tralac’s Daily News Selection
Call for papers: Harnessing intra-COMESA trade through the interface with the African Continental Free Trade Area. Selected papers will be peer reviewed and considered for publication in the COMESA flagship publication “Key issues in Regional Integration”, Volume IX.
DG Azevêdo: “To modernize the WTO, we will need vision and determination” (WTO)
I have been saying this since the first day I took office in 2013: that the system has to deliver more and deliver quicker. Its rules must cover more aspects of cross-border economic activity. And we have been doing just this. The trade facilitation agreement concluded in 2013 is a boost to global transactions that could lift trade by over one trillion dollars. In 2015, members agreed to eliminate agricultural export subsidies, removing a major distortion in farm trade. That same year, a group of about 50 members agreed to expand the plurilateral Information Technology Agreement, cutting tariffs on $1.3 trillion worth of touch screens, new-generation microchips, GPS equipment and other infotech products that didn’t exist back in 1996. These were important changes, but they are not enough. We need to go further. Unless we do, grey areas in trade rules will keep expanding. They will become fodder for tensions. In fact, some of the unconventional policies and bilateral arrangements we see today might never have arisen had we done more to update the system. The impasse on dispute settlement is a case in point. Many members, not only the United States, were dissatisfied with different aspects of how the Appellate Body was operating. It is my hope that members will use the current crisis to produce an improved two-step appeals process. [Note: Address at the Washington International Trade Association Conference, 4 February]
Validation workshop for Sierra Leone’s national trade strategy: Repositioning trade for the AfCFTA (UNECA)
The national trade strategy of Sierra Leone is anchored around implementing the AfCFTA as a means for repositioning Sierra Leone’s trade away from an overdependence on iron and other mining products, towards more diversified goods and services. The strategy has four components: AfCFTA, trade support, industry development, and institutional capacity building. Mr David Luke, coordinator of the African Trade Policy Centre of ECA, told the workshop (4 February): “The entire economy of Sierra Leone amounts to $3.7bn. And yet, as part of ECOWAS, Sierra Leone is on the doorstep of more than a $700bn economy with 350 million people. And within Africa, it has access to an economy of 1.3 billion people worth $2.5 trillion in GDP.” Mr. Luke further stated that for Sierra Leone to take advantage of these markets, among many others, the regulatory framework needs greater predictability, better mechanisms for dialogue with the private sector should be in place and trade-related infrastructure needs to be improved.
Protectionism mars progress on Africa-wide free trade area (Global Trade Review)
According to risk consultancy firm EXX Africa, however, hostilities and restrictions on exports in some African countries continue to present issues that are holding up progress. “The highly diverse continent is not immune to global trends of nationalism and protectionism, as exhibited by recurrent anti-immigrant violence in South Africa, trade restrictions in East Africa, and economically harmful border closures in Nigeria,” it says in a report published in January. Robert Besseling, executive director of EXX Africa, says those trends are “by far the greatest threat to AfCFTA implementation”. Extract from the EXX Africa report:
Moreover, the AfCFTA will always be vulnerable to the unilateral actions of sovereign member states that go against the ethos of the agreement. This was demonstrated last year when Nigeria decided to block imports of a long list of products from neighbouring Benin, Niger, and Cameroon—including foods such as live poultry, pork, beef, refined vegetable oils and fats, and sugar, as well as many other items ranging from medications to used cars. It is worth noting that Nigeria did not formally notify its regional partners of its restrictions as required by ECOWAS trade rules at the time, and its actions therefore contravened an agreement that guarantees free movement between the 15 ECOWAS members. Similar actions under the AfCFTA are not unlikely, as border closures and delays are common during elections, unexpected changes in power, security crises, or even as a result of poor bilateral relations. In 2019, closures were also witnessed between Rwanda and Uganda, Ethiopia and Eritrea, Sudan and Chad, and Mozambique and South Africa, demonstrating the prevalence of such actions across the continent
TFTA Agreement update: Botswana deposits Tripartite FTA ratification instruments
Botswana has deposited the instruments of Ratification for the COMESA-EAC-SADC Tripartite Free Trade Area bringing the number of countries that have done so to eight. The other countries that have ratified and deposited their instruments are Burundi, Kenya, Egypt, Rwanda, Uganda, South Africa, and Namibia. The ceremony took place in Lusaka, at the COMESA Secretariat on 30 January 2020. Ms Chileshe Mpundu Kapwepwe (Comesa Secretary General): “All Annexes to the Agreement have been finalized , 93.4% of the rules of origin have been agreed on, and the exchange of tariff offers is near complete. More critically, negotiations between SACU and EAC have now been concluded and this will pave way for the commencement of trade between the two bloc to which Botswana belongs.”
COMESA Simplified Trade Regime update: Malawi, Zimbabwe review common list products
The governments of Malawi and Zimbabwe have reviewed and added products to their Common List which will be traded between the two countries using the COMESA Simplified Trade Regime (STR). Each country is now expected to have the List gazetted by 28 February 2020. This was agreed during a bilateral meeting between the two countries held in Mponela, Malawi in November 2019. COMESA Secretariat, through the Cross-Border Trade Initiative, was part of the meeting.
The January 2013 African Union Summit adopted Agenda 2063 – “The Africa We Want” – as Africa’s blueprint and master plan for sustainable development and economic growth of the continent. This report is a consolidation and evidence-based assessment of country and regional-level progress reports on Agenda 2063, complemented with interventions and results achieved at the regional and continental level. This is the first continental-level report that has been compiled from reports received from 31 African Union Member States, covering 56% of the continent, and six Regional Economic Communities. The report presents an analysis of the aggregate status of progress made against the targets stipulated in the First Ten- Year Implementation Plan, taking into consideration that the continental plan has so-far been implemented over six years.
At the regional level, East Africa recorded the highest performance in five out of the seven aspirations in Agenda 2063 First Ten Year Implementation Plan with an aggregate score of 40% against the 2019 targets. The aggregate performance of West Africa stood at 34%, while the aggregate performance of North Africa stood at 27%. Southern and Central Africa both recorded an aggregate score of 25% against the 2019 targets.
Profiled recommendation: There will be need for more sensitisation on Agenda 2063 and its added value to country and regional development efforts. Further efforts should be made towards deepening domestication and mainstreaming of the continental development agenda into planning, budgeting and implementation at national, regional and continental levels. It will be important to anchor Agenda 2063 within existing country and regional institutional mechanisms with designated focal points for improved domestication, coordination, implementation and reporting on Agenda 2063. Institutionalising evidence-based reporting on Agenda 2063 among all AU Member States, RECs and AU continental-level bodies is thus required to review progress on a biennial basis. On this note, it is recommended that AUC, AUDA-NEPAD and other relevant bodies strengthen the capacities of Member States and RECs in data collection, data analysis and reporting on Agenda 2063.
Note: A dashboard showcasing the findings of the above report is available online on the AUDA-NEPAD website. The dashboard showcases the quantitative data on the progress made by AU member states in the implementation of Agenda 2063 and the Sustainable Development Goals 2030.
PIDA PAP2 training workshop: update (AU)
In his opening remarks, the Head of Information Society division at the AUC, Mr Moctar Yedaly, emphasized the need for unceasing commitment to see the PIDA PAP2 through the validation of Specialised Technical Committee in October, 2020 and its adoption by the Heads of State in January, 2021. “We have new projects to select taking into consideration what has been achieved and what we have yet to do,” he highlighted. The task force intends to build upon the experiences and lessons learned from PIDA PAP1 projects to lay the groundwork for PIDA PAP2. The Task force members will train experts from Member States and RECs during regional workshops.
Moving into the second phase of PIDA, member states and RECs must first identify priority projects so that ultimately the projects reflect the needs of the main stakeholders. Member states will propose their projects to RECs, who are required to fill out specific forms requesting key information to screen projects with the guidance of the task force before submitting it for review. Once the project identification is complete, the task force will analyze, score and screen the proposed projects according to the eligibility and project selection criteria. While the eligibility criteria focuses on regional integration, the project selection criteria concentrates on inclusiveness and sustainability with regard to gender sensitivity, rural connectivity and environmental friendliness. The project selection criteria also weighs the economic and financial impact of projects in terms of job creation, economic impact, bankability, smart/innovative approaches, and corridor planning. Fifty total projects will be picked by the end of the process, ten projects per region and at least one project by sector. The screening tool, based on inputs by the taskforce, will generate a weighted overall score to measure a project’s ability to respond to the Integrated Corridor Approach for the selection.
Newly appointed Transnet group CEO Portia Derby told delegates at the Investing in African Mining Indaba on Wednesday that the state-owned rail freight company’s mission to establish itself on the African continent would yield benefits for the economy of South Africa and other African nations. Derby said the establishment of Transnet International Holdings – a subsidiary of Transnet Group – in 2018 was a critical part of investing in the revival of the South African economy and the further industrialisation of countries on the rest of the continent. Transnet International Holdings’ key projects include a rail revitalisation programme in Ghana and the North South Rail Corridor, which connects rail networks among Southern African states. Derby said Transnet needed to take the lead in establishing South Africa as a key investor on the African continent, mentioning that the South African economy reaps little benefit from the $104bn in Chinese exports the continent receives. “If you look at the exports to the continent from China, they are substantial, but in terms of logistics, South Africa gets little of that. There is absolutely no reason why we can’t be the queens of trans-shipment,” said Derby.
Morocco’s trade deficit expanded by 1.5% to 209 billion dirhams ($21.6 bln) in 2019 compared with a year earlier, the foreign exchange regulator said on Wednesday. Total imports rose 2% to 491 billion dirhams, outstripping exports of 282 billion dirhams, which were 2.4% higher, the regulator said in its monthly report. Energy imports, including gas and oil, dropped 7.2% to 76.4 billion dirhams, or 15.6% of total imports. The automotive sector continued to top Morocco’s exports at 27.3% of all sales standing at 77.1 billion dirhams, up 6.6%. Agri-food exports grew 4.1% to 60 billion dirhams, while phosphates and by products dropped 5.9% to 50 billion dirhams due mainly to lower fertilizer sales. Remittances from Moroccans living abroad, which are important to Morocco’s hard currency flow, were stable at 64.8 billion dirhams. Foreign direct investment dropped 46.8% to 18.1 billion dirhams.
Witney Schneidman: Can an investment summit save Trump’s Africa policy? (Brookings)
Unfortunately, apart from convening business meetings in Kenya and Tunisia, the Trump administration has yet to transform this good idea into an effective policy instrument. Bureaucratic turf-fighting over where Prosper Africa should be housed—State, Commerce, USAID, the new DFC, or none of the above—has hampered the rollout. The initiative’s leadership remains unresolved: The interim leader does not even appear on the website. Nor does a board, staff, or any point of contact. It is not yet clear how the 16 U.S. government agencies that make up Prosper Africa can work as a unified entity to help US companies compete in Africa.
Many American companies rely on some form of partnership with the US government as key to mitigating risk and doing business in Africa. This comes in many forms: advocacy from Washington or an embassy, resources from the DFC, or export financing from the newly re-authorized U.S. Export-Import Bank, to name a few. A fully functioning Prosper Africa and a fully funded DFC are essential to deepening US-Africa commercial ties. A US-Africa investment conference would be vital as well. While commercial supports are essential to spurring more US investment in Africa, so is a coordinated diplomatic, commercial, and security strategy. An integrated and forward-looking policy toward the continent will not emerge until the most senior leaders in the administration determine that Africa is a priority region for the United States.