The past couple of years have been tough for African countries in the business of trade, a statistics report by United Nations Conference on Trade and Development shows. According to the report, a slowdown in trade was particularly evident in merchandise exports, which fell by 10.5 percent. Decreasing volumes of goods loaded in seaports for international shipment and falling foreign direct investment receipts also illustrated the challenges, the findings show. Nevertheless, for the region, GDP grew by a modest 1.7 percent.
Other factors for Africa’s less than satisfactory trade sector includes the fact that the sector remains characterized by low product diversification and high dependency on raw materials compared with other regions of the world.
The report also shows that decreasing commodity prices in recent years have led to deteriorating terms of trade. This deterioration was reflected in large trade deficits for manufactured goods, which were not outweighed by trade surpluses for primary products. Consequently, Africa ran a merchandise trade deficit, as their percentage of exports, was much higher than other developing regions.
Other statistics, available in the report, indicate some favorable trends for African economies. Since June 2016, for example, the UNCTAD commodity price index has been increasing year-on-year. The current account deficit of many African economies stabilized in 2016 and stopped rising. Looking at demographic trends, the proportion of people of working age in Africa is expected to grow rapidly, yielding a demographic dividend and a positive effect on labor supply. The same favorable trends have been seen in 2017.
The report also illustrates the importance of trans-continental and intra-region trade and how they vary across continents. In 2016, the exchange of goods between China, the United States of America and Germany amounted to almost USD 1 trillion – 6 percent of world merchandise trade.
In the same year, 69 percent of the European exports remained within Europe and 59 percent of the Asian exports, in Asia. By contrast, for Northern America, Latin America and the Caribbean and for Africa, most exports were delivered to economies in other continents than that of the exporter.
UNCTAD’s report referred to as a Statistics Handbook provides a coherent overview of trends worldwide and novel summary analyses of countries, regions and sectors.
According to UNCTAD’s Deputy Secretary-General Isabelle Durant “Reliable statistical information is essential to support, evaluate and guide policy choices for all nations, and notably developing countries, providing them with tools that are not always easy for them to produce. Such tools are indispensable, both for their national economies and development, and to better integrate them into the global economy.”

Africa’s eastern countries are experiencing the most rapid economic growth on the continent.Djibouti, Ethiopia,Rwanda and the United Republic of Tanzania, underpinned by infrastructure investments, resilient services and the recovery of agricultural production are growing the fastest, according to the Economic Situation and Prospects (WESP) 2018 report that was launched in Ethiopia on Tuesday, January 16, 2018.
In other African regions, the report states that Senegal in West Africa has joined this group of rapidly growing economies, spurred by greater competitiveness, progress in structural reforms and favorable external conditions, such as positive terms of trade, favorable climatic conditions and a stable security environment.
The report shows that Africa’s aggregate GDP masks considerable variation among its sub regions. The less resource-dependent countries in East Africa, such as Djibouti, Ethiopia and the United Republic of Tanzania, and in West Africa, including Côte d’Ivoire, Ghana and Senegal, will continue to witness above average growth, supported by vigorous infrastructure investment, strong service sectors and a recovery in agricultural production.
By contrast, many oil and minerals exporters will witness weak growth, as commodity prices remain well below their 2014 levels and fiscal consolidation efforts constrain public investment.
Some Least Developed Countries (LDCs) of the world face prominent growth challenges, the publication also shows. Conflict-afflicted Yemen has been in recession for the past several years. The ongoing armed conflict has inflicted significant damage to the agriculture sector and itscrumbling institutional infrastructure is expected to prevent a significant rebound in the near future.
After an estimated growth of only 1.3 per cent in 2017, Haiti is forecast to see a moderate pickup in economic activity by 2019, amid continued reconstruction of infrastructure and recovery in the agricultural sector. However, severe macroeconomic imbalances, political unrest and natural disasters threaten to derail the recovery.
Findings also show that strong public and private investment is a common feature among those LDCs that are growing at over 7 per cent per year. As explained in the State of the Least Developed Countries 2017 (UN-OHRLLS,2017), another significant publication, an additional investment of USD 24 billion per year would suffice to bring the group, on average, to 7 percent GDP growth between 2016 and 2020.
Looking at other parts of the world, the report states that the recent pickup in global growth stems predominantly from firmer growth in several developed economies, although East and South Asia remain the world most dynamic regions. In 2017, East and South Asia accounted for nearly half of global growth, with China alone contributing about one-third.

Legal issues have erupted related to the monopolization of the National Tobacco Enterprise (NTE) by private companies related to the full privatization process.
A couple of weeks ago the Ministry of Private Enterprises (MoPE), agreed to the second biggest deal in the country with Japan Tobacco International (JTI), to sell the remaining share of the government business of NTE at a cost of USD 434 million.
According to the deal the company took the remaining 30 percent of NTE which means that JTI owns over 70 percent of the tobacco company including a record 40 percent purchase a year ago at USD 510 million. The balance is managed by the Yemeni firm, Sheba Group, who initially joined the monopoly in 1999. Their share gradually increased to about 30 percent.
Wondafrash Assefa, Public Relations head of MoPE, told Capital that the company also took a ten year monopoly right on the privatization agreement which was signed some weeks back.
He said that the agreement stated that the monopoly right will be extended for a decade.
“It is a sensitive sector that has to be strictly controlled unlike other investments or privatization,” Wondafrash said. “It is not encouraged for other private actors to engage in the sector since it is a dangerous business,” he explained.
“The monopoly is given because it needs close follow up by the government,” he added.
Experts in the sector argued that the monopoly for the private actor is against the market economy policy and strategy adopted by the government.
Wondafrash defended this saying that there is a right to transfer an enterprise with the monopoly rights. When we sold to Sheba we talked with the board about the legality of the monopoly.
An expert at the Trade Competition and Consumers’ Protection Authority argued that the sector will be opened to other private actors since it is the issue of competition and consumer protection. “It shall be applied in a strict manner,” he argued.
Daniel Getnet, head of Dabe Investment and Consulting and Conveyance PLC, a legal consultancy firm for businesses mainly for FDIs’, told Capital that the issue will be settled by the constitution and depends on a proclamation amended by parliament.
“As far as I know there is not a law in the country that allows the right to monopolies besides the National Lottery,” the legal expert said.
In some cases there are compromises by the government for some sectors, according to experts.
“It is all about the interpretation issue. If it was necessary to give a monopoly right the constitution shall give a monopoly right for tobacco like national lotteries,” Dabe’s head said.
“There is also an antimonopoly law that prevents monopolization and anticompetitive activities by the companies,” Daniel said.
The investment law allows for a monopoly for locals and is open to the overseas actors but does not mention trading excluding some selected sectors that are monopolized by the government or the finance sector.
But he agreed that it is sensitive to allow many actors on the sector. “But previously an enterprise that the government has also share but currently it is fully privatized that may against the policy of the government,” experts added.
Proclamation no. 181/1999 ‘Transfer of the Monopoly Right of the National Tobacco Enterprise to the National Tobacco Enterprise (Ethiopia) Share Company’ issued when Sheba joined the sector in 1999 stated in its preamble that the National Tobacco Enterprise has been partially privatized and converted into a share company.
It added that it has become necessary to transfer the monopoly right of the National Tobacco Enterprise, as stipulated by its establishment proclamation, to the National Tobacco Enterprise (Ethiopia) Share Company. However, there is not an additional law that supports the full acquisition of the enterprise via private actors.
The enterprise has been given an exclusive right to produce, process, manufacture, distribute, import and export tobacco and tobacco products in Ethiopia. The enterprise also has tobacco farms at Shewa Robit, Hawassa, Bilatie and Wolaita.

The Japan International Cooperation Agency (JICA), which works through the Japanese government, has constructed ten new secondary schools in the Southern Nations Nationalities and People’s Region (SNNPR). They also have expanded ten others. The schools cost 216.9 million birr and will help improve education for 20,000 students.
The project took three years to complete. The schools, which come equipped with laboratories, computers, play grounds and toilets, are located Welkite, Halaba, Tiya, Selte, Aleta Wendo, Gamo Goffa, and Arba Minch.
The local inhabitants were happy about the new and expanded schools. Dr. Eshetu Kebede is the head of the SNNP Educational Bureau. He spoke at the inauguration ceremony of the Tiya Secondary School expansion project last Tuesday. He said that the government is working as a team to make sure that everyone in the country has an equal opportunity at a good education. He called on the public to make the most of education.
“We sincerely thank the Japanese government for building the schools. Educating our children is a key to development. Strong schools mean a strong economy,” he said.
Ke Yamanda, Chief Representative of JICA Ethiopia, said the new schools are a sign of productive cooperation between Japan and Ethiopia.
At the inauguration ceremony certificates were given to JAICA, the Japanese Embassy and Rotary Club which also played a role in constructing the schools.
“A long time ago, Ethiopian students had to travel long distances to attend school but because of the work that has been done recently, education is close by for them which helps the nation develop. The Ethiopian government looks forward to working more closely with JAICA to open additional schools,” he said.
JAICA Ethiopia has been a part of movement to improve access to basic and secondary education by building more than 50 primary and secondary schools in rural areas of Oromia, SNNPR and Amhara regional states. Soon the organization plans a similar project in Tigray.