Building capacity to help Africa trade better

tralac’s Daily News Selection


tralac’s Daily News Selection

tralac’s Daily News Selection

2019 Visa Openness Index Report (AfDB, AU)

For the first time, African travellers have liberal access to over half the continent, the 2019 Africa Visa Openness Index published by the AUC and the African Development Bank, reveals. The report was launched today on the sidelines of the Africa Investment Forum, which opened in Johannesburg. The progress on visa openness in Africa follows growing momentum for greater integration between countries and signals that policymakers across the continent are pushing reforms, making it easier for African businessmen and women, investors, students and tourists to travel. This fourth edition of the Index shows that 47 countries improved or maintained their visa openness scores in 2019.

The 2019 top performers on visa openness rank among the top countries for foreign direct investment in Africa, and benefit from strong levels of growth, including in tourism. The Index shows that Seychelles and Benin remain the top two countries on visa openness in Africa, with their visa-free policy for all African visitors. Ethiopia moved up a record 32 places on the Index and entered the top 20 most visa-open countries in Africa. The Visa Openness Index has inspired reforms in more than 10 African countries including Ghana, Benin, Tunisia, Ethiopia and Kenya, unlocking tremendous potential for the promotion of intra-regional tourism, trade and investments.

Average visa openness: Africans do not need a visa to travel to 25% of other African countries (also 25% in 2018, and up from 22% in 2017 and 20% in 2016); Africans can get visas on arrival in 26% of other African countries (up from 24% in 2018 and 2017 and 25% in 2016); Africans need visas to travel to 49% of other African countries (down from 51% in 2018 and 54% in 2017, and 55% in 2016)

eVisas: The number of countries offering eVisas increased by 31% in 2019, with 21 countries now hosting an online platform. Two-thirds of countries that offer eVisas also made the most progress on visa openness since 2016, with the majority having recently introduced the system.

Regional integration: 12 out of the top 20 countries have signed the Protocol on Free Movement of Persons. 10 out of the top 20 countries have ratified the African Continental Free Trade Area. Nine out of the top 20 countries have signed the Single African Air Transport Market.

Profiled case study: Ethiopia moved into the top 20 countries, rising a record 32 places since the 2018 edition of the Africa Visa Openness Index, and multiplying its score by 14 with 96% liberal access. Another driver for the country’s policy to relax its visa regime has been to promote fresh economic opportunities linked to the travel and tourism industry, including in the hospitality and conference sectors. This is being supported by the high volumes of transit traffic passing through Bole International Airport on premier national carrier Ethiopian Airlines, which was identified as a leading Africa-to-Africa investment business champion by the AfDB. As a result, in the last year, the country’s travel and tourism economy witnessed the largest growth of any country worldwide according to the World Travel & Tourism Council. Growing by a record 48.6% in 2018, the sector makes up 9.4% of Ethiopia’s total economy.

The 2019 Africa Investment Forum opened today in Johannesburg: The opening ceremony was attended by President Cyril Ramaphosa of South Africa; President Nana Akufo Addo of Ghana; President Paul Kagame of Rwanda; and Prime Minister Agostinho do Rosario of Mozambique. “The time is now to move with speed to ensure that we unlock our potential…Indeed our continent is ripe for investments, but more importantly, it is also brimming with enormous profitable opportunities,” President Ramaphosa said in his address, as he urged investors to move beyond pledges. “As the investor community, your presence here shows your unwavering will to help us and support us to succeed. I invite you, therefore, to join us as we pass the flickering torch of progress across every border of this great continent until the light of development and economic prosperity illuminates every African village, every African town, every African city, in every African household.” he said.

AIF2019: Opening remarks by AfDB’s Dr Akinwumi A. Adesina. Africa is rising — and Africa is shining! This is a new, more confident Africa. A continent now aware of its place in the world, and determined to be a global investment haven. Economic growth rates are encouraging. This year, 37 countries in Africa experienced growth rates of 3% and above. And guess what? Six of the 10 fastest growing regions of the world are in Africa. Commodity prices are recovering. Foreign direct investments in Africa increased in 2018 by 11%, compared to 4% in Asia, and a decline of 13%, globally. So, Africa is doing well on investments, but it still needs a lot more! Africa is ready to absorb a lot more of those investments. The risk perceptions of the continent, while high, are often exaggerated. And they do not match what data shows on risk and return performance on investments. Consider this for a moment: The Moody’s Investor Service on project finance bank loans between 1983 and 2016, shows that Africa has one of the lowest project default rates in the world; much lower than Latin America, Asia, Eastern Europe, North America and Oceania. Yet, investments are tilted to the regions with the much higher default rates. So, it is not about real risks. It is all about perceived risks.

African oil states offer new deals to lure more selective investors (Reuters)

Lower prices and increasing competition for investment are driving many African states to make it easier and cheaper for overseas companies to keep their oil and gas output flowing. From Ghana to Gabon, governments are adjusting terms to lure picky investors who are also increasingly concerned about long-term demand for fossil fuels as renewable energy gains ground. The shift follows declining oil production in Angola and Cameroon and disappointing bid rounds in Ghana. It also marks an recognition that the era of $100 per barrel oil is over. “Because of increased competition for investment in Africa, we are changing our strategy,” Mohammed Amin Adam, Ghana’s deputy minister for petroleum, said at last week’s Africa Oil Week in Cape Town. Ghana’s Adam was not alone in announcing plans to revise oil and gas licensing laws in an effort to spur output.

In Kimberley, the world’s diamond capital, illicit mining fight flounders (Reuters)

The first South African project to bring illegal miners into the formal fold has been plagued by violence in diamond capital Kimberley, dealing a major blow to national efforts to stem a booming illicit trade. The project was launched 18 months ago in Kimberley, the site of a 19th-century diamond rush that lured fortune-seekers from the world over. Mine owners granted more than 800 unlicensed, or informal, small-scale miners the right to legally mine around 1,500 acres of diamond-rich waste fields. The aim of the government-backed scheme was to curb illegal mining and black-market trade of diamonds, and serve as a blueprint for future attempts elsewhere in the country, not only in the diamond sector, but also potentially manganese, gold and chrome. However the project has been hit by violence, with informal miners not included in the scheme attacking infrastructure and even members of the newly licensed cooperative, according to mine owner Ekapa Minerals which is running the initiative. Asked whether he was pleased with the results of the Ekapa project, minerals minister Gwede Mantashe told Reuters: “I’m not. We will have to assign somebody to work on it.” He did not elaborate on what would have to be done, adding only: “I am not happy because it (informal mining) must be in the mainstream of mining, it must not be in the periphery.” The project’s troubles also demonstrate the perils of piecemeal formalisation in a country whose regulation of small-scale mining lags far behind its African counterparts.

New ITC handbooks guide Chinese investors through sustainable investment in Africa

With more than 10,000 Chinese-owned firms now operating in Africa and an estimated 12% of Africa’s industrial production (valued at $500bn a year) handled by Chinese firms, China has become a major investor in Africa. To maximize sustainable growth for Chinese-owned businesses in Africa, the International Trade Centre has launched four sustainable investment handbooks at the China International Import Expo in Shanghai. These country-specific handbooks on Sustainable investment in agroprocessing and light manufacturing guide Chinese investors through compliance with environmental and social sustainability requirements and voluntary standards in Kenya (pdf), Mozambique (pdf) and Zambia (pdf). “Foreign investment in agroprocessing and light manufacturing can unlock opportunities to increase exports to regional and global markets, while contributing to the country’s development agenda” said ITC Executive Director Arancha González. “To do so, investors need to implement more sustainable environmental and labour practices, aligned with the United Nations Sustainable Development Goals.”

East Africa Law Society Annual Conference: speech by President Kagame

I want to emphasise that your voices are very much needed to keep the integration agenda on track. Indeed, the survival of our East African Community depends on professionals like you. You are uniquely positioned to advocate for the benefits of fully implementing the integration agenda. You are also called upon to hold governments accountable for respecting the common rights enjoyed by East African citizens, throughout our Community. Lawyers should constantly be in the trenches defending these rights and freedoms, without apology. To deepen the economic integration agenda, which includes trade in services, qualified lawyers should be able to practice anywhere in the East African Community, removing unnecessary barriers. Let us work together to sign and implement the Mutual Recognition Agreement without further delay. This should be a win for all of us in the region and also serve as an example for other regulated professions.

Can EAC capital markets learn from SADC model? (The East African)

The Southern African Development Community integrated stock markets offer good lessons for the East African Community as it seeks to integrate its stock exchanges via a suitable interconnectivity window. This was laid bare at a meeting of capital markets experts held in Kampala recently. The SADC operates a shared model that makes it possible to procure affordable digital operating platforms and reasonable sharing of commissions between stockbrokers. According to Paul Bwiso, the chief executive officer of the Uganda Securities Exchange; “Our stock markets are in different stages of development and this makes system integration more difficult than expected. “While Uganda and Tanzania’s stock exchanges appear more compatible with each other based on results of trades done in the past, Rwanda’s stock exchange shares a CDS platform with the central bank in a very entrenched arrangement. Kenya’s securities exchange operates an internal CDS platform separate from that of the central bank while Burundi is yet to establish an exchange. Due to divergent technological factors, the integration of the local stock market trading platforms across East Africa has been pushed to first quarter of 2020. But finding consensus on a trading revenue sharing ratio remains one of the biggest obstacles facing the stock market integration agenda.”

Today’s Quick Links:

The WTO’s Keith Rockwell on his organisation, Trump, Brexit and Africa’s free trade area

Ghana now imports flowers from SA: Osafo Maafo laments high importation rate

Nigerian traders beg Akufo-Addo, Buhari for help

Investment case for LNG imports into South Africa to be completed by year-end

Reuters: Moody’s cuts global sovereign rating outlook to “negative” for 2020

Multimedia: Moody’s Alastair Wilson explains how the increasingly antagonistic global political environment


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