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tralac’s Daily News Selection
The selection: Friday, 26 February 2016
Launching today, in Addis: 'Trade in services - case studies from Africa' (AU)
The book highlights air transport services in Ethiopia, banking services in Nigeria, business processing outsourcing/ICT services in Senegal, cultural services in Burkina Faso, and higher education services in Uganda. The studies are an examination of possible best practices in services exports on the continent, as seen from the suppliers’ point view, with a review of the role of government policy and other factors that may have shaped their success. The countries and sectors were selected on the basis of their service sector performance. In some cases (such as for Cultural Services in Burkina Faso), we have looked for non-traditional service sectors, especially where the private sector’s role in exploring the foreign market has been a critical success factor.
African citizens to get easy entry into Ghana in July (Africa News)
Ghana’s president, John Dramani Mahama, said the West African country will offer visas to citizens of African Union member states on arrival into the country from July. President Mahama made the declaration on Thursday, February 25, 2016 during the delivery of Ghana’s State of the Nation Address to parliament in the capital, Accra.
Featured tweet, @DonaldKaberuka: Tariffs no longer the major obstacle. Now fast track non-tariff issues: visas, aviation, cross border red tape. (In reponse to The Economist’s article ‘Tear down Africa's trade walls’)
Mihe Gaomab II: 'Competition law - a necessity for effective regional integration' (Southern Times)
If competition laws are fostered at the regional level, it would have the potential to ensure such cross border competition behaviour is disciplined to the best regional interest of growing economies through trade. Regional competition policies and laws can assist in enforcing anti-competitive behaviour right across the regions and on the African continent. It can also ensure uniform market discipline through curbing substantial abuse of market power or dominant position or monopoly situations. The above shows that the importance of competition law as a tool to regional integration especially on the business conduct and the competitive markets in Africa cannot be underemphasised and should be pitched at regional, continental and international agendas such as SACU, SADC,COMESA, AU, and the World Trade Organisation.
Dr Chris Kiptoo: 'How Kenya plans to close its ever-growing foreign trade deficit' (Business Daily)
Dr Chris Kiptoo, the Principal Secretary State Department of Commerce and Trade at the Ministry of Industry, Investment and Trade, spoke to the Business Daily’s Charles Mwaniki on the sidelines of last week’s Africa 2016 conference in the Egyptian resort of Sharm el Sheikh about Kenya’s export strategies as Africa moves towards a free trade area: 'At the continental level, the summit has also pronounced itself for a continental FTA. The only problem is that the level of intra-regional trade is still low although it has improved from around 10% to about 15-16%. Trade of that level in an FTA is not meaningful enough. We need to grow that by dealing with connectivity issues — transport challenges. We are doing something but I think it can be fast tracked. We also have to do something about non-tariff barriers by adopting ICT platforms that improve transparency.'
Eating the intra-African trade pudding: Uganda, South Africa top as neighbours drive Kenya’s tourism recovery (M&G Africa)
One promising way of solving this is seen as ramping up regional trade in services - a model that has contributed to the booming growth in many Asian countries. It may be already happening and could herald exciting possibilities. The number of tourists visiting Kenya from neighbouring countries has increased over the past few months as the East African nation set off on promotions around the region to make up for dwindling numbers from its traditional source markets in Europe.
Malaysia, African continent bilateral trade to grow by 10% (New Straits Times)
Bilateral trade between Malaysia and the African continent is expected grow by 10% this year from RM30.1 billion recorded in 2015, Minister of International Trade and Industry Datuk Seri Mustapa Mohamed said today. South Africa, Eqypt, Nigeria and Angola are Malaysia’s top trading partners and export destinations.
Tanzania: Giant $30bn gas project now hangs in the balance (IPPMedia)
Mozambique's commissioning of an Italian company to start building a planned liquefied natural gas plant in that country has put neighbours Tanzania at a considerable disadvantage in the race to construct the first gas exporting facility in this part of Africa. The Mozambican government this week granted its approval to the Italian energy firm Eni to go ahead with the project, with Eni - which aims to sell the gas produced by the plant to British oil company BP - expected to make its final investment decision later this year. In contrast, Tanzania was initially expected to make a final investment decision regarding its own planned LNG plant this year, but this has been delayed for at least another four years due to red tape and regulatory uncertainties.
Tanzania: AfDB board approves 2016-2020 Country Strategy Paper (AfDB)
The AfDB will support Tanzania’s economic transformation to inclusive and green growth with an indicative concessional resource assistance package estimated at over US $1.1 billion over a five-year period. The Bank Group’s portfolio in Tanzania comprised 29 operations with total net commitment of US $1.97bn as of 30 November 2015. The portfolio consists of 15 public sector operations, 4 private sector operations and 10 multinational operations. Infrastructure (transport – 44%, energy – 5%, and water – 16%) accounted for 65% of the portfolio in value terms. Social sector accounted for 5%, agriculture 3%, multi-sector 4% and multinational operations 16% (79% of which are in energy and transport). Private sector operations accounted for 7% of the overall portfolio.
Seychelles: new development strategy targets diversification and resilience (AfDB)
Fitch revises Zambia's outlook to negative; affirms at 'B' (Reuters)
The revision of the Outlook reflects the following key rating drivers: a combination of falling copper revenue and slowing growth has led to persistent and large fiscal deficits and a doubling of gross general government debt since 2012. Fitch forecasts the 2016 fiscal deficit to narrow slightly to 7.1% of GDP, materially higher than the 3.8% deficit forecast by the Zambian authorities in the 2016 budget. Mining revenues, which directly contributed about 17% of total government revenue in 2012, fell to under 13% of revenue by 2015.
Namibia: Budget Statement (Ministry of Finance)
The Sub-Saharan African region has also taken a knock from the generalized slowdown in Emerging Markets economies. In fact, the soft landing for the Chinese economy has resulted in a much harder landing for Sub-Saharan African economies through the trade channel. Closer to home, the South African economy, which is closely linked to Namibia through strong trade, monetary and financial ties, is projected to grow at a rate of about 0.9% in 2016, which represents a further slowdown from 1.3% in 2015. This low growth trend for the South African economy holds negative implications for Namibia through trade and financial linkages as well as revenue derived from SACU.
I am aware that there have been mixed public reactions regarding the relevance of the currency peg to the South African Rand. Let me use this opportunity to reassure the public that due to the significant trade linkages, the currency peg to the South African Rand remains a relevant policy and a credible anchor of domestic price stability and trading for Namibia. Such relevance only gets eroded if imported inflation and excess volatility becomes a permanent occurrence and fundamental macroeconomic imbalances emerge. [Calle tightens government’s belt (New Era)]
Botswana: 2016 Monetary Policy Statement (Bank of Botswana)
The 2015 Business Expectation Surveys indicates a generally subdued level of business confidence, particularly among export-oriented businesses. However, optimism about recovery in output improves, going forward, in line with projected higher output growth for 2016. Overall, the key challenges to businesses include weak demand, deficiency of key inputs and the regulatory environment as well as related scarcity of skilled manpower. For the 2016/17 fiscal year, while total government expenditure is estimated to decrease by 2.7%, a budget deficit of P6.05bn (3.8% of GDP) is anticipated, given the projected contraction in government revenue of 6.5%. The budget includes spending associated with the Economic Stimulus Programme, which is partly aimed at accelerating completion of NDP 10 projects.
Africa’s infrastructure: five years on (World Bank Blogs)
Africa’s Infrastructure: A Time for Transformation, the inaugural report in the Africa Development Forum series in 2010, was the fruit of an unusual confluence of circumstances. Seldom have donors put such a solid funding base behind primary data collection and analytical work on infrastructure, seldom has World Bank management been able to dedicate such significant human resources over a multiyear horizon to study these issues, and seldom has an infrastructure knowledge project brought together such a broad coalition of stakeholders including the key regional bodies in Africa. Five years later, after a period of great dynamism and momentous changes, an update of the report would be very timely. Work would need to start soon to be completed in time for the 10th anniversary. [The author: Vivien Foster]
Overloading costing East Africa millions in road deterioration (How we made it in Africa)
“The main cause of road deterioration is overloading,” says Nicholus Kithinji, managing director of Avery East Africa (AEA), a large supplier of weighbridges in Kenya. AEA sells equipment used by government authorities to check compliance with axle load requirements. “Overloading costs hundreds of millions of shillings in road deterioration. A truck that is loaded 10% more than it should causes 50% more damage on the road than a compliant truck. Some of the trucks coming from Congo, for example, that are 200% loaded reduce the life of the roads they pass on by nearly half. So axle load control is the first step in road maintenance,” says Kithinji. “If we can’t maintain what we have, every 10 years we will be redoing the infrastructure we already have. We will build forever.”
The European Union and the African Union: a statistical portrait
With data up to and including the year 2014, this “portrait” includes various domains such as demography, health, education, national accounts, trade, and more. Tables in the eight chapters help the user to gain a detailed view on different aspects, such as mobile phone subscriptions, number of teachers, life expectancy, GDP, tourism, etc. An overview chapter is also included, presenting statistical comparisons with the rest of the world.
International trade: Africa accounted for around 9% of both the imports to the EU-28 and the exports from the EU-28 in 2014, measured by value. This was far below Asia, which stood for 43% of the imports value to the EU-28 and about a third of the exports value. Northern America only accounted for 14% of the imports to the EU-28 but was the destination for 21% of the exports. The EU-28 goods trade balance with Africa was negative in all years between 2003 and 2014 (Figure 1.11). The EU’s trade deficit with Africa fell sharply from EUR 41 billion in 2008 to around EUR 4 billion in 2009 with both import and export values dropping, clearly reflecting the worldwide economic crisis. This decline in EU-28 exports to and imports from Africa broke the steady increase of EU-28 trade with Africa between 2003 and 2008, which had seen export values raise by 71% and imports by 94%. [Download]
Digital globalization: the new era of global flows (McKinsey)
Global flows of all types support growth by raising productivity, and data flows are amplifying this effect by broadening participation and creating more efficient markets. MGI’s analysis finds that over a decade, all types of flows acting together have raised world GDP by 10.1 percent over what would have resulted in a world without any cross-border flows. This value amounted to some $7.8 trillion in 2014 alone, and data flows account for $2.8 trillion of this impact. Both inflows and outflows matter for growth, as they expose economies to ideas, research, technologies, talent, and best practices from around the world.
Although there is substantial value at stake, not all countries are making the most of this potential. The latest MGI Connectedness Index - which ranks 139 countries on inflows and outflows of goods, services, finance, people, and data - finds large gaps between a handful of leading countries and the rest of the world. Singapore tops the latest rankings, followed by the Netherlands, the United States, and Germany. China has grown more connected, reaching number seven, but advanced economies in general remain more connected than developing countries. In fact, each type of flow is concentrated among a small set of highly connected countries.
To understand GVCs, connect the dots: visualisation tool (World Bank)
The increasing salience of global value chains and their analysis has created tremendous demand for “mapping” these chains. How can we quantify the ‘value’ along a chain? How can we visualize the connections between each link? These are questions we’ve been seeking to answer at the World Bank Group. And we’ve developed a new visualization tool, accessible through our World Integrated Trade Solution database, which allows the public to explore the quantifiable reality of GVCs.
Resource exploration: A move south (IMF)
Our analysis suggests that if all of Latin America and sub-Saharan Africa were to adopt the same quality of institutions as the United States, the number of discoveries worldwide would increase by 25%, all else equal. Institutions can affect discoveries in many ways. A stronger rule of law may reduce the risk perceived by potential foreign investors, making them more willing to undertake the long-term investments usually required in resource exploration and extraction. This could make it easier for a country to adopt better technology, if, for example, stronger contracts make the prospect of costly investments in technology more attractive.
The leaders of Africa’s Great Lakes Region and private sector stakeholders agree to boost investment (PSIC)
SADC security committee addresses piracy, human trafficking (New Era)
Zimbabwe: Zimra introduces hand scanners at Beitbridge Border Post (The Herald)
Vale writes $2.4bn off its Mozambique coal assets (Zitamar)
Mozambique to chair Zambezi Watercourse Commission (Club of Mozambique)
Makhtar Diop, Cristina Duarte: 'Closing the gender gap: lessons from Africa' (World Bank)
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