Notizie

The artificious use of import bans in Africa

Martedì 15 Agosto 2023 17:27

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Import bans are measures that are particularly trendy in Africa, as many governments use these kind of restrictions to protect their local productions from foreign competition. They have been often defined as a ‘poor substitute’ to the inability of African governments to create incentives that enable local producers to compete favorably with foreign competitors. But in the WTO context, import bans are regarded as non-tariff trade barriers and are therefore generally prohibited. So why African nations insist on introducing them?

Kenya and Ethiopia sign pact for railway development between Lamu Port and Addis Ababa

Martedì 15 Agosto 2023 09:06

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In 2012, Kenya and Ethiopia signed a bilateral agreement for the Development, Operation and Management of a Standard Gauge Railway (SGR) linking the port of Lamu in Kenya with Addis Ababa, passing through the city of Isiolo and the border town of Moyale, where a One Stop Border Post (OSBP) commenced operation in June 2021. The railway, whose construction works are set to begin in 2025, will also include a link from Isiolo to Nairobi that will intersect the Mombasa-Nairobi-Malaba SGR, and one to South Sudan via the border town of Nakodok, for a total lenght of about 3,000 Km. Recently, the two countries also agreed to establish a Bilateral Steering Committee to fast-track the development of the LAPSSET Corridor and its supporting infrastructure.

Private sector as an important source of growth in Somalia

Lunedì 14 Agosto 2023 14:35

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At present, little is known about private sector organizations in Somalia, despite a mapping exercise conducted by the Center for International Private Enterprise (CIPE) in 2022, identified 38 of such organizations, including business associations, chambers of commerce and several types of cooperatives active in different sectors of the economy. The study shows that despite most of these organizations have basic governance structures in place (e.g., board of directors, constitution or bylaws, a general assembly, etc.), many of them are still not registered with the competent authorities. The registration process also lacks of clarity, and multiple registrations are required, both at federal and State-level, which create complexity. Moreover, a single register of all private sector organizations seems to be lacking in the country.

Foreign earnings restrictions in Ethiopia to be eased, but doubts remain on compliance of regulation to the AfCFTA Protocol on Investment

Venerdì 11 Agosto 2023 10:04

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In force since 6 January 2022, a Directive issued from the National Bank of Ethiopia (NBE) requires all exporters of goods and services in the country to transfer 70 percent of their foreign currency earnings to the NBE and 10 percent to their respective commercial banks. The measure, aimed at countering the perennial shortage of foreign currency in the country, allows exporters to access to only 20 percent of the earnings generated by their sales abroad, with the rest being transferred to the banking system that will convert the relevant amount in local currency. Today, the NBE has announced the adoption of a new Directive that relaxes this requirement, allowing local exporters to retain up to 40 percent of their foreign exchange proceeds. This measure is supposed to relaunch exports, allowing Ethiopian traders to use a higher share of their foreign earnings for buying the inputs they need from outside the country in order to feed their manufacturing processes or to pay the services they need from abroad.

AfCFTA able to spur extra-continental investment, but what about intra-continental ones?

Lunedì 07 Agosto 2023 12:47

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In October 2022 a study from the Kiel Institute argued that the AfCFTA offers an opportunity also to third countries for expanding their trade and investments in Africa. The study noted that already the EU is conducting studies on how to improve its connectivity with Africa by identifying a series of Strategic Corridors in the continent where to concentrate funding, so to facilitate its trade links with the continent. At the same time, the study warned that a condition which is necessary for foreign exporters to benefit from the AfCFTA is the reduction of the current level of Non-tariff Barriers, that are amongst the highest in the world, as described in the latest UNCTAD "Key Statistics and Trends in Trade Policy” report. In fact, removing such barriers would mean that also exporters from Europe and third countries will be able to move their products from one African country to another with less hindrances, and therefore at a lower cost. The special assistant to the US President, during a press conference in Washington on 31 July, raised also the need to harmonise investment regulations between African countries as a condition for expanding investments of US companies to Africa.