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tralac’s Daily News Selection
The selection: Tuesday, 28 June 2016
Assessing Africa’s policies and institutions: 2015 CPIA results for Africa (World Bank)
The average CPIA score for IDA-eligible countries in Sub-Saharan Africa was 3.2 in 2015, representing a flat regional trend in the quality of policies and institutions. Rwanda continued to lead all countries with a score of 4.0, followed by Cabo Verde, Kenya, and Senegal, all with a score of 3.8. Beneath a flat regional trend, there was considerable movement in policy and institutional performance across countries, with half of the region’s countries experiencing a change in their aggregate CPIA score in 2015. The number of countries that saw a decline in this score outpaced the number of gainers by nearly two to one, a worsening trend compared with 2014. Weaker macroeconomic management, underpinned by difficult global economic conditions, explains much of the deterioration in country-level performance. Indeed, over one-third of the region’s countries (13 of the 38 IDA-eligible countries) experienced a slippage in at least one of the economic management policy areas -monetary and exchange rate, fiscal, and debt.
Mauritius and Brexit: Ministerial committee set up to look into repercussions of Brexit (GoM)
The share of our total exports to the UK has dropped from 34% in 2008 to 12.6% in 2015 stemming, inter alia, from our market diversification strategy. Mauritius’ export denominated in UK Pound Sterling which was 18% in 2008 has declined to 6% in 2015. The Committee pointed out that Brexit may weaken the UK economy in the medium term with implications for some sectors of the Mauritian economy. In this context, the Joint Public-Private Sector Technical Committee agreed to pursue its assessment of Mauritius trade with the UK in various sectors with a view to identifying areas which may be vulnerable. On the other hand, the Bank of Mauritius is monitoring closely all developments in the international financial markets. The BOM has re-affirmed that it stands ready to intervene and take measures, if necessary, to protect the economic interest of Mauritius.
Selected Brexit commentaries: Alex de Waal, Simon Allison, David Lipton, Ronak Gopaldas, Dipolelo Moime
Implementing Africa’s largest free trade agreement (Ahram)
The agreement was signed but it will take more negotiation rounds to finalise the outstanding issues, in order for it to enter into force. No tangible progress has been achieved since the signing, as technical level negotiations are still ongoing. The market access and tariff liberalisation offer has only been exchanged bilaterally between Egypt and EAC while SACU member states have made no key progress worthy of mention yet. This means that the timeframe will be extended for at least two more years. The risk is that the African Union launched negotiations on a continental FTA and according to the AU roadmap the CFTA should be launched in 2017. Consequently, the tripartite FTA has to be finalised before that date. Egyptian negotiators should push aggressively to finalise negotiations on rules of origin and market access. This will give Egyptian products the privilege of penetrating the tripartite non-COMESA member states' markets with a competitive advantage. [The writer, Sherif Fahmy, is senior director of N Gage Consulting and former chief of the Tripartite Agreement Negotiating Team]
Namibia: New gateway into SADC? (Transport World Africa)
Average border waiting time on the Trans-Kalahari Corridor between Botswana and Namibia has decreased to 30 minutes – provided all documents are in order. Reported bribery and corruption gets dealt with immediately because the Namibian government is on board, so it’s easy to make a phone call and get problems sorted out from the top down. Travel time from the port of Walvis Bay takes, on average: 2 days to Botswana or South Africa; 3 to 4 days to Zambia or Zimbabwe; 3 to 5 days to Angola; 5 to 6 days to the DRC or Malawi.
Multi-billion Kalahari railway still in starting blocks (The Namibian)
The governments of Namibia and Botswana are currently preparing the terms of reference for a scoping study to identify other commodities and their quantities which can be accessed by the Trans-Kalahari Railway Corridor. “The identification of other commodities not only broadens the project scope, but also helps diversify the project risks, more especially considering the high risk involved due to the low prices of coal. The scoping study will also look at spatial development opportunities and scenarios along the corridor,” said Robert Kalomho, who represents the Namibian government on the project.
Rwanda: Businesses seek improved security on Northern Corridor (New Times)
The East African Business Council has warned that objectives of an efficient transport mode in the region cannot be achieved or guaranteed unless supply chain security is “effectively addressed” on the Northern Corridor trade route. This, according to John Bosco Rusagara, the regional body’s director of Infrastructure, Transport and Resource Mobilisation, is in light of increasing threats from global terrorism and other criminal activities, as well as civil disobedience throughout the supply chain. A practical application of the supply chain, he noted, is the case of the Middle East, where a GPS antenna is installed on the truck and a Radio-Frequency Identification (RFID) e-seal affixed onto the container. Accordingly, the GPS pings the RFID seal every 10 minutes and data is transmitted every 20 minutes by GPS, enabling the recording and remote reporting of the location of every vehicle that’s equipped with the system.
Transporters in Malawi want government to arbitrate Mozambique crisis (Club of Mozambique)
Tanzania: Over 500 accidents occurred along central railway in 3 yrs (The Citizen)
SA’s borders a top consideration as Parliament resumes (Business Day)
Roads and rural development in Sub-Saharan Africa (World Bank)
This paper assesses the relation between access to markets and cultivated land in Sub-Saharan Africa. Making use of a geo-referenced panel over three decades (1970-2005) during which the road network was significantly improved, the analysis finds a modest but significant positive association between increased market accessibility and local cropland expansion. It also finds that cropland expansion, in turn, is associated with a small but significant increase in local gross domestic product. These results are suggestive of agricultural activities that develop at the extensive margin, which are mostly to serve local demand, but are not indicative of commercial agriculture that serves external markets.
Logistics Performance Index 2016 (World Bank)
The Logistics Performance Index is an interactive benchmarking tool created to help countries identify the challenges and opportunities they face in their performance on trade logistics and what they can do to improve their performance. The LPI 2016 allows for comparisons across 160 countries. The LPI is based on a worldwide survey of operators on the ground (global freight forwarders and express carriers), providing feedback on the logistics “friendliness” of the countries in which they operate and those with which they trade. They combine in-depth knowledge of the countries in which they operate with informed qualitative assessments of other countries where they trade and experience of global logistics environment. Feedback from operators is supplemented with quantitative data on the performance of key components of the logistics chain in the country of work. The LPI consists therefore of both qualitative and quantitative measures and helps build profiles of logistics friendliness for these countries. It measures performance along the logistics supply chain within a country and offers two different perspectives: international and domestic.
How lowering trade barriers can revive global productivity and growth (IMF)
New research, based on our unique database of effective tariffs in 18 sectors across 18 advanced countries spanning more than two decades, sheds light on this issue. We find that productivity gains arising from tariff cuts on intermediate inputs outweigh the gains arising from cutting “output tariffs,” which capture competitive pressures from liberalization in the sector considered. In other words, trade liberalization in upstream industries that use intermediate inputs matters more for sector-level productivity than liberalization in the sector itself.
Malawi: Letter of Intent, Memorandum of Economic Financial Policies, and Technical MoU (pdf, IMF)
The exchange rate depreciated significantly during the second half of 2015 up to early March, but is now appreciating. The Kwacha depreciated by more than 34% from July 2015 to early March 2016, a trend broadly mirroring that of neighbouring countries. It is likely that deteriorating expectations - including when our ECF arrangement went off-track - and the liquidity expansion of July 2015 following the LRR reductions also played a role in this. We intervened more than programmed to smooth volatility at various times but, on the whole, largely allowed the depreciation to run its course. In this manner, we managed to hold our reserve cover close to 3 months of imports. [Malawi: Seventh and Eighth reviews under the Extended Credit Facility Arrangement]
SADC report to the WTO Sanitary and Phytosanitary Committee meeting on SPS activities (WTO)
Extract: SADC Secretariat facilitated a workshop for Pesticides Regulators from the SADC member States to review the Regional Guidelines for Regulation of Plant Protection Products in the SADC member States. This workshop was held in Pretoria, South Africa from 15 to 16 June 2016. The objective of the review process was to align the Regional Guidelines with the revised WHO/FAO International Code of Conduct for Management of Pesticides and also to include biopesticides and biocides. [Downloads available]
El Niño puts more than 26 million children at risk in Eastern and Southern Africa (UNICEF)
One of the strongest El Niño events ever recorded has placed the lives of 26.5 million children at risk of malnutrition, water shortages and disease in ten countries in Eastern and Southern Africa, a new UNICEF report notes in a study (pdf) on the Eastern and Southern Africa region. [Ending hunger in the Horn of Africa: moving from rhetoric to action (AU-FAO)]
Making sustainable development the key focus of the BRICS New Development Bank (SAIIA)
The study is a first attempt to capture the diverse views of South Africans, which can be used for further dialogue and debate in developing a working definition of ‘sustainable development’ for the NDB from a South African perspective. By briefly highlighting a number of sustainable infrastructure projects in South Africa, it further makes the case that the NDB could use existing examples of successful sustainable development projects to define its own ambitions in supporting sustainable development in all spheres of its operations.
Are China and India the new colonial powers in Africa? (LiveMint)
However, the pattern of trade hasn’t changed much since colonial times. China and India mainly buy commodities or natural resource-based products from Africa, while exporting mainly manufactured goods to the continent, thus reinforcing the classic colonial pattern of trade. Of all the exports from Africa to China and India, 90% are commodities and natural resource-based products. In case of Africa’s exports to the rest of the world, excluding the two Asian giants, the share of such commodities and natural resources in total exports is much lower, at an estimated 63%. Thus, while it is true that China and India’s trade with Africa resembles the traditional model of colonial trade, the fact remains that the engagement of these two countries with Africa extends beyond merchandise trade to large-scale investments, not necessarily in extractive industries, and to other projects often aimed at catering to local demand.
Left stranded? Extractives-led growth in a carbon-constrained world (Chatham House)
Climate-proofing the Malabo Declaration (pdf, Montpellier Panel Briefing Paper)
African Development Bank accelerates pace with ‘High 5’ priorities (AfDB)
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