News

tralac’s Daily News selection

tralac’s Daily News selection
Photo credit: IRU

24 Jun 2020

UNCTAD’s latest Policy Brief: Making trade agreements work for gender equality - exploring data gaps and availability

SADC Council approves revised regional guidelines to ease cross-border transport operations and standardise operating procedures

The SADC extra-ordinary Council of Ministers Meeting, held virtually on 23 June, has approved the Revised Regional Guidelines on Harmonization and Facilitation of Cross Border Transport Operations across the Region, and Regional Standard Operating Procedures for the Management and Monitoring of Cross Border Road Transport at Designated Points of Entry and Covid-19 Checkpoints. The revision of the Regional Guidelines has been informed by the lessons learnt from the implementation of the original Guidelines which were approved by Council on 6 April 2020, to facilitate harmonisation in the movement of essential goods and services across borders during the COVID-19 Pandemic. The approved guidelines aim to first and foremost, balance, realign, harmonise and coordinate COVID-19 response measures with the requirements for trade and transport facilitation; secondly, to promote safe trade and transport facilitation for economic growth and poverty alleviation in the SADC region; and thirdly, to facilitate the adoption and implementation of harmonised standard operating procedures for management and monitoring of cross border road transport at designated points of entry and COVID-19 checkpoints.

The revised guidelines, will also facilitate the implementation of SMART corridor trip monitoring system for management of the registration of cross border trips through, recording, monitoring and surveillance of driver wellness; tracking of vehicles loads and drivers; contact tracing; queue management; as well as statistical analysis and reporting. [Note: Various downloads available]

SADC Private Sector and Business Associations: Communiqué on COVID-19 trade challenges and post recovery strategies. The Directors of National Private Sector Apex Body and Regional Business Body Associations in the SADC region held an online meeting on 10 June 2020 to discuss the post COVID-19 recovery strategies. The meeting noted that the COVID-19 outbreak in SADC has brought the following challenges on trade:

  • Lack of information on the measures that are being applied by the countries across the corridors affecting the movement of cargo or trade flows.

  • Lack of harmonisation of interventions, measures, and recommendations to COVID-19 at country and regional level.

  • Cargo blockages caused by temporary shutdown of inland ports and seaports. This problem continues despite efforts by different stakeholders to find a permanent solution.

  • Varying and non-standardised COVID-19 testing procedures across different member states resulting in slower processes at border posts.

  • Lack of clear strategy towards movement of essential cargo and the repatriation of citizens with member states in the region.

  • Challenges in the classification of essential commodities i.e. different countries have different classifications.

  • Whilst the NTB reporting and monitoring mechanism is recording some of the challenges being faced by the business during this time, the process of monitoring and resolution usually takes time.

In brief:

  1. SADC Regional Response to COVID-19: Transport and trade facilitation, climate change and the environment

  2. COMESA BC and SADC BC joint position statement: Addressing trade restrictive measures during the covid-19 pandemic (pdf)

  3. Conference on Africa’s Leadership role in COVID-19 Vaccine Development and Access: remarks by AUC chairperson President Cyril Ramaphosa

  4. Coronavirus may trigger debt emergency across Africa: summary of a new study

President Buhari urges caution on ECOWAS common currency (GoN)

President Muhammadu Buhari yesterday cautioned that the ambition for Eco regional currency could be in ‘serious jeopardy,’ unless member states complied with agreed processes of reaching the collective goal. President Buhari also expressed concern over the decision of francophone countries that form the West African Economic and Monetary Union (UEMOA) to replace the CFA Franc with Eco ahead of the rest of Member States. The President delivered Nigeria’s position on the new regional currency at a virtual extraordinary meeting of the Authority of Heads of State and Government of the West African Monetary Zone. The meeting discussed the implementation of the ECOWAS Monetary Cooperation Programme and the ECOWAS Single Currency Agenda. [Gambia remains committed to the ECO: urges member states to do same]

The IMF’s pdf World Economic Outlook Update (June 2020) (656 KB) : A crisis like no other, an uncertain recovery (IMF)

Global growth is projected at –4.9% in 2020, 1.9 percentage points below the April 2020 World Economic Outlook forecast. The COVID-19 pandemic has had a more negative impact on activity in the first half of 2020 than anticipated, and the recovery is projected to be more gradual than previously forecast. In 2021 global growth is projected at 5.4%. Overall, this would leave 2021 GDP some 6½ percentage points lower than in the pre-COVID-19 projections of January 2020. As with the April 2020 WEO projections, there is a higher-than-usual degree of uncertainty around this forecast. Extract: Overall, growth in the group of emerging market and developing economies is forecast at –3.0% in 2020, 2 percentage points below the April 2020 WEO forecast. Growth among low-income developing countries is projected at –1.0% in 2020, some 1.4 percentage points below the April 2020 WEO forecast, although with differences across individual countries. Excluding a few large frontier economies, the remaining group of low-income developing countries is projected to contract by –2.2% in 2020.

ITC’s 2020 SME Competitiveness Outlook: The great lockdown and its impact on small business

The novel coronavirus COVID-19 is having a profound impact on global trade and the businesses that drive it. With countries in various stages of lockdown or loosening confinement periods, it is becoming clear that the virus has particularly impacted SMEs. Released yesterday, the 2020 edition of the International Trade Centre’s 2020 SME Competitiveness Outlook reveals just how profoundly SMEs and global supply chains have been tested by the COVID-19 pandemic and left international trade in turmoil.

While most countries experienced some form of shutdown, the findings in the SME Competitiveness Outlook highlight that it was lockdowns in China, the European Union and the United States that have had the greatest impact on trade. Together these three economies account for 63% of world supply-chain imports and 64% of supply-chain exports. The report estimates that the global disruption of these manufacturing hubs will amount to $126 billion in 2020. This disruption is also having a negative knock-on effect on developing countries. The SME Competitiveness Outlook predicts that African exporters are set to lose more than $2.4 billion in global industrial supply-chain exports as a result of factory shutdowns in China, the EU and the US. The bulk of this loss - more than 70% - is caused by the temporary disruption of the supply-chain linkages with the EU.

Future drivers of growth in Rwanda: Innovation, integration, agglomeration, and competition (World Bank)

Rapid economic growth is Rwanda’s overarching development goal— a strategic choice to anchor its long-term vision. Vision 2050 encapsulates this choice with long-term, income-based goals that aim for upper-middle-income status by 2035 and high-income status by 2050. With this vision, Rwanda has aligned itself with the successful East Asian economies that began their development journey with a similar quest for high growth. The prioritization of long-term growth recognizes an important truth—sustained growth does not just happen, especially in a global landscape marked by forces of technology, trade, and tremendous competition. It requires a combination of leadership, social cohesion, and deep investments in core capabilities—of people, firms, and institutions—to harness the opportunities on offer. The implications of different growth pathways are staggering. At its current pace of growth (4% per capita), Rwanda will barely cross the threshold for lower middle- income status by 2035. At growth of 7% per capita, average income would reach $2,400 (2017 prices). To become an upper-middle-income country by 2035, Rwanda will need to grow at more than 10% per capita. In 2035, the economic landscape of Rwanda could resemble that of present-day Bangladesh or, alternatively, surpass that of today’s Vietnam or even Georgia and Indonesia. Extracts from Chapter 2: Transformation through trade - using exports and regional integration to drive future growth (pdf)

A key focus should be on revising and lowering the common external tariff within the EAC to benefit Rwandan producers and exporters that use imported inputs and poor consumers who disproportionately consume heavily taxed imports. The integrated market can also be extended by promoting harmonized standards in goods and services and by reducing nontariff barriers. For key sectors such as energy and finance, the EAC and SADC should develop regional supply chains that can result in economies of scale. Intra-industry regional trade competition can force firms to larger scale and drive out less productive firms. Finally, Rwanda could advocate for stronger EAC and SADC secretariats that can review and discuss potential violations of common market protocols. The recently agreed AfCFTA, a pan-African initiative to liberalize continental trade, can also be advantageous, once details are penned and implementation modalities agreed to.

Lower policy barriers to services competition and stronger services trade within the region would enhance competitiveness across the EAC. Rwanda should look to broaden value added tax exemptions on services exports by aligning itself with leading African countries such as Mauritius and South Africa. Rwanda would benefit from elevating tourism promotion in a separate, high-visibility strategy that seeks to expand leisure tourism beyond gorillas and to convince tourists to spend more time in Rwanda. In the decades ahead, Rwanda is strategically positioned to take advantage of exports in mining, education, and business services. Realizing these opportunities requires seeking out foreign firms and facilitating near-term services trade for EAC and SADC professionals, which can be strengthened by extending mutual recognition agreements beyond architecture, accounting, and engineering to include, for example, legal, finance, and consulting services. Abolishing limits in work-permit regimes for all eligible professionals is also critical and would help to facilitate services trade for short-term assignments. However, stimulating services exports requires considerable investment in addressing Rwanda’s skills deficit. [Download the overview report (Vol 2) here]


Zambia: Digital Economy Diagnostic Report (World Bank)

This digital economy diagnostic assesses Zambia’s strengths and weaknesses with respect to five pillars that together form the foundation upon which the benefits of digital transformation can be realized. These pillars are digital infrastructure, digital skills, digital entrepreneurship, digital platforms, and digital financial services. This analysis finds that Zambia has made significant strides on its path to digital transformation over the past few years. Progress is particularly evident in digital infrastructure, digital financial services, and digital platforms, while more significant gaps remain in digital skills and digital entrepreneurship. This report suggests that the digital transformation strategy include four strategic thrusts:

  • promoting greater use of digital technologies in the economy

  • reducing government transaction costs and reducing the cost of doing business through digitally optimized government systems

  • improving the adoption of innovative digital solutions by enabling entrepreneurship

  • leveraging data and digital systems to improve sector-specific outcomes in secondary towns and rural areas.

  • Speech by Dr Denny Kalyalya (Governor, Bank of Zambia)


Scaling up disruptive agricultural technologies in Africa (World Bank)

This study — which includes a pilot intervention in Kenya (pdf) — aims to further the state of knowledge about the emerging trend of disruptive agricultural technologies (DATs) in Africa, with a focus on supply-side dynamics. The first part of the study is a stocktaking analysis to assess the number, scope, trend, and characteristics of scalable disruptive technology innovators in agriculture in Africa. From a database of 434 existing DAT operations, the analysis identified 194 as scalable. The second part of the study is a comparative case study of Africa’s two most successful DAT ecosystems in Kenya and Nigeria, which together account for half of Sub-Saharan Africa’s active DATs. The objective of these two case studies is to understand the successes, challenges, and opportunities faced by each country in fostering a conducive innovation ecosystem for scaling up DATs. The case study analysis focuses on six dimensions of the innovation ecosystem in Kenya and Nigeria: finance, regulatory environment, culture, density, human capital, and infrastructure. The third part of the study is based on the interactions and learning from a pilot event to boost the innovation ecosystem in Kenya.