On the aim to benefit from service goods in business activities under the CFTA, the trade negotiating committee under the Ministry of Trade and Integration requests the steering committee to consider a significant policy shift for the Ethiopian business community to have an overseas capital account.
The Ministry has also approved a list of goods to go through the tariff removal as well as other sectors that would be totally closed.
“We have submitted the final document to the chairperson of the steering committee led by Mamo Mihretu, Senior Advisor and Chief Trade Negotiator in the Prime Minister’s Office,”Mussie Mindaye, Director General of Trade Relation and Negotiation at MoTRI told Capital, adding, “the chairperson, is responsible to submit the document for final approval.”
The National Macroeconomic Committee led by Prime Minister Abiy Ahmed is the body that will give the final decision on the document.
Though it will be difficult for Ethiopians to benefit from the CFTA or other countries’ service offers as its not allowed to have overseas capital accounts, it needs a policy change expressed Mussie, so as to reel in the desired results. This is also advantageous for the country as it increases import rate of service goods whilst also having the ability to create competition in the market and stabilize prices, he further added.
Mussie expressed his expectation that the document will be approved very soon. “The country shall not be stated as late to come up with the tariff offer of products and services since there are countries that have not yet finished the identification process,” he opined.
So far 34 countries have come up with their tariff offers and 47 countries have submitted their service commitments, while trading has not yet begun.
The CFTA will bring together fifty-four African countries with a combined population of more than one billion people and a combined gross domestic product of more than USD 3.4 trillion.
The main objectives of the CFTA are to create a single continental market for goods and services, with free movement of business persons and investments, and thus pave the way for accelerating the establishment of the Customs Union. It will also expand intra-African trade through better harmonization and coordination of trade liberalization and facilitation and instruments across the RECs and across Africa in general. The CFTA is also expected to enhance competitiveness at the industry and enterprise level through exploitation of opportunities for scale production, continental market access and better reallocation of resources. The establishment of the CFTA and the implementation of the Action Plan on Boosting Intra-African Trade (BIAT) provide a comprehensive framework to pursue a developmental regionalism strategy. The former is conceived as a time bound project, whereas BIAT is continuous with concrete targets to double intra-African trade flows from January 2012 and January 2022.
Trade ministry pushes for overseas capital accounts
We’ve achieved against all odds, PM emphasizes
Prime Minister Abiy Ahmed defends his government by stressing the fact that massive economic achievements have been attained bearing in mind the difficult situations.
Even though he is expected to come to the parliament before the end of the budget year, which will end on July 7, to present his administration annual performance and proposed the ratification of the coming budget year, the PM has appeared at the parliament on Tuesday June 14 to provide his responds for the questions presented by members of the parliament.
Despite the expectations being that he would make his presentations at the end of the budget year come July 7 for the address of his administration’s annual performance alongside the proposed ratification of the coming budget year, the PM made an appearance in parliament on Tuesday June 14 to provide response to questions presented by members of parliament.
In his deliberation that took more than three hours, he covered the social, economic, political and current affairs issues.
Regarding economic and social issues, the PM defended his government’s performance, whilst he did not zoom in to touch upon the details on inflation.
Nonetheless, the PM highlighted several success results which the country registered in the reform period in the current budget year.
For instance he stated that the country debt that includes the external debt had shown significant reduction in the reform period.
In spite of the country facing different pressures from international and local forces and global situation like COVID 19, the government has performed very well in terms of settling debt.
He said that the government is committed to repay borrowers and added that before the reform the country debt was 58 percent of the GDP which has since narrowed to 50.5 percent.
Every year the country allocates huge budget for debt settlement. The debt settlement budget has become one of the biggest portions over the years, which remains similar in the proposed next budget year.
Regarding road networks, Abiy said that the national road sector development for the past about four years have seen positive expansions. Similarly, he pointed out that the Addis Ababa city asphalt road project has hugely been developed.
He explained his case by citing the asphalt concrete constructed at western Gojam zone of Ahmara region, which is a 520 km stretch of a road.
The road sector development in the past few years has shot up by 40 percent when compared with the preceding year.
He said the road network that was 127,000 km before the reform has reached 165,000 km. An additional 4,700 km asphalt road has been constructed in the reform period that was 13,000 km about four years ago, while more 22,000 km road projects are in different stages.
Regarding the sugar sector development, the PM stated that the sugarcane plantation has tripled in the past few years besides finalized five new millers that drove up the sugar factory numbers to nine.
So far the sugar production capacity has amped to 365,000 metric tons from 200,000 metric ton about three years ago.
However, he said that there is still a gap between the demand and supply of the sweet.
Regarding industry parks development, Abiy said that in the past few years 12 industry parks including three agro processing facilities have been inaugurated that are expected to expand the industry sector development in an integrated manner.
The number of truckers that are engaged in farming have reached 5,000, which is stated by the PM as a big success on the way to transforming the agriculture sector. He added that through agricultural cluster development about 45 percent of farm land have been included, “of course it would be better if we improve the percentage to 55 percent.”
Regarding the prominent dry season wheat production there have been massive performance attained since the initiative was introduced, and to this end he hinted that the country will commence the grain export in the near future besides substituting the import of wheat, which consumes huge amounts of hard currency every year.
Abiy further said that the government has given ample attention to the agriculture development which he indicates that the sector financing has been blooming.
“From the total 267 billion birr credit, the facility 73 billion birr was taken by the agriculture sector, while the government has subsidized 15 billion birr for fertilizer. Such attention to the agriculture sector that is given by the government has managed to ease the international pressure,” he remarked.
Policy to govern intellectual property on the horizon
The Intellectual property organization prepares a 10 year policy and strategy aimed to promote and increase the use of IP in areas where Ethiopia has comparative and competitive advantage.
“This policy provides us with the much needed framework which lets us know the needs of the country, and thus we will effectively render our support by knowing what technical assistance to give to stakeholders in the country,” stated Loretta Asiedu, representative to the World Intellectual Property Organization which is known for bringing stakeholders together to develop global IP agreements.
The national intellectual property policy and strategy/NIPPS/ will be implemented over a ten-year period beginning from the date of its approval. The national IP policy is also viewed to be very dynamic.
“The NIPPS implementation will require the involvement and participation of a number of public and private bodies,” said Ermias Yemanebirhan, Director General, Ethiopian Intellectual Property Authority, adding, “Each of these bodies is expected to take measures envisaged in the policy.”
“This draft policy is intended to provide a framework for integrating intellectual property into national and sectoral development policies and strategies, helping to ensure the formation of a development-oriented IP system, trying to encourage the use of IP as a strategic instrument, and fostering the monitoring and evaluation of the IP system’s impact,” said the Director General.
According to the draft, the key institution that will oversee the implementation and coordination of the relevant public and private bodies will be the National IP Council.
According to the draft, the National IP Council will be headed by the Deputy Prime Minster and will consist of top government officials and leaders of private institutions.
When approved the policy is also expected to review and amend existing laws dealing with intellectual property enforcement and provide an adequate, uniform and effective procedures and remedies against infringement of intellectual property rights having regard the Provisions of Part III of the Agreement on Trade related Aspects of Intellectual Property.
Djibouti’s port moves notch higher in new index
Djibouti port, Ethiopia’s main sea cargo outlet, attains major scores on the World Bank container port performance index (CPPI) 2021.
The CPPI 2021 which was recently released is intended to identify gaps and opportunities for improvement that will ultimately benefit all stakeholders from shipping lines to national governments to consumers.
The report which a year ago issued the 2020 performance disclosed that compared with the preceding report, 149 ports improved their rankings in CPPI 2021 as compared to CPPI 2020, with some of the largest improvers increasing their ranking by over 200 positions.
On the second year report, Djibouti port has been able to reel in massive improvement which places the country as one of the top performing port operating countries.
From the report published a year ago, ports in Sub-Saharan Africa (SSA) did not make it to the global top 50 container ports. That reporting year, Djibouti port ranked the highest (61st and 93rd for administrative and statistical approaches respectively).
For the CPPI 2021, the east African logistics hub registered dramatic improvements coming in at 19th and 24th positions in administrative and statistical approaches respectively.
Djibouti currently operates the modern Doraleh Container Terminal Management Company (SGTD), while its other multiple port facilities are also handling containerized cargos. The facilities are mainly providing service to Ethiopia which is the most populous nation in the world without a seaport.
The two top-ranked container ports in the CPPI 2021 are King Abdullah Port (Saudi Arabia) in first place, followed by the Port of Salalah (Oman) in second place. These two ports occupy the same positions in the rankings generated by both approaches. King Abdullah Port was ranked second in both approaches in CPPI 2020.
The Port of Salalah ranked sixth and ninth in the statistical and administrative approaches, respectively, in CPPI 2020. Of the top 10 ranked ports, all have improved their position since CPPI 2020, with Jeddah and Hamad Port moving up 35 and 34 positions in the ranking, respectively.
The exceptions are Yokohama (Japan), which has fallen from first place in both approaches in 2020, to 10th and 12th in CPPI 2021 in the administrative and statistical approaches, respectively, and Guangzhou of China, which dropped from sixth to ninth place in the administrative approach.
This technical report, which represents the second edition of the Container Port Performance Index (CPPI), has been produced by the Transport Global Practice of the World Bank in collaboration with the Maritime, Trade and Supply Chain division of S&P Global Market Intelligence.
The CPPI is intended, as in its earlier iteration, to serve as a reference point for improvement for key stakeholders in the global economy, including national governments, port authorities and operators, development agencies, supranational organizations, various maritime interests, and other public and private stakeholders in trade, logistics, and supply chain services.
More than four-fifths of global merchandise trade (by volume) is carried by sea. A significant and growing portion of that volume, accounting for approximately 35 percent of total volumes and more than 60 percent of commercial value, is carried in containers.
The report said that the development of high-quality container port infrastructure, operated efficiently, has been a prerequisite to successful export-led growth strategies. Having such prerequisites was noted to facilitate investment in production and distribution systems, supporting the expansion of manufacturing and logistics, creating employment, and raising income levels.
The development of the CPPI rests on total port time in the manner explained in subsequent sections of the report. This second iteration utilizes data for the full calendar year 2021. It includes ports that had a minimum of 20 valid port calls within the 12-month period of the study. Accordingly, the number of ports covered has increased from 351 in CPPI 2020 to 370 in this edition.
