Building capacity to help Africa trade better

tralac’s Daily News selection


tralac’s Daily News selection

tralac’s Daily News selection
Photo credit: World Bank

Buhari nominates Okonjo-Iweala as Nigeria’s candidate for WTO’s DG election (Premium Times)

Nigeria has nominated a former Minister of Finance, Ngozi Okonjo-Iweala, as its candidate for the Director-General of the WTO election coming up next year. President Muhammadu Buhari confirmed the nomination on Thursday in an official announcement through the Nigerian Embassy and Permanent Mission to the AU and UNECA in Addis Ababa. In the diplomatic note to inform all member countries’ embassies and permanent missions, President Buhari said he was communicating Nigeria’s decision to withdraw the candidacy of Yonov Frederick Agah for the election. He did not disclose the reasons for the withdrawal of Mr Agah’s candidature. Mr Agah is currently one of the four deputy directors-general of the WTO. He was first appointed deputy director-general October 1, 2013. He was reappointed for a second four-year term on October 1, 2017. His tenure runs out on October 1, 2021. The President said Mrs Okonjo-Iweala would serve as Nigeria’s candidate for the term 2021-2025 at the elections scheduled for in Geneva, Switzerland in 2021.

Kenya overtakes Angola as third-largest economy in Sub-Sahara Africa (Business Daily)

Kenya has overtaken Angola as the third-largest economy in Sub-Sahara Africa, IMF fresh estimates released Friday has shown. The East Africa’s largest economy, that has been the fourth largest economy in the Sub-Sahara Africa, has surpassed Angola to become third-largest economy in dollar terms. Kenya now is behind Nigeria and South Africa. Bloomberg reports that Angola has contracted every year since 2016 as oil output declined, and the kwanza was devalued in 2019 while Kenya’s shilling held steady. The coronavirus pandemic and restrictions to limit its spread will probably see Angola’s gross domestic product contract 1.4% in 2020, while Kenya’s is projected to grow by one percent, according to the IMF report.

Regional Economic Outlook: Sub-Saharan Africa

Angola cuts oil shipments to China as it seeks debt relief (Reuters)

Angola has cut the number of oil cargoes that it will ship to Chinese state firms to pay down debt to Beijing as it seeks to renegotiate repayment terms to deal with the crippling impact of the coronavirus, three sources familiar with the matter said. Angola said this week it had asked for G20 debt relief and was in advanced talks with some countries importing its oil on adjusting financing facilities, but expects no further debt overhaul to be needed beyond this. The sources said that China’s state-owned Sinochem would receive five cargoes in July, down from the usual seven or eight, while the trading arm of Chinese giant Sinopec called Unipec would receive none. Unipec typically receives two to three cargoes earmarked as debt repayment. Sonangol, Angola’s finance ministry, Sinopec and Sinochem did not immediately respond to requests for comment. China’s foreign ministry said on Wednesday that the relevant departments were in contact with Angola over its request for debt relief.

ECOWAS COVID-19 Ministerial Committee: extracts from the communique

The Ministers were concerned that the epidemic continues to spread in the ECOWAS region, although the Member States are at different stages of evolution. They noted that as at 1 June 2020, 35,115 people had been confirmed to have Covid-19 in the region since the first case on 27 February, of whom 56% still had active infection, 42% had recovered and 2% had unfortunately lost their lives. They observed that, despite the improved surveillance and rapid increase in testing, only about 0.11% of the population had been tested to date. Following presentations by experts and exhaustive discussions, the Ministers agreed (inter alia):

  • Develop a cross-border surveillance and management strategy for use during epidemics. The idea of designated border crossings with enhanced surveillance facilities, trained personnel, and robust data sharing platforms including smartcards should be explored

  • Ensure data driven decisions, particularly when easing lockdown. Ministers agreed that the easing of lockdown which has already started in some Member States should be data-driven, adapted to local context, and implemented gradually; that its effect on the pandemic should be evaluated after a period of about two weeks; and that lockdowns should be reapplied in the event of a resurgence in cases.

  • The Ministers tasked WAHO to work with the Department for Trade, Customs & Free Movement at ECOWAS Commission, and the Ministerial Coordination Committee on Transport, to come out with health-related guidelines and protocols on regional cross-border movement by air, land or sea for consideration by the Ministers.

  • pdf Final Communiqué: COVID-19 Ministerial Coordinating Committee Meeting of ECOWAS - 2 June 2020 (249 KB)

As lockdown fuels food shortages, Africa goes online for groceries (Reuters)

Launched in October 2018 and selling surplus fruits and vegetables from local farms, Fresh in a Box found itself scrambling to add more farmers to its roster to supply the sudden rush of new customers, said co-founder Kudakwashe Musasiwa. He added that it now distributes about 2.6 tonnes of vegetables daily from nearly 2,000 small-scale farmers to customers’ doorsteps. “With COVID-19, something incredible happened. We had to find a way of scaling up really quickly because all of a sudden our demand shot up,” Musasiwa said.

Like Zimbabwe’s Fresh in a Box and the Market Garden app in Uganda, which is connecting women produce vendors to a new wave of online customers, Namibia has also seen a rise in the popularity of online markets under lockdown. A website called Tambula - meaning “take” in the local Oshiwambo language - is described as “an online mall” by its founder Jerobeam Mwedihanga, who launched the site about a week into Namibia’s lockdown, which started in March. “Rental fees in malls are high in Namibia,” said Mwedihanga, 36, an IT engineer, whose site delivers electronics, beverages, furniture and more. “And there are many home-run businesses with no place to showcase their products.”

Selected perspectives on intra-African trade policy issues:

Ibrahim Sagna (Director and Global Head, Advisory and Capital Markets at Afreximbank): ”The opportunities from more integrated and diverse trade across the continent are evident from the benefits already accruing for a select group of trailblazers. In Francophone West Africa, harmonization of currency and regulation has demonstrated what regional co-operation can achieve. Trade hubs like Côte d’Ivoire and Senegal have already emerged (measured as a share of total regional imports). It is however on the Anglophone side that resides the largest trading hub. South Africa alone is the source of about 35% of all intraregional imports in Africa (and about 40% of intraregional manufacturing imports). Size does not always matter. Algeria, Egypt, and Nigeria, which collectively represent about half of Africa’s total GDP, account together for only 11% of continental trade. In contrast, the three leading intra-African exporters in 2015–2017 were Eswatini, Namibia, and Zimbabwe—all three, nations of limited size, but leading Africa in export contributions. Importantly, all three are members of the SADC.”

Stephen Karingi (Regional Integration Division Director at the ECA): “One of the things we have been able to demonstrate empirically is that the AfCFTA has the potential to deepen not only the regional integration of the continent but also to allow us to do more value addition in our production processes. We know what the AfCFTA means for this continent. COVID-19 has exposed that had we implemented the AfCFTA earlier, we would be in a better position than we are now,” he said, adding the ECA’s analytical work had been able to demonstrate the big role that services are going to play in terms of economic development.

Raghav Prasad (Mastercard’s SSA Division President): “Let me put it very simply: in Africa, our biggest competitor is cash. Around 99% of all transactions in Africa are in cash. I could spend all my time thinking about Visa or American Express or I could try to reduce that 99% – come with new ways to expand and digitalize cash. By the way, cash is very expensive. You have to print, store, transport, secure it. We estimate that the cost of cash is around 1.5% of the GDP of an economy. That is where we can make a difference.”

KRA new rules target e-commerce (Business Daily)

The Kenya Revenue Authority is targeting e-commerce platforms with new taxes to fund Sh3 trillion 2020/2021 budget. Under the draft 2020 Value Added Tax (Digital Market Supply) Regulation, downloadable digital contents, subscription based media, software programmes, electronic data management and supply of music, film and games will be taxed. Others include search engines and automated help desk services, online tickets, e-learning platforms, audio, vision or digital media, transport hailing platforms, among others. “A person supplying taxable services through a digital marketplace shall be required to register for VAT in Kenya,” the regulation says. Finance CS Ukur Yatani has mooted plans to tax such digital platforms such as WhatsApp and Facebook as part of effort to meet and fund a budget that is currently facing constraints. Such challenges include infrastructure projects under the Big Four Agenda and reviving an economy.

Effective market access for Least Developed Countries’ services exports: an analysis of the WTO’s services waiver for LDC (UNCTAD)

In 2016 UNCTAD commissioned a study on “LDCs Services Waiver–Operationalized?” The study carried out an in-depth assessment of the preferences offered in the context of the waiver and juxtaposed them with what LDCs had asked for through their Collective Request. This deliberation has now been further developed in the current overview paper (pdf) enriched by findings from the four pilot country studies, namely Cambodia, Nepal, Senegal and Zambia, that accompany this overview. Taking a bottom-up approach, the paper further looks at the waiver notifications from the perspective of four services-exporting LDCs: Cambodia, Nepal, Senegal and Zambia. The four countries examined all are successful services exporters. All four have active, sometimes fast-developing services industries across multiple sectors. A closer look reveals many export stories that may surprise, for example: animation studies in Cambodia and Nepal supplying services to Europe and the USA including Disney; a Nepalese information technology service supplier providing specialized software services for self-driving vehicles worldwide; Senegalese veterinarians providing advisory services in Mode 4 to breeders across West Africa and in some European countries; Zambian insurances covering several African countries through commercial presences (Mode 3) or Cambodian banks opening dozens of branches in regional markets.

Adva Saldinger: Taking stock of the Trump administration’s Africa policy. The Trump administration’s Africa policy has had fits and starts, and while there are some promising developments, several experts told Devex that the framing of Africa policy as part of a US competition with China and others is not winning it friends on the continent.

  • Grant Harris (senior Africa policy adviser to former President Barack Obama): ”There is an enormous problem with how this administration framed Africa policy vis-a-vis China. They framed Africa as a pawn in a great game, as if it’s something to be lost or won, that Africans don’t have agency, and there is no intrinsic value otherwise to strong relations with African states or engaging Africa as an important region of increasing political and economic weight globally.”

  • Aubrey Hruby (senior fellow with the Atlantic Council’s Africa Center): ”What the US has struggled with, especially in this administration, around overarching Africa policy is that it’s very clear what we’re against — the Chinese model — but we don’t always make it extremely clear what we’re for. We still have that need to be clear about what our story is in terms of what is the American offer and vision for Africa policy.”

  • Christopher Maloney (acting assistant administrator for USAID’s Bureau of African Affairs): ”We’re not offering vulnerability to strategic dependence, we really want to make sure that we’re walking with the country along its own unique journey to self-reliance.”

USAID’s ongoing development priorities and COVID-19 assistance response in Africa: Christopher Runyan (USAID senior coordinator for the Bureau for Africa). “The relationship between America and Africa is strong and when it comes to the current COVID-19 crisis, the US government’s response builds on a foundation of decades of support across the continent. The United States has committed more than $60bn over the last 20 years to support public health on the African continent – by far the largest contribution by any donor nation. We’ve trained more than 285,000 healthcare workers and partnered with ministries of health, hospitals, and village health centers across the continent. In Fiscal Year 2019 alone, USAID and the Department of State provided $8.3bn of assistance to 47 countries and eight regional programs in sub-Saharan Africa. This provides us a unique and powerful set of relationships with African country governments, local civil society, and non-governmental organizations, and individual communities who have come to know us and our assistance. Our primary concerns in Africa now are responding to the disease, the food security issues and disruptions in access to food, economic and employment impacts in Africa, and concerns for democratic backsliding, and the loss of progress in other development sectors.”

Dale Aluf: China’s bear hug for the blockchain (Asia Times)

As the world confronts the profound social, economic and political challenges that have emerged in the wake of Covid-19, Beijing has unleashed digital innovations that hold profound implications for the future of international trade, global governance, and geopolitics. On 25 April, in the midst of battling the pandemic, China’s government established the world’s largest blockchain ecosystem, the Blockchain Service Network (BSN), and its central bank introduced “digital yuan” pilot programs across four cities – making the People’s Republic the world’s first major economy to issue a national digital currency. Professor Michael Seung, co-director of the Fintech Research Center at the Fanhai International School of Finance at Fudan University, has called the BSN the “infrastructure of infrastructures,” explaining that the permissionless blockchain ecosystem “allows the vertical integration of cloud computing, 5G communications, industrial IoT, AI and big data, with fintech and other application-level services.”


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