Next week in Durban: Afreximbank’s Trade Finance Seminar (4-7 November), to be followed by a one day Factoring workshop. The programme can be accessed here.

AfDB shareholders approve landmark $115bn capital increase (AfDB)   

At an extraordinary shareholders’ meeting yesterday in Abidjan, Governors of the African Development Bank, representing shareholders from 80 countries, approved a landmark $115bn increase in capital for the continent’s foremost financial institution. The capital increase, the largest in the history of the AfDB since its establishment in 1964, is a remarkable show of confidence by shareholders. With the approved increase, the capital of the Bank will more than double from $93bn to $208bn. This solidifies the Bank’s leadership on development financing for the continent.

The AfDB's VP for Finance, Bajabulile Tshabalala: Why global and pan African investors need to set their sight on the 2019 Africa Investment Forum (Brussels Times)

The timing of the coming into being of the Forum is fortuitous, coming on the heels of the AfCFTA and the Single African Air Transport Market, ratified by the majority of AU members. New investments made possible through the Africa Investment Forum (11-13 November, Johannesburg) have the potential to spur an explosion in trade, contribute to Africa’s re-industrialization and promote cross-border regional economic integration. Indeed, while the platform continues to ramp up and grow, the Forum offered some very important lessons. In particular, additional resources are required to adequately prepare projects which are crucial for Africa’s development. Well-prepared projects minimize negative environmental and social issues, while maximizing development and economic outcomes, thus contributing to enhanced bankability.

Joint Labour Migration Governance Programme for Regional Development and Integration in Africa: African ambassadors meet Middle East, Gulf Cooperation Council

African experts drawn from major countries of origin of migrant workers in the Middle East and the Gulf Cooperating Countries met to share experiences on international labour migration cooperation mechanisms aimed at improving labour migration governance and to explore avenues for policy dialogue with Middle East Countries. This meeting responds to the recommendations by stakeholders in labour migration governance in Africa, for a multilateral process, for enhanced protection of teeming number of migrant workers of African descent in the Middle East. Available data show that the Middle East region is the second largest region of destination for African migrant workers due to cultural, religious and historic factors. An increasing number of African member states have negotiated bilateral labour agreements with Middle East countries, including Jordan, Qatar and Saudi Arabia, mainly for the supply of domestic workers. Egypt, Ethiopia, Kenya, Sudan, South Africa and Uganda account for top African migrant workers in the Middle East.

In spite of this, labour migration governance in the Middle East and GCC region is in dire need of policy and structural reforms in various areas including training and ethical recruitment, decent jobs, skills recognition, legal and consular services as well as protection of human rights in line with international standards. Unlike Asian countries, Africa does not have any labour migration multilateral cooperation agreement with the Middle East, hence there are gaps in the protection of African migrant workers and their families. To address this, Sri Lanka as the previous Chair of the Colombo process was invited to the meeting to share its experiences in managing Asian labour migrant workers.

South Africa: Implementing focused and flexible industry and trade policy (National Treasury)

Due to a lack of more effective and appropriate trade agreements, South African trade policy evolves on a piecemeal basis through applications to ITAC. A major challenge for ITAC is that trade support is provided on a product-by-product basis. This lends to the process an inherent bias towards products produced by large and well-organized firms that can adhere to the administrative requirements associated with ITAC applications, which can reduce overall competitiveness. These industries tend to be further upstream while downstream industries (which are often less concentrated and more dynamic) tend to have less participation in the process. It is also important for ITAC to take Competition Commission findings into consideration when making their assessments. ITAC should be capacitated so that it conducts broader value chain analysis of the impacts of submissions and is proactive in addressing the current biases of trade policy. Although ITAC is able to initiate investigations, the information required for the initiation of an investigation is still provided by industry. As such, it is imperative to consider what support can be given to small companies in unorganised industries which need assistance collecting the data required to initiate an investigation. ITAC also conducts some impact assessments to evaluate the effect its interventions have on industry. However, these cannot be conducted widely and comprehensively due to limited resources.

Following the initial release of this paper the dti and the Presidency have embarked on a reimagined industrial policy aligned to some of the proposals in this paper. The reimagined industrial policy is not the development of a new industrial policy action plan, but rather a process allowing for the use of existing policy levers in a more coordinated way to derive maximum impact. This involves a shift towards a regional and global value chain approach to industrial policy, anchored by masterplans in key priority sectors developed together with the private sector and unions. [Note: This is an extract from Chapter 7, Implementing focused and flexible industry and trade policy, in the National Treasury report Economic transformation, inclusive growth, and competitiveness: A contribution towards a growth agenda for the South African economy (pdf). See also Chapter 8: Promoting export competitiveness and harnessing regional growth opportunities]

South Africa: September 2019 trade surplus  (SARS)

The South African Revenue Service yesterday released trade statistics for September 2019 which recorded a trade surplus of R5.16bn.  The year-to-date (1 January - 30 September)  trade surplus of R2.51bn is an improvement from the R1.76bn surplus for the comparable period in 2018. Exports decreased by 2.2% year-on-year whilst imports for the same period showed a decrease of 9.8%. August 2019’s trade surplus was revised downwards by R2.30bn from the previous month’s preliminary surplus of R6.84bn billion to a revised surplus of R4.54 billion as a result of ongoing Vouchers of Correction.  

South Africa: Task force to tackle illicit cross-border flows, tax evasion. National Treasury has set up a Financial Action Task Force in an effort to curb illicit cross‐border flows and tax evasion. Delivering the 2019 Mid-Term Budget Policy Statement in Parliament on Wednesday, Finance Minister Tito Mboweni said the task force will review government’s approach in dealing with money laundering. “Steps are also being taken to strengthen cooperation between the Financial Intelligence Centre, the South African Reserve Bank and SARS,” the Minister said. To promote investment and reduce unnecessary, burdensome approvals, Mboweni said the Reserve Bank will propose a more modern, transparent and risk‐based approvals framework for cross‐border flows.

Related:  The South African Revenue Service is investigating criminal syndicates operating in the scrap metal, fuel and gold industries and responsible for value-added tax and customs fraud estimated at “tens of billions of rand” a year, the tax commissioner said on Thursday. “In terms of the total fraud our estimate is it runs into tens of billions of rands, if you take the scrap metal, if you take the oil majors, if you take the cigarette industries,” commissioner Edward Kieswetter told Reuters. Kieswetter did not mention any companies or intermediaries involved, but said it affected the entire value chain.

Mombasa seaport stakeholders agree on measures to address illegal wildlife trade (TRAFFIC)

Recognising the urgent need for action against illegal wildlife trade, 76 port and maritime supply chain representatives from 12 countries convened last week to agree measures to address wildlife trafficking through Mombasa seaport. Specific actions discussed included enhancement of inter-agency, inter-sectoral and international collaboration, cargo risk profiling, policy enforcement and prosecution capacity, as well as information and intelligence exchange to curtail wildlife crime. Participants identified key gaps and opportunities in the port management systems to prevent, detect and intercept illegal wildlife products and determined next steps. The port of Mombasa is the largest seaport in Africa and is a key exit point for trafficking of African wildlife. Drew McVey, East Africa Wildlife Crime Technical Advisor for WWF-Kenya: “It is not enough to stop poaching in our country if we are on a transit route for the rest of Africa. To do this takes co-operation between various government agencies, the private sector and other stakeholders.”

UNCTAD and partners make progress on measuring illicit financial flows: Addis meeting summary

UNCTAD’s head of statistics and information, Steve MacFeely, and UNODC’s chief of research and trend analysis, Angela Me, presented the inter-agency work done so far at the 10th meeting of the Inter-Agency and Expert Group on SDG indicators on 22 October in Addis Ababa.  They stressed three important features of their approach: Disaggregated and modular, Country-level, Compatible.  MacFeely and Me also stressed that UNCTAD, UNECA and UNODC have undertaken a wide consultation, including two expert group meetings, that comprised academics, private sector, NGO and international organization experts. They also explained how a task force comprising the three UN agencies as well as the IMF, Eurostat, the OECD and national statistical offices from Europe, Latin America, Asia and Africa have worked to develop and refine the methodology. This work was also presented at the International Statistical Institute World Congress in Kuala Lumpur, in August 2019, and will be presented at the IMF statistical committee meeting in Washington in November 2019. The next steps are the development of training modules, followed by pilot testing in Latin America, African (and later Asian) volunteer countries. [Note:  Documents from the Addis meeting can be accessed here]

Rwanda protests mineral traceability scheme (New Times)

Rwanda has said that the ITSCI programme, an international scheme designed to regulate minerals mined from the Central African region, is expensive, unnecessary and prohibitive for miners. Rwanda is subject to what is known as Section 1502 of the US Dodd-Frank Wall Street Reform and Consumer Protection Act, which covers tin, tantalum, tungsten and gold, all of which are produced in large quantities in the country. It is also a party to the International Conference on the Great Lakes Region (ICGLR) and the Organisation for Economic Co-operation and Development (OECD) due diligence guidelines. “We continue to argue that the cost of traceability and due diligence must be reduced to make it affordable and fair,” Francis Gatare, the Chief Executive Officer of Rwanda Mines, Petroleum and Gas Board (RMB), told participants at a mining forum taking place in Kigali. “It’s a reason why we have tried as a country to attract other competing instruments.”

Nigeria: Private sector mulls measures to overcome AfCFTA constraints (ThisDay)

Members of the Organised Private Sector (OPS) have stated that a lot still needs to be done to enable Nigerian manufacturers to maximise the benefits offered by the AfCFTA agreement. The OPS clarified that Nigeria lacked the capacity to compete with small African countries that serve as an outpost for highly industrialised economies to penetrate and subjugate the Nigerian economy in spite of its status as the biggest economy in Africa. They enjoined the government to ensure that goods coming into the country from neighbouring countries in the name of AfCFTA are truly made in Africa. Laying the groundwork yesterday for the discussion to prepare the Nigerian private sector to grasp the proper understanding of the details of the AfCFTA’s agreement (such as the Rules of origin, protocol of trade in goods and services, dispute resolution) at the AfCFTA Dialogue Series organized by the Nigerian Association of Chamber of Commerce, Industry, Mines and Agriculture (NACCIMA) in collaboration with Deloitte, the Director-General of the Manufacturers Association of Nigeria, Mr Segun Ajayi-Kadiri urged members of OPS to make their businesses competitive enough in order to benefit from the opportunities will derive from AFCFTA.

Towards a customized Trade Map tool for the West African region (ITC)

The International Trade Centre has initiated preliminary discussions with ECOWAS to launch a customized Trade Map tool for the West African region. The trade information tool will serve as a key resource for business owners seeking to identify potential business partners in the region. Through an ECOWAS trade portal, Trade map users will review up-to-date trade statistics, an outline of applicable regional tariffs and existing public tenders available in the region. “The installation of the Trade Map tool is a significant first step towards achieving ITC’s larger mandate of providing comprehensive trade data and intelligence for the entire continent through the Africa Trade Observatory as tasked by the African Union. Direct access to this tool will give West African MSMEs valuable data to pursue their strategic business objectives including for intra-African trade,” said Ashish Shah, ITC Director of Division of Country Programmes.  In addition to the Trade Map, ITC is also expanding the use of its Trade Alert Obstacles Mechanism tool, which is already implemented in the francophone West African region of UEMOA. The alert tool tracks trade barriers at a national and regional level for SMEs and MSMEs.

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Today's Quick Links:

Trump scraps AGOA trade benefits for Cameroon over rights abuses

South Africa: Portfolio Committee on Trade and Industry approves the SACUM-UK Economic Partnership Agreement

African Union: Building Africa Energy Database for the Industrial Sector

Uganda says its economy 11% larger after rebasing

Africa Beijing + 25 review report

Joint WHO, WIPO, WTO technical symposium on cutting-edge health technologies