African Union Ministers of Trade (AMOT) will meet in Niamey, Niger, on 1 and 2 December in a bid to finalize negotiations on the Continental Free Trade Area (CFTA) by the end of 2017, as directed by the African Union (AU) Heads of State and Government in June 2015.
David Luke who coordinates the African Trade Policy Centre at the Economic Commission for Africa (ECA) said that the month of November was characterized by a series of meetings by the CFTA Technical Working Groups, the CFTA Negotiating Forum, and the African Union Senior Trade Officials.
“The objective of these meetings is to conclude the outstanding issues of the Modalities for Tariff Liberalization that were adopted at the 3rd Meeting of the AU Ministers of Trade in June 2017; and to consider the draft Texts of the CFTA Agreement, its Protocols and its Annexes and Appendices,” added Mr. Luke.
The ECA official expressed optimism about the December deadline for the establishment of the CFTA, stating “Given the momentum behind the negotiations thus far, we are confident that there will be the essential substance of an agreement to come out of the ministerial meeting in Niamey."
He cautioned, however, that some technical work will be needed during the first half of 2018 to finalize tariff schedules and rules of origin arrangements.
Mr. Luke added that "ECA is advocating for implementation of the agreement to begin early in 2018 on the basis of the level of ambition of tariff liberalization that has been agreed and with interim rules of origin pending the finalization of the outstanding technical issues."
The main objective of the CFTA negotiations is to achieve a comprehensive and mutually beneficial trade agreement among the Member States of the African Union.
The trade ministers are expected to consider the Report of the 4th meeting of the Senior Trade Officials, which took place on 27 - 29 November in Niamey; and approve the Text of the Agreement establishing the CFTA, Protocols on Trade in Goods and Services and any other Annexes deemed as early harvests.
The meeting is organized by the African Union Commission’s Department of Trade and Industry. (UNECA)
At the invitation of the African Union, WCO Secretary General Mr. Kunio Mikuriya attended the 9th Meeting of the African Union (AU) Sub-Committee of Directors General of Customs, held in Yaoundé, Cameroon from 13 to 17 November 2017.
The theme of the Meeting was “The contribution of Customs to the analysis of international trade data, for security and the boosting of intra-African trade”.
During the opening ceremony, Mr. Fongod Edwin Nuvaga, Director General of Cameroon Customs, welcomed delegates and updated them on current developments in his Administration.
H.E. Ambassador Albert Muchanga, the African Union’s Commissioner for Commerce and Industry, outlined the AU’s current activities, including its work on the introduction of the African Free Trade Area.
Secretary General Mikuriya highlighted the main priorities of the WCO, and urged AU Members to draw on the content of WCO instruments to bring about, inter alia, the implementation of the African Continental Free Trade Area and the WTO Trade Facilitation Agreement. He emphasized that the WCO offers assistance in many relevant areas, mentioning seminars on transit and origin conducted recently for the benefit of AU Members as examples of such support.
Mr. Alamine Ousmane Mey, Cameroon’s Minister for Finance, welcomed the representatives of the 54 AU Members present at the meeting, and emphasized the central role of Customs in ensuring a safe and secure trade environment and facilitating trade.
The Directors General heard and debated the reports of several Working Groups, and provided orientation for future work based on the outcomes and analyses of the Expert Working Group which had met prior to the Meeting. Issues addressed included the Interconnectivity of Computerized Customs Transit and Clearance Systems, and the outcomes of the Regional Economic Communities Sub-Committee on Customs Cooperation, the 3rd AU Customs Experts Trade Facilitation Forum, and the 1st Extra Ordinary Meeting of the AU Sub-Committee of Directors General of Customs.
The Directors General discussed and adopted a number of recommendations, relating in particular to: how to increase the number of accessions to the WTO TFA; the setting up of National Committees on Trade Facilitation as foreseen in the TFA; and issues related to the further development and implementation of AU objectives and programmes, notably those aimed at boosting intra-Africa trade which continues to show very low levels of improvement. Delegates also endorsed the need for enhanced consultations with Trade, as well as the sharing of information and best practices.
The Meeting elected Cameroon as Chair of the Bureau (Chair of this Group) for 2017/2018, with Comoros, Uganda, Benin, Côte d’Ivoire and Morocco completing the Bureau’s membership.
Secretary General Mikuriya joined delegates in congratulating Cameroon Customs on the excellent arrangements for the Meeting; he also met bilaterally with Cameroon’s Minister of Finance Mr. Alamine Ousmane Mey, to discuss issues of mutual interest. (World Customs Organization)
Facebook will open a “community hub space” in Nigeria next year to encourage software developers and technology entrepreneurs and become the latest technology giant to pursue a training program in fast-growing Africa.
The U.S. social media company said the center would host an “incubator program” to help develop technology start-ups, while it will also train 50,000 Nigerians in digital skills.
Africa’s rapid population growth, falling data costs and heavy adoption of mobile phones rather than PCs is attracting technology companies looking to attract more users.
Facebook did not provide details of the period over which its planned training would take place in Nigeria, which is Africa’s most populous country with 180 million inhabitants.
“We understand the important role Facebook plays here in Nigeria with developers and start-ups and are invested in helping these communities,” Emeka Afigbo, its regional head of platform partnership, said in a statement on Wednesday.
Facebook said the training – aimed at software developers, entrepreneurs and students – would be offered in cities including the capital, Abuja, Port Harcourt in the south, Calabar in the southeast and Kaduna in the north.
Last year Facebook founder Mark Zuckerberg visited technology companies in Lagos and his charitable foundation provided $24 million to Andela, which trains developers.
Google’s chief executive in a July visit to Lagos said the company aimed to train 10 million people across the continent in online skills over the next five years. He also said it hoped to train 100,000 software developers in Nigeria, Kenya and South Africa.
Although Africa may not offer as much opportunity to add consumers as China or India, because large wealth gaps mean that many people in places like Nigeria have little disposable income, Facebook said more than 22 million people already use its social media website every month in Nigeria.
Widespread poverty means mobile adoption tends to favor basic phone models. That, combined with poor telecommunications infrastructure, can mean slow internet speeds and less internet surfing, which tech firms rely on to make money. (CNBC)
The East African Community (EAC) would need a hefty $ 55 billion to implement a number of proposed flagship infrastructure projects in the coming years.
The projects are seen as key in connecting the six partner states and hence boost intra-EAC trade and economic integration.
They were approved last week during the fourth extra-ordinary sectoral council of Transport, Communication and Metereology (TCM) during its session held here.
The transport links would also connect the bloc with the neighbouring states.
"The projects would have high impact on socio-economic growth and required an investment amounting to more than $ 55bn", said Steven Mlote, the deputy secretary general in charge of Planning and Infrastructure.
On the source of funds for implementation, Eng Mlote noted the bloc would approach the development partners and the private sector "in order to realize the huge financial investments required".
On the Tanzanian side, projects already approved include construction of the proposed 144 kilometre Dar es Salaam-Chalinze expressway and a mega hydropower project at Stiegler's Gorge along Rufiji river.
Also approved is the development of Zanzibar ports.
However, some of the projects such as the 1,442 kilometre Hoima (Uganda) to Tanga port crude oil pipeline and an oil refinery in Uganda are implemented bilaterally by the two countries with financing from the multilateral agencies.
Those whose civil works are already underway include the construction of the standard gauge railway (SGR) from Dar es Salaam and which will later connect to Burundi and Rwanda.
While the long-awaited Dar -Chalinze expressway is now on the radar of implementation within the framework of EAC, a similar expressway is planned for Mombasa-Nairobi-Jinja for the northern corridor.
The first SGR in the region between Mombasa and Nairobi has been completed and is now being extended to Malaba on the border with Uganda with a spur to South Sudan and Rwanda.
The projects which were reviewed by experts during the meeting include construction of a new single point mooring, one stop centre, expanded gates and improved access roads at the port of Dar es Salaam.
Also earmarked for implementation on the Tanzania side are upgrading of the Ndumbi port on Lake Nyasa,construction of the road from Simiyu region and to Sirari on the Tanzania/Kenya border.
According to Eng Mlote, the EAC Heads of State had way back in 2014 gave a priority status to the projects, paving way for implementation pending availability of the funds.
The Uganda minister of State for Works and Transport Aggrey Bagiire underscored the need to enhance capacities of the existing transport networks in the region "to cope with the future demands and to meet international standards and requirements". (All Africa)
African countries are forging ahead to complete negotiations for a continental free trade area between 55 countries by early next year. The idea, adopted by the African Union in 2012, is to create a single market which includes the free movement of goods, services and people. The integrated African market covers 1.2 billion people and a combined GDP of over USD$3.5 trillion.
Large markets are job-creating as they support more trade in goods, services and assets. It is expected that a well designed agreement would help Africa boost industrial development, promote economic transformation and create new wealth. The benefits won’t be automatic but will require continuous national, regional and continental efforts.
Large regional markets are also essential for industrialisation. This is because they attract investment into firms that can diversify their product lines and stimulate the creation of related industries. This includes the supply of spare parts, distribution of goods and provision of advisory services. Some of these may start as their supplies but they may also grow into independent enterprises.
Viewed against the odds of success in getting 55 countries to foster meaningful regional integration, Africa has made commendable progress in crafting its own creative approach. But reports from recent talks and a slowdown of regional integration efforts suggest a disturbing trend.
Some government delegates are likely to seek to include protection for existing products and industries. This would be detrimental to the process if these lists ended up shaping the final agreement given the 2018 signing deadline. Such a retreat would run counter to recent advances in Africa’s trade integration efforts. In 2015 for example, three regional trading blocs, covering 650 million people in 26 countries, signed the landmark Tripartite Free Trade Area with a combined GDP of over USD$1.5 trillion.
The trade agreement nevertheless needs to be carefully thought out, particularly given that Africa is starting with a low intra-regional trade of 15% compared to 19% in Latin America, 51% in Asia and 72% for Europe.
There is the risk that rushed negotiations could result in an agreement with too many exceptions to cover protected industries. This could include using non-tariff barriers – like safety measures – to protect local industries. A range of African countries use non-tariff barriers to curb imports of goods such as maize, milk, sugar, food oil products, and steel and iron.
Sensitive and excluded products – like sugar and dairy products – might in some cases cover up to 600 tariff lines (product codes used at the national level). But these exceptions should be used sparingly to enable domestic industries to access the larger regional and global markets needed for their growth.
In addition, the trade agreement needs to address the effects it may have on existing industries, environment, peace and security. It also needs to provide the policy space needed for governments to promote social policies such as job creation that could provide new performance standard for industries. Such policies should also balance between social goals and the need to be competitive on the global market.
Concerns over the expansion of foreign imports, rather than regional trade integration, also needs to be carefully assessed to avoid the free trade area becoming a conduit for imports. This could undermine Africa’s goals to increase its industrial and trade capacity. At present, nearly 85% of the goods traded in Africa come from outside the continent. Only 15% of the goods traded in Africa are produced locally, leading to an annual food import bill of over USD$35 billion.
But the focus of the negotiations should not be the fear of imports. Rather the focus should be on scaling up export production in existing niche markets through the creation of new industries. Examples of growing industries include the supply of semi-processed processed foods that are turned into final products by importers. African firms such as the Agro Chemical and Food Company in Kenya are also producing speciality chemicals which are used in a variety of medical and manufacturing industries.
Moving away from protectionism
The alternative to protection is therefore market growth. This involves having deeper knowledge of markets through the collection of key information market, eliminating trade barriers, reducing subsidies and upgrading the quality of infrastructure. It also involves building capacity to manage the rules of origin of products to avoid illegal dumping of goods, customs and trade procedures and reporting and resolution of trade barriers.
The negotiations need to shift their focus from protectionism to greater regional trade integration. One way to do this is to set up a high-level expert committee or panel – drawn from government, private sector, academia and civil society – to include other relevant perspectives on issues such as infrastructure, technological capacity, and industrial growth. This would help to broaden discussions to reflect Africa’s current needs of trade as an instrument for economic transformation.
This committee would be guided by evidence-based research as well as by Africa’s own regional trade experiences. There are many examples that show how quickly Africa is learning about the risks of using bans and exemptions to restrict regional trade. For example, Zambia’s positive decision to reverse a ban on fruit and vegetable imports.
The committee would also need to draw on lessons from other regions of the world. As I set out in Emergent Africa: Evolution of Regional Integration, Africa has a lot to learn from regional trade integration, especially the Association of Southeast Asian Nations .
The bloc’ approach to integration transcends the traditional focus on the free movement of goods. It includes measures such as the creation of industrial parks to foster industrial development. The region also uses technology-based agreements covering key fields such as information and telecommunications technologies. This is particularly important because of the role of engineering and technology in all aspects of trade covering product design, production and distribution through international logistics chains.
The future is open
The challenges facing African trade negotiators are not easy. Africa’s regional integration efforts are the most complex ever undertaken. They are not just about emulating trading rules used in other regions of the world. They are about remaking the continent to create new networked interactions between sovereign states in a flexible way. This makes for a more open future with expanding possibilities to use regional trade integration to spread prosperity.
Africa Day, held on 15 November within COP23 in Bonn, was the springboard for the official launch of Africa NDC Hub, the African Platform for Nationally Determined Contributions (NDCs). This African Development Bank (AfDB) initiative is intended to help the 54 African countries fulfil their commitments under the Paris Agreement, in other words, to put their respective NDCs into action without neglecting their own development priorities.
"This platform is a response to requests made by various African countries," said Amadou Hott, AfDB vice president for electricity, energy, climate change and green growth, as he unveiled the new initiative to a gathering of Heads of State, ministers, policy makers and representatives of civil society, among others, from across the continent. “It should be seen as an "opportunity to accelerate investment in climate action in Africa through NDCs," he said, noting that it will facilitate "better coordination among partners to provide a collective and effective response", for and by the whole of Africa.
A statement in the AfDB website reads ‘this platform should be a catalyst for concessional funding for climate-related projects in Africa which will, in turn, help raise private finance. This is a most timely initiative, bearing in mind that, US$ 4 billion will be required to implement the NDCs, according to recent studies’.
While all 54 African countries signed the Paris Agreement, 43 have ratified it and 53 (the exception being Libya) have submitted their NDCs, 85% of which are conditional upon financial aid from abroad while only 15% are on the basis of domestic budgets. And Africa is already the poor orphan when it comes to world climate funding, capturing less than 5% of the total. Thus, the announcement of this new platform was warmly welcomed.
To date, Africa NDC Hub has 10 partners other than AfDB: the African Union Commission (AUC), the United Nations Economic Commission for Africa (UNECA), the NEPAD Planning and Coordination Agency, the Food and Agriculture Organization of the United Nations (FAO), the United Nations Development Programme (UNDP), the United Nations Environment Programme (UNEP), the Economic Community of West African States (ECOWAS), the World Wildlife Fund (WWF), the International Institute for the Environment and Development (IIED) and the secretariat of the United Nations Framework Convention on Climate Change.
Almost twenty years after the launch of the first Forum on China-Africa Cooperation, China-Africa relations remain unbalanced. Bilateral trade has leaped over the past ten years (a total of $123 billion in 2016), driven, up to 2014, by exports, which have fallen by 51% since the peak. The region now has a trade deficit with China. While exports remain mainly concentrated on natural resources (90% of exports to China), imports are more diversified and include manufactured goods, transport equipment, and machinery (51% of the total) before minerals and precious metals. This trade imbalance also reinforces the risk of "Dutch disease" which, in economics, links the decline of the local manufacturing sector to the economic development of raw materials.
The slowdown in the Chinese economy and the reorientation of its growth model towards private consumption are reflected in a weakening of demand for commodities from Africa. This will have inevitable consequences for exporters. According to Coface economists' calculations, sub-Saharan Africa had a significantly higher export dependency ratio (on a 0-to-1 scale) than other emerging countries in 2016, at 0.24 compared to 0.16 for South-East Asia (one of China's largest trading partners) and 0.19 for Russia, Brazil, and India. The differential is even greater with the European Union (0.07) and the United States (0.12).
Unsurprisingly, the countries that have benefited the most from China's expansion and those with a less diversified economy are likely to feel the effects of lower demand more acutely. The strongest trade dependency is concentrated around crude oil exports and, according to the index established by Coface, South Sudan has been at the top of the ranking since its independence was declared in 2011, followed by Angola and Congo. The Gambia, which produces wood, is not far behind. Eritrea, Guinea, and Mauritania are also among the most dependent countries because of their exports of metal ores (iron, copper, aluminium).
Despite this strong dependence on exports to China, the China-Africa relationship could turn into a win-win cooperation. Africa’s export basket is gradually diversifying, incorporating higher value-added processed raw materials, raw wood, and, to a lesser extent, some agricultural products (tobacco, citrus fruit, seeds, and oleaginous fruit), matching the needs of China’s emerging middle class. Even if such a change maintains the vulnerability of commodity-rich countries to international price developments, this could increase local incomes and foster employment and technology transfers.
Diversification also includes FDI flows and loans from China. Chinese investments in Africa are no longer extractive in nature and now extend to services, processing industries, transportation, and utilities. Existing initiatives, such as the One Belt, One Road, will ultimately boost regional connectivity and reduce export costs.
However, since FDI and financing flows are much lower than trade flows, African countries that are heavily dependent on China remain highly vulnerable to weakening demand or a further decline in the prices of raw materials. Moreover, the risk for African governments would be to increase their vulnerability to changes in China’s foreign policy and to those of its demand because Chinese interests in the region are, first and foremost, based on a complex network of political and economic objectives.
“The latest developments seem to be moving in the right direction but efforts are still needed to move from a marriage of unbalanced convenience to a partnership based on win-win cooperation,” said Ruben Nizard, Coface’s economist in charge of sub-Saharan Africa and co-author of the study, “China-Africa: will the marriage of convenience last?”. (Coface)
The 4th Global Business Forum on Africa, organised by the Dubai Chamber of Commerce and Industry, has called for increase in investment flows between the UAE and Africa in several key sectors, including trade, financial services, logistics, and tourism.
A poll conducted during the two-day forum revealed that 48% of delegates considered trade to be the most promising sector for investment, followed by financial services (24%), and 14% for both logistics and tourism sectors.
Participants labeled the above sectors as key areas where Dubai can offer its expertise and investment to boost African economies.
Over the last five years, Dubai Chamber of Commerce and Industry has stepped up its efforts aimed at strengthening economic ties between Dubai and Africa by opening four representative offices on the continent and organising the Global Business Forum on Africa in Dubai.
The Chamber recently announced that it has invested about $27.7 million to raise awareness of trade and investment opportunities in Africa, and promote Dubai as an attractive business hub for companies on the continent.
Other activities carried out by the Chamber in recent years include organising frequent trade missions to African countries, conducting specialised research and studies, and developing the Africa Gateway app to expand is members’ access to opportunities opening up in the fast-growing market.
President and CEO of Dubai Chamber, Hamad Buamim explained that these efforts have given a major boost to UAE-Africa trade ties by facilitating cooperation between businesses and investors on both sides.
He noted that the Global Business Forum on Africa was launched in 2013 with the intention of establishing an ideal platform to explore business potential in Africa, adding that participation in the forum has increased significantly in recent years.
He revealed that Dubai’s non-oil trade with Africa has grown to exceed AED 700 billion in the last five years, while 10,000 African companies have joined Dubai Chamber over the same period, bring the total number of African businesses registered with the Chamber to over 17,000 today.
“There are different sectors that investor from different part of the world look at in Africa and infrastructure is one of the very important sector, we see construction as an opportunity for businesses in our part of the world because of the experience we have in developing infrastructure in Dubai and the Gulf region,” he said.
According to a number of Africa-based entrepreneurs, African countries have come a long way in terms of connectivity, by expanding digital infrastructure and opening up their economies to new growth opportunities.
Emirate the world’s fourth largest airline and the largest in the Gulf with a 6 percent passenger growth in Africa in 2017 recently announced an increase of more destinations in Africa as a means of improving business integration with the continent.
The Senior Vice president, commercial operations for Africa, Emirates, Orhan Abbas said they have a hub in Dubai that caters to all the connectivities in each point in Africa”
“As you know the African continent is large and huge from the north to the south, many hours of flying and off course any flight you take on Emirate stop at the hub in Dubai. We operate in 22 countries in Africa, if a passenger is coming out from Morocco, and stop over at Dubai, they have a choice of four flights a day from Johannesburg or three flights a day to Cape Town or Durban,” he added.
The Chief executive officer, Dubia Corporation for Tourism, Issam Kazim noted that they are leveraging on the social media and the digital spaces as well to hit the mass audience within Africa.
“I think for us, it was important, we had a very good experience working with one of the movie stars in Nigeria and Africa as well, which is the wedding party. We participated in the award ceremony, and we had an amazing reaction from the market, so that gave us the incentive to actually work with the same producers to shoot their sequence in Dubai. It encourages people to really get an experience of these celebrities that they are familiar with what they are doing in Dubai and how they experience Dubai as well,” Kazim said.
The Global Business Forum on Africa, organised by Dubai Chamber, is the largest event of its kind that is hosted outside of the continent, while it remains one of the most high-profile international forums dedicated to exploring investment opportunities in fast-growing African markets.
This year’s forum, held under the theme “Next Generation Africa”, examined the role of young African entrepreneurs who are stimulating economic growth, and building relationships and partnerships with companies around the world. In addition, sessions focused on how technology and digitalisation are reshaping African economies and meeting the demand of a growing middle class.