190) and 120,250 Rwandan francs ($130) respectively. They will compete with Samsung, whose cheapest smartphone costs 50,000 Rwandan francs ($54), and non-branded phones at 35,000 Rwandan francs ($37). Mara Group CEO Ashish Thakkar said it was targeting customers willing to pay more for quality. Mara Group hopes to profit from the AfCFTA, a pact aimed at forming a 55-nation trade bloc, to boost sales across Africa, Thakkar said.

Economic transformation through digital technologies: Will Africa make the right decisions? (World Bank) 

The policy brief is for ministers and parliamentarians responsible for policies on ICT and innovation, the development of the informal sector, and broader economic growth and equality issues, education, finance, and labor and social protection. The policy brief was prepared to inform deliberations on policies and programs for job creation and economic growth through digital technologies by presenting the best available evidence and policy implications based on this evidenceExtract (pdf):   About 60% of the Sub-Saharan Africa labor force comprises adults who are ill-equipped for jobs, a cloud that hangs over the region. The silver lining is that lower-skilled workers in Sub-Saharan Africa may benefit more from digital technology than workers in other regions. There are at least three possible reasons for this: 

State of Sustainable Markets 2019 (ITC)

The State of Sustainable Markets 2019: Statistics and Emerging Trends provides a snapshot of substantial growth of sustainability standards for bananas, cocoa, coffee, cotton, oil palm, soybean, sugarcane, tea and forestry products. It points out that the share of certified agricultural land is expanding and that this trend likely to continue. A joint publication by the International Trade Centre, the Research Institute of Organic Agriculture and the International Institute for Sustainable Development, the fourth edition of the State of Sustainable Markets presents data on area, production volume and number of producers that comply with a sustainability standard. The complete findings of the report – the only global publication highlighting sustainable market trends – can be found on a new interactive website featuring data from 14 of the world’s leading standards organizations. 

The report notes (pdf) that in the past five years, land area dedicated to growing certified cotton has grown by 172%. Meanwhile, land certified as sustainable for sugarcane grew by 80%, whereas for cocoa, it more than doubled. In 2016–2017, the certified areas for the nine commodities increased at least 18%, led by sugarcane and cotton. At least 17.9 million hectares of farmland for nine agricultural crops singled out in this report were certified in 2017, equalling 7.6% of the total area for them. Organic farmland covers the greatest area. In fact, almost 70 million hectares – roughly the size of Myanmar – were certified as organic in 2017, representing 1.4% of the world’s farmland– but most of the other standards have grown more in recent years.

The IMF’s Kristalina Georgieva: Decelerating growth calls for accelerating actionSo why the slowdown in 2019? There are a range of issues and one common theme: Fractures. I will start with trade. We have spoken in the past about the dangers of trade disputes. Now, we see that they are actually taking a toll. Global trade growth has come to a near standstill. In part because of the trade tensions, worldwide manufacturing activity and investment have weakened substantially. There is a serious risk that services and consumption could soon be affected. And the fractures are spreading. Even if growth picks-up in 2020, the current rifts could lead to changes that last a generation — broken supply chains, siloed trade sectors, a “digital Berlin Wall” that forces countries to choose between technology systems. Our goal should be to fix these fractures. Our world is intertwined. So our responses must be coordinated. I believe we can do it. 

I said trade tensions were now taking a toll. Let me show you what I mean. This graphic is part of the updated analysis on tariffs we will release next week. It shows the projected global GDP loss from the escalating trade conflict between the US and China. The blue, yellow, and purple blocks show the direct costs on businesses and consumers from the three rounds of implemented and announced tariffs. Now, look at the red blocks. This is what happens when the expected secondary effects are added in — including the loss of confidence and market reactions. The results are clear. Everyone loses in a trade war. 

Free trade zones: A Pandora’s box for illicit money (Global Financial Integrity)

Governments around the world are increasingly turning to free trade zones (FTZs) as a means of promoting economic growth and investment: Ghana recently signed an agreement with Iran to bolster cooperation between their free zones, while the Dubai Multi Commodities Centre announced 1,868 new companies have registered in its free zone in 2018 – an all-time record. Further, last year the tiny country of Djibouti launched Africa’s largest FTZ. Even UK Prime Minister Boris Johnson has announced plans to create up to ten free ports in the UK to offset post-Brexit tariffs and attract investment. But the risks of FTZs are glaring, with the EU discouraging their existence, labelling FTZs as a “new emerging threat” in the world of financial crime.

But FTZs have a darker side, too. Criminals see them as perfect places to manufacture and transport illicit goods, as controls and checks by authorities are often irregular or absent. Illegal transactions can be easily disguised as legal, using trade-based money laundering (TBML) schemes that are notoriously difficult to detect. If an offshore financial center is thought of as a tax haven for illicit finance; think of an FTZ as a haven for illicit trade (and associated crimes): Customs authorities have little or no oversight of what actually goes on in an FTZ, goods are rarely ever inspected and companies operating in FTZs tend to benefit from low disclosure and transparency requirements. With the number of FTZs around the globe a continuing mystery – some estimate the number at 4,300 – the opacity inherent in the zones is a massive security, crime and tax challenge.

If we are to see any significant improvements in FTZ governance and oversight, the WTO and WCO should, at the very least, enforce some basic requirements. Stricter measures need to be in place when it comes to issuing trading permits in FTZs, the national customs authority must be physically present and inspection of goods should be carried out routinely in warehouses. The cost of engaging in TBML practices in FTZs should always outweigh the benefits reaped from illicit activities, which means that prosecution of such crimes should be more aggressive, sustained and targeted by authorities. Until these basic requirements are met, free trade zones will continue to be haven for free crime. [South African Special Economic Zones: history of limited successes

Today's Quick Links:

Why are Irish supermarkets selling apples from Chile, South Africa and New Zealand?

Land reforms, climate change, cheap imports pose risks to agriculture in KZN says FNB's Dawie Maree

Britain says 88% of imports to face no tariffs in event of no-deal Brexit

Mauritius workshop: Socio-economic impacts of international exhaustion of trademarks

African Peer Review Mechanism: Mauritius to finalise its first progress report

Transparency in fisheries subsidies: Notification-driven analytics of country performance and disclosure requirements

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