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tralac’s Daily News Selection

tralac’s Daily News Selection

04 Nov 2019

Starting tomorrow, in Johannesburg: UNCTAD’s Empowerment Programme for Southern African National Transit Coordinators.  Event objectives include training representatives of Botswana, Eswatini, Lesotho, Malawi, Namibia, South Africa and Zambia on transit coordination and the role of transit coordinators, as per Article 11 of the WTO Trade Facilitation Committee.

A reminder that the 11th African Private Sector Forum starts on Wednesday in Antananarivo.  And the launch of two major reports at a side event tomorrow: The 2019 Africa’s Development Dynamics report and Domestic Resource Mobilization: a fight against corruption and illicit financial flows

David Pilling: The 'Uber of trucks' shakes up freight transport across Africa  (Financial Times)

Lori Systems was established in Kenya in 2016 by co-founders from South Africa and Togo to simplify the fragmented and notoriously inefficient trucking industry. Lori, which is inevitably most often described as the “Uber of trucks”, prefers to call itself “a logistics co-ordination platform”. Whichever way it is described, the company acts as a matchmaker between people who own trucks, and companies that want to shift cargo, such as Lafarge, Unilever, Olam or Maersk. Lori is not the only such company in Africa.

Second Tripartite Sectoral Ministerial Committee on Infrastructure: outcomes

Ministers responsible for infrastructure from the tripartite group (COMESA, EAC, SADC) have called for the speedy implementation of regional infrastructure programmes in energy, transport and ICT sectors to accelerating economic integration. This was after reviewing the status of implementation of these key programmes during the  Second Tripartite Sectoral Ministerial Committee on Infrastructure in Lusaka on Thursday.  The meeting was a follow up to the first one held in Dar es Salaam on 26 October 2017.  Ministers noted the need to facilitate the development of a more competitive, integrated and liberalised regional road transport market in the Tripartite region, under the supervision of the Tripartite Transport and Transit Facilitation Programme.  So far, two multilateral agreements, namely the Vehicle Load Management Agreement and the Multilateral Cross Border Road Transport Agreement, have been developed and validated to support an envisioned harmonized legal framework in the Tripartite region. Sixteen Member/Partner States (Angola, Burundi, Egypt, Eswatini, Ethiopia, Kenya, Lesotho, Malawi, Mozambique, Rwanda, South Africa, Sudan, Tanzania, Zambia, Zimbabwe) participated in the Lusaka meeting.  [COMESA, TMEA sign MoU  to promote trade]

13th Steering Committee Meeting of the Abidjan-Lagos Corridor Highway Development Project: outcomes

The ministers in charge of road infrastructure from Benin, Cote d’Ivoire, Ghana, Nigeria and Togo have applauded the steady progress in the execution of the feasibility and detailed engineering design studies for the Abidjan-Lagos Corridor Highway feasibility study. They also commended the injection of an additional $16m from the AfDB and the EU to bridge the funding gap for the technical preparatory studies and establishment of the Corridor Management Authority. Among others, the Ministers urged the ECOWAS Commission to strengthen their monitoring of consultants in the execution of respective contracts for the feasibility and detailed engineering studies.  They also called on Consultants to ensure adequate consultations with all related authorities and stakeholders at the national levels on critical issues such as alignment definition, national development plans as well as social and environmental impacts of their proposals before concluding draft reports for submission to ECOWAS. [Related:  Ghana’s VP demands formation of Abidjan-Lagos Corridor Authority]

Nigeria: Businesses express support for FG’s extension of border closure to Jan 2020 (ThisDay)

Business leaders and other stakeholders have expressed support for the decision by the federal government to extend the closure of all the country’s land borders to its neighbours to 31 January 2020. The Nigerian Association of Chamber of Commerce, Industry, Mines and Agriculture and the Manufacturers Association of Nigeria  commended the federal government, saying it is an indication that the government has the progress of Nigerian business community at heart.  In line with the president’s new order, the land borders will now be reopened on 31 January 2020, sealing the expectations of industrialists in the West African region, who were hopeful that the Nigerian government would reopen the borders on or before Christmas. This is coming as the Nigerian Customs Service yesterday said the 31 January date, which was contained in what it described as a leaked memo is not the terminal date for the border closure. NCS’s Public Relations Officer, Mr Joseph Attah, said the 31 January date was just for this phase of the operation:  “Please note that the internal memo is referring to the end of this phase of the joint security Exercise Swift Response and not a terminal date for the partial border closure. Security operation of this kind is usually in phases. The partial border closure will continue until the set objectives are achieved."

However, the Lagos Chamber of Commerce and Industry viewed the entire closure of the border and its anticipated reopening in an entirely different manner. The chamber, in a statement by its Director General, Mr Muda Yusuf, said it, however, appreciated concerns of government regarding security and economic sabotage which informed the action. “But the demands of sacrifice imposed on business and the citizens by the border closure is disproportionate and becoming unbearable. The effect is perhaps more pronounced in the south western part of the country being the financial and commercial hub of the country and the sub-region. This has grave consequences for investments and jobs.  Many industries have invested in products registered under the ECOWAS Trade Liberalisation scheme.  These are investors whose business models were anchored on market opportunities in the ECOWAS. These investments have been completely disrupted and dislocated. Majority of the victims of the border closure are small businesses, most of them in the informal sector.  Their means of livelihood has been put in great jeopardy. This class of traders does not have the capacity to move their products by sea because of the modest scale of their operations. Supply chain of some business has been completely disrupted. Maritime sector investors have been denied opportunities offered by transit cargo destined for landlocked countries which normally comes through the Nigerian ports. The closure has triggered an unprecedented hike in prices with a devastating impact on the poor.  This implies further aggravation of the poverty situation in the country.”  [Why unmonitored borders, fuel subsidy are harmful to Nigerian economy: transcript of interview with the Matrix Group CEO]

You won’t prosper closing your borders: IMANI Africa's Franklin Cudjoe to Nigeria (GhanaWeb)

The President of Policy think tank, IMANI Africa, Franklin Cudjoe has observed Nigeria’s decision to shut its border with Benin, ostensibly to prevent goods it produces from entering the country, will not make Nigeria prosper in any way but rather make matters worse for them. He has stated that the closure of borders for reasons of import substitution does not work but rather leads to inefficiency and a rise in the cost of production. He has, therefore, cautioned the government of Ghana to resist the temptation to also close its borders.

“There is an assumption that Nigeria will automatically become prosperous by closing its borders to other markets, in furtherance of the age-old but discredited policy of import substitution. Some are urging Ghana and others to do same. But lessons must be learnt from the mistakes of others who took that path. In the 1950s and 1960s, governments of many countries in Africa and Latin America erected trade barriers. The plan was to enable the industries of their countries to grow, “protected” from outside competition. What actually happened was the opposite. Although the industries in these “protected” countries grew for a short period, the lack of competition meant that their industries became inefficient and fell behind the rest of the world. Also, because imports were very expensive or even unavailable, their costs of production rose as they were stuck using old technologies. Soon these “protected” industries were producing goods that few people wanted, exports fell and, in many cases, the industries – usually run by friends of the president – had to be subsidised by the state in order to keep them afloat."

Kenya-Uganda to upgrade third border point (Daily Monitor)

The Uganda Revenue Authority says Kenya and Uganda have resolved to upgrade the Suam border point to ease pressure on Malaba and Busia. Addressing leaders in Mbale, James Malinzi, the URA regional customs manager eastern Uganda, said this is part of the support the Japanese International Cooperation Agency is giving URA to develop capacity to control borders. Kenya and Uganda share a long border stretching from Lake Victoria to Karamoja and River Nile. However, the most commonly used borders are Malaba and the recently upgraded Busia One Stop Border Point, which controls 80 per cent of the goods that enter Uganda, Burundi and DR Congo. The Suam border post is expected to ease pressure on the two border points.

Unlocking Africa’s $100bn public-finance opportunity (McKinsey)

Yet, as this paper shows, African governments have more scope than is often assumed to mobilize domestic resources for their own development and improve efficiencies in public spending. Several pioneering governments have already achieved big gains in revenue collection through tax-system reform, while others have delivered significant budgetary savings in areas such as public procurement and capital expenditure. Each of these countries has delivered annual revenue improvements of between $1bn and $5bn, or budgetary savings of at least 5% of total budget, or both. McKinsey’s analysis shows that programs to enhance tax and tariff-collection performance have the potential to deliver between $45bn and $65bn in additional annual tax and customs collection across Africa within three years (see Exhibit). That translates into additional revenues of between 2%  and 3% of GDP—without changes to tax rates or trade tariffs. In addition, programs to improve public-spending efficiency have the potential to deliver between $40bn and $60bn a year from expense efficiencies, such as implementing leaner capital expenditure practices, revamping procurement procedures, and eliminating “ghost” workers. Those savings represent between 8% and 12% of the aggregate budgets of African governments. [The authors: Acha Leke, Yaw Agyenim-Boateng, Francisco Mendes, Aurelien Vincent]

Financing for development: International development cooperation and interrelated systemic issues (UNCTAD Secretariat Note)

Extract: Private donations- a drop in the bucket? (pdf). Philanthropy has increasingly attracted attention. While this represented 1.9% of ODA in 2009, it increased to 3.7% of ODA in 2017. According to OECD data, private foundations provided $13.9bn for development from 2015 to 2017 (figure 6).  In specific sectors, the relative size of philanthropic funds makes them a crucial source of funding. These private resources appear to target social issues more than other private international flows, with philanthropic activities toward the Sustainable Development Goals focused mainly on general health and education (62% of the total), followed by agriculture, forestry and fishing (9%), and government and civil society (8%). Africa is the main beneficiary region of philanthropic giving (28% of the total), followed by Asia (17%), Latin America (8%) and Europe (2%).  Figure 7 shows that lower-middle-income countries and the least developed countries have been the main recipients of philanthropic flows.   [Note: This document was prepared for the Intergovernmental Group of Experts on Financing for Development, third session, starting today in Geneva]

2nd EAC Joint Ministerial, Development Partners and Investors’ Roundtable on Investment in Health: communique

We, the Ministers responsible for Health in the EAC partner states in collaboration with investors, development partners, private sector and civil society organizations’ leaders, assembled here in Nairobi (1 November) resolve to (extracts):

Explore and implement innovative financing mechanisms to increase domestic resources for health in Partner States

Continue to support the strengthening of EAC regional capacities for infrastructure and human resources development for the prevention, preparedness, response and recovery from epidemic prone infectious diseases

Support mechanisms geared towards strengthening health professional regulatory bodies to ensure availability and performance of qualified and skilled workforce for the delivery of quality health care services;

Strengthen the capacities of National Medicines Regulatory Authorities to improve access to quality, efficacious and affordable medicines in Partner States in line with the EAC decision.

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