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tralac’s Daily News Selection

tralac’s Daily News Selection

12 Feb 2020

Posted by the AU: 2nd biennial review report on the implementation of the Malabo Declaration

AfCFTA: How prepared is Africa for July 1st? (CNBC Africa)

The Commissioner for Trade and Industry at the African Union, Albert Muchanga, says the union is ready for the commencement of trade under the African Continental Free Trade Agreement on the first of July this year. While speaking to CNBC Africa’s Godfrey Mutizwa, Muchanga added that the union is almost done with its work on the rules of origin. They discussed this and more on the sidelines of the 33rd African Union Summit.

BUSA president congratulates Wamkele Mene on election as AfCFTA secretary-general (IOL)

Business Unity South Africa president Sipho Pityana has congratulated Wamkele Mene on his election as the first Secretary-General of the AfCFTA: “We are confident that Mene has what it takes to ensure rapid implementation of the AfCFTA, and to maximise the opportunities it presents. This is a significant appointment for South Africa and the continent, and it is particularly notable that it takes place during the same AU session at which President Cyril Ramaphosa took over the chairmanship of the AU. Organised business knows Mene well and we are sure he will be able to ensure the seamless implementation of AfCFTA.”

Online course: Making the AFCFTA work (ECA/IDEP)

This self-paced course will be delivered from 24 February to 5 April 2020. The course will be moderated asynchronously on a weekly basis and participants are required to participate in the weekly on-line discussions. In addition, each module has interactive lessons that provide the core content around the topic for that module. The lessons are designed in a way that learners are also able to self-assess their understanding through built-in quizzes. Additional resources such as bibliographies, web links and optional readings are provided for participants who wish to deepen their knowledge of the course topic.

Third Africa Business Forum: update (UNECA)

Speaking during the opening session, ECA Executive Secretary, Vera Songwe, said; “One of the reasons we cannot silence the guns in Africa is because there are no jobs for the youth. There is no energy to power job creation. We can silence the guns if the right investments are made into our energy and ICT sectors, including strengthening our health systems in partnership with the private sector. If we cannot ensure Africa has the energy it needs then 2030 is really a distant dream. We need to do more and we need to do it faster.” She said Africa should make clean energy investments now: “Ambitious climate action can deliver a US$26 trillion boost to the global economy between now and 2030. If we enter into the new climate economy, we can create 20 million jobs for the continent. Right now we need 13 million jobs every year.”

One year on: Companies to Inspire Africa 2019 (London Stock Exchange Group)

This report is a follow-up to London Stock Exchange Group’s ‘Companies to Inspire Africa 2019’ report and seeks to highlight key activities of the nominated companies from 31 January 2019 to 31 October 2019. All market data and information was obtained from publicly available sources such as the companies’ respective websites, and has not been independently verified by PwC, Asoko Insight or London Stock Exchange Group. There are 360 companies from 32 different countries across the continent represented in this report, boasting an incredibly impressive average compound annual growth rate of 46%, up from 16% last year. On average, each firm employs over 350 people, with an average compound annual employee growth rate of 25%.

A diverse range of industry sectors feature, painting an encouraging picture of the future of the African economy. Consumer Services, Industry and Agriculture are the three biggest sectors, between them making up over 50% of the companies featured. Technology & Telecoms, and Financial Services together represent over 25% of firms, while Healthcare & Education and Renewable Energy also feature strongly. It is also very encouraging that 23% of the senior executives of the companies featured are female, a near doubling from 12% in last year’s report. Extract (pdf):

Specifically, in the past year, 41 of the featured companies grew organically; this included increasing capacity in their existing market, moving into new geographies, introducing new product lines, or diversifying. Consumer services, and technology and telecoms were the leading sectors in organic growth. This was predominantly achieved through the development of new products and by accessing new markets. The pan-Africanisation of companies operating in the private sector is a stepping-stone towards market integration and development. Organisations entering new markets, while growing, in terms of revenues and brand recognition, are likely to bring new products and services, along with employment and sector development. There are, however, significant challenges in undertaking this route: understanding and adapting to specific market conditions, whether in a new market or a new sector, and developing cross-border or cross-sector partnerships becomes crucial to mitigate the risks of accessing new markets.

More from the cup: Better returns for East African coffee farmers (ITC)

East Africa produces some of the world’s most valuable specialty coffees, yet farmers in the region pocket only a minuscule share of the profits. Farmers could grab a bigger piece of the pie by participating in higher-value activities that add value to their crop, says a new report by the International Trade Centre. More than 90% of coffee is exported as a raw or ‘green’ beans, and developing countries handle most of the transformation that adds value, according to the report launched at the African Fine Coffees Conference and Exhibition in Mombasa. ‘Looking at the international value chain that delivers the “$5 cup of coffee,” less than 1% of the price remains in the hands of the men and women who cultivated the crop,’ writes ITC Acting Executive Director Dorothy Tembo in the report. ‘Almost all value is created after the farm gate. Even allowing for the expected returns of the retailer, enough value should be generated to allow farmers a greater share of the global earnings.’ On the ‘premiumization’ of African coffee (pdf):

All East African origins sell part of their coffee as specialty, because of its intrinsic high quality. While a greater proportion of the fully washed and bolder bean coffees from Ethiopia, Kenya and Rwanda fit into this category, some Arabica coffees from Uganda, the United Republic of Tanzania and Burundi can also command huge premiums over the prevailing benchmark indicator prices. The ‘premiumization’ of much of African coffee is highlighted in the 2019 Specialty Coffee Transaction Guide, which puts the median FOB price at $3.23/pound (lb), far above the 2018 average ICO composite indicator benchmark price of $1.09/lb.38

Africa’s Urbanisation Dynamics 2020: Africapolis, mapping a new urban geography (Sahel and West Africa Club)

Africa is projected to have the fastest urban growth rate in the world: by 2050, Africa’s cities will be home to an additional 950 million people. Much of this growth is taking place in small and medium-sized towns. Africa’s urban transition offers great opportunities but it also poses significant challenges. Urban agglomerations are developing most often without the benefit of policies or investments able to meet these challenges. Urban planning and management are therefore key development issues. Understanding urbanisation, its drivers, dynamics and impacts is essential for designing targeted, inclusive and forward-looking policies at local, national and continental levels.

This report, based on the Africapolis geo-spatial database (www.africapolis.org) covering 7 600 urban agglomerations in 50 African countries, provides detailed analyses of major African urbanisation dynamics placed within historical, environmental and political contexts. Covering the entire distribution of the urban network — from small towns and secondary cities to large metropolitan regions — it develops more inclusive and targeted policy options that integrate local, national and regional scales of urban development in line with African realities.

South Africa: OSBPs, Border Management Authority Bill briefing by Minister of Home Affairs (GCIS)

“The Beit Bridge Border Post is one of six large land ports of entry which we have identified for infrastructure development. These land ports of entry have high traveller and trade volumes. It is important to develop these ports of entry to reflect our commitment to easing the movement of people and goods through the ports. The ports will be developed in partnership with the private sector through public private partnerships and with our neighbouring countries. The partnership with our neighbouring countries centres on creating One Stop Border Posts. Just this past Friday, I had a fruitful meeting at the Kopfontein border post with my counterpart from Botswana on the One Stop Border Post and other immigration issues of mutual interest. I have already held successful meetings at our various border posts with my counterparts from the Kingdom of Eswatini (Oshoek border post), Lesotho (Maseru border\post) and Mozambique (Lebombo border post). The Master Plan for the development of Beit Bridge has been finalised and we are in the process of appointing a service provider. When we implement the Border Management Authority in phases, we will prioritize Beit Bridge as one of the areas where we will start implementation. Hence, Beit Bridge shall have two programmes running more or less at the same time, that is, the One Stop Border Post and Border Management Authority.” [Related: Government planning six, one-stop border posts]

Nigeria in a New Decade: Priority for accelerated growth, job creation and poverty reduction (Nigerian Economic Summit Group)

To step up the inclusive growth narrative, our Macroeconomic Outlook for 2020 takes a deep-dive approach to fixing Nigeria’s poverty problem through accelerated economic growth and job creation as a precursor to inclusive economic growth. Part I of the report reviews the Nigerian economy in 2019 and provides an outlook for 2020, which will be influenced by several events and policies such as the VAT increase, implementation of the AfCFTA agreement, movement in global oil prices, US-China trade wars, loan-to-deposit ratio and insurance companies’ recapitalisation, etc. Part II of the report examines how Nigeria can create significant number of jobs in the medium to long term to lift millions out of poverty. The following broad recommendations are crucial in ensuring significant growth in job creation. #5: Implement regulation that supports business growth (pdf):

To deliver broad-based economic growth that addresses the priorities of job creation and poverty reduction, there needs to be a fundamental shift in the thinking of the Nigerian government’s role in the business environment. Government (at different levels) and its agencies must truly act as “enablers” in the business environment rather than creating hurdles for businesses through fierce regulations and numerous charges. The motivation and incentives for business and industry regulators such as Nigeria Customs Service, NAFDAC, SON, among others, need to be re-engineered to focus on efficient and effective service delivery to their immediate stakeholders, in a simplified and easily accessible manner. This proposition is based on the premise that quality, clear and business-friendly regulation, are key in removing business hurdles across sectors and are germane to the expansion of existing businesses as well as to the growth of new businesses across the country. [The Africa Report: Buhari and Ouattara make Eco heart of regional power struggle]


IATA’s global, African data for 2019 passenger traffic, air freight demand:

  1. Slower but steady growth in 2019 for passenger traffic. The International Air Transport Association announced full-year global passenger traffic results for 2019 showing that demand (revenue passenger kilometers or RPKs) rose by 4.2% compared to the full year of 2018. The 2019 result is a slowdown compared to 2018’s annual growth of 7.3% and marked the first year since the global financial crisis in 2009 with passenger demand below the long-term trend of around 5.5% annual growth. African airlines led all regions with a 5.0% demand increase, down from 6.3% growth recorded for 2018. Capacity rose 4.5%, and load factor edged up 0.3 percentage point to 71.3%. Airlines in the region benefitted from a generally supportive economic backdrop in 2019 as well as increases in air transport connectivity.

  2. 2019 worst year for air freight demand since 2009. All markets except Africa suffered volume declines in 2019. Asia-Pacific retained the largest share of FTKs, at 34.6%. The share of freight traffic increased modestly for both North America and Europe, to 24.2% and 23.7%, respectively. Middle East carriers’ traffic share held steady at 13%. Africa and Latin America saw their shares lift marginally, to 1.8% and 2.8%. African carriers’ saw freight demand increase by 10.3% in December 2019, compared to the same month in 2018. This was reflected in the strong 2019 full-year performance, which saw Africa freight volumes expand 7.4%. Capacity in December grew by 10% and for 2019 in total, increased by 13.3%. Over the year, air cargo volumes have been supported by strong capacity growth and investment linkages with Asia.

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This post has been sourced on behalf of tralac and disseminated to enhance trade policy knowledge and debate. It is distributed to recipients across Africa and internationally, serving in the AU, RECs, national government trade departments and research and development agencies.

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