Over the course of two days, Pan-African Trade experts will meet to validate the methodology to produce the African Continental Free Trade Area (AfCFTA) Country Business Index at the United Nations Conference Centre in Addis Ababa.
The aim of the index is to provide an assessment of the extent to which businesses across Africa find trading across borders in Africa challenging, and to identify the main barriers to trade they experience. The index will allow for a ranking of this data across countries and provide an evaluation of the developmental impact of the AfCFTA. Views will be collected through a survey administered through regional and local chambers of commerce and industry.
“The index is an instrument that provides business perceptions of the country-specific challenges in their own country, and how these country challenges impact on firms’ ability to trade across borders in Africa” says Adeyinka Adeyemi, Senior Advisor at the United Nations Economic Commission for Africa (ECA).
The AfCFTA entered into force on 30 May 2019 having been ratified by the required 22 countries. Currently, 54 countries have signed, and 29 countries have ratified the AfCFTA. The AfCFTA provides the opportunity for Africa to create the world's largest free trade area, with the potential to unite more than 1.2 billion people, in a $2.5 trillion economic bloc and usher in a new era of development. The AfCFTA has the potential to generate a range of benefits through supporting trade creation, structural transformation, productive employment and poverty reduction.
The AfCFTA Country Business Index is part of a comprehensive project aimed at deepening Africa's trade integration through effective implementation of the AfCFTA. Financially supported by the European Union, ECA has been working with its partners including the African Union Commission (AUC), International Trade Centre (ITC), United Nations Conference on Trade and Development (UNCTAD) and a selection of independent trade experts to ensure effective AfCFTA implementation strategies.
The Committee on Private Sector, Regional Integration, Trade, Infrastructure, Industry and Technology (CPRTIIT), comprising senior officials and experts from member states, which meets biennially opened today in Addis Ababa on the theme: Private Sector Development and the Digital Economy in support of Regional integration in Africa. According to the organizing team, the Committee, which has been in place since 1999 has been reconstituted by the Economic Commission for Africa under a broader mandate, that gives prominence to the private sector, to harness its full potential for job creation as well as its capacity to finance development and make regional integration functional.
Speaking at the opening, Stephen Karingi Director Regional Integration and Industrialisation Division at the ECA said, studies by ECA have shown that the African Continental Free Trade Area, - AfCFTA could increase intra-African trade by between 15 to 25 per cent, compared to a scenario with no AfCFTA in place. With this in mind, stated Karingi, “increase in trade in itself is not as interesting as the composition of the trade created and around two-thirds of the gain is expected to be derived from industrial goods, providing a good environment for diversification of the African economies.”
He also said that the increase in trade expected to provide good quality jobs and improve livelihoods on the ground and the Continent will also benefit from strengthened regional supply chains.
While the economic gains are clear, Karingi opined that they will not be automatic. The AfCFTA provides the platform through which new industrialisation pathways can be realised, by harnessing the opportunities digitalisation offers. The Agreement, added Karingi, has to go beyond goods and services and a working dispute settlement “..it has to embrace the digital age in which it is coming into life.”
The meeting also learnt that the African Union Commission and the ECA are finalising a Digital Transformation Strategy for Africa, which will be presented at the AU Summit in February 2020 for consideration. The Digital Transformation Strategy will help unlock the potential of the digital economy.
Ambassador Mesganu Arga Moach, Ethiopia’s State Minister in the Ministry of Trade said his country is preparing a draft national law which outlies the governance framework for ecommerce. The law, said the Minister, will be ground breaking for businesses that are moving towards online trading and financial transactions.
He also told the gathering that Ethiopia has launched an electronic world trade platform - the second in Africa after Rwanda - which will enable Ethiopia to provide smart logistics and services, conduct cross-border trades with a focus on small and medium-sized enterprises. The platform will be pivotal in availing market opportunities and linkages for SMEs with business across the globe.
“Our policies are being designed to encourage adoption, but also to enhance innovative capabilities in creating home-grown technologies, products and services, said the Minister.
Pepin Guilaume Manjolo Buakila, Minister of International Cooperation, Regional Integration and Francophonie expressed his appreciation to the ECA for organizing the series of meetings to provided experts with an opportunity to examine the studies done by the ECA, particularly in areas aimed at maximising the implementation of the AfCFTA, even as the Continent seeks to address numerous challenges, including low levels of diversification and governance.
Nigeria Determined to Fully Implement AfCFTA Terms and Commitments, Industry Minister
Lagos, Nigeria, December 5, 2019 (ECA) – Nigeria is determined to fully implement the terms of the African Continental Free Trade Agreement (AfCFTA) and uphold its commitments on trade and regional integration, the country’s Industry, Trade and Investment Minister, Mr. Adeniyi Adebayo, said Monday.
In remarks to a two-day national AfCTA forum that opened Monday in Lagos, Mr. Adebayo said Nigeria, however, will not allow smuggling and other predatory trade practices to continue unchecked in the country as this undermines the nation’s development efforts and destroyed local industries, leading to job losses.
“We also will not allow rogue traders to manipulate the rules of origin and disguise goods from outside the continent as made in Africa so as to qualify for duty free passage,” he said, adding for a successful implementation of the AfCFTA, his government had constituted the National Action Committee to coordinate a wide range of actions at the domestic, regional and continental levels
From the studies done so far, the Minister said, Nigeria has established that the AfCFTA can facilitate economic growth and diversification through preferential access to Africa’s market for manufactured goods and services.
This can be done through upping the country’s production capacity, retooling and upscaling existing businesses and assisting sectors that will be negatively impacted to migrate to new areas; prioritizing the resolution of bottlenecks that hinder competitiveness in trade, including hard infrastructure such as power and logistics as well as policies and regulations; and enforcement of trade rules without compromising the country’s efforts on trade facilitation and ease of doing business.
“Whilst we have rightfully been wary of the risks posed by the AfCFTA to Nigeria, we ought now to look at it with significant optimism,” the Minister said, adding the Nigerian Export Promotion Council had mapped out goods and services where the country has strong potential to export to Africa.
President Muhammadu Buhari signed the AfCFTA agreement in July after what his government said were comprehensive consultations with the private sector and in-depth consideration of its potential impact on the Nigerian economy.
The forum, running under the theme Effective Implementation for Industrialisation and Inclusive Economic Development in Nigeria is also a platform to actively engage with and consult intra-African actors across a diverse range of different sectors to better understand how the agreement can shape more inclusive economic development in Nigeria.
The AfCFTA entered into force on 30 May 2019 and implementation starts in July 2020. The historic agreement provides an opportunity for Africa to create the world's largest free trade area, with the potential to unite 1.3 billion people, in a $2.5 trillion economic bloc, ushering in a new era of development.
The forum was co-organized by the United Nations Economic Commission for Africa (ECA), the European Union, the Manufacturers Association of Nigeria (MAN), the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), and in collaboration with the African Union Commission (AUC).
Click here for the report.
Following the introduction, the structure of the report is as follows: section II focuses on trade integration; section III on productive integration; section IV on macroeconomic integration; section V on infrastructure integration; section VI on migration and the free movement of people; section VII on governance, peace and security; and, to close, section VIII offers a conclusion and recommendations
Profiled side events (9-10 December): Governing the interface between the AfCFTA and RECs’ Free Trade Areas: issues, opportunities and challenges; Review and validation of the methodological approach to produce the AfCFTA Country Business Index; Africa’s Services Trade Liberalization and Integration under the AfCFTA; Towards a common investment area in the AfCFTA: levelling the playing field for intra-African investment.
Click here for paper update.
The Specialized Technical Committee recommendations were adopted during the AU Summit in February 2019, which gave a concrete mandate to the African Union Commission, in cooperation with African Union member States, ECA and all relevant stakeholders, to develop a comprehensive African Union Digital Trade and Digital Economy Development Strategy, to be presented for adoption during the summit scheduled for January 2020.
In 2020, it is planned that the sub-programme will scale up its pilot project on informal cross-border trade and apply the methodology to other corridors and regions on the continent, with the ultimate goal of developing a single continental framework for informal cross-border trade data collection in the context of implementation and monitoring of the Agreement Establishing the African Continental Free Trade Area.
In 2020, sub-programme 2 proposes to explore the possibility of a research project on the structural and policy underpinnings required to facilitate the emergence of an African Customs Union to support the implementation of the Agreement Establishing the African Continental Free Trade Area.
A new work programme that is focused on assessing the human rights and inclusivity implications of the trade and climate change nexus will be launched in the context of the partnership of ECA with OHCHR and the Friedrich-Ebert-Stiftung. In the context of the AfCFTA, this work stream will further focus on strategies for green industrialization and technological leapfrogging to ensure a low carbon and sustainable growth trajectory for member States. The findings are expected to provide cutting-edge and innovative contributions to the climate change policy debate and the United Nations Climate Change Conference – 26th Conference of the Parties in 2020.
The digital trade and digital economy work stream will engage more deeply in the themes of e-commerce in free trade agreements and support the implementation of the African Union Digital Trade and Digital Economy Strategy. The work stream will also support preparations across the continent for multilateral and plurilateral e-commerce negotiations through a study on the practical issues of e-commerce entrepreneurship to identify African interests and possible negotiating positions.
Nigeria, which signed the landmark African Continental Free Trade Agreement in July, is this weekhosting its national AfCFTA Forum on the "Effective Implementation of the AfCFTA for Industrialization and Inclusive Economic Development".
The Forum, which runs from 5-6 December 2019 in Lagos, is being co-organized with the United Nations Economic Commission for Africa (ECA), the European Union, the Manufacturers Association of Nigeria (MAN), the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), and in collaboration with the African Union Commission (AUC).
This AfCFTA Forum will bring together the private sector in Nigeria to afford them the opportunity to learn how to best leverage the opportunities within the AfCFTA. The role of the private sector is critical in its implementation," says Mr. Adeyinka Adeyemi, Senior Advisor with the African Trade Policy Centre at the ECA.
The forum is also a platform to actively engage with and consult intra-African actors across a diverse range of different sectors to better understand how the agreement can shape more inclusive economic development in Nigeria.
The AfCFTA entered into force on 30 May 2019 having been ratified by the required 22 countries. Currently, 54 countries have signed, and 27 countries have ratified the AfCFTA. The historic agreement provides an opportunity for Africa to create the world's largest free trade area, with the potential to unite 1.3 billion people, in a $2.5 trillion economic bloc, ushering in a new era of development.
The agreement has the potential to generate a range of benefits for Nigeria through supporting trade creation, structural transformation, productive employment and poverty reduction.
Nigerian President, Mr. Muhammadu Buhari, signed the AfCFTA agreement in Niamey at the African Union Summit in July after what his government said were comprehensive consultations with the private sector and in-depth consideration of its potential impact on the Nigerian economy.
Following this, the National Action Committee for the implementation of the AfCFTA under the chairmanship of Mr. Otunba Niyi Adebayo, the Minister of Industry, Trade and Investment, was created, signalling its readiness to implement the agreement.
In meeting these objectives, the AfCFTA will become a key engine of economic growth, industrialization and sustainable development in Africa in line with the African Union’s Agenda 2063 for "The Africa We Want".
This Forum is part of a comprehensive project, supported financially by the European Union, aiming to deepen Africa's trade integration through effective implementation of the AfCFTA. The ECA has been working with its partners including the African Union Commission (AUC), International Trade Centre (ITC), United Nations Conference on Trade and Development (UNCTAD) and a selection of independent trade experts to ensure effective AfCFTA implementation strategies.
The UN Economic Commission for Africa and the ECCAS General Secretariat have convened National experts from the eleven ECCAS Member States to a three-day regional workshop to prepare the subregion’s comprehensive lists of services to be tabled for unhampered trade once borders open up under the African Continental Free trade Area regime by July 2020.
The exercise which will run from 3 to 5 December in Douala Cameroon will be presided over by the Assistant Secretary-General of ECCAS in charge of the Department of Physical, Economic and Monetary Integration (SGA-DIPEM).
It is meant to technically support the ECCAS Member States in the drafting of convergent regional specific lists of commitments, consistent with the regulatory frameworks, in the African Union’s five priority sectors of services (financial services, transport, telecommunications / ICTs, professional services and tourism). The lists would be submitted to the AU by the start of 2020.
More specifically, the meeting will:
1- Promote the appropriation by the Member States of the techniques and tools for negotiation on trade in services within the framework of the AfCFTA;
2- Accompany ECCAS Member States in the definition of convergent positions which would be reflected in the creation of a free-trade area for services in Africa;
3- Build capacity and technically support ECCAS Member States to develop specific lists of commitments that are consistent with relevant regulatory frameworks.
This is considered a serious exercise as African countries are expected to be get fully integrated the exchange of services by July 2020 following the conclusions of the AU Summit of July 2019 in Niamey during which the operational phase of the AfCFTA was launched. This prospect is likely to materialize, on the basis of the AfCFTA Protocol on Trade in Services, the commitment of AU Member States to begin liberalization of trade in services at continental level through a process of specific commitments backed by harmonious regulatory frameworks in the five priority sectors.
However, owing to the methodological and technical requirements inherent in the preparation of such lists, the ECCAS Secretariat General is supposed to accompany and support its Member States in this exercise, in order to allow them at the end of this regional workshop, to come up with convergent regional lists of specific commitments in the five priority sectors of AfCFTA, consistent with the relevant regulatory frameworks.
ECA is working side by side the ECCAS General Secretariat, as well as all other statutory AU Regional Economic Communities, to compile these specific lists of commitments for continental trade in services.
Specifically, the conference will give African stakeholders, youth representatives and political leaders the opportunity to: provide their insights and thoughts on the debate on youth jobs, skills and entrepreneurship capacities; assess the impact of past and current reforms and initiatives to address youth jobs challenges in Africa; and discuss the feasibility of proposed innovative policy options to reap the benefits of Africa’s youth bulge and address the challenge of youth skills mismatch in the labor market. [Twitter updates: #AEC2019]
The Sustainable Development, Sustainable Debt: Finding the Right Balance conference is underway in Dakar. The opening address was delivered by the IMF’s managing director, Kristalina Georgieva. A backgrounder by the IMF’s Abebe Aemro Selassie: Africa’s Infrastructure Gap and Debt
The midterm review on the implementation of the Vienna Programme of Action for Landlocked Developing Countries for the Decade 2014–2024 takes place later this week in New York. Downloads include National Reports and three regional preparatory reviews. UNCTAD compiled this backgrounder.
German companies in Kenya less optimistic about their business (AHK Eastern Africa)
German companies are still confident about their business in Kenya but optimism has decreased in the last six months, as indicated in the Autumn 2019 World Business Outlook Survey, released by the Delegation of German Industry and Commerce for Eastern Africa (AHK Eastern Africa) in cooperation with the German Business Association in Kenya. According to the survey results, the business expectations of companies in the next twelve months now stands at 62% expecting higher/better. This is down from 71% in the Spring 2019 survey results. In addition, interest in expansion of existing employee base has fallen to 38%, down from 45%, while 48% remained constant in their desire to maintain their current employee numbers. However, the German business community in Kenya still sees many opportunities for bilateral trade relations and economic growth, including employment opportunities. 57% of responding companies, up from 42%, indicated their current situation is likely to remain constant. In addition, 33%, up from 19%, still maintain constant positive business expectation for the next 12 months. The highest increase is 33% expecting better/higher economic growth for their organization, up from 29%, while 52%, up from 42%, expect their economic growth to remain constant.
South Africa’s merchandise trade statistics: October surplus
The South African Revenue Service, on Friday, released trade statistics for October 2019 recording a trade surplus of R3.09bn. The trade surplus is attributable to exports of R123.35bn and imports of R120.26bnn. Exports increased from September 2019 to October 2019 by R13.09bn (11.9%) while imports increased by R14.53bn (13.7%). The year-to-date (1 Jan - 31 Oct) trade surplus of R5.32bn is an improvement from the R3.70bn deficit for the comparable period in 2018. Exports increased by 2.8% year-on-year whilst imports for the same period showed a decrease of 4.3%. The top 5 countries for exports during October: China (10.1%), Germany (9.1%), US (6.8%), Mozambique (5.0%), UK (4.7%). Top 5 countries for imports: China (18.6%), Germany (10.1%), US (7.0%), India (4.8%), Nigeria (3.9%). [Related: SA’s tourism trade balance edges lower]
The National Council of Province is scheduled to consider the BMA Bill on Tuesday. This will bring to finality deliberations on the Bill and once adopted, will be referred back to the National Assembly which will then consider it for submission to the President before it becomes law. In the meantime, the BMA project management team has been busy finalising the technical work required to establish the BMA. I have directed the BMA project management office to focus their initial efforts in strengthening the borderline between Limpopo and Zimbabwe, Mpumalanga and Mozambique and KwaZulu-Natal with Mozambique.
On the e-Visa pilot: The department is testing the new system with Kenya. As part of the pilot, a team of DHA immigration and IT officials visited Kenya. This team is scheduled to return to Kenya next week, on 09 December 2019. The first Kenyan tourist who applied for a visitors’ visa on the new e-Visa system arrived yesterday afternoon and more are expected this week as part of the pilot. We are continuously monitoring this pilot process to ensure that user experience is not compromised. In early 2020, we’ll include China, India and Nigeria to the pilot which will run until March 2020.
The 39th Meeting of the EAC Council of Ministers has approved the final draft Cotton, Textiles and Apparels (CTA) Strategy and its implementation roadmap. The strategy makes a critical analysis of the CTA sector along the following key levels of the value chain: cotton seed (production); seed cotton (ginning); cotton lint (spinning); yarn (weaving/knitting/printing/dyeing/finishing), and fabrics (garments/apparels/fabrication/manufacturing) level. The Council further approved the Final Draft Leather and Leather Products Sector Strategy and its Implementation Roadmap.
The Council directed the Sectoral Council on Agriculture and Food Security to develop a strategy to boost the production of cotton in the region. In their deliberations, the Ministers observed that the seed cotton sector was constrained by low and declining production, low productivity, low quality and fluctuating farm gate prices. Textile mills were further constrained by outdated technology; low spinning capacity, availability of cotton lint, high cost of energy and low skill levels.
The Council also approved the draft EAC Export Promotion Strategy 2020 – 2025 for implementation. The EPS 2020-2025 contains the following strategic interventions: Stimulate exports through acquired market intelligence for enterprises and improved visibility on international markets; Improve market access and conditions for EAC export; Strengthen export competitiveness through interventions like improved access to finance and technology for enterprises, in particular SMEs, and; Strengthen the trade support institutions and partnerships.
The Council referred the request for admission to the EAC from the Democratic Republic of Congo to the 21st Summit of the EAC Heads of State for consideration.
The EU and COMESA have signed an €8.8m contribution agreement to increase private sector participation in sustainable regional and global value chains through improved investment/business climate and enhanced competitiveness in the COMESA region. This was one of the activities conducted during the opening of the 40th Meeting of the Council of Ministers that took place in Lusaka. The funds will be used to implement the Regional Enterprise Competitiveness and Access to Markets Programme (RECAMP), focusing on agro-processing, horticulture and leather products. RECAMP will also support pre-selected value chains based on the potential to generate value addition, jobs creation and attraction of investments to the region.
Rwanda, DRC begin joint border services (New Times)
The Rwanda-DR Congo border of La Corniche, popularly known as Grande Barrière, on Saturday started operating as a OSBP, according to the Directorate General of Immigration and Emigration. Grande Barrière is one of the busiest border crossings on the continent. Construction of the OSBP linking Rubavu in Western Province to the border city of Goma in eastern DR Congo was launched in late 2014, with the project’s construction, worth $9m (about Rwf6 billion), financed by the Howard G. Buffet Foundation.
2020 Africa-France Summit: African technical consultation meeting in Lusaka (AU)
African experts have convened in Lusaka to deliberate on regional priorities in preparation for the 2020 Africa-France Summit, billed for 4-6 June 2020 in Bordeaux, France on the theme of “Better Cities, Better Lives” co-hosted by the AUC, the ECA and UN-Habitat. With Africa having the world’s highest rate of urban growth (3.58%) and its urban population doubling between 1995 and 2015 and projected to almost double again by 2035, the Summit presents an opportunity for African countries to further reinvigorate commitments to advance sustainable urbanization through innovative solutions, and strengthen international cooperation in this regard. Mr Apollinaire Nkeshimana (Ministry of Minister of Local Government of Public Works, Infrastructure and Urban Planning of Burundi) and the representative of the Chair of the Sub-committee on Human Settlement and Urban Development of the AU-STC8, emphasized that the Africa-France 2020 Summit aims to develop new long-term partnerships within the framework of Africa-France cooperation.
Since 1998, WTO members have periodically taken decisions at Ministerial Conferences to continue their practice of not imposing customs duties on electronic transmissions. Recognizing the potential implications on certainty and predictability for business and consumers from the moratorium lapsing prior to the next Ministerial Conference, we propose an extension of the moratorium until the 12th Ministerial Conference and to continue the work under the Work Programme on Electronic Commerce during this period. We note that the moratorium is without prejudice to Members’ right to impose internal taxes, fees or other charges in a manner consistent with WTO Agreements. We propose that the General Council adopts a decision to this effect at its meeting in December 2019 and we will submit a draft decision in the near future.
Draft General Council Decision (pdf). The General Council decides as follows: Members agree to continue the work under the Work Programme on Electronic Commerce, based on the existing mandate as set out in WT/L/274. Members agree to maintain the current practice of not imposing customs duties on electronic transmissions until the 12th Ministerial Conference. The General Council shall report to the 12th session of the Ministerial Conference. [Note: Both documents circulated by: Australia, Canada, Chile, Colombia, Costa Rica, Georgia, Guatemala, Hong Kong, China, Iceland, Israel, Korea, Mexico, New Zealand, Norway, Panama, Paraguay, Singapore, Switzerland, Thailand, Uruguay]
Global Sugar Alliance committed to stamping out export subsidies (Queensland Country Life)
Members of the Global Sugar Alliance have reaffirmed their commitment to use all avenues available to stamp out export subsidies and remove trade-distorting domestic price supports. Meeting in London last week to celebrate 20 years since the alliance of countries was formed, government ministers and industry representative organisations discussed the sugar price supports and export subsidies being paid by the Indian government, and India’s alleged violation of its commitments to the world community made in the WTO. Canegrowers chairman Paul Schembri said Australia, Brazil and Guatemala remain 100% committed to the action they have launched with the WTO. “We do know that a dispute panel has now been formed,” Mr Schembri said. “These things do take time but we’re confident we will get a result in 2020. This is going to be a defining year for us.”
Mr Schembri said this was not just an action against India: “This is also sending a signal from Australia and other countries that aren’t subsidised, that if we think any country is breaking WTO rules, we will ferociously protect our patch to ensure that producers get a fair go and access to a fair world price.” The action in the WTO comes after the Indian government approved an export subsidy equal to a staggering A$216/tonne in August. The unprecedented subsidy is designed to enable India to export more than 6 million tonnes of sugar over the next year, a move which will flood global markets.
Commerce and Industry Minister Piyush Goyal on Saturday said India was looking at introducing a “border adjustment tax” on low cost imports from free trade partner countries, which will bring level playing field between such imports and locally produced goods. The proposed tax is perfectly compliant with the WTO’s rules on multilateral trade, Goyal said in his address to industry leaders at the Economic Times Awards for Corporate Excellence, 2019, on Saturday in Mumbai. The proposal for a “border adjustment tax” came up from a domestic steel maker at a recent meeting on ‘Make In India’, the minister said. Goyal emphasised that India’s trade policy rests on national interest as well as on the interests of its people and the industry, which will guide all government engagement with the rest of the world. “The interest of our people and industry are paramount. That is the terms of India’s engagement with the rest of the world. No more will India stand with weak knees or play on the backfoot,” the minister said, adding that India walked out of the Regional Comprehensive Economic Partnership deal earlier this month when the country’s concerns were not adequately addressed.