News
tralac’s Daily News selection: 1 October 2015
The selection: Thursday, 1 October
Entering uncharted waters: El Niño and the threat to food security (Oxfam)
Millions of poor people in Southern Africa, Asia and Central America face hunger and poverty this year and next because of droughts and erratic rains as global temperatures reach new records, and because of the onset of a powerful El Niño – the climate phenomenon that develops in the tropical Pacific and brings extreme weather to several regions of the world. The combination of record warmth one year followed by an El Niño the next is unique and the climatic implications are uncertain. If 2016 follows a similar pattern, we are entering uncharted waters.
Perhaps the greatest problems may occur in Southern Africa. The annual rains across Southern Africa are notoriously fickle and in addition, borderline El Niño conditions were prevalent by late last year. The rains that fell from October/November 2014 through to February 2015 were very erratic, starting a month or more late, and then from mid-December through January 2015, they were extraordinarily heavy and brought unusually extensive flooding to southern Malawi and northwest Mozambique. Zimbabwe suffered particularly poor rains. [The author: John Magrath]
Can intra-regional trade act as a global shock absorber in Africa? (Africa at LSE)
Several important issues remain for future research. First is gaining a better understanding of the relationship between regional integration and intra-regional trade and how to strengthen multilateral trade ties. Our results should not be interpreted as support for regional integration via preferential regional trade agreements at the expense of multilateral trade. Second, we have focused on the transmission of shocks from the advanced economies to Africa, leaving the impact of shocks in emerging markets on Africa to further investigation. Finally, future research could examine channels through which intra-regional trade facilitates diversification and integration of African RECs into global value chains. [The authors: Zuzana Brixiová, Qingwei Meng, Mthuli Ncube]
Informal trade flows in the EAC (Global Trade Review)
Speaking at GTR’s East Africa Trade & Commodity Finance Conference, Ecobank’s head of group research, Edward George, surmised that informal trade represents 30 to 40% of the EAC’s trade flows, affecting the competitiveness of the region’s formal traders. In this excerpt from his presentation, he questions who and what is driving this illicit activity and what hopes East Africa has for the future of trade.
Unlocking the trade potential of a continent on the move (Africa Outlook)
With a potential slowdown in China refocusing attention on SSA’s future growth and trading partners, Barclays has studied trade openness and market opportunity across SSA to provide a comparative perspective on the opportunities ahead. The research demonstrates: [The author, John Winter, is Barclays’ Corporate Banking CEO]
Business and the Sustainable Development Goals (Business Fights Poverty)
South Africa: August 2015 merchandise trade statistics (SARS)
The R9.95bn deficit for August 2015 is due to exports of R87.63bn and imports of R97.58bn. Exports decreased from July 2015 to August 2015 by R5.45bn (5.9%) and imports increased from July 2015 to August 2015 by R3.38bn (3.6%). The cumulative deficit for 2015 is R36.27bn compared to R69.94bn in 2014. Africa trade surplus: R15 330 million – this is a 6.9% decrease in comparison to the R16 464 million surplus recorded in July 2015. Trade statistics with the BLNS for August 2015 recorded a trade surplus of R9.12 billion.
US-South Africa trade dispute risks $1.7bn of exports (Bloomberg)
“South Africa needs to take concrete steps towards eliminating barriers to US trade and investment, a key criterion to be eligible for AGOA trade benefits,” Trevor Kincaid, a spokesman for the office of the U.S. Trade Representative in Washington, said in an e-mailed response to questions on Wednesday. “Ultimately, South Africa’s AGOA eligibility is in South Africa’s hands.”
Congressmen bewail SA’s trade ‘barriers’ (Business Day)
New AGOA apparel quota cap for 2015-2016 announced (AGOA.info)
DTI to lead an outward selling and investment mission to Zambia (Cape Business News)
The Department of Trade and Industry will lead a delegation of 38 business people to participate on an Outward Selling and Investment Mission to Zambia. The mission will take place from 6-8 October 2015 in Lusaka, Zambia. “Trade between South Africa and Zambia has increased from over R15bn in 2011 to more than R28bn in 2014. South Africa is Zambia’s main trading partner in the Southern African Development Community region, whilst Zambia is South Africa’s fourth trading partner,” says Davies.
Zimbabwe: Dairy producers want duty on inputs scrapped (NewsDay)
Dairy producers have called on government to scrap import duties on inputs which are not locally available to ensure that prices of final products are competitive in the region. Dendairy director Daryl Archibald told a delegation from the Office of the President and Cabinet (OPC) which toured the company’s Kwekwe plant on Tuesday that Zimbabwe’s milk products were failing to compete locally because of the heavy duty imposed by the Zimbabwe Revenue Authority on inputs such as packaging and other machinery imported by dairy companies. “If the government wants us to just produce for the local market it’s fine, but if we have to go into exports, we ask that they do not charge any duty on any product that is not available locally because even duty of 5% would make us lose the market to South Africa in the region,” he said.
Formalisation of informal economy (NewsDay)
Malawi to implement new visa regime from October 1st (StarAfrica)
Malawi through its Immigration Department will start implementing its new visa regime from 1st October whereby all foreign nationals will require to pay visas fees ranging from $50 to $100 to enter the Southern African country. Minister of Home Affairs and Internal Security, Jean Kalirani told reporters in the capital Lilongwe on Tuesday that the new regime is required from nationals of all countries except Southern African Development Community (SADC) countries except Angola, Common Market for Eastern and Southern Africa (COMESA) countries, diplomats and government officials. “Nationals from all countries that do not require Malawian nationals to pay visa fees when travelling to such nations will not pay to enter Malawi,” she added.
Falling import demand, lower commodity prices push down trade growth prospects (WTO)
WTO economists have lowered their forecast for world trade growth in 2015 to 2.8%, from the 3.3% forecast made in April, and reduced their estimate for 2016 to 3.9% from 4.0%. These revisions reflect a number of factors that weighed on the global economy in the first half of 2015, including falling import demand in China, Brazil and other emerging economies; falling prices for oil and other primary commodities; and significant exchange rate fluctuations. Trade growth remains uneven across countries and regions as illustrated by Chart 2, which shows WTO merchandise trade volume indices by geographical region.
More collaboration is needed to ensure the benefits of trade are enjoyed by all, panellists agreed at the plenary debates of the WTO’s 2015 Public Forum on 30 September. The need for multilateral cooperation among governments was highlighted in the opening plenary debate while the importance of public-private sector dialogue was underlined in the afternoon debate on making trade work for business. [The Forum www]
WTO accessions and trade multilateralism: case studies and lessons from the WTO at Twenty (WTO)
Ethiopia: IMF concludes 2015 Article IV Consultation (IMF)
Noting a softening of export activity, Directors recommended more decisive action to strengthen the business climate and enhance external competitiveness. Greater exchange rate flexibility, less burdensome regulation, and easier private sector access to credit and foreign exchange would be steps in the right direction. Opening some strategic sectors to foreign investment could also improve the provision of critical services.
Bullish Ethiopia and Djibouti agree on $1.55Bn pipeline; Kenya’s LAPSSET has reason to worry (M&G Africa)
Germany commits 37 million Euros to support regional integration in East Africa (EAC)
Delivering on the promise: Leveraging natural resources to accelerate human development in Africa (AfDB/Gates Foundation)
In the light of these challenges, this report makes three fresh contributions on how to leverage oil, gas, and mineral resources to accelerate human development progress in Africa. First, it provides a broad estimate of the possible magnitude and timing of potential new extractives revenues in Ghana, Liberia, Mozambique, Sierra Leone, Tanzania, and Uganda – six countries that have recently discovered significant oil, gas, or mineral resources. Second, it presents a practical policy framework for helping governments to better link their revenue management decisions to their human development agendas. Third, it highlights ways to leverage extractives companies’ direct spending, including procurement and employment throughout the lifecycle of extractives projects, to ensure businesses and individuals are ready to harness the benefits. [Download]
This research was inspired by a major conclusion of the 2013 African Economic Outlook on natural resources and structural transformation. The Outlook’s cross-country analysis stated that, while dependence on natural resources poses serious challenges, natural resource abundance is associated with positive outcomes such as long-term growth. By analysing the correlations among export diversification patterns of unprocessed, semi-processed and finished goods, this paper indicates that broadening the array of exported unprocessed commodities is a good predictor of higher manufacturing diversification. And, it is sometimes a first step towards industrialisation for many poor countries. This important conclusion makes a compelling case for inviting more low-income countries to join the OECD Development Centre’s ongoing Policy Dialogue on Natural Resources.
ALSF catalysing Uganda’s extractive resource sector (AfDB), Tanzania: New database launched for openness in gas, oil sector (The Citizen), Commodity exporters facing the difficult aftermath of the boom (IMF)
UN Office for Coordination of Humanitarian Affairs migration debate (UN News Centre)
As the world confronts the biggest refugee and migration crisis since the Second World War, Secretary-General Ban Ki-moon convened a high-level meeting on the issue and outlined eight guiding principles to improve preparedness.
Malaysia ramping up in Africa (Institute of Southeast Asian Studies)
Apart from South Africa, major trade partners for the export of Malaysia goods in 2014 included Kenya at $737m, Angola at $585m and Nigeria at $389m. The largest trade partners for the import of Africa goods, on the other hand, are concentrated in West Africa, with the highest ranking being Cote d’Ivoire at $355m, Ghana at $346m and Algeria at $310m
Dubai Chamber reviews investment potential of East African markets (CPI Financial)
WTO issues panel report on Argentinian financial, tax and forex measures affecting trade
Overview of INDCs submitted by 31 August 2015 (OECD)
AECF: African youths pivotal to agric business (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)
