ATPC DAILY DIGEST 7 AUGUST 2020
Today’s Topics:
‘Women Gain Economic Benefits from Greater Trade’ – (This Day)
The African Continental Free Trade Area : Economic and Distributional Effects – (World Bank)
Free Trade Agreement’ll boost Africa economies’ -experts predict - (The Sun)
Egypt: Trade Minister Orders Restructure of CPO for Intellectual Property Rights – (Egypt Online)
Rwanda harnesses technology to fight COVID-19, drive recovery – (tralac)
Tanzania: Horticultural Exports Rise to 800m Usd in Five Years – (Daily News)
ECOWAS Bank invests US$2.9 billion in economies of member states – (Ghana Web)
Mozambique: Afreximbank Commits U.S.$400 Million To Mozambique's LNG Project – (allAfrica)
INTERNATIONAL
‘Women Gain Economic Benefits from Greater Trade’ – Trade increases women’s wages and helps close the wage gap between men and women while creating better jobs for women, a new World Bank Group report has stated. It stated that countries that are open to international trade tend to grow faster, innovate, improve productivity, and provide higher income and more opportunities to their people. Countries that are more open to trade, as measured by the trade-to-GDP ratio, have higher levels of gender equality. The report, produced in collaboration with the World Trade Organisation, marked the first major effort to quantify how women are affected by trade using a new gender-disaggregated dataset. The dataset, developed by the World Bank Group, allows researchers to understand how women are employed, in which industries they work, how much they earn, and whether or not they are involved in global trade. This analysis helps governments see how trade policies can affect women and men differently. “Over the past 30 years, trade has been the engine of poverty reduction. This report shows that, provided the right policies are in place, it can also provide an engine to reduce the gender gap,” World Bank Managing Director, Mari Pangestu said. “Trade can expand women’s role in the economy and decrease disparities with men by giving women more and better employment opportunities. Seizing these opportunities will be even more important in a post-COVID-19 world.”
The report titled, ‘Women and Trade: The Role of Trade in Promoting Women’s Equality,’ offers several key findings. It showed that firms that are part of global value chains (GVCs) employ a greater percentage of women (33 percent) relative to non-GVC firms (24 percent). “When countries open themselves to trade, women’s share of wages in the manufacturing sector increase by 5.8 percentage points on average. When women are employed in sectors with high exports, they are more likely to be formally employed. Formal employment means better job benefits, training, and job security,”nit stated. The report also highlighted the importance of addressing discrimination against women in trade policy. Although no country overtly imposes tariffs according to gender, implicit biases can amount to “pink tariffs” that put women at an economic disadvantage. (This Day)
Key Words: Global Trade, GVCs, COVID-19
PAN AFRICA
The African Continental Free Trade Area : Economic and Distributional Effects – The African Continental Free Trade Area (AfCFTA) agreement will create the largest free trade area in the world, measured by the number of countries participating. The pact will connect 1.3 billion people across 55 countries with a combined GDP valued at $3.4 trillion. It has the potential to lift 30 million people out of extreme poverty by 2035. But achieving its full potential will depend on putting in place significant policy reforms and trade facilitation measures. The scope of the agreement is considerable. It will reduce tariffs among member countries and cover policy areas, such as trade facilitation and services, as well as regulatory measures, such as sanitary standards and technical barriers to trade. It will complement existing subregional economic communities and trade agreements by offering a continent-wide regulatory framework and by regulating policy areas—such as investment and intellectual property rights protection—that have not been covered in most subregional agreements. The African Continental Free Trade Area: Economic and Distributional Effects quantifies the long-term implications of the agreement for growth, trade, poverty reduction, and employment. Its analysis goes beyond that in previous studies that have largely focused on tariff and nontariff barriers in goods—by including the effects of services and trade facilitation measures, as well as the distributional impacts on poverty, employment, and wages of female and male workers. It is designed to guide policy makers as they develop and implement the extensive range of reforms needed to realize the substantial rewards that the agreement offers. The analysis shows that full implementation of AfCFTA could boost income by 7 percent, or nearly $450 billion, in 2014 prices and market exchange rates. The agreement would also significantly expand African trade—particularly intraregional trade in manufacturing. In addition, it would increase employment opportunities and wages for unskilled workers and help close the wage gap between men and women.(World Bank)
Key Words: World Bank, AfCFTA, Regional Integration
Free Trade Agreement’ll boost Africa economies’ -experts predict - Experts have predicted that the commencement of the Africa Continental Free Trade Agreement (AcFta) in January 2021 will boost the economies of member nations. They gave the assurance at a webinar organized by the Alliance Law Firm, Lagos with the theme: “Leveraging international trade law for the recovery of the global economy during the post COVID-19.” Participants at the webinar are the keynote speaker, who is the president of Afreximbank, Prof. Benedict Oramah; director of Agriculture and Commodities division, World Trade organization, Edwini Kessie; Partner, King and Spalding LLP, Mr. Daniel Crosby; director of legal services, African Export-Import Bank, Ms. Samallie Kiyingi and the immediate past registrar, UNIRMCT, Dr. Olufemi Elias. Others are: The chairman, Nigeria Bar Association Section on Business Law (NBA-SBL), Mr. Seni Adio (SAN); chairman, International Trade Law Committee and managing partner, Alliance law firm, Uche Val Obi (SAN) and the principal partner, Folashade Alli and Associates, Mrs. Folashade Alli moderated the event. In his address, Prof. Oramah explained that in the absence of international cooperations towards a shared growth and prosperity at the world level, Africa has to take her destiny in her own hands. “Thank God our leaders have risen to the challenge. The African Continental Free trade agreement provides that alternative. The journey for a rich African has already begun with the signing of the AcFta,” he said. He lamented that the emergence COVID-19 caused the shift of the commencement of the Agreement from July 2020 to January 2021 and stressed that AcFta is expected to boost inter-Africa trade. He charged lawyers to advise governments and stakeholders on the essential elements of the agreement.
Speaking on how Nigeria could use the emergence of COVID-19 to address its challenges, the organizer, Uche Val Obi (SAN), noted that the country hesitated in signing the agreement on the excuse that it wanted to carry all stakeholders along. He however maintained that it was never in contest that AcFta was a very relevant continental pact meant for the economic growth of member states. According to him, the closure of land borders by Nigeria around October 2019 to curb smuggling, aggravated the situation. This is because it was coming at the heels of the pressure to sign the pact,” he said. “COVID-19 provided an opportunity to assess the contribution of international trade to the global economy. Consequently, it has become imperative for concerted efforts to be made at the regional level to restore things.”(The Sun)
Words: AfCFTA, Regional Integration, COVID-19
Why the African Free Trade Area Could Be the Game-Changer for the Continent's Economies – Most economists see structural transformation as one of the main routes to Africa’s sustainable development. What it means is changing the share of agriculture, manufacturing and services in an economy. It is a central aim of the African Union’s Agenda 2063. With this aim in mind, economists and policymakers need to know what determines structural transformation. They have flagged factors like demand for goods and services, trade policies, financial development, institutional quality and economic integration. But researchers haven’t closely examined the way economic integration through trade and finance influences structural transformation. I therefore set out to study African countries’ integration with the rest of the world and the effect of that integration on their structural transformation. This study provides fresh evidence about whether integration is good for Africa. It also unearths the right levels of integration necessary to increase structural transformation.
Trade and financial integration are both about countries exporting to and importing from each other. The two are often referred to as economic integration. Opening national borders to trade has a number of potential benefits which can promote development. For example it creates comparative advantage, access to external finance and opportunities for risk sharing. It also enables technology transfer. Local firms serving larger foreign and domestic corporations can acquire knowledge and skills and transfer them to the rest of the economy. All these benefits are essential for structural transformation. But excessive openness and integration may also come at a cost, largely from distortions around trade policy. For instance, if certain local industries have been protected, local firms may not be fit enough to compete with foreign counterparts. Opening these industries to competition may harm them. Balancing the potential benefits and dangers of integration is a pressing policy issue now that African countries have signed the African Continental Free Trade Area agreement, which aims to foster integration. Policy makers need to know whether there is an ideal level of trade and financial integration that will change economies in the desired ways. (The Conversation)
Words: AfCFTA, Regional Integration, Economic Growth
NORTH AFRICA
Egypt: Trade Minister Orders Restructure of CPO for Intellectual Property Rights – Trade minister orders restructure of CPO for Intellectual Property Rights. Trade and Industry Minister Nevine Gamae has decided to restructure the Contact Point Organization (CPO) for Intellectual Property Rights to guarantee information exchange with its counterparts in other countries. The decision is also meant to boost coordination between Egyptian bodies concerned and trade partners to prevent imports and exports of products that violate intellectual property rights (IPRs), Gamae said in a statement on Monday 3/8/2020. This is in line with Egypt's commitments as a member of IPR agreements, she noted. Gamae made it clear that the chairman of the CPO should be an IPR expert of her Ministry's staff. The restructured organization should also include a technical affairs unit, a training unit, an information exchange unit, a distance education unit, an arbitration unit, a research unit and an administration unit, she explained. The CPO board should convene at least once every month with representatives of the ministries of higher education, supply, culture, information, communications, agriculture, trade, finance and interior, Gamae noted. (Egypt Online)
Words: North Africa, Trade, IPR
EAST AFRICA
Rwanda harnesses technology to fight COVID-19, drive recovery– In a conversation with IMF Country Focus, Rwanda’s Minister of State in Charge of National Treasury Richard Tusabe explains how his government is leveraging technology and grass-roots networks to fight the spread of COVID-19 and ensure financial support for households and businesses.
Q: What has been the impact of COVID-19 on the country and what sectors suffered most?
A: Most of the impact has been on Rwanda’s services sector, which has been adversely affected by limitations on international travel and social distancing measures. The services sector is projected to grow by only 1 percent in 2020 due to lower trade (imports are expected to fall by 7 percent) and travel. Travel to Rwanda has fallen by 70 percent, which has caused a major impact on the tourism industry. The agricultural sector, which is a major economic driver, was also impacted, further to the already expected decline because of adverse weather. A reduction in demand due to COVID-19 as well as a drop in international prices of export crops has made the situation worse. The industrial sector will also slow because of a drop in demand and delays in foreign direct investment in the construction sector. Economic growth is projected to slow down to 2 percent in 2020 from 9.4 percent in 2019. In the medium term, the economy is expected to recover with growth reaching 6.3 percent in 2021, and back to its average growth of 8 percent in 2022. Rwanda’s use of grassroots networks and local governments has been cited as an innovative way to assist households. How does this program work? In the year 2000, Rwanda adopted the National Decentralization Policy – a “people centered” policy that uses grassroots networks and local governments to help lessen shocks on households and alleviate poverty. Household assistance is based on Ubudehe categorization, a long-standing cultural value of mutual assistance that was also adopted by the government as a poverty reduction strategy.
Ubudehe is a socio-economic stratification system that provides support for Rwandans in lower categories with social protection schemes such as cash transfer, public works, access to agricultural inputs, shelter, health, and education with the aim to graduate to higher categories. The process has been useful in identifying vulnerable households – through community-based identification, the Ubudehe database, and other means – that need assistance as a result of the crisis. In 2018, core social protection programs covered 6.5 percent of the population. These are being scaled up to cover more people in this period of pandemic. (tralac)
Key Words: East Africa, Business, Economic Growth
Tanzania: Horticultural Exports Rise to 800m Usd in Five Years – HORTICULTURAL exports surged 12 times in the last five years, becoming a leading subsector that drives agricultural sector growth. The subsector exports value surged to 779 million US dollars last year, up from 64 million US dollars in 2004, according to Tanzania Horticultural Association (TAHA). TAHA Business Environment Manager, Kelvin Remen told the 'Daily News' that foreign direct investment has played a very significant role in increasing growth of the horticulture industry by importing technological and expertise. Speaking at the ongoing 27th NaneNane agricultural exhibitions in Bariadi, Simiyu Region, he said as more private investors join the industry, growth will continue to surge. Mr Remen said every year the horticultural farmers improve and increase productivity, thus getting better and more produce with available markets locally and abroad.
TAHA is an apex private sector member based organization that advocates for the growth and competitiveness of the horticultural industry in Tanzania. It safeguards the interests of the private sector and ensures the industry's issues are well mainstreamed at the national and international agenda. Since its inception in 2004, TAHA has acted as a voicing platform for producers, traders, exporters and processors of horticultural products. According to him, TAHA experts offer extension services, training on nutrition and quality control to farmers. He further said that they also avail market information to growers and sensitize them on best practices to improve productivity. Horticultural crops grown in Tanzania include flowers, vegetables, fruits and spices. On July 2020, Deputy Minister for Agriculture, Mr Hussein Bashe, said the government will revive the leading horticulture estate on the southern slopes of Mount Meru in Arusha. Mr Bashe said the move will bolster horticultural production and realize its annual export value from the current $779 million to $3billion come 2025. (Daily News)
Key Words: Tanzania, Export Market, COVID-19
Seychelles: Port Expansion Project in Seychelles Being Tendered - Drop in Value of Rupee Problematic - The Seychelles Ports Authority is now tendering out the main aspects of the Port Victoria expansion project and civil works which covers the south half of the port, said a top officer of the Ports Authority. Port Victoria, which is currently 270 metres long, will be extended by an additional 330 metres to accommodate two boats measuring up to 250 metres in length at the same time. Space will be also be made for the installation of two mobile cranes for loading and unloading of ships, storage yards and warehouses. The project was approved by the Cabinet in 2017 and had secured funds for up to $41million -- $35 million from the Agence Française de Développement (AFD) and the European Investment Bank (EIB) and a grant of $6 million from the European Union (EU). The Seychelles Port Authority said it expects the recent drop in the value of the rupee against the main foreign currencies to impact the cost of the project.
The Authority's chief executive, Ronny Brutus, said although the financial agreements provides for certain adjustments, the COVID-19 pandemic will affect the total cost of the port expansion. "We are asking the companies which are expressing interest in the project to also include the construction materials component by detailing where they will source these and at what cost," he said. Brutus added that the Authority is also working with local construction material providers for those produced locally such as crusher dust and aggregate. "We are seeing how they can start stockpiling these materials for the project, so that when we start it does not have a great impact on availability for other uses in the country," he said. The project involves upgrading and rehabilitating the port which has over the years become deteriorated and congested and in some areas dangerous for continued operations. (Seychelles News Agency)
Key Words: Seychelles, Regional Integration, COVID-19
WEST AFRICA
ECOWAS Bank invests US$2.9 billion in economies of member states - The ECOWAS Bank for Investment and Development (EBID) has invested US$2.9 billion into the economies of member states. Dr George Nana Agyekum Donkor, the President of the Bank, who announced this, said the investments were in line with the mandate of the bank to promote the development agenda of the sub-region. He was speaking at the construction site of the Garden City Mall in Kumasi after leading a delegation of the bank to inspect the progress of work as one of the financiers of the project. The project, which is being funded by EBID and the Ghana Commercial Bank (GCB), is a partnership between the Kumasi Traditional Council, the Methodist Church of Ghana and the Retail and Realty Company Limited. The ECOWAS regional bank has so far invested US$20 million into the project, which is 85 per cent complete and expected to be opened in April 2021. Dr Donkor said EBID was committed to the economic development of member states, adding that the Garden City Mall project had a huge prospect of enhancing the local economy of Kumasi as well as job creation. He said the partners involved in the execution of the project were reputable institutions worth supporting for the benefit of the thousands of people who would be given direct and indirect jobs. He disclosed that EBID also funded the Kempiski and Marriott Hotels, expansion of the Ghana National Fire Service (GNFS) and the extension of electricity to 114 communities in Ashanti, Bono and Ahafo Regions.
Other countries in the sub-region, according to him, also had the fair share of investments and gave the assurance that EBID would continue to drive the economy of the sub-region. He commended the project contractors for the remarkable progress made so far and urged them to work hard to complete the work on time. The delegation later paid a courtesy call on the King of the Asante Kingdom, Otumfuo Osei Tutu II at the Manhyia Palace. The Asante Monarch commended the bank for supporting the project which, he said, would have a significant impact on the livelihoods of those who would be employed to work at the mall. He encouraged the bank to extend their support to all member countries to address the infrastructural deficit in the sub-region. The EBID is the financial arm of ECOWAS, comprising 15 member states with headquarters in Lome, the Republic of Togo. It is committed to financing development projects and programmes in the areas of infrastructure, transport, energy, agriculture, telecommunication, rural development and industry. The bank intervenes through short, medium and long term loans, equity participation, granting of lines of credit and putting in place framework agreements for refinancing, financial engineering operations and services. (Ghana Web)
Key Words: West Africa, Regional Trade, COVID-19
SOUTHERN AFRICA
Mozambique: Afreximbank Commits U.S.$400 Million To Mozambique's LNG Project– The African Export-Import Bank (Afreximbank), Africa’s foremost multilateral trade finance institution, is supporting the advancement of Mozambique’s energy industry and economy by committing up to US$400 million in guarantees and direct lending to the Area 1 LNG Project. The total Project is estimated to cost about US$24 billion and is set to be the largest private foreign direct investments in Africa, and one of the largest LNG projects in the world. It will play a key role in Mozambique’s economic growth and support the wider region. The US$400m financing will be used to partially finance the project development activities required to extract natural gas offshore, its transfer to onshore processing facilities and then its conversion to LNG for export to various markets around the world. The Mozambique Area 1 LNG project is an integrated LNG development that will initially comprise two LNG liquefaction trains – each capable of processing 6.44 million metric tonnes a year.
The initial development is expected to produce more than sixteen trillion cubic feet of gas and ninety-three million barrels of condensate over the 30-year development and production period. A key focus is for the project to be developed in an environmentally and socially sustainable manner and that it operates responsibly, protecting the environment, as well as the health and safety of the public, employees and contractors. Investment into the region will create jobs, increase the standard of living and is expected to drive long-term sustainable economic growth for the country and the region. The US$400 million commitment to the project is in line with Afreximbank’s strategy of promoting intra-African trade as well as industrialization and export development. The guarantee is done jointly with Export Credit Insurance Corporation of South Africa SOC Limited (ECIC) which has enabled significant African contribution to the overall financing of the Project. This joint collaboration is offered under the South Africa-Africa Trade and Investment Promotion Programme (SATIPP), launched in 2018, to promote and expand trade and investments between South Africa and the rest of Africa. (allAfrica)
Key Words: Mozambique, Economic Growth, Export Sector
