News
tralac’s Daily News selection: 22 July 2015
The selection: Wednesday, 22 July
Featured commentary: Nexit - will Namibia be able to sustain rand parity? (The Namibian)
Irrespective of what policy measures the government chooses to impose to deal with the unsustainable trade imbalance, it is slowly running out of both foreign exchange reserves and time. The time for government to act is now before the reserves fall to what is often seen as a critical minimum i.e. approximately four weeks import cover. While four weeks is still enough to cover imports, it is commonly seen as the point at which investors will see the writing on the wall for the Namibian dollar - rand parity and start to move ever more foreign exchange out of the country. This exit of financial capital will only hasten a crisis. Unless the optimistic and benign approach is taken then after five years of increasing trade deficits it is time to act and use both fiscal restraint as well as tax policy to assure that we do not have a 'Nexit'- an exit from Namibian dollar parity with the rand and a devaluation of the Namibian dollar. [The author: Roman Grynberg]
Govt gets 15% in diamond deal (The Namibian)
The Namibian government and De Beers company have agreed on a new 10-year sales agreement but the deal falls short of what the government was demanding. Last month, Cabinet said it wanted up to 30% of rough diamonds produced by Namdeb Holdings, to be supplied to local factories under the new sales agreement. Namdeb, which has land and sea operations, is owned 50/50 by the government and De Beers.
BoN sets daily limits for kwanza exchange at border towns (The Namibian)
A BIT far? Geography, investment agreements, and FDI (World Bank Blogs)
Despite hard times at home, emerging market multinationals (EMMs) continue their impressive rise in the global marketplace. In 2014, outward foreign direct investment (FDI) by developing and emerging economies increased by 23 percent, reaching a record level of $468 billion or 35 percent of global FDI flows. In little more than a decade, emerging market firms like India’s Tata Group, South Africa’s SABMiller, and China’s Haier, have established operations around the world, becoming global leaders in their respective products.
Yet, the fast and far-reaching geographic spread of these global giants is not the norm among this particular brand of multinationals. Our recent book “New Voices in Investment” where we surveyed over 700 firms from four emerging economies – Brazil, India, Korea, and South Africa—shows that, in fact, a large majority of EMMs look primarily within their regions when deciding where to invest. Although 40 percent of respondents claimed that market size and business opportunities were the main factors influencing their location decisions, their revealed preference seems to be for closer destinations. How does geography affect the investment decisions of emerging market multinationals? [The authors: Gonzalo Varela, Laura Gomez-Mera]
Is Africa’s growth sustainable in the face of climate change? (ICTSD)
So while GDP growth is laudable, its conversion to poverty reduction for the Base of Pyramid (BoP) has not always occurred. Consequently, African growth has not always been inclusive, and its long-run sustainability is therefore brought into question. Two critical concerns about Africa’s growth and future outlook are addressed in this article. Can the agriculture sector contribute toward enhancing inclusive growth and job creation on the continent? Considering the overriding threat of climate change to Africa’s growth, what is the continent’s likely position at the UN climate meeting this December in Paris, France? [The authors: Richard Munang, Robert Mgendi]
Africa: Sendai Framework starts moving (PreventionWeb)
First half of 2015 ‘hottest six months on record'- UN (WMO)
The objectives of this paper are, first, to identify how susceptible are the EAC economies to asymmetric shocks; second, to assess the value of the exchange rate as a shock absorber for these countries; and third, to review adjustment mechanisms that would help ensure a successful experience under a common currency-EAC. While the analysis draws on recent experience, backward-looking measures are imperfect for a forward-looking assessment. The paper thus also draws attention to likely further structural changes in the EAC economies (for example, large oil discoveries in some countries) as well as the intrinsic endogeneity of further integration to the currency union project itself. The paper main findings are as follows: [Download]
Integrating West African economies PPP-wise (World Bank Blogs)
What do Benin, Niger, Guinea-Bissau, Togo and Mali have in common? Apart from being members of the eight-country strong West African Economic and Monetary Union , they share a common status as low-income countries, faced with huge infrastructure needs and financing challenges. Furthermore, they have decided that one way to address these challenges and sustain their economic growth was to promote public-private partnerships through a regional framework and strategy. The issues we covered included the need to: [The author: Francois Bergere]
Over the past two days, we have had robust debate on matters close to our respective nations and how they affect our region. Politics, defence and security matters shape the development trajectory of our region. It is therefore imperative that we meet annually to take stock of the progress we are making, and if needs be re-adjust our strategies and goals, to address the security challenges of our times. While there have been remarkable developments in some areas where the region has experienced political and security challenges, there needs to be ongoing political and security engagement within the region.
Promoting peace, security and sustainable development in East Africa: GPF conference (IPPMedia)
Africa and the First Conference of States Parties to the Arms Trade Treaty: an update (ISS)
Feasibility study on the navigability of Shire-Zambezi Waterways (SADC)
From 14th to 17th July, 2015, the 14th meeting of the Joint Technical Committee (JTC) was held, at the SADC-Secretariat Headquarters in Gaborone, Botswana. The purpose of the meeting included: validating the navigability and technical investigations, transport economics and market surveys, environmental and social impact analysis, components of the Draft Final Study Report...
SADC China infrastructure investment seminar (SADC)
The main focus of the seminar (held in Beijing) was to showcase priority infrastructure projects contained in the Short Term Action Plan (STAP) 2012-2017 and in particular those in the Energy, Transport and Water Sectors. The objective of the Conference was to bring to the table, a number of bankable projects and those under preparation for consideration and possible funding. The estimated cost of the projects in the Five-Year Plan is about USD 64 billion, and it is expected that private sector will play its key role by financing some of these key projects. The Seminar was attended by major Chinese business community and other International Cooperating Partners, Investors, and Business Organizations.
Kaberuka shares his experiences with African diplomats in Beijing (AfDB)
China-Africa Entrepreneurs Forum in Pretoria: speech by Ambassador Tian Xuejun (MFA, China)
Expect more investors from China, World’s largest bank tells Kenya (Daily Nation)
3AGT: AUC, NEPAD charged on alternative sources of funding (Vanguard)
The African Union Commission and the NEPAD Planning and Coordinating Agency have been urged to facilitate the mobilisation of investment finances required for the operationalization of the Malabo Declaration on Accelerated African Agriculture Growth and Transformation (3AGT). The call was made by participants at the just concluded two-day Leadership Retreat for engagement with Permanent Secretaries /Heads of Ministries of Agriculture in AU Member States held in Nairobi, Kenya.
In a communiqué issued at the end of the retreat, the participants underscored the urgency of reviewing National Agricultural Investment Plans to align them and recommended the strengthening of CAADP activity coordination within countries to give greater impetus to the implementation of the Malabo Commitments. The Retreat also called upon Member States, that have not already done so, to fast track the development ofNational Agriculture Implementation Plans.
The updated and expanded 2015 edition of the Trade Capacity-Building Resource Guide includes profiles of 31 multilateral agencies and 37 bilateral donors. The trade-related services of 31 countries from the OECD and 16 G20 countries, some of which are also OECD members, are also reflected in the Guide. The Guide reveals that many of the OECD Development Assistance Committee (DAC) members support triangular cooperation, and other DAC members are considering introducing such support. All developing countries included in the Guide mention active participation in South-South cooperation, with Argentina, Brazil, China, Indonesia, Mexico and the Russian Federation being particularly engaged. The Guide highlights how both multilateral agencies and bilateral donors encourage and support South-South and triangular cooperation, and provides examples of projects and services for almost all multilateral and regional agencies.
Making USAID fit for purpose: a proposal for a top-to-bottom program review (Center for Global Development)
Kenya Budget 2015 guide and analysis (IEA)
UNCTAD and TradeMark East Africa strengthen collaboration
Egypt: Trade Ministry considers website for businessmen eyeing Africa (State Information Service)
Charles Brewer: 'Trade integration key to reduce poverty and support Africa’s growth' (New Times)
World Bank Group at the WTO's 5th Global Review of Aid for Trade
Pacific ACP seeks to conclude 11 years negotiation with EU (Matangi)
Work moves ahead on TPP trade pact, but nations still divided over deal (Pew Research Center)
Nigeria: World Bank to spend $2.1bn to rebuild North-east (Vanguard)
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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 over 300 recipients across Africa and internationally, serving in the AU, RECS, national government trade departments and research and development agencies. Your feedback is most welcome. Any suggestions that our recipients might have of items for inclusion are most welcome. Richard Humphries (Email: This email address is being protected from spambots. You need JavaScript enabled to view it.; Twitter: @richardhumphri1)
