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tralac’s Daily News Selection

tralac’s Daily News Selection

24 Oct 2019

Doing Business 2020: Sub-Saharan Africa

Economies in Sub-Saharan Africa continued to improve their business climates, with the region’s largest economy, Nigeria, earning a place among the year’s top global improvers alongside Togo, according to the World Bank Group’s Doing Business study (pdf). Economies of the region enacted 73 reforms in the 12 months leading to May 1, down from a record high of 108, and the number of countries implementing at least one reform fell to 31 from 40. The regional average ease of doing business score was 51.8 on a scale of 0 to 100, below the OECD high-income average of 78.4 and the global average of 63.0. There were several bright spots in the region. Togo is on the list of top improvers for the second year in a row thanks to reforms lowering fees for construction permits and streamlining property registration procedures, among other measures. Nigeria conducted reforms impacting six indicators, including making the enforcement of contracts easier, which placed the 200-million-person economy among the world’s top improvers. Kenya also carried out six reforms, including improving the reliability of its electricity supply and introducing an online system for social security contributions, positioning it third highest in the regional rankings, behind Mauritius and Rwanda. With four reforms implemented this year, Mauritius remains the easiest place to do business in the region, ranking 13th globally. Among other reforms, the country made resolving insolvency easier and improved contract enforcement.

Elsewhere, Cabo Verde and Eswatini each carried out four reforms, a record for both. Zimbabwe improved in five areas measured by Doing Business while the Democratic Republic of Congo, Gabon and Rwanda advanced in three. Due to active reform efforts, Niger’s and Senegal’s scores improved significantly.

The region conducted the most reforms in the areas of starting a business, dealing with construction permits and getting credit, with twelve reforms in each. Thanks to initiatives led by the Central African Economic and Monetary Community, getting credit became easier in several economies in the region. The region’s economies performed best in the areas of starting a business and getting credit, with three economies – Kenya, Rwanda and Zambia – ranking among the world’s top 10 in the latter category. On average, it now takes around 20 days and costs 33.5% of income per capita to start a new business in the region, substantially faster and less expensive than the 62 days and 305% of income per capita it took in 2003. [Download: Sub-Saharan Africa regional report (pdf)]

A special feature on the Russia-Africa Summit, which concluded today in Sochi:

(i) Declaration of the First Russia-Africa Summit: profiled outcomes

Establish a Russia-Africa Partnership Forum with a view to coordinating the development of the Russian-African relations, and designate the Russia-Africa Summit as its supreme body to be convened once every three years.

Hold annual political consultations between Ministers of Foreign Affairs of the Russian Federation and African States acting as the present, former and future Presidencies of the African Union in the period between Summits.

Make efforts to substantially expand the trade between the Russian Federation and African States and diversify it, including by increasing the share of agricultural products in import and export operations. Assist the existing bilateral Russian-African intergovernmental commissions and committees on trade, economic, scientific and technical cooperation in their work, and contribute to establishing new similar partnership mechanisms between the Russian Federation and African States.

Provide necessary assistance to major Russian companies working in African markets and entrepreneurs from African States who plan to operate in the Russian Federation through reciprocally improving investment and business climate, as well as through providing possible special preferences.

(ii) Putin seeks to double trade volume with Africa within five years. Military cooperation is set to dominate the first Russia-Africa summit in the Black Sea resort of Sochi, attended by leaders and top officials from all 54 African countries and scores of African businessmen eager to tap into Russia’s emerging market. While opening Wednesday’s summit, Russian President Vladimir Putin told leaders and representatives of Africa’s 54 countries that he would seek to double trade ties between the two partners over the next 5 years. [Putin: Russia exporting more food than weapons to Africa]

(iii) Russia-Africa trade has doubled since engagement, says Afreximbank chief. Trade between Africa and Russia has doubled in the years since the African Export-Import Bank started engaging with the Russian Export Center to promote trade between the two sides, Bank President Prof. Benedict Oramah said yesterday. Professor Oramah, who was speaking during the opening of the Russia-Africa Economic Forum organised as part of the first-ever Russia-Africa Summit taking place in Sochi, Russian Federation, told the heads of state from about 50 African countries from Africa and Russia and other participants that annual trade between Africa and Russia now stood at about $20bn as against $10bn in the past. He announced that Afreximbank and the Russian Export Center had committed to act to achieve another doubling of the trade volume in next two years. Afreximbank would offer guarantees and other programmes to address certain risk perceptions and increase trade, stated Professor Oramah. The Bank was also working with the Russian Export Centre to create a trade information portal which would provide information to businesses to facilitate trade between the two sides.

(iv) Egypt could be the hub for Russian exports to Africa: Russia’s trade minister. In a session on supporting African trade, Russia’s Trade Minister Denis Mantorov pointed to the possibility of enhancing the role of the Egyptian market as a hub for Russian products to access the African continent, where Egypt is a key trade partner of Russia and the volume of trade exchange between the two countries increased by 17% and Egypt accounts for 30% of Russia’s exports to the African continent.

(v) Putin courts Africa and offers to mediate dam dispute. Russian President Vladimir Putin on Thursday sought to expand Moscow’s clout in Africa by touting military aid and economic projects at the first-ever Russia-Africa summit and even offered to help mediate a growing dispute between two of the continent’s largest powers, Egypt and Ethiopia. Kremlin spokesman Dmitry Peskov said Putin addressed the issue with Egyptian President Abdel-Fattah el-Sissi and Ethiopian Prime Minister Abiy Ahmed in separate meetings on the sidelines of the two-day summit attended by leaders of 43 of Africa’s 54 countries. Peskov didn’t say whether Egypt and Ethiopia accepted the mediation offer, which the United States also extended in recent days after talks on the dam collapsed this month.

(vi) Russia sets up $5bn trading platform in Africa. An agreement has been reached at the Russia-Africa summit in Sochi to establish a mechanism for funding trade deals. It is aimed at giving Russian exporters access to the African market. “The deal is designed to develop cooperation with African states by arranging mechanisms of issuing loans for joint foreign trade projects,” the Russian Export Center said. It explained that the deal opens up opportunities for increasing the volume of Russian exports to Africa, including to Angola, Ethiopia, Mozambique, Zimbabwe, and other states. With a volume of more than $5bn, the platform will enable risks related to trade with African countries to be absorbed. According to REC Director Andrey Slepnyov, Russia will “attract at least 10 countries and literally open a trade corridor to the African continent.” That will create “a unique opportunity for Russian businesses to systemically expand presence in the region and consolidate on one of the most promising and dynamically developing global markets opening it for high-tech domestic export.”

(vii) Inside the Russia-Africa matryoshka: summitry, geopolitics and resources.  The paper begins with a brief overview of the drivers of recent Russian foreign policy, followed by a focus on the evolution of its Africa engagement and an analysis of the different sectors that have formed the basis of this re-engagement. The paper includes a brief overview of relations with South Africa, probably the most significant country in Russia’s Africa engagement in sub-Saharan Africa, not so much because of commercial relations but because of South Africa’s important regional and global role and its presence in many international forums. The last section focuses on what Africa could expect from Russia and how the continent as a whole should engage with Russia in the future. [The authors: Chris Alden, Elizabeth Sidiropoulos]

(viii) Sochi Summit Quick Links

Landry Signé: Vladimir Putin is resetting Russia’s Africa agenda to counter the US and China

Peter Fabricius: Putin showcases Russia’s support for Africa at inaugural economic forum

President Faure speaks on building Blue Economy partnerships at Russia-Africa Forum

Lavrov inks co-operation agreements with African countries at Russia-Africa summit

Arms, oil and influence: What you need to know about Russia’s first-ever Africa summit

Andrew Hammond: Why is everyone suddenly wooing Africa?

DW: Russia’s comeback in Africa


Rwanda hosts 1st Forum of Owners of Cotton, Textile and Apparels Manufacturing Industries (EAC)

The establishment of fully serviced industrial parks with plug and play facilties to attract investments is one of the proposed actions to gain quick wins in the promotion of the Cotton, Textiles and Apparels (CTA) Manufacturing Industries in East Africa. Themed Promoting Local Production and Consumption of Cotton, Textile and Apparels Made in the EAC Region, the two-day forum was attended by participants from the ministries responsible for industry, trade, agriculture and EAC; private sector players, CTA industry associations, private sector associations, industry associations and development partners, among other stakeholders. The overall objective of the Forum was to ensure that the Owners of CTA industries meet, discuss pertinent issues within the sector and make useful and practical recommendations to the EAC Policy Organs especially the Heads of State Summit for purposes of promoting the sector.

Opening the Forum, Rwanda’s Permanent Secretary of Trade and Industry, Mr Michel Minega Sebera, noted that CTA has the potential to create employment, improve economic well-being and widen the tax base in the region. Mr Sebera called on EAC Partner States to fast track the phasing out of the second hand clothes in order to reap the benefits of the sector. He informed the meeting that in 2016, Rwanda started implementing the Summit directives and embarked on the phase out of the second hand clothes. The PS disclosed that the phasing out of second hand clothes in Rwanda had attracted new investments in the sector and led to more than 15 new companies investing in apparels. He further revealed that the country had also developed enabling infrastructure in the exports processing zones. He noted that the region’s efforts to promote the sector comes at a good time as the region stands to benefit with the larger market as part of the Africa continental free trade area.

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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.

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