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 | Simone D. McCourtie

Mainstreaming gender in key e-commerce policy areas: possible lessons for AfCFTA (CUTS)

In particular, the study aims to: (i) outline key policy areas for the promotion of e-commerce, where gender mainstreaming has an important role to play; (ii) analyse how these policy areas can impact gender inclusiveness in e-commerce; and (iii) identify good practices for mainstreaming gender in continental, regional and national strategies, policies and frameworks in relation to ecommerce; and (iv) highlight best practices of implemented programmes and projects at the national and regional levels that maximise participation by women and women-owned enterprises in cross-border e-commerce.

West African ministers propose phased re-opening of borders (Reuters Africa)

West African government ministers have proposed re-opening borders between their countries in the first half of July and allowing in travellers from other countries with low or controlled levels of coronavirus spread by the end of July. The new proposal, contained in an ECOWAS summary of a virtual meeting last week of foreign ministers and trade ministers, called for coordinated efforts to re-open cross-border trade that has been crippled by coronavirus restrictions.

It said a first phase consisting of opening up domestic air and land transport should be implemented this month. Many governments in the region have already begun to do so. A second phase, involving the opening of land, air and maritime borders within the region, should happen by July 15 at the latest. A third phase, involving the opening of air and land borders to “countries with low and controlled levels of COVID-19 contamination rates”, should occur by July 31 but will depend on the evolution of the pandemic, the report said. [ECOWAS Ministers validate reports on ease of business and coronavirus control]

East Africa: EU signs Sh602 million deal to fund safe trade (Business Daily)

Efforts to speed up cargo movement in the region received a major boost Tuesday after the European Union signed a deal with the Trademark East Africa to fund safe clearance at the ports and border points. Under the Sh602 million (€5m) emergency trade programme, mobile testing labs will be provided at Mombasa port and key border crossings, including Busia and Malaba. The programme to be rolled out under public-private partnership will also provide personal protective equipment to port and border point workers to cushion them from Covid-19 spreading at these trade hubs. “This (fund) grant is very important and will complement the government’s efforts that ultimately cushion not only large enterprises but especially also the MSME who rely greatly on the flow of supply chains as most cannot maintain large inventories,” said Trade Secretary Betty Maina.

Tanzania, Kenya agree to end cross-border trade spat (The Citizen)

Tanzania and Kenya have reached an agreement that will see to them facilitating free movement of goods across their common border, the Covid-19 pandemic notwithstanding. The two countries will now conduct coronavirus testing for truck crews at their common border, a departure from the May agreement whereby testing was to be done at the point of departure. Longido District Commissioner Frank Mwaisumbe yesterday said that leaders have resolved that Tanzanian truck crews crossing the Namanga border to Kenya would now be tested by Kenyan authorities - and vice versa. The new agreement was reached after a meeting that involved Arusha Regional Com-missioner Mrisho Gambo, Tanzania Revenue Authority officials and some senior officials from Kenya. He said that, under the new arrangements, truck crews will be allowed to proceed with their journey even without having received their Covid-19 test results. “While returning, they would pick up their results - and proceed home. In short, they would no longer be denied entry into either country due to Covid-19 test results. They will, however, be required to take all precautions against Covid-19,” he said. [Kenya: Trucks backlog at borders to be cleared in a week’s time – CS]

Benchmarking Madagascar’s Free Zone Competitiveness (World Bank)

The Government of Mauritius is implementing a bilateral Special Economic Zone program under the Mauritius-Africa Fund (MAF) which was established in February 2014 as a public company, with the Mauritian government as the sole shareholder. The immediate focus of the MAF is to develop SEZs in select sub Saharan African countries under a government-to-government cooperation framework to further regional integration and South-South cooperation while promoting quality investments into SSA. Facing increasing costs and the loss of preferential trade arrangements, Mauritian firms are seeking to offshore the more labor-intensive segments of the textile and apparel value chains to countries such as Madagascar where Mauritian firms have traditionally made significant investments. One of MAF’s current SEZ projects is in Madagascar where they have partnered with the Government of Madagascar (GoM) for the development and operation of a portion of the proposed Moramanga Textile City/Zone. This technical note (pdf) is in response to a request from both the MAF/Government of Mauritius and the EDBM/GoM for:

  • an update of the current status of the SEZ regime in Madagascar i.e. policy, legal, regulatory and institutional framework and current proposals being considered by the GoM as well as opportunities for improvement

  • benchmarking Madagascar’s main competitors in the global textile and apparel markets (such as Bangladesh, Ethiopia and Kenya) and comparing their SEZ regimes for textile/garment zones to identify competitiveness strengths and weaknesses and lessons learned, and

  • outline opportunities for successful development of the proposed zone for consideration by both the GoM and the MAF/Government of Mauritius.

The following short-term recommendations are proposed for the consideration of both the MAF/Government of Mauritius and the GoM as they move forward with the joint venture agreement and the planning process for the Moramanga Textile City Zone (Figure 3: Recommendations for a new SEZ Regime for Madagascar).

Textile firms want Kenya’s ban on second-hand clothes maintained (The East African)

The local textile industry in Kenya is pushing the government to make the temporary ban on second-hand clothes permanent in order to revive the collapsing domestic apparel sector. The Kenya Bureau of Standards imposed the ban in March as a precautionary measure to prevent the spread of the coronavirus. However, Betty Maina Cabinet Secretary in the Ministry of Industry, Trade and Co-operatives said the ban was temporary and would be lifted when the pandemic was over. The Leather Apex Society of Kenya is among organisations that want the government to permanently lock out the cheap clothes imports and say the country has an opportunity to re-awaken the local sector. “It is important for Kenya to induce demand for locally-finished products by keeping the ban on second-hand imports,” said the lobby group. After several failed attempts occasioned by threats of retaliation by the US — a major source country — the government is now considering a prolonged ban.

Lesetja Kganyago: The SARB the coronavirus shock and the age of magic money (SA Reserve Bank)

Frankly, rather than 1929 repeating itself, I am more worried about a different scenario. As a country, we have got ourselves into a lot of trouble. We are struggling to learn the lessons of these mistakes, and to achieve the consensus to fix them. And we are running out of time. We have just completed our worst growth decade on record – worse than the 1980s or the 1990s. On a per capita basis, South Africans have been getting poorer since 2013. In the world, we are slipping backwards. In 1960, South African incomes were around 26% of those in the US. They are now down to 13%. They were 128% of Brazil’s in 1960, a country to which we are often compared; they are now down to 65%. Rather, we risk following Argentina’s path, where ideological conflicts and unstable macroeconomic policies produced a steady economic decline. In much of the period after 1994, we in South Africa surprised everyone by cooperating despite our differences, and delivering robust and sustainable macroeconomic policies. But those accomplishments have faded. Instead, we now find ourselves sitting on the highest debt pile in our history, arguing about printing money and waving ideological banners at each other. [The author is Governor of the South African Reserve Bank]

Senegal: End-of-Mission statement by IMF team

The COVID-19 pandemic has had a significant impact on economic activity, exacerbated by border closures, a curfew, and social distancing. The GDP growth rate is projected at 1.1% for 2020 compared to 5.3% in 2019. These forecasts are based on the control of the spread of the pandemic, the implementation of measures to support the economy, and a gradual recovery of economic activity during the second half of 2020. The forecasts are nonetheless subject to major downside risks. A comprehensive assessment of the impact of the pandemic on revenue collection and supplementary expenditure requirements raises the estimated budget deficit to 6.1% of GDP in 2020. The authorities have stated their commitment to implementing measures that are temporary, well-targeted, cost-effective, and fully reflected in a revised budget. They intend to return gradually to a budget deficit of 3% of GDP through 2022 (WAEMU convergence criterion) as the crisis abates. The authorities are also committed to taking steps to strengthen transparency and accountability regarding emergency expenditure.

Tanzania: Request for debt relief under the Catastrophe Containment and Relief Trust (IMF)

COVID-19 is having an adverse economic impact on Tanzania, mainly through external channels. These include the collapse of international travel (tourism accounts for 15% of GDP and 35% of export receipts), lower activity in the hospitality and food service sectors, and a slowdown in the economies of the Tanzania’s main trading partners. While there is uncertainty about the extent of the impact (data as of March 2020 do not show a deterioration in economic conditions), these factors will become more prominent in coming months as the tourism high season was expected to begin in June. Moreover, should the number of COVID-19 cases and deaths intensify, the health system will be under severe pressure and more sectors of the economy will be affected. Real GDP growth is expected to fall to about 4% this fiscal year (ending in June) and further decelerate to less than 3% next year compared to the pre-crisis projection of nearly 6%. At present, the baseline macroeconomic projections assume that the health impact is contained and that the economic impact is mainly felt through the external sector with limited implications for the rest of the economy (Tanzania has not, contrary to other countries, imposed a lockdown on the economy). However, given the uncertainties about the effects of the pandemic, downside risks to growth are pronounced. In the baseline, foreign reserves will also be under pressure and are projected to decline by nearly 25% reducing the import coverage from 5.2 months at end-2019/20 to 3.7 months at end-2020/21 (if exceptional financing is not secured to help close the financing gap, the reserve coverage would fall to 3.2 months of imports).

The World Bank’s Board of Executive Directors have approved $250m ($125m grant and $125m credit) in supplemental financing for the ongoing Second Ethiopia Growth and Competitiveness Programmatic Development Policy Financing.

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