tralac’s Daily News Selection
Recommendations on Enabling Business Environment and Formalization include (pdf):
Given the large share of informal employment in sub-Saharan Africa, policy interventions should avoid severe restrictions and instead target creating enabling business environment for informal traders.
Registration requirements could be relaxed for informal cross-border traders, for example, through initiatives such as the National Cross-border Trade Strategy of Rwanda, which proposes removing the requirement for informal cross-border traders to be formally registered as a business, and setting up facilities at the border where informal traders can register and obtain an identification number (to be used for tracking purposes, not for collecting taxes).
The benefits of formalization should be integrated into any training or awareness-raising initiative to make it attractive for informal cross-border traders, many of whom are women.
National agricultural and manufacturing development strategies should mainstream cross-border trade considerations so that new linkages between domestic production and informal (including small-scale) cross-border trade could be established.
Procurement practices should take into account women’s role as informal cross-border traders and feature more inclusive processes that encourage supplier diversity by sourcing from women-owned businesses. For example, in Zambia, the government has a plan to put in place a gender equality seal for both the public and private sector, aimed at offering opportunities for women-led firms in public procurement processes launched by government and in the private sector.
Recommendations on policy coordination include (pdf):
There is need to strengthen mutual recognition of standards and conformity assessment bodies, and harmonize the characteristics of STRs to help streamline rules and procedures associated with different overlapping trade arrangements to which each country is party (e.g. EAC, SADC, COMESA).
One-stop border posts could be tailored further to meet the needs of cross-border traders, for example, by constructing basic shared facilities, and establishing one-stop window and fast-track clearance systems for small-scale traders.
National policies could be introduced to oversee all initiatives carried out on cross-border trade, and promote coordination among initiatives and entities dealing with cross-border trade.
Relevant gender stakeholders should be added to the list of members of the National Trade Facilitation Committee (NTFC), and trade and gender should be included among topics to be discussed at NTFC meetings.
The second annual retreat of the African Permanent Representatives and the ECA ended in Mahe, Seychelles, late Tuesday following two days of intense dialogue on key development priorities that can lead to accelerated development in Africa. Debate on climate change took centre stage as Ambassadors and ECA experts discussed how the continent, in particular small island developing States , can leverage new technologies and research to mitigate the impact and vulnerabilities they face due to their remoteness, frontline exposure and levels of development. Africa has six SIDS namely Cabo Verde, the Comoros, Guinea-Bissau, Mauritius, Sao Tome and Principe, and Seychelles, all highly dependent on the coastal and marine sectors.
Whilst their economies are faced with exacerbating climate threats, significant potential also exists to develop through the Blue Economy. The retreat, which brought together representatives from 44 member States, discussed a number of important topics including appropriate response to climate issues, the next phase on the implementation of the AfCFTA, how to stem illicit financial flows and the accelerated actions needed if Africa is to deliver the sustainable development goals by 2030.
The ECA on Wednesday announced that it is currently working with more African countries in developing the joint online information project, dubbed “iGuide”, an easy-to-use tool providing potential investors with useful information concerning investment opportunities, costs, and applicable laws and procedures. With a view of supporting investment flows and by jointly working with UNCTAD, the Commission has already launched the iGuide projects in seven countries, including Ethiopia, Nigeria, and Zambia.
The Regional Integration and Trade Director at ECA, Stephen Karingi, said progress has been registered in the area of investment in many African countries though the regional distribution show that FDI is concentrated in a handful countries, including Egypt and South Africa. He underlined the need to change the existing situation by doubling up efforts to attract greater and more qualitative investments flows on the African continent. The director was speaking at the opening of the first meeting of the Committee on private sector, regional integration, trade, infrastructure, industry and technology on the premises of ECA in Ethiopia’s capital Addis Ababa, whereby private sector and digital economy are emphasized to boost regional integration of Africa.
UNCTAD’s Handbook of Statistics 2019: Nowcast shows international trade and global economy cooling down
After a continued surge last year, global trade and economic output have stagnated this year, according to UNCTAD’s nowcast published today in the 2019 Handbook of Statistics. Merchandise trade is predicted to drop by 2.4% to US$19 trillion, after significant growth rates in 2018 (9.7%) and 2017 (10.7%). Trade in services is predicted to only increase by 2.7% to $6 trillion, a considerable deceleration from 7.7% in 2018 and 7.9% in 2017. Real global economic output (gross domestic product) is now expected to grow by 2.3% this year, 0.7 percentage points less than last year. “We see consistency across a range of indicators – the global economy is slowing,” said Steve MacFeely, UNCTAD’s chief statistician.
Last year, world merchandise trade increased by 2.3% in volume terms. The 9.7% increase in values could to a large extent be attributed to changes in prices. For example, fuel prices recorded substantial growth, year-on-year, during all the months of 2018, a trend that was reversed at the beginning of 2019, as UNCTAD’s free market commodity price index shows. Maritime transport lost momentum in 2018. World seaborne trade volumes rose by only 2.7%, compared with 4.7% in 2017, and port container traffic grew by 4.7%, two percentage points less than the year before. Extract (pdf): Different exposure to the upswing in trade. In 2018, transition economies enjoyed a boost in merchandise exports (22.7%), increasing at almost two and a half times the rate of their imports (9.4%). Africa also experienced high exports growth (14.7%), combined with a slightly slower growth of imports (11.6%). In the other economic groups exports and imports increased in line with the world average, varying between 8 and 11%, with imports growing slightly faster than exports.
Gaps, limitations and the way forward: UNCTAD assessment of progress in the implementation of the Vienna Programme of Action for LDCs for 2014-2024
Landlocked developing countries (LLDCs) face a number of unique challenges in their quest for development, partly due to their geographical position, and the structure of their economies. Their lack of direct access to the sea makes them dependent on transit countries to effectively link to global markets. As a result, on average, LLDCs have less trade and incur up to 50% more trade costs, according to a study by the World Bank. Furthermore, 26 of the 32 LLDCs are dependent on primary commodities for more than 60% of their exports, rendering them highly vulnerable to external price shocks, and limiting the impact of trade and growth on employment and poverty reduction.
The dual challenges facing LLDCs (remoteness from the sea and commodity dependence) have an adverse impact on their overall development prospects. 17 of the world’s 32 LLDCs also belong to the category of Least Developed Countries. The present report provides UNCTAD’s assessment (pdf) of the progress achieved by LLDCs at the mid-point of the implementation period of the VPoA in areas within its mandates. It identifies the key challenges ahead, together with policy recommendations for the way forward. A particular focus is placed on Priorities 3 (International Trade and Trade Facilitation) and 5 (Structural Transformation). [Companion UNCTAD analysis: eTrade Readiness Assessments of Land-Locked Developing Countries]
Ghana: Exploring the revenue management and producer pricing mechanism within the cocoa sector (Imani Africa)
Cocoa has played a pivotal role in the economic development of Ghana. It provides employment across the cocoa value chain, serves as an export earner, provides interim liquidity support for the management of the foreign exchange, contributes to growth of the economy and ultimately helps reduce poverty. In spite of these benefits, the sector is bedevilled with challenges such as low yield gap, disease and pest infestation, producer incentivization vis-à-vis government deficit and dissatisfaction from cocoa farmers. Against this background, this report aims to explore the revenue management and producer pricing mechanism within Ghana’s cocoa sector.
Using a mixed methods approach for the core part of the report, a number of tools including, variance analysis, econometric analysis, survey analysis and interviews have been leveraged for analysing the data throughout the study, in answering the core research questions. There are four key objectives of the study (pdf): to understand the current cocoa pricing mechanism; to examine the nexus between cocoa prices and cocoa production in Ghana; to explore the perspectives of stakeholders in the cocoa sector; and to examine the revenue and expenditure management of COCOBOD.
Economic Openness: Ghana case study (Legatum Institute)
The report reveals that Ghana’s overall rank in the Global Index of Economic Openness is 91st. Its strongest performance is in Governance (55th), and weakest in Market Access and Infrastructure (115th).
Ghana’s Market Access and Infrastructure (115th) is improving, but at a slower rate than its peers. While Transport and Import Tariff Barriers have both deteriorated over the past decade, there have been improvements in Communications, Resources, and Border Administration.
Ghana’s Investment Environment (106th) has deteriorated over the last 10 years, although it has seen improvements in Property Rights and the Financing Ecosystem.
Ghana has improved its Enterprise Conditions (69th) since 2009 but not changed its global rank. Its Environment for Business Creation is relatively strong, ranking 53rd in the world, and both Burden of Regulation and Labour Market Flexibility have improved.
Governance (55th) is Ghana’s highest-ranking pillar, putting it among the leaders in Africa and reflecting the strong democratic traditions built up under the 1992 constitution. However, it has seen a decline in Government Integrity and Government Effectiveness over the last decade.
Leading through consensus: South Africa chairs the AU (pdf, ISS)
Nearly 18 years after former president Thabo Mbeki chaired the AU, South Africa is officially taking over at the helm of the pan-African institution in February 2020. South Africa will not only assume the chair of the AU, but it will also assume this position for the African Peer Review Mechanism as well as the Committee of African Heads of State and Government on Climate Change. During its chairship of the AU, South Africa will have a mandate to speak on behalf of the continent. As it will also remain a non-permanent member of the United Nations Security Council, as well as a member of the G20 and the BRICS groupings, South Africa will also be the voice of Africa in those fora. This will give South Africa a formidable platform to take continental priorities forward and align them with its own priorities. This includes boosting its economy and those across the continent through the AfCFTA. South Africa can achieve a lot during its presidency but it has to muster the necessary diplomatic capacity and clout to do so. [The authors: Liesl Louw-Vaudran, Mohamed M Diatta]