The selection: Thursday, 6 August

Sh850bn Suez Canal opens today (Business Daily)

Thousands of regional dignitaries and millions of Egyptians gather Thursday as the country opens its mega maritime infrastructure set to double revenues from international trade. The Sh850 billion second Suez Canal promises to be a catalyst for inter-cementing Egypt’s position in the global trading arena and propelling its centuries old maritime industry. Egypt President Abdel Fattah El Sisi is due to host visitors from all over the world in the opening feat. The new vessel channel will funnel close to 15 per cent of world trade to Egypt and effectively to Africa.

Egypt celebrates new Suez Canal, but real challenges lie ahead (Ahram)

Multimedia: Egypt opens $8.2bn new Suez Canal (Bloomberg)

Infograph: The new Suez Canal in numbers (Ahram)

Willemien Viljoen: 'African economies unable to resist the protectionist impulse' (tralac)

Increased protectionism can lead to unintended consequences for many African economies. Inward-looking policies can have the undesired effect of jeopardising their growth prospects, developmental goals and industrial development. Import products are often an important intermediate input into the manufacturing process, including agro-processing. Increasing the cost of these intermediate products can have negative effects on the cost of production for downstream industries along the value chain, raising the cost of the final product and eroding competitiveness on regional and world markets.

Deep integration in Eastern and Southern Africa: what are the stakes? (Journal of African Economics)

Evidence indicates that trade costs are a much more substantial barrier to trade than tariffs, especially in sub-Saharan Africa. We decompose trade costs into (a) trade facilitation; (b) non-tariff barriers and (c) the costs of business services. We develop a conceptually innovative model and new dataset to assess deep integration to reduce these three types of trade costs in the ‘Tripartite’ Free Trade Area, within the EAC alone and unilaterally by the EAC.

We find that there are substantial gains for all six of our African regions from deep integration in the Tripartite FTA or comparable unilateral reforms by the EAC; but the estimated gains vary considerably across countries and depend on the reform. Thus, countries would have an interest in negotiating for different reforms in different agreements. Tariff removal in the Tripartite FTA would produce only small losses or gains, depending on the country. Interestingly, we estimate that Kenya gains less from comparable unilateral liberalisation by the EAC than from the Tripartite FTA, due in part to an umbrella of protection in services markets in the Tripartite region. [The authors: Edward J. Balistreria, David G. Tarrb, Hidemichi Yonezawac]

TFTA a building block for Continental Free Trade Area (New Era)

Minister of Industrialisation, Trade and SME Development, Immanuel Ngatjizeko, yesterday warned that Namibia needs to increase its industrial capacity to take advantage of the opportunities provided by the TFTA. “Namibia in particular places industrialisation at the centre of its development strategy, hence the need to expand our industrial base is more important now than ever,” said Ngatjizeko during a public seminar on regional and continental economic integration arrangements.

One of the issues still to be agreed upon is the movement of business people within the TFTA. “All signatories to the agreement need to provide unrestricted, yet guided market access for business persons engaged in trade. Negotiations are still ongoing on this protocol and one of the contentious issues is who is to be considered a trader,” explained director of trade in the trade ministry, Benjamin Katjipuka.

Zimbabwe: Govt engages contractor on Beitbridge (Financial Gazette)

The project will encompass upgrading the road network to and from the bridge, installing a perimeter fence and gate control infrastructure; establishing parking areas and a commercial centre as well as building staff accommodation. It will also include setting up a weighbridge, upgrading the communication and security systems; installing lighting systems, computerisation of the border post and construction of a new bridge, among other things. The project will also include measures to strengthen collaboration between the South African Revenue Services and the Zimbabwe Revenue Authority (ZIMRA) by harmonising their customs systems and procedures. ZIMRA's information technology also needs to be upgraded to minimise downtime, which adds to delays in processing documentation.

54 transborder checkpoints spur complaints (GhanaWeb)

Ghana’s security agencies have come under severe criticism from transborder operators for mounting scores of permanent and temporary checkpoints that contravene the ECOWAS convention on transit goods. The transborder operators cited the Tema-Paga route as the most stressful as the security agencies have put up 42 police and 12 customs checkpoints along the route, which is more than the three checkpoints recommended by ECOWAS to be on that stretch of road including checkpoints at the port, the Paga border and final point of destination.

CPIA Africa: Assessing Africa’s policies and institutions (World Bank)

The overall quality of government policies and institutions designed to spur development and reduce poverty in African countries remained steady in 2014, with the greatest progress made in budgetary and financial management, according to a new World Bank review. The latest Country Policy and Institutional Assessment Africa analysis “Assessing Africa’s Policies and Institutions” describes the progress and challenges faced by governments in Africa when strengthening the polices, institutions and programs that help boost sustainable development.

Beneath the flat regional trend, the range of CPIA scores for the region widened. Ten countries experienced a climb in the overall CPIA score. A strengthening of policy reforms boosted Rwanda’s CPIA score to 4.0 and elevated it to the top of the list, just above Cabo Verde’s 3.9 score. Kenya, Senegal, and Tanzania followed closely behind, all with scores of 3.8. Among the countries with gains, Zimbabwe led all with a large 0.4-point increase to 2.7.

Africa Open Data Conference: 2-5 September, Dar es Salaam

AGOA and South Africa: feedback on consultative meeting (AgBiz)

Agbiz attended the AGOA Consultative Meeting on the 31st July 2015 at the dti Campus, in Pretoria. The meeting was chaired by the special Envoy on AGOA, Ambassador Faisil Ismail. The objective of the meeting was to determine how government and industry should proceed regarding South Africa’s out-of-cycle review under AGOA. Four specific issues were discussed, and these included: (i) an update of the AGOA out-of-cycle review (ii) an update on the implementation of the poultry quota, and (iii) an update of the SPS issues on beef, pork and poultry.

Peter Leon: 'Amended bill still takes SA out of step with rest of world' (Business Day)

After a 20-month gestation, the Department of Trade and Industry has finally made good on its promise to revise the Promotion and Protection of Investment Bill, which was originally published for public comment late in 2013. Unfortunately, the bill introduced to Parliament by Trade and Industry Minister Rob Davies last week does little to assuage the original criticism of the legislation. This is particularly so in the bill’s domestication of international investment protection at a time when the trend, globally, is the internationalisation of such protection. It follows, of course, the 2012-13 termination of SA’s bilateral investment treaties with members of the European Union, a trend that has not so far extended to South America, China, Russia or the rest of Africa.

Submission on the South Africa’s Expropriation Bill 2015 (PLAAS)

East Africa: Regional body cuts share transfer time (Daily Monitor)

The East African Securities Exchange Association has reduced the period of transferring securities (shares) from one stock exchange to another to between 24 to 48 hours from one week. The EASEA said the new move now makes transfer and trading of securities/ shares easier for investors in the region’s stock exchanges. At the end of their 25th consultative meeting held last week in Kampala, the members of EASEA announced that movement of securities across East Africa has been made easier as a result of automated trading system in Nairobi, Dar-es-Salaam and Uganda securities exchanges.

Northern Corridor: Telecoms slash SMS, data costs (New Times)

Telecom operators in Rwanda have begun revising downwards their short message service and data charges from Rwanda to countries within the Northern Corridor region marking the beginning of the second phase of the One Network Area. The revised costs will apply to SMS charges from Rwanda to Kenya, Uganda and South Sudan. Tigo Rwanda was the first to lower the charges on Tuesday this week by about 45%, from Rwf75 to Rwf45.

Kenya loses its position among Africa’s top 10 foreign investment destinations (New Times)

A new report that lists the investment climate across all 54 economies in Africa indicates that East Africa’s economic giant is trailing her neighbours in terms of attracting top investments. The study conducted by diversified financial services brand, Rand Merchant Bank, ranks Kenya 11th, having fallen from the top 10 bracket since the previous study released last year.

Kenya: Policy guidelines if adopted could ease doing business in the counties (Soko)

Governors and various stakeholders have welcomed the launch of policy guidelines for the drafting of County Revenue Laws saying these guidelines if well implemented would help facilitate ease of doing business at the county and inter-county level. They made these remarks on 4 August 2015 during the launch of the Legislative and Economic Policy Framework guidelines that have been developed by The Commission on Revenue Allocation and Kenya Association of Manufacturers that will provide guidelines for drafting of County Revenue Laws in Kenya. These two documents that were officially handed over to County Governments should assist Counties with proper drafting of county revenue laws that will facilitate business and attract investments. [Downloads available]

On the drivers of inflation in Sub-Saharan Africa (IMF)

We find that in the past 25 years, the main drivers of inflation have been domestic supply shocks and shocks to exchange rate and monetary variables; but that, in recent years, the contribution of these shocks to inflation has fallen. Domestic demand pressures as well as global shocks, and particularly shocks to output, however, have played a larger role in driving inflation over the last decade. We also show that country characteristics matter—the extent of oil and food imports, vulnerability to weather shocks, economic importance of agriculture, trade openness and policy regime, among others, help in explaining the role of shocks.

The resource curse revisited (Chatham House)

This paper challenges the view that the ‘resource curse’ – for which so many academics found evidence in previous decades – has now been laid to rest. The extractives-led growth agenda promoted by donors and international advisers in multilateral banks, consultancies and some development agencies has tended to reinforce domestic, government and investor pressures to pursue a ‘fast-track’ approach to extractives projects. This appears logical, given the obvious benefits of foreign-investment inflows and export revenues for countries suffering from poverty, lack of infrastructure and high levels of indebtedness. However, there is an urgent need to re-evaluate whether the policy advice stemming from this agenda can serve as an antidote to the negative effects identified in the resource-curse literature.

@KAM_kenya: The EAC meeting, 3-7 August, is aimed to afford stakeholders the opportunity to consult the TFTA rules of origin. View the @KAM_kenya TL for further details.

Daniel Steinmann: 'A free trade area with unlimited liquidity' (Namibia Economist)

Dark days loom for farmers as fears of El Niño rise (New Era)

South Africa: Home Affairs on compliance with child travel requirements (GCIS)

Nigeria’s auto plans can help us, says Nissan SA (Business Day)

Zimbabwe: Minister tells SA investors to take advantage of job cuts (NewsDay)

José Antonio Ocampo: 'A defeat for international tax cooperation' (Project Syndicate)

Jonathan Glennie, Andy Sumner: 'Aid should be seen as foreign public investment, not just charity' (The Guardian)

India cancels EU trade talks over pharma ban (LiveMint)

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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)