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tralac’s Daily News Selection
Featured African trade policy tweet, from @DavidLukeTrade: This is very significant and underscores momentum behind AfCFTA. Ethiopia has always been wary of trade agreements, not in the COMESA FTA or WTO. Congrats to Ethiopia and to UNECA for the technical analysis and support that made this decision possible. [See also: thread by Mamo Mihretu, Ethiopia’s chief trade negotiator]
REC updates: EAC, SADC
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Tough term for Kagame as chair of deeply divided EAC. Rwandan President Paul Kagame took over the chair of the East African Community on Friday from his Ugandan counterpart Yoweri Museveni, after a long day of heated consultations compounded by hostile relations between Rwanda and Burundi. Highly placed sources in the EAC Secretariat told The EastAfrican that Burundi opposed the takeover of the chair by Rwanda, arguing that its neighbour should not assume the chairmanship before a lasting solution to their disputes has been found. The closed session of the EAC Heads of State Summit delayed the plenary session for over four hours as the leaders reportedly debated the issue. The plenary session was scheduled to begin 2pm, but it was not after 6pm that the closed session was concluded. [Related: Museveni to guide EAC constitutional process, East Africa summit endorses Kenya application for UN Security Council slot, Joint communiqué]
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Geingob unhappy with non-implementation of regional goals. SADC chairperson Dr Hage Geingob, who is the president of Namibia, expressed his profound concern on Friday about the regional bloc’s chronic failure to turn its aspirations into actions. Speaking during his visit to the SADC Secretariat in Gaborone, he said the pursuit of regional integration was the paramount objectives behind the establishment of SADC. But President Geingob stressed that failure to successfully implement the regional integration agenda was affecting economic growth in southern Africa. “No one can question the fact that all of these trade agreements were signed in good faith and with the best of intentions. However, the question we need to ask ourselves is whether we have done or are doing enough in terms of implementation. Case in point is the SADC Free Trade Area, which was envisioned as a tool to augment the private sector in the region by increasing domestic production and business opportunities, as well as supporting higher regional imports and exports. Have we achieved this? Alas, sometimes we take decisions and after failing to implement them, we simply move on to another decision. It is imperative that as Africans we should manage our RECs as corporations. Therefore, the core principles of corporate governance should be inculcated at all levels within the SADC Secretariat. Fairness, accountability, responsibility and transparency should constitute the DNA of our organization. This is the only guarantor of future growth and the successful implementation of our developmental aspirations,” Geingob said while addressing the SADC Secretariat staff. [Note: The full text of President Geingob’s speech can be accessed from here]
Trade facilitation updates:
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East Africa Market Access Upgrade Programme. To mark the launch of the Market Access Upgrade Programme (MARKUP) – an initiative funded by the EU to boost market access to Europe for East African micro, small and medium-sized enterprises – participants from Burundi, Kenya, Rwanda, Tanzania and Uganda attended a five-day induction workshop that set out the programme’s main features and planned activities. Participants at the workshop included representatives from the EAC Secretariat, Geneva-based EAC ambassadors, and the German cooperation agency. Launched in June 2018, MARKUP is a regional initiative funded under the 11th European Development Fund contributing to the economic development of the EAC. Taking advantage of a growing global demand for avocado, cocoa, coffee, spices, tea and horticulture products, selected SMEs will be trained to adapt their agribusiness to better seize market opportunities in regional and global value chains.
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UNCTAD’s mission to unlock Africa’s services sector. Africa is ready to take advantage of its rapidly growing services sector but needs to step up its analytics game to play a more active role in global and regional value chains. This was the consensus among African countries participating in a joint UNCTAD-UNECA project on services trade. The project is helping train African experts to do just that: measure the contribution of services to regional value chains and explore the role of domestic and foreign firms. In partnership with Ethiopia, The Gambia, Kenya, Mali, Nigeria and Togo, UNCTAD-UNECA delivered a three-day ‘train-the-trainers’ seminar, in Addis Ababa, Ethiopia, from 29 to 31 January. The focus was on how to unlock potential in three services sectors – transport, financial services and tourism – in those countries, and help African countries acquire the necessary skill set to measure and monitor services trade value chains.
African services - the numbers: (i) In 2016, about 55% of Africa’s GDP was generated by services; (ii) The share of services in Africa’s trade reached 22% in 2016, following a steep increase and catching up process to the global average of 24%; (iii) In 2017, Africa accounted for only 3% of the world’s total services imports and 2% of the world’s total exports of services (iv) Removal of tariff barriers will increase intra-African trade by 50%; (v) The improvement of trade facilitation will more than double the intra-African trade.
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Afreximbank’s Fund for Export Development in Africa. The operationalization of the newly-created Fund for Export Development in Africa has moved into high gear with the holding of the pre-incorporation meeting of the Board of Directors in Cairo. FEDA, a wholly-owned development-oriented subsidiary of Afreximbank, has been set up to implement the Bank’s Equity Investment Programme by providing seed capital to companies in Afreximbank’s key focus sectors, including agri-business, manufacturing, consumer and retail, financial services, technology, travel and tourism, transport and logistics, and industrial parks. In addition to Prof Oramah and Dr Kamau (both attached to Afreximbank), the other members of the Board of Directors are Jean-Louis Ekra (former President of Afreximbank); Vishwanathan Shanker (Gateway Partners); Dr Sidi Ould Tah (Arab Bank for Economic Development in Africa); Dr Deji Alli (Asset and Resource Management Company Ltd., Nigeria).
South Africa: Joint statement on Foot and Mouth Disease outbreak in Vhembe (GCIS)
Following the sharing of update reports with trade partners, trade restrictions on the export of processed products have been relaxed by many trade partners. Trade in safe commodities to direct neighbouring countries have largely been accepted and, where necessary, negotiation of new health certificates is underway. There has also been good progress with negotiations to re-open markets for deboned matured beef, processed dairy products and processed hides and skins to the other African countries, the Middle East and the Far East. The Trade Task Team has been a very successful platform to streamline the communication between industry, Provincial Veterinary Services, DAFF and trade partners.
Tanzania: Tough new rules see multinationals give up majority stakes (The East African)
In a span of four months, two major international firms in Tanzania have changed shareholding, with the majority stake going to influential ex-government officials. Analysts are seeing this as a sign of the future of multinationals in the country as the President John Magufuli administration seeks a new business order that will see Tanzanians benefit more from foreign investments.
Nigeria: “Over N1bn informal exports originate from Kano monthly” (National Wire)
Informal trade worth more than N1bn takes place in Kano each month, regional coordinator, North West, of the Nigerian Export Promotion Council, Mr Balla Hassan, has said. Hassan, who also disclosed that the Council is aware of the ‘back door’ trade ongoing from the Kano grains market, said the NEPC is working hard to help traders to export formally and reap the benefits of their efforts. He made this disclosure after a capacity building workshop organized by the NEPC-AGOA Trade Resource Centre in Kano recently. “We are aware that people do export from the ‘back door’ through the Dawanau Grains Market in Kano. What we do is visit the market and obtain information on the product(s), volume and value of products being exported through the ‘back door’ and forward to the ED/CEO at the headquarters.” He pointed out that mostly, Agricultural products like maize flour, millet flour, guinea corn flour, ginger flour and other crops valuing above N1.7bn per month are exported informally to Niger, Chad Republic, Algeria and Libya.
Hitting the trillion mark: pdf A look at how much countries are spending on infrastructure (1.76 MB) (World Bank)
This paper is structured as follows. We discuss previous efforts at estimating infrastructure spending, explain the available data sets as well as their relative advantages, compare the results obtained using these data sets, and propose methods to combine them to “triangulate” and improve accuracy. We then use the uniquely detailed BOOST fiscal data to provide some trend analysis and discuss some budgeting challenges. A final section concludes and discusses potential directions for further strengthening our understanding of what countries spend on infrastructure and the use that can be made of such data.
On the BOOST database: Finally, the World Bank recently developed a regional baseline of public spending by leveraging the wealth of micro fiscal data collected by the BOOST initiative in more than 55 countries (with another 15 in progress). This baseline allows us to examine annual trends, execution rates, funding sources, and levels of capital expenditure by general government across infrastructure sectors. The BOOST database covers 25 countries in Africa - which has enabled the World Bank to develop a regional baseline of annual public spending across infrastructure sectors in Sub-Saharan Africa. It also includes 14 Latin American and Caribbean countries, which the World Bank and IDB teams are using to derive investment estimates ground-truthed in the IDB’s country-specific fiscal analysis. The hope is that, in the future, estimates could be derived from BOOST data instead of requiring costly country visits.
Given the limitations of each of these proxies (pdf), the authors employ several transformations to derive a lower-bound estimate for infrastructure investments in low-and middle-income countries of 3.40 percent of their gross domestic product, a central estimate of around 4 %, and an upper-bound estimate of 5% for 2011. Corresponding absolute amounts are US$0.82 trillion, US$1.00 trillion, and US$1.21 trillion, respectively with East Asia and the Pacific accounting for 55% of infrastructure investments and Africa 4%. The public sector largely dominates infrastructure spending, accounting for 87–91% of infrastructure investments, but with wide variation across regions, from a low of 53–64% in South Asia to a high of 98% in East Asia.
Osaka G20 Summit: Is Japan up to leading WTO reform? (EAF Editorial Board)
If the goal of Japan’s G20 presidency in 2019 is merely to get through the summit in June with a business-as-usual approach, at best it would be a lost opportunity. At worst, Prime Minister Shinzo Abe and Japanese officials could find the global economic order collapsing around them on their watch or end up throwing a hospital pass to the next G20 hosts, Saudi Arabia. This week, Shiro Armstrong explains in our feature piece that ‘the World Trade Organization, at the core of the multilateral trading system, is in crisis’. The dispute settlement system will cease to have a binding appellate body by the end of 2019, with two of its three remaining judges set to end their terms. The usual number of judges is seven and three is the minimum needed for it to function. There is a lot that every country would like to change about the WTO and Armstrong explains ‘there is now an opening for G20 leaders to set the strategic direction of reform for the WTO’ after the leaders’ communique from Argentina opened up that opportunity. The G20 countries are now talking about what WTO reforms are needed, instead of whether they are needed at all. [Abe and Merkel seek to take Japan-Germany ties to ‘higher level’ amid trade turmoil and Brexit]
Today’s Quick Links: Nonkululeko Nyembezi: Africa shifts to the periphery at World Economic Forum The EALA’s sensitization programme (1-6 February): EAC Integration Agenda - accessing the gains and assessing the challenges Enhancing SADC DFI’s role towards industrialization: an interview with Tanzania’s Charles Singili Trans-Gambia bridge a boon for trade: but a blow for local traders Battle for US skies: Ethiopian Airlines ups the stakes Ethiopia takes over Amisom command Kenya: Shilling hits 6-month high to dollar IFC’s Sergio Pimenta: Rwandan private sector can do more to seize opportunities Little known Kenya firm buys Tanzanian cashew nuts for Sh18bn |
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Mission to unlock Africa’s services sector
African countries must level up on their ability to measure services trade and use services to grow their economies and value chains.
“Services offer African countries an important opportunity to diversify production away from traditional sectors and engage in activities with higher value added,” says Paul Akiwumi, UNCTAD’s division head for Africa, least developed countries and special programmes.
“Some services – transport, financial, and information and communication services – are key contributors to trade and improve the ease of doing business across borders.”
“Services offer African countries an important opportunity to diversify production away from traditional sectors and engage in activities with higher value added,” says Paul Akiwumi, UNCTAD’s division head for Africa, least developed countries and special programmes.
“Some services – transport, financial, and information and communication services – are key contributors to trade and improve the ease of doing business across borders.”
Continental trade dreams
Services trade can also support the aspirations of the African Continental Free Trade Area (AfCFTA) agreed by African leaders in March 2018.
The AfCFTA seeks to establish a single market for goods and notably services. To date, 16 countries have ratified the agreement.
But turning the AfCFTA vision into a reality has proved challenging, especially when it comes to services trade, says Stephen Karingi, UNECA regional integration and trade division director.
“One of the main stumbling blocks to the implementation of trade services-related policies is the lack of understanding and quantification of services trade, and more generally, the role services play in regional and global value chains,” Mr. Karingi says.
Raising the profile of services in Africa may offer promising opportunities for export diversification, services-led transformation and services trade-led growth.
Leveraging gains
Africa stands to gain from sharpening its ability to measure and analyze services value chains.
That is why policymakers are committing to levelling up their services analysis skills to design services policies aimed at increasing integration into regional and global value chains.
UNCTAD economist Claudia Roethlisberger told attendees that services have become essential for countries’ ability to participate in global and regional value chains.
“The continental market brings immense opportunities for shaping Africa’s services trade, creating and supporting services regional value chains and regional integration,” Ms. Roethlisberger said.
In practical terms, unlocking this potential requires services trade to be better understood and supported in policy-making processes.
UNCTAD and UNECA’s seminar series helps deliver this through user-friendly tools and capacity-building initiatives like the seminar of African trade analysts and policy makers.
Getting to work
Workshop participants dug deep into the details of the data and methodologies on how to construct reliable indicators on services trade and trade in value added.
Country delegations and experts discussed quantitative and qualitative tools to measure the contribution of services to value chains.
Ms. Ya Awa Nyassi from The Gambia highlighted the possibility of engaging industry associations to select firms to survey and interview and confidentiality was essential for useful inputs.
Mr. Kossi Abiguime from Togo also emphasized the need to adapt the survey to country contexts.
Participants are already seeing the value of measuring services trade. Ethiopian and Kenyan delegates found transport sub-sectors where they expect the project to generate value.
They now want to assess how transport services support horticulture and manufacture exports and the how transport of the freight industry facilitates regional value chains.
Mr. Sidy Keita and Mr. Sidy Boly from Mali discussed how surveys can be adjusted to measure the tourism sector.
The project is filling important and practical knowledge gaps for the continent. “We are addressing the lack of understanding and quantification of services trade in Africa,” Mr. Karingi said.
Given that many services sectors employ many women, services trade can also have significant gender impacts and offer new opportunities for women in Africa, ensuring no-one is left behind, added Mr. Akiwumi.
“To reap real benefits from today’s international trade, countries must integrate into value chains and build their services sectors to participate in segments with higher value added.”
“This will increase their ability for income generation, boost their development outcomes and contribute to realizing the targets of the Sustainable Development Goals,” he said.
The project is funded by the United Nations Development Account.
African Services: The numbers
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In 2016, about 55% of Africa’s GDP was generated by services.
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The share of services in Africa’s trade reached 22% in 2016, following a steep increase and catching up process to the global average of 24%.
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In 2017, Africa accounted for only 3% of the world’s total services imports and 2% of the world’s total exports of services.
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Removal of tariff barriers will increase intra-African trade by 50%.
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The improvement of trade facilitation will more than double the intra-African trade.
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With $100 million Afreximbank commitment, Fund for Export Development in Africa (FEDA) positions to support African businesses
The operationalization of the newly-created Fund for Export Development in Africa (FEDA) moved into high gear on Sunday with the holding of the pre-incorporation meeting of the Board of Directors in Cairo.
FEDA, a wholly-owned development-oriented subsidiary of the African Export-Import Bank (Afreximbank), has been set up to implement the Bank’s Equity Investment Programme by providing seed capital to companies in Afreximbank’s key focus sectors, including agri-business; manufacturing; consumer and retail; financial services; technology; travel and tourism; transport and logistics; and industrial parks. It will invest across all market segments but will have its greatest focus on small and medium-sized enterprises.
The long-term objective of FEDA is the provision of equity capital and related financial, non-financial and support services to operators in Africa’s tradable and support sectors, with emphasis on activities that support intra-African trade and value-added exports.
The Fund, which has been set up with an initial $100-million commitment, will also seek to leverage on the role Afreximbank has played in mobilising trade finance into Africa to also mobilise foreign direct investment (FDI) into the continent.
Addressing the pre-incorporation meeting, Prof. Benedict Oramah, Chairman of the Board of Directors of FEDA and President of Afreximbank, said that the fund would expand Afreximbank’s offerings to include vital equity investments that would boost intra-African trade.
Dr. Philip Kamau, Chief Executive Officer (CEO) of FEDA, said that a feasibility study conducted for Afreximbank had identified a funding gap which was inhibiting intra-African trade. FEDA had, therefore, been set up to provide equity and to leverage FDI to help close that gap.
He announced that FEDA would start investment activities in 2019, with a target to invest $10 million during the year. It was also targeting to raise $450 million in FDI during the period.
In addition to Prof. Oramah and Dr. Kamau, the other members of the Board of Directors are: Jean-Louis Ekra, former President of Afreximbank; Vishwanathan Shanker, Partner and CEO of the private equity fund Gateway Partners and former Board Member and CEO for Europe, Middle East, Africa and America at Standard Chartered Bank; Dr. Sidi Ould Tah, Director- General, Arab Bank for Economic Development in Africa; and Dr. Deji Alli, Non-Executive Director, Asset and Resource Management Company Ltd., Nigeria, which was named the Best Fund Manager in Nigeria in 2018.
FEDA will be headquartered in Mauritius.
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tralac’s Daily News Selection
20th Ordinary Summit of Heads of State of the East African Community: Joint Communiqué
Highlights: The Summit received a progress report on the Review of the East African Development Bank (EADB) Charter to streamline it into the EAC mainstream. The Summit directed the Council of Ministers to expedite the process
The Summit received a progress report from H.E. President Yoweri Kaguta Museveni, on the EU-EAC Economic Partnership Agreement (EPA) and decided that the EAC engages the EU on the matter in the next four months to get more clarification on the pertinent issues of concern. Thereafter, Partner States who wish to, may or may not sign the EPA.
WDR 2020: Sneak preview (World Bank Blog)
The next World Development Report, Global value chains: trading for development, is well under way. Check out our website for a sneak preview. Since the Bank’s last report more than 30 years ago on Industrialization and Foreign Trade, the world has been transformed, mostly in positive terms from a development perspective. Several low and middle income countries can now participate globally thanks to global value chains. The WDR will seek to answer three big questions: [Blog author: Pinelopi Goldberg]
Hippolyte Fofack: Overcoming the colonial development model of resource extraction for sustainable development in Africa (Brookings)
Although the Africa Cocoa Initiative has received little publicity, its impact has been significant in Côte d’Ivoire - the world’s leading producer of cocoa beans that, over the years, has captured less than 10% of the global cocoa value chain that generates more than $120bn annually. The support provided by the Bank has enabled Côte d’Ivoire to increase its processing capacity to become a leader in the global cocoa processing space and to overtake the Netherlands as the world’s largest processor of cocoa during the 2014-15 season. The AFRICOIN model could be replicated with a wide range of other soft commodities to extract more value and lift more people out of the vicious cycle of poverty and intergenerational dependency. The process of value addition along African commodities is likely to be enhanced under the AfCFTA, which offers tremendous opportunities for economies of scale and regional value chains to smooth the transition towards more competitive global value chains. At the same time, the success of a few natural resource-rich nations in value addition and export diversification will serve as a catalyst for economic transformation, further accelerating the development of regional value chains for commodity-based industrialization and beyond. [Ghana now processing 34% of its cocoa]
The African continental free trade area: an integration trilemma (ERF Policy Portal)
Plans to establish an African continental free trade area are hampered by three incompatible objectives: solidarity across the continent’s diverse countries; large membership to break the curse of small markets; and deep integration to reap all the benefits of close economic cooperation. This column explains Africa’s ‘integration trilemma’ – and suggests that it may in part explain why no North African country has as yet ratified the AfcFTA Treaty. [The author: Jaime de Melo]
East Africa, India and Europe: norms to enhance Indian ocean commerce (EU India Think Tanks Initiative)
The paper seeks to identify key trade linkages in Indian Ocean littoral states in East Africa along with Indian Ocean island states as a means of understanding the scope for India and the European Union to cooperate in establishing transparent rules-based norms for supply chains in the region. Both India and the European Union are key trading partners for the African nations analysed in this paper, and as the region develops economically, the trade regime in the Indian Ocean will witness substantial changes. The paper sources data on the trade in commodities between India and the European Union with eight African nations in the Indian Ocean, and analyses the data to reveal key commodities traded between them. The paper identifies vital trends in the trade while noting the lack of commonalities. The recommendations in the end are suggested accordingly. Extract (pdf):
As seen in Figure 1.1, India’s exports to the IOA-8 is mostly concentrated around Tanzania, Mozambique and Kenya, all countries with close political ties to India. These countries are also moderately sized and have a larger GDP (nominal) compared to the other nations. Kenya and Tanzania both figure in the top 10 African economies by GDP and have comparatively better trade infrastructure. However, given the fact that East Africa is the fastest growing economic region in the African continent, it is surprising to see that exports from India to the IOA-8 have reduced by gross value over the course of the three years. Across the three-year period recorded within this dataset, there are instances of India’s trade activities with certain East African nations fluctuating drastically. Notably, between 2016 and 2017, India’s combined imports and exports to Kenya decreased by nearly 50%, while similarly, in Somalia, between 2016 and 2017, substantial decreases in exports were noted. Tanzania is another country where exports decreased drastically between 2016 and 2017. India’s exports to Tanzania dropped from $ 1,766,864,783 to $ 1,006,031,268,a 43% drop. [The authors: Mihir Sharma, Tuneer Mukherjee, Gareth Price, John-Joseph Wilkins]
UK signs Eastern and Southern Africa trade continuity agreement (UK Gov)
Trade Minister George Hollingbery signed the UK-Eastern and Southern Africa agreement in London on Thursday, 31 January 2019 with a number of representative governments. The new UK-ESA agreement replicates the effects of existing trading arrangements as far as possible. It will come into effect as soon as the implementation period ends in January 2021, or on 29 March 2019 if the UK leaves the EU without a deal.
Magufuli seeks the right balance for Tanzania’s mining fiscal regime (NRGI)
Last week, President John Magufuli highlighted the difficulties in getting this balance right. At a multi-stakeholder meeting concerning the mining sector, he stated his government’s intention to review the 2017 fiscal regime given his concern that the recent increase in taxes is hindering rather than helping efforts to collect more revenue from the sector. While the media focused on his comments on artisanal and small-scale mining and tax evasion, the president also spoke about the impact of the new regime on large-scale investment. NRGI’s preliminary analysis of the current fiscal regime for Tanzania’s mining sector suggests that the president is right to be concerned. Using an Excel-based economic model that we developed specifically for this analysis (similar to other models we have recently published), we evaluated the impact of the regime on a number of hypothetical large-scale gold projects (ranging from mines as large as Acacia’s North Mara mine to small ones like Shanta Gold’s New Luika mine). We focused on the implications for new projects; since contracts for existing projects are not in the public domain, it is difficult to assess the impact of renegotiating them. [The authors: Thomas Scurfield, Silas Olan’g]
Illicit financial flows: conceptual and practical issues (South Centre)
In this brief (pdf) we share our understanding of the unjust system that drains billions of dollars out of the continent annually, and make recommendations and a case for bringing citizens back into the political economy discourse; and to reshape the rigged rules and systems into an effective framework for stemming them huge illicit financial flows from Africa to other regions.
Confronting tobacco illicit trade: a global review of country experiences (World Bank Blog)
A new report, Confronting Tobacco Illicit Trade: a global review of country experiences, prepared in collaboration with a multisectoral team across different institutions shows that reducing illicit trade in tobacco products is critical from the perspective of public health, public finance, governance, or equity. This publication presents country and regional case studies, covering over 30 countries across the income and development spectrum, detailing their illicit tobacco trade context, legal and policy frameworks, enforcement strategies, progress achieved, lessons learned, and recommendations regarding further strengthening illicit trade control. In response to demand from government officials and other partners, this report provides practical input and guidance on how to address illicit tobacco trade based on diverse country experiences.
Sub-Saharan chapters: Southern African Customs Union (Botswana, Lesotho, Namibia, South Africa, and Eswatini) and Zambia: Addressing the illicit flow of tobacco products (pdf); Botswana, Lesotho and South Africa: An analysis of alcohol and cigarette prices in Maseru, Gaborone, and neighboring South African towns; Kenya: Controlling illicit cigarette trade (pdf); Senegal: Addressing illicit tobacco trade (pdf)
Reform clouds darken the future of the UN Development Programme (PassBlue)
As the first effects of Secretary-General António Guterres’s ambitious organizational reform plans become apparent, former and current officials of the UNDP see the future of the internationally influential agency as uncertain if not in peril. Fears center on aspects of the reform plan for development that would allow more political interference by host governments in the work of the UNDP, as it’s called. The plan could also deter the agency from factoring in human-rights issues in country programs, after rights were stripped earlier from the Sustainable Development Goals. The reform agenda was formally approved by the General Assembly in May 2018. Its most radical departure is the separation of the development program’s resident representative in a given country from a “resident coordinator” overseeing the UN’s work more broadly in the country, in close cooperation with the national government. Until now, the two functions were often combined in one person, with the development program’s representative — the “res-rep” — serving like a UN ambassador. Deputy Secretary-General Amina Mohammed, a former Nigerian cabinet minister, has been a driving force behind changes in how UNDP functions. She is now in charge of the UN’s development work, whose main job is to eradicate poverty. The resident coordinators will report to her and not, as in the past, to the UNDP administrator, the top official of the development agency, Achim Steiner.
India: Top advisory body on foreign trade to discuss policy for goods, services (Devdiscourse)
The Board of Trade will seek views of stakeholders including various government departments, exporters and industry members on 15 February to frame a new foreign trade policy and boost shipments of goods and services, an official said. The 70-member board, a top advisory body on external trade, is chaired by Commerce and Industry Minister Suresh Prabhu. “Views would be taken on the new foreign trade policy, which is scheduled to be released later this year,” the official said. The objective of BoT is to have continuous discussion and consultation with trade and industry. It advises the government on policy measures related to the foreign trade policy in order to boost the country’s trade. The Board’s last meeting was held in June 2017.
India must join WTO members in e-commerce talks (editorial comment, Hindustan Times)
In opposing discussions on e-commerce rules at the WTO, India continues a quixotic trade policy that further marginalises it in the international political economy. New Delhi’s opposition has accomplished little. As many as 76 WTO members have decided to separately begin a process that will frame rules governing cross-border e-commerce. Since this group includes the four largest trading nations — the US, China, EU, Japan — as well as nearly half the WTO’s membership, the breakaway faction is well on its way to becoming the mainstream. India wants a 1998 agenda to be the basis of any conversation about e-commerce. The agenda is from an age when the name Amazon was still associated with a South American river. New Delhi’s stance is no surprise. It continues to have relatively restrictive policies on foreign multi-brand retail. It has now added a convoluted and protectionist rulebook for its domestic e-commerce market. It would be par for the course for India to try and obstruct any attempted moves towards an international free market for e-commerce. India’s posture will, in time, prove to be the worst of both worlds. India will not be able to stop the main trading nations from moving forward with an e-commerce agenda at the WTO. Even if one supported New Delhi’s position, it would be better placed to obstruct if it was sitting at the table rather than sulking on the pavement. Once the other countries set the agenda, India would find itself in the onerous position of having to decide on a set of parameters that it will have no means to modify or dilute. [E-comm talks: India must stand firm. Note: The statement on e-commerce, signed by 76 WTO members, can be accessed here]
Today’s Quick Links: COM2019: Vera Songwe signs agreement with Morocco, urges Rabat to ratify AfCFTA Nigeria’s Manufacturing Index rises for 22nd consecutive month Eromosele Abiodun: Dilemma of Nigerian exporters Niger: AfDB’s Country Strategy Paper 2018–2022 Senegal: Fiscal transparency evaluation US imposes visa restrictions on Ghana |
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20th Ordinary Summit of Heads of State of the East African Community: Joint Communiqué
Enhancing the Economic, Social and Political Integration of the EAC
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The East African Community Heads of State, their Excellencies President Yoweri Kaguta Museveni of the Republic of Uganda; President Paul Kagame of the Republic of Rwanda; President Uhuru Kenyatta of the Republic of Kenya; President Dr. John Pombe Joseph Magufuli of the United Republic of Tanzania; H.E. Gaston Sindimwo, 1st Vice President, Representing President Pierre Nkurunziza of the Republic of Burundi; and Hon. Paul Moyom Akec, Minister of Trade, Industry and EAC Affairs Representing President Salva Kiir Mayardit of the Republic of South Sudan; held the 20th Ordinary Summit of the East African Community Heads of State at the Arusha International Conference Centre, in the United Republic of Tanzania, on 1 February, 2019. The Heads of State Met in a warm and cordial atmosphere.
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The Summit received the report of the Council of Ministers covering the period 23rd February, 2018 to 31st January, 2019 and commended the Council for the progress made in the implementation of the Programmes and Projects of the Community.
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The Summit considered a report of the Council on the implementation of the previous Directives and Decisions of the Summit and directed the Council to implement all outstanding Directives and Decisions and report to the 21st Summit.
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The Summit received a report on the Status of Ratification of Protocols and directed Partner States to ratify all outstanding Protocols and the Council to report to the 21st Summit.
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The Summit noted the status of resolution of long outstanding non-tariff barriers and directed Partner States and the Council to resolve them.
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The Summit received a report of the Council that all Partner States had nominated constitutional experts to work on the Constitution of the Political Confederation. The Summit directed the Council to cause the experts to provide a preliminary report within seven months. The Summit decided that President Yoweri Kaguta Museveni shall provide political guidance to the exercise.
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The Summit received a progress report on the Review of the East African Development Bank (EADB) Charter to streamline it into the EAC mainstream. The Summit directed the Council of Ministers to expedite the process.
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The Summit considered a report on the Roadmap for the Accelerated Integration of the Republic of South Sudan into the EAC and directed the Council to conclude the process.
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The Summit received a progress report that the verification exercise for the admission of the Federal Republic of Somalia into the East African Community had not been undertaken. The Summit directed the Council to follow up on the matter and report to the 21st Summit.
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The Summit considered a report on the Modalities for the Promotion of Motor Vehicle Assembly in the Region aimed at reducing the importation of used motor vehicles from outside the Community, and directed the Council to follow up the matter and report to the 21st Summit.
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The Summit received a report on the Review of the Textile and Leather Sector in East Africa with a view to developing a strong and competitive sector that gives consumers better choices than imported textiles and footwear. The Summit directed the Council to conclude the matter and report to the 21st Summit.
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The Summit recalled its directive of having two Deputy Secretaries General at the East African Community recruited competitively on a rotational basis and decided that the Deputy Secretary General from the United Republic of Tanzania and the Deputy Secretary General from the Republic of Rwanda shall serve their respective two terms in office.
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The Summit received a progress report from H.E. President Yoweri Kaguta Museveni, on the EU-EAC Economic Partnership Agreement (EPA) and decided that the EAC engages the EU on the matter in the next four months to get more clarification on the pertinent issues of concern. Thereafter, Partner States who wish to, may or may not sign the EPA.
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The Summit assented to the EAC Oaths Bill, 2018; the EAC Monetary Institute Bill, 2018; and the EAC Supplementary Appropriation Bill, 2018.
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The Summit received a report on the Financial Status of the East African Community and directed Partner States to fulfil their financial obligations to the Community in a timely manner.
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The Summit endorsed the Republic of Kenya’s candidature for the non-permanent membership of the United Nations Security Council (UNSC) for a two-year term for the period 2021-2022.
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The Summit, pursuant to Article 24 (1) of the Treaty for the Establishment of the East African Community, appointed Hon. Lady Justice Sauda Mjasiri as Judge to the Appellate Division of the East African Court of Justice with effect from 13th February, 2019. The Honourable Lady Justice Sauda Mjasiri replaces Hon. Justice Edward M. K. Rutakangwa who will be retiring on 12th February, 2019. The Summit commended Hon. Justice Edward M. K. Rutakangwa for his dedicated service to the Community.
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The Summit presented awards to the winners of the EAC Students Essay Writing Competition, 2017 and 2018 editions respectively.
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The Summit directed the Council within three months to review the relevant policies and harmonise the Framework for Importation of Goods into the EAC with a view to supporting the growth of local industries.
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His Excellency President Yoweri Kaguta Museveni handed over the Chairmanship to His Excellency President Paul Kagame. The United Republic of Tanzania took over as rapporteur from the Republic of Rwanda. The Summit thanked His Excellency President Yoweri Kaguta Museveni for ably steering the affairs of the Community during his tenure.
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The Summit received a report from the Facilitator of the Inter-Burundi Dialogue His Excellency Benjamin Mkapa, Former President of the United Republic of Tanzania. The Summit thanked the Facilitator for his contribution to the dialogue during his tenure. The Summit decided to consult further on the inter-Burundi dialogue process.
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Their Excellencies President Yoweri Kaguta Museveni of the Republic of Uganda; President Paul Kagame of the Republic of Rwanda, President Uhuru Kenyatta of the Republic of Kenya; H.E. Gaston Sindimwo, 1st Vice President representing President Pierre Nkurunziza of the Republic of Burundi; and Hon. Paul Moyom Akec, Minister of Trade, Industry and EAC Affairs representing President Salva Kiir Mayardit of the Republic of South Sudan, thanked their host, President Dr. John Pombe Joseph Magufuli, of the United Republic of Tanzania, for the warm hospitality extended to them and their delegations during their stay in Arusha.
Done at Arusha, this 1st day of February, 2019
Speech by Amb. Liberat Mfumukeko during the 20th Ordinary Summit of the EAC Heads of State
2019 is a significant year, as the Community will be marking its 20th Anniversary in November. We will be marking two decades in which the EAC has grown in leaps and bounds. Since its establishment almost 20 years ago, the EAC has registered great achievements.
Allow me to highlight a few of the milestones achieved in the last two (2) years.
In the Infrastructure sector, the Partner States continued implementing the EAC priority infrastructure projects. Here in Arusha, we are enjoying the Arusha - Tengeru Dual Carriageway and witnessing the near completion of the Arusha Bypass Road. It is important to note that both roads are part of the completed Multinational Arusha - Holili/Taveta - Voi Road, and the Arusha - Namanga - Athi River Road, both of which the EAC provided technical support.
In addition, the EAC mobilized funds and coordinated the feasibility studies and design for two (2) key links for the Republics of Rwanda and Burundi to the Central Corridor. One project is the 250Km long Nyakanzi - Kasulu - Manyovu road in Tanzania linking to the 78Km long Rumonge - Bujumbura road in Burundi. The other is the 92Km long Lusahunga - Rusumo Road in Tanzania linking to the 70Km long Kayonza - Kigali road in Rwanda.
The EAC Lake Victoria Water and Sanitation Project (LVWATSAN II) has implemented various interventions aimed at developing and/or improving water supply and sanitation services for 15 secondary towns in Burundi, Kenya, Rwanda, Tanzania and Uganda. These projects, most of which were commissioned in 2018, were designed to provide reliable portable water to the populations until 2035.
In an effort to heighten education in the region, the Heads of State declared the EAC a Common Higher Education Area in 2017. This has facilitated the recognition of academic certificates and the transfer of credits from higher education institutions across the region. University students in the region are now enjoying their ability to transfer credits across universities and study anywhere within the region. In addition, scholarship programmes have been availed to several students to study at various Centers of Excellence. Regional integration has been further enhanced through mobility of academic Staff in which University Lecturers are able to undertake academic activities such as teaching and research across the region.
The EAC has also implemented various health projects in the region. These include equipping the Partner States with Mobile Laboratories to better facilitate rapid identification of infectious disease outbreaks, as well as, several immunization programs throughout EAC in which millions of children have received life-saving vaccines.
In an effort to further improve the lives of the citizenry, the EAC has established Centers of Excellence for Higher Medical Education, Health Services and Research. These Centers of Excellence are: The East Africa Kidney Institute in Kenya; The East Africa Heart Institute in Tanzania; The East Africa Cancer Institute in Uganda; The East Africa Nutritional Sciences Institute in Burundi; The East Africa Biomedical Engineering Institute in Rwanda; and The EAC Regional Center of Excellence for Vaccines, Immunization and Health Supply Chain Management in Rwanda.
Under the Customs Union Pillar, the implementation of the Single Customs Territory is in progress and coverage of goods cleared has been expanded to include all intra-regional trade within the Community. This has resulted in the drastic reduction of the period taken to clear goods from over 20 days to three (3) or four (4) days on the Central Corridor; and from 21 days to four (4) days from Mombasa to Kampala and from 18 days to six (6) days to Kigali, on the Northern Corridor. It is also worth noting that out of the 15 Borders earmarked to operate as One Stop Border Posts, 13 have been completed and are now operational. The One Stop Border Posts have reduced transit costs incurred in cross border movement by combining the activities of both country’s border organizations and agencies at a single location in each direction.
On the Common Market, the EAC Partner States enacted new laws to conform to the Protocol. The Republics of Kenya, Rwanda and Uganda allow their respective citizens to enter and exit their territories using National IDs. It is our hope that soon, all EAC citizens will be able to use their national IDs as an official travel document within the region. In addition, Kenya, Rwanda and Tanzania have also commenced issuance of the International East African e-Passport. With the East African e-Passport, we are now being recognized as East Africans all over the world. Further Mutual Recognition Agreements for Engineers; Architects; Accountants; and Veterinary Officers have been signed and the process is underway for Land Surveyors and Advocates. These Agreements allow professionals in these categories to practice anywhere within the region as each Partner State recognizes one another's conformity assessments.
Under the Monetary Union Pillar, programmes for harmonization of Capital Markets and Payment Systems are ongoing. The Community has harmonized critical policies necessary for a sustainable Monetary Union and remains firmly on course towards attaining a single currency by the year 2024. The East African Legislative Assembly recently enacted the East African Monetary Institute Bill, 2018 and the East African Statistics Bureau Bill, 2018.
There is also considerable progress in the Political Federation Pillar and the EAC has set the stage for the commencement of developing a Constitution for the Political Confederation, as a transitional model of the East African Political Federation. EAC Partner States’ Armed Forces, Police and Civilian Components have established a Combined Joint Task Force that plans and undertakes joint operations. Such joint operations incorporate Peace Support Operations, Counter Terrorism, Counter Piracy and Disaster Management as well as tackle other complex security challenges in the region and beyond. Several Safety Monitoring Centres have also been established on Lake Victoria.
Since 2016, the EAC has mobilized over US$ 360 million from various Development Partners. These include USAID, the European Union, the World Bank, the African Development Bank (AfDB), the United Nations, the Federal Republic of Germany, the People’s Republic of China, Japan, Denmark, Switzerland and the Alliance for a Green Revolution in Africa among many others. These funds are all allotted to support various development projects and programmes in the Community.
In addition to the above, the African Development Bank (AfDB) and African Development Fund (ADF) approved US$ 2.5 Billion for the implementation of new and ongoing priority infrastructure projects in the EAC region up to the year 2022.
The significant strides made in resource mobilization are indicators of our Development Partners’ confidence in us. We look forward to mobilizing more resources for development projects in our region in 2019.
I wish to inform you that the EAC received a Clean Audit Report for all EAC Organs and Institutions for the Financial Year 2017/2018.
The EAC Secretariat has also operationalized a Project Coordination Unit to better facilitate the coordination of projects. The Unit serves as a one-stop desk for information on EAC projects both internally and externally.
The EAC Secretariat has continued implementing minimal reforms aimed at managing our travel budget with the view of ensuring efficiency. To this end, the EAC travel budget has reduced significantly as we are now using Video Conference facilities as well as hosting more meeting at the EAC Headquarters. We shall continue implementing reforms until we conform to internationally accepted standards.
Despite these significant achievements, it is ironic that most East Africans cannot associate themselves with the Community. To address this challenge, EAC Organs and Institutions have embarked on various outreach programmes to educate East Africans on the integration process and its role in their lives.
Going forward, the EAC will work on building stronger relationships with the Private Sector, both within the region and globally. We acknowledge the private sector has a vital role in taking our integration agenda to higher heights through investments in critical industrial and service sectors, creation of a competitive advantage for the region as well as creation of jobs.
We have worked on a detailed roadmap to integrate the Republic of South Sudan in the EAC projects and programmes, which is currently under implementation. Mainstreaming of the Republic of South Sudan needs to be fast tracked to be at the same level of integration with the other Partner States especially in the implementation of the Customs Union and Common Market Protocols.
As we mark 20 years of regional integration, our achievements cannot be downplayed. The East African Community of today, is not what it was 20 years ago in terms of development. Our countries are more vibrant, with increased trade, improved infrastructure and an overall positive trend in socioeconomic development. The EAC is on the global spotlight as the most promising Regional Economic Community.
I wish to conclude by thanking you, Your Excellencies, for your commitment, zeal and determination to make the EAC dream a reality.
I also wish to acknowledge the EAC Policy Organs for their guidance.
I thank you all for your attention and wish the 20th Ordinary Summit of the EAC Heads of State fruitful deliberations!
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UK signs Eastern and Southern Africa trade continuity agreement
Trade Policy Minister George Hollingbery signed the trade continuity agreement in London with a number of representative governments.
A continuity agreement will see British businesses and consumers benefitting from continued trade with Eastern and Southern Africa after we leave the European Union.
Trade Minister George Hollingbery signed the UK-Eastern and Southern Africa agreement in London on Thursday, 31 January 2019 with a number of representative governments.
The news has been welcomed by businesses including Princes Tuna, who say it will help to support over 4000 jobs and ensure they can keep trading without disruption.
This continuity agreement has been agreed as we prepare to leave the EU on 29 March. It replicates the effects of the existing pdf EU Economic Partnership Agreement with Eastern and Southern Africa (8.59 MB) .
It will allow continued tariff-free imports from Eastern and Southern Africa, and removes the majority of tariffs on British exports to these countries over the coming years.
The agreement ensures that there will be no disruption to our trading relationship with Eastern and Southern Africa as we leave the leave the EU.
Trading on these preferential terms rather than on World Trade Organization terms will deliver significant savings and help to support British jobs.
This will help to further strengthen the trading relationship between the UK and these countries, which was worth £1.5 billion in 2017.
Based on current trade flows, meat and fish exporters in Eastern and Southern Africa could save £30 million a year in tariff charges that could apply if the agreement wasn’t in place, while clothing exporters could save more than £10m and sugar exporters could save around £8m.
Consumers in the UK will continue to benefit from more choice and lower prices for products as clothes and tuna from Mauritius.
These agreements are part of the UK government’s commitment to supporting developing countries to reduce poverty through trade. It will help to them to grow their economies, create jobs, increase incomes and reduce reliance on overseas aid in the long-term.
Trade Minister George Hollingbery said:
The continuity agreement, signed today, marks our commitment to help developing countries increase trade and boost economies both across Africa and the UK.
The agreement will allow businesses in Eastern and Southern Africa to continue trading with the UK without any tariffs and lays the foundations for our ambitious trade for development agenda.
Africa’s long-term success matters to the UK which is why we are investing in, and partnering with African nations for our mutual benefit.
Abdulla Elahee Doomun, Managing Director, Princes Tuna (Mauritius) Limited said:
Princes Tuna Mauritius warmly welcomes this agreement as the UK is the largest market for the tuna products that we manufacture.
Ensuring there is frictionless trade is critical to our long-term business success and to supporting over 4,000 direct jobs in our two factories as well as many other Mauritian businesses that provide us with goods and services.
HM Trade Commissioner for Africa, Emma Wade-Smith said:
Today’s agreement will help to keep trade between the UK and nations in Eastern and Southern Africa well on track, providing continuity for businesses, consumers and exporters as the UK prepares to leave the EU.
This deal forms part of the UK government’s wider commitment to supporting developing nations and emerging economies worldwide and across Africa. Providing continuity of the trading arrangements with our trading partners will help sustain jobs and further strengthen trade and investment ties between the UK and nations of Eastern and Southern Africa.
The new UK-ESA agreement replicates the effects of existing trading arrangements as far as possible. It will come into effect as soon as the implementation period ends in January 2021, or on 29 March 2019 if the UK leaves the EU without a deal.
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Agenda items for tomorrow’s EAC Heads of State Summit in Arusha:
The presidents are expected to tackle key issue amongst member states, with priority given to resolution of long outstanding non-tariff barriers; the progress report on the adoption of Political Confederation as a Transitional Model to the East African Political Federation. Other items include: the roadmap for the accelerated integration of South Sudan into the EAC, and the verification exercise for the admission of Somalia.
Agenda items for the 32nd AU Summit:
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Draft agenda for the Executive Council (7-8 February)
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Draft agenda for the Assembly of the Union (10-11 February). Highlights (pdf) include three major reports: Institutional reform of the AU (by President Kagame and the AUC Chairperson); AfCFTA (by President Issoufou); Implementation of the Assembly decision on post-Cotonou negotiations (by the AUC Chairperson), to be followed by six reports by Chairpersons of the Committees of the Assembly and eight reports by leaders on specific thematic issues.
Again, MAN warns FG against signing of AfCFTA (Nairametrics)
Mansur Ahmed, the President of Manufacturers Association of Nigeria, has urged the Federal Government not to sign the AfCFTA. Ahmed, who is also the interim Chairman of Africa Manufacturers Association, said the measure would save Nigeria from being used as a dumping ground for foreign goods. “Our advocacy on AfCFTA is yielding desired results and as you are aware, Nigeria is yet to sign the framework agreement. MAN is a functional member of the committee that is billed to submit its report to the President in early February. In addition, MAN, being a proactive organisation that strongly believes in evidence-based advocacy, commissioned a sector-specific study on AfCFTA. We have shared the study, full report and fact sheets on the highlights of findings with the Presidential Committee on AfCFTA.” [Manufacturing sector to increase contribution to national GDP: Ahmed explained that Nigeria would eventually sign the agreement but that stakeholders did not want the government to just sign the framework without looking at the impact of the agreement on the sector and on the economy]
ECA, UNCTAD conduct three-day workshop on services trade in Africa (UNECA)
Komi Tsowou of the ECA said currently six countries have been targeted - Kenya, Ethiopia, Gambia, Mali, Togo, Nigeria – for the project. The project targets three services sectors that are critical for enabling trade and fostering inclusiveness, in particular in relation to women and youth, namely: infrastructure services (transport and energy), financial services and tourism services. The project offers: Train-the-trainers seminars on measuring and analyzing global and regional value chains; Analysis of selected regional value chains; Multi-stakeholder workshop to share experiences of value chain analysis; Contribution to evidence-based services trade policies; Online knowledge-sharing platform on regional value chain analysis; Guidebook on the experiences, lessons learned and best practices of services value chain analysis. [Strengthening the capacities of African governments for integration of accountability in national development planning: UNECA project update]
Aid for Trade in the services sector: capacity-building and facilitation in the services sector in small states and LDCs (Commonwealth Secretariat)
A core area of concern for LDCs in trade in services is the lack of transparency of regulation, and access to credible information on trade policy, guidelines and procedures. Any effort to facilitate trade in services would be incomplete if it did not commence with addressing this core concern. Aid for Trade can help be used, with the support of the Governments, to create platforms, where LDC service suppliers can access such information, and keep up to date on regulations, and policy, globally, on their respective industries. This would bring down the cost imposed by uncertainty in trade, and help service suppliers better plan their economic activities. Since AfT programmes are collaborative efforts between international agencies, and donor countries, not just restricted to funding ease and facilitation of trade, but also providing capacity building and institutional reform support, the platform would also be ideal to foster, between donors and recipients, mutual recognition (especially, for example, professional qualifications), harmonization, and the exchange of technical know-how and skill-building capacity and initiatives, and promoting best practices, benefitting suppliers and governments on both sides, and making way for easier trade. To this end, it would be essential, as well as beneficial for these programmes, to leverage technology, and create an ‘ecosystem’ of service suppliers from LDCs, and their trading partners, donors and other stakeholders, to connect and collaborate. [The author: Pallavi Bajaj] [Mauritius: national workshop on trade in services]
G20 Compact with Africa update (World Bank)
The World Bank Group and the German Federal Ministry of Economic Cooperation and Development have announced a deeper partnership for economic development in six countries in Africa. BMZ will provide significant additional financial support through the partnership, which will harness WBG expertise on the ground in order to catalyze investment, job creation and sustainable economic growth. The partnership flows from a Joint Declaration of Intent signed at an Africa Investment Summit in Berlin on 30 October 2018. It sets out parameters for joint action in Morocco and Tunisia in North Africa, and Côte d’Ivoire, Ethiopia, Ghana, and Senegal in Sub-Saharan Africa.
South Africa: December 2018 trade statistics stay in surplus (pdf, SARS)
The South African Revenue Service, today, released trade statistics for December 2018 recording a trade surplus of R17.17bn: the surplus is attributable to exports of R102.75bn and imports of R85.58bn. Exports decreased from November 2018 to December 2018 by R15.92bn (13.4%) while imports decreased from November 2018 to December 2018 by R29.80bn (25.8%). The year-to-date (01 January to 31 December 2018) trade surplus of R11.29bn is a deterioration on the surplus for the comparable period in 2017 of R76.68bn. Exports year-to-date increased by 5.4% whilst imports for the same period showed an increase of 11.6%. Top five countries for exports: China (9.2%), Germany (7.6), United States (7.2), India (4.9), Japan (4.6). Top five countries for imports: China (16.1%), Germany (8.1%), United States (6.3), Saudi Arabia (4.8), Nigeria (4.3)
Kenya hints at lifting embargo on Uganda poultry imports (Business Daily)
The deadly avian influenza disease that led Kenya to place a ban on Ugandan poultry products has now been controlled, paving the way for the lifting of the embargo. Livestock PS Harry Kimutai says Uganda has submitted the report on eradication of the disease to World Organisation for Animal Health and that Kenya is waiting for a directive from the organisation after which the ban will be lifted. The ban was supposed to have been lifted last November but Kenya did not get a status report on the disease in Uganda. Currently, only three Ugandan firms are allowed to export poultry products to Kenya following a partial lift last year. They are Hudani Manji Holdings, SR Afrochick and Kukuchick.
Berkshire Partners buys stake in Africa’s biggest data center (Bloomberg)
Berkshire Partners LLC acquired a stake in Teraco Data Environments Pty Ltd., becoming the biggest shareholder in Africa’s largest data-center to capitalize on growing demand for internet and cloud-based services on the continent. The Boston-based private-equity firm is sweeping in on Johannesburg-based Teraco as technology plays a more integral part in the life of consumers and businesses. Teraco was expected to fetch between $600m and $1bn, including debt, people familiar with the matter said in November.
Mauritius: IMF completes 2019 Article IV mission (IMF)
A range of reforms and initiatives has been introduced in recent years to spur productivity and competitiveness - including the adoption of the Business Facilitation Act, finalization of the Financial Sector Blueprint, and programs to support youth skill development, small-scale entrepreneurs, and female labor force participation. Improvement in the World Bank’s Doing Business 2019 indicator is encouraging. Coordination and synergies between the various reforms and initiatives, as well as interaction among the stakeholders, could however be strengthened to enhance their effectiveness and efficiency. The mission welcomed the authorities’ ongoing efforts to strengthen the AML/CFT framework in line with the Financial Action Task Force recommendations and reiterated the need for maintaining strong and independent institutions to overcome the range of policy challenges Mauritius faces to remain an attractive investment destination.
Mauritius and Mozambique sign MOUs to enhance engagement in Africa (GoM)
Mauritius and Mozambique have renewed their strong commitment into deepening the existing bilateral and economic ties to further enhance engagement in Africa through the signing of three MOUs in the presence of the Prime Minister of Mauritius, Mr Pravind Kumar Jugnauth, and the President of Mozambique, Mr Filipe Jacinto Nyusi. The MOUs pertain to environment, tourism and trade and investment. An MOU between the State Trading Corporation and its counterpart is also being worked out with regards the supply of Liquefied Natural Gas. Both parties also agreed to operationalise the political consultative committee to enable the two countries to consult each other regarding bilateral and other regional issues of common interest with a keen interest into triggering the Joint Commission between Mauritius and Mozambique.
Tantrade takes local sunflower manufacturers to Mozambique (IPPMedia)
Local sunflower manufacturers will have their chance to showcase their products and capture SADC market through an exhibition to be held in northern Mozambique in September. Tanzania Trade Development Authority Coordinator SADC Sunflower Export Promotion Project, Gertrude Ngweshemi, said the exhibition is aimed at opening up the regional market to locally processed sunflower oil where demand is high. Ngweshemi said the exhibition will involve at least 10 big local sunflower manufacturers who will showcase their products in the northern Mozambican town of Nampura. She added that after the Nampura sunflower fair, a similar event is scheduled for the Mozambican capital, Maputo later this year.
Africa Road Maintenance Funds Association: Southern African update
The Namibia Road Fund Administration officially opened the Africa Road Maintenance Funds Association’s Southern Africa Focal Group Meeting yesterday at the Hilton Hotel in Windhoek. The four-day event is being held in preparation for the ARMFA Annual General Assembly which will be held from 10-16 March in Swakopmund. Chairperson of the Road Fund, Penda Ithindi, on behalf of the Finance Minister, Mr Calle Schlettwein, said over the past two decades or so, the world has witnessed the rebirth of Africa, the African Renaissance that is anchored on its demographic dividend, growing consumer market, the improved governance index and macroeconomic management. “However, intra-African trade has not mushroomed by much and still remains low, therefore the trade corridor infrastructure is destined to play a pivotal role in enabling the expansion of intra-Africa trade in this expanded market.” [Trade corridor infrastructure to play pivotal role in intra-Africa trade]
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EAC leaders to meet in Tanzania on Friday
20th Ordinary Summit of EAC Heads of States scheduled for 1 February 2019 in Arusha
Rwanda has confirmed that President Paul Kagame will attend the East African Community Heads of State Summit scheduled for Friday, erasing doubts that he would skip and opt to mark Heroes Day celebrations in his country.
The meeting of the presidents of Kenya, Tanzania, Uganda, Rwanda, Burundi and South Sudan will be held on February 1 in Arusha, Tanzania, where the EAC Secretariat is headquartered.
The summit has aborted twice – the first on November 30 when Burundi pulled out forcing its cancellation and a subsequent meeting planned for December 27 failing to take place.
“The agenda will be that of November 30 and we don't intend to add any other item. And the Burundi/Rwanda relations are not on the agenda. We are dealing with the issue bilaterally with Uganda,” Mr Olivier Nduhungirehe, State Minister for EAC Affairs told The EastAfrican on Thursday.
The presidents are expected to tackle key issue amongst the member states with priority given to resolution of long outstanding non-tariff barriers; the progress report on the adoption of Political Confederation as a Transitional Model to the East African Political Federation.
Other items on the agenda include; the roadmap for the accelerated integration of the Republic of South Sudan into the EAC, and; the verification exercise for the admission of the Republic of Somalia into the Community.
The Heads of State are also expected to assent to key Bills including the EAC Polythene Materials Control Bill, 2018, which will now see the region have a common framework on the elimination of the use of plastic bags.
The Summit is also expected to discuss modalities for the promotion of motor vehicle assembly in the region in a bid to reduce importation of used vehicles, as well as review the textile and leather sectors.
Rows among partner states will not feature despite Burundi’s President Pierre Nkurunziza request for the EAC to convene an extraordinary summit to address differences pitting his country and Rwanda.
However, Burundi’s EAC Minister Isabelle Ndahayo told The EastAfrican in Bujumbura last month that they are ready for the summit and are committed to discuss the “issues that will be on the order paper.”
It is, however, not clear if President Nkurunziza will attend the meeting, seeing as since the coup attempt of 2015 when he was attending a summit in Dar es Salaam, he has delegated such events to his first vice-president Gaston Sindimwo.
Uhuru Kenyatta of Kenya, Yoweri Museveni of Uganda, South Sudan's Salva Kiir and the host president John Magufuli are expected to attend.
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World Bank, BMZ announce enhanced collaboration on Africa development projects
World Bank Group and German Federal Ministry for Economic Cooperation and Development (BMZ) launch joint efforts in six countries
The World Bank Group and German Federal Ministry for Economic Cooperation & Development on 30 January 2019 announced a deeper partnership for economic development in six countries in Africa. BMZ will provide significant additional financial support through the partnership, which will harness World Bank Group expertise on the ground in order to catalyze investment, job creation and sustainable economic growth.
The partnership flows from a Joint Declaration of Intent between BMZ and the Bank Group signed at a G20 Africa Investment Summit in Berlin on October 30, 2018. It sets out parameters for joint action in Morocco and Tunisia in North Africa, and Côte d’Ivoire, Ethiopia, Ghana, and Senegal in Sub-Saharan Africa. The countries will benefit from joint financial support for technical assistance, development policy operations and other reform programs provided by the World Bank Group.
Included in the partnership is a time frame for joint missions to the six countries and guidance for potential reforms to increase private capital inflows and job creation. The sectors covered include renewable energy, power grid modernization, jobs and skills training, investment policy and land reform, and development of the automotive sector.
“Millions of young people will be entering the job market in Africa in the years ahead,” said World Bank Chief Executive Officer, Kristalina Georgieva. “Good policy reforms pay off by creating a dynamic business environment that can unleash the potential of the private sector. We are pleased to be working with the Government of Germany to step up our joint engagement on this important agenda.”
“Germany wants to see more investments and jobs in Africa and has identified reform countries under the G20 Compact with Africa Initiative,” said State Secretary in the German Ministry for Economic Cooperation and Development, Martin Jäger. “To make this happen we will forge a new type of partnership with the World Bank Group. In order to achieve quick and tangible results, we will work with the World Bank Group in a much more integrated way – regularly aligning our engagements with regard to policy reforms and concrete investments as well as technical assistance.”
The six countries have been selected by BMZ are participants in the G20 Compact with Africa, an initiative that was launched in 2017 under the German G20 Presidency. The Compact with Africa brings together G20 members with 12 countries in Africa, with the support of the World Bank Group, International Monetary Fund, and African Development Bank.
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Featured commentary, Célestin Monga (Project Syndicate): Reaping the benefits of African economic integration
East Africa’s private sector seeks larger role in resolving EAC challenges (Daily News)
As the East African region braces for the EAC Heads of State Summit this Friday, the region’s private sector has asked for deeper engagement in resolving economic challenges facing the bloc. In a telephone interview with ‘Daily News’ yesterday, East African Business Council executive director, Mr Peter Mathuki observed that issues like the removal of non-tariff barriers, ease of doing business and trade facilitation will only be resolved if the private sector gets fully engaged in matters of integration. “The private sector needs to be fully involved in its entirety in integration issues; we no longer want to be mere observers but actors in this matter.”
An interview with the EABC’s Peter Mathuki: Our new models will help regional businesses grow their networks (The East African)
The EABC will also take a lead role in the African Continental Free Trade Area with an eye to opening up new markets for businesses. The council will mobilise the private sector to support partner states in endorsing the agreement. The EABC hopes to expand its membership base: currently, we have around 150 members. We are looking to raise that number to 500. We will divide the EABC into five departments in order to strengthen it: The service department, which will tackle tourism, airspace and telecommunication; manufacturing; agriculture; energy and infrastructure department to support growth and trade facilitation; and the SMEs department, to attract small and medium players to join the Council. [Rwanda, Burundi frosty ties to feature in summit]
Zimbabwe’s trade deficit hits $2,4bn (The Herald)
Zimbabwe’s trade deficit for the 11 months to December 2018 stood at $2,4bn, as the value of imports continued to outstrip value of exports, mostly unprocessed raw materials. Figures from the Zimbabwe national Statistics Agency, show that Zimbabwe imported goods worth $6,3bn between February and December 2018, from $4,9bn recorded during the same period the prior year. This was against exports that came in at $3,9bn, representing an increase of 14% from the $3,4bn worth of exports recorded in 2017. However, the growth was not enough to offset the ballooning import bill. According to Zimstats, South Africa remained Zimbabwe’s top trading partner accounting for the biggest chunk of both imports and exports while Mozambique, China, United Arab Emirates and Zambia have also remained Zimbabwe’s top trade partners.
Zambia: Modernising licensing for customs clearing agents (Global Alliance for Trade Facilitation)
Customs clearing agents in Zambia are to be offered accredited training as part of a new trade facilitation project being launched today by the Zambia Revenue Authority and the Global Alliance for Trade Facilitation. Over the next two years the project will see the ZRA, customs clearing agents associations, training institutions and local and international businesses that trade in Zambia work together to design and introduce a new framework for licensing customs clearing agents. Customs clearing agents will be able to access a professional course delivered by qualified trainers, combining practical, hands-on training with e-learning. They will then sit an exam, allowing them to demonstrate their competence in applying ZRA regulations and the Harmonized Tariff Schedule. The project is the result of several months of collaboration between the ZRA and the private sector to identify the challenges faced by traders moving goods across Zambia’s borders. It will support Zambia’s plans to implement the World Trade Organization’s Trade Facilitation Agreement and increase the competitiveness of Zambian industry. The project in Zambia becomes the ninth in the Alliance’s portfolio of work to support developing and least developed countries implement the TFA through the public and private sectors working together.
The State of Small Business in South Africa (TIPS)
How many small business are there? As Graph 1 shows, the number of formal small business reported in the labour market surveys climbed from around 600 000 in 2010 to 2012 to 640 000 in 2017. The number of informal business grew from 1,3 million to 1,5 million in the same period. Small business by sector. According to the Labour Force Survey, the distribution of small business between industries was stable over the past decade. In 2017, a quarter of formal small businesses were in business services, with almost as many in trade. A seventh each was in construction and personal services. In the services sectors, around a quarter of small formal businesses were in cleaning and security, with professional services such as law firms and healthcare accounting for most of the rest. Just under a tenth of formal small enterprises were in manufacturing, with over a quarter in metals and machinery, followed at a distance by food processing, wood and printing. Half of all informal businesses were in trade, a seventh in construction and another seventh in personal services. The main services for informal enterprises were cleaning and security. Just under a tenth of informal businesses were in manufacturing, largely clothing followed by metals. [Related: World Bank on its growth forecasts for South Africa: Better to err on the side of caution; Public-Private Growth Initiative believes high-growth South Africa is within reach]
Global seed firms reach only 10% of world’s small farmers (EABW)
Global seed companies are adapting their products to combat the impact of climate change and address nutrition needs. But limited access to quality seed in many emerging economies persists, with the global seed industry reaching just 10% of the world’s smallholder farmers, according to a new study. The Access to Seeds Index 2019 – Global Seed Companies, published by the Amsterdam-based Access to Seeds Foundation, evaluates the activities of the 13 leading global seed companies to shine a light on where the industry can do more to raise smallholder farmer productivity, improve nutrition and mitigate the effects of climate change through the development and dissemination of quality seed. The research shows that sales by the 13 global seed companies only reached around 47 million of the world’s 500 million smallholder farmers in 2017, and most investment went to a small number of countries, mostly in South and Southeast Asia. In these regions, global companies invest heavily in local seed business activities: 12 of them in breeding and 12 in production. In contrast, such activities are rare in Western and Central Africa, with only two companies investing in local breeding and one in production.
Trade misinvoicing undermines the impact of international trade in developing nations (GFI)
A new analysis of illicit financial flows due to trade misinvoicing in 148 developing countries demonstrates that trade-related IFFs appear to be both significant and persistent features of developing country trade with advanced economies. As such, trade misinvoicing remains an obstacle to achieving sustainable and equitable growth in the developing world. This update, pdf Illicit Financial Flows to and from 148 Developing Countries: 2006-2015 (1.15 MB) , is the latest in a series of Global Financial Integrity reports which provide country-level estimates of the illicit flows of money into and out of 148 developing and emerging market nations as a result of their trade in goods with advanced economies. Increasing trade among developing and emerging market countries is seen by many economists as a primary path to greater development. However, high levels of misinvoicing, as a percentage of total trade, indicate that most developing country governments do not benefit from a significant portion of their international trade transactions with advanced economies. Highlights of GFI’s research for 2015 (the most recent year for which there is usable data) show that:
Corruption Perceptions Index: Sub-Saharan Africa (TI)
This year’s Corruption Perceptions Index (CPI) presents a largely gloomy picture for Africa – only eight of 49 countries score more than 43 out of 100 on the index. Despite commitments from African leaders in declaring 2018 as the African Year of Anti-Corruption, this has yet to translate into concrete progress. Seychelles scores 66 out of 100, to put it at the top of the region. Seychelles is followed by Botswana and Cabo Verde, with scores of 61 and 57 respectively. At the very bottom of the index for the seventh year in a row, Somalia scores 10 points, followed by South Sudan (13) to round out the lowest scores in the region. Notwithstanding Sub-Saharan Africa’s overall poor performance, there are a few countries that push back against corruption, and with notable progress.
Two countries – Côte d’Ivoire and Senegal – are, for the second year in a row, among the significant improvers on the CPI. In the last six years, Côte d’Ivoire moved from 27 points in 2013 to 35 points in 2018, while Senegal moved from 36 points in 2012 to 45 points in 2018. These gains may be attributed to the positive consequences of legal, policy and institutional reforms undertaken in both countries as well as political will in the fight against corruption demonstrated by their respective leaders. With a score of 37, Gambia improved seven points since last year, while Seychelles improved six points, with a score of 66. Eritrea also gained four points, scoring 24 in 2018. In Gambia and Eritrea, political commitment combined with laws, institutions and implementation help with controlling corruption. In the last few years, several countries experienced sharp declines in their CPI scores, including Burundi, Congo, Mozambique, Liberia and Ghana. [A DW interview with Samuel Kaninda: Transparency International’s coordinator for West Africa]
Today’s Quick Links: EU market opens up for Kenyan sweet potato farmers Ethiopia-Djibouti Transport Corridor Project Phase I: Environmental and social impact assessment summary, Resettlement Action Plan summary Tanzania: TANESCO at centre of efforts to spread power supply across Africa Uganda, Tanzania edge closer to constructing oil pipeline AU-ILO-IOM-ECA hold steering committee meeting on labour migration SAIIA G20 Africa Conference: Navigating African Priorities for the G20 |
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Illicit financial flows are significant and persistent drag on developing country economies
Trade misinvoicing undermines the impact of international trade in developing nations
A new analysis of illicit financial flows (IFFs) due to trade misinvoicing in 148 developing countries demonstrates that trade-related IFFs appear to be both significant and persistent features of developing country trade with advanced economies. As such, trade misinvoicing remains an obstacle to achieving sustainable and equitable growth in the developing world.
This update, titled Illicit Financial Flows to and from 148 Developing Countries: 2006-2015, is the latest in a series of Global Financial Integrity (GFI) reports which provide country-level estimates of the illicit flows of money into and out of 148 developing and emerging market nations as a result of their trade in goods with advanced economies.
IFFs are defined as money that is illegally earned, used or moved and which crosses an international border. Trade misinvoicing is a method of moving IFFs, and includes the deliberate misrepresentation of the value of imports or exports in order to evade customs duties and VAT taxes, launder the proceeds of criminal activity or to hide offshore the proceeds of legitimate trade transactions, among other motivations.
Increasing trade among developing and emerging market countries is seen by many economists as a primary path to greater development. However, high levels of misinvoicing, as a percentage of total trade, indicate that most developing country governments do not benefit from a significant portion of their international trade transactions with advanced economies. Highlights of GFI’s research for 2015 (the most recent year for which there is usable data) show that:
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On average, trade misinvoicing is equivalent to 18 percent of total trade with advanced economies among all developing countries.
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Several nations have trade misinvoicing levels significantly higher than the global average including: Sierra Leone (39.8%), Georgia (34%), Botswana (31.8%), Maldives (29.6%), Ethiopia (29.3%), The Bahamas (29%) and Cameroon (26%).
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On average, illicit inflows (53% of total) are greater than illicit outflows.
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Countries with high dollar values of illicit inflows include: Indonesia ($10.1 billion), Romania ($6.8 billion), Chile ($3.2 billion), Colombia ($2.9 billion), Morocco ($2.7 billion) and Tunisia ($2.3 billion)
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Nations with high dollar amounts of illicit outflows include: Mexico ($31.5 billion), Malaysia ($22.9 billion), Brazil ($12 billion), Vietnam ($9.1 billion), Hungary ($7.6 billion), South Africa ($5.9 billion), Algeria ($4.1 billion), Bangladesh ($2.7 billion) and Tunisia ($1.8 billion).
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A different set of countries is produced when ranked by illicit outflows as a percentage of total trade with advanced economies, including Uganda (14.7%), Rwanda (13.7%), and Namibia (13.6%), as well as Costa Rica (12.5%), Colombia (12.1%) and Guatemala (11.9%).
In addition to updating the estimated IFFs GFI has presented in the past, this report widens the scope of its research and uses a more detailed database published by United Nations (UN) Comtrade along with updated measures from the International Monetary Fund (IMF) data it has used previously. This report presents estimates of IFFs based on both data sets.
While the Comtrade data set is more detailed, not all countries provide their trade data to the UN and therefore are not represented in this analysis. Many of the 44 nations that do not report trade transactions to the UN are small states, however a few non-reporting countries have substantial economies including Kenya, Nigeria and Venezuela. Trade-related illicit flows for these nations (and the other 41 countries not reporting to the UN) can be found in the report using the IMF’s Direction of Trade Statistics (DOTS) data set (see Appendix Table III-1).
Highlights of GFI research for the year 2015 using the DOTS dataset from the IMF shows that:
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The top quintile (30) of countries, ranked by dollar value of illicit outflows, includes resource rich countries such as South Africa ($10.2 billion) and Nigeria ($8.3) but also European countries including Turkey ($8.4 billion), Hungary ($6.5 billion) and Poland ($3.1 billion) as well as Latin American nations Mexico ($42.9 billion), Brazil ($12.2 billion), Colombia ($7.4 billion) and Chile ($4.1 billion). Asian states in the top 30 countries of this category include Malaysia ($33.7 billion), India ($9.8 billion), Bangladesh ($5.9 billion) and the Philippines ($5.1 billion).
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The top quintile (30) of countries, ranked by illicit outflows as a percentage of total trade with advanced economies, produces an entirely different group of countries including Mozambique (48.1%), Malawi (44.1%), Zambia (43%), Honduras (39.7%), Namibia (38.7%) and Myanmar (30.8%).
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The list of top 30 countries ranked by dollar value of illicit inflows[1] include a regionally diverse group including Vietnam ($22.5 billion), Thailand ($20.9 billion), and Indonesia ($15.4 billion) as well as Latin American nations Panama ($18.3 billion) and Argentina ($4.8 billion). Additional countries include Kazakhstan ($16.5 billion), Belarus ($6.1 billion) and Morocco ($3.9 billion).
[1] Note: illicit inflows are a type of resource curse in that a) their origin is unknown, b) inflows are invisible to governments, c) they are not taxed, and d) they often times fuel illegal activities such as drug trafficking.
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2018 Corruption Perceptions Index: Undemocratic regimes undermine anti-corruption efforts in sub-Saharan Africa
The 2018 Corruption Perceptions Index (CPI), released on 29 January 2019 by Transparency International, reveals that the continued failure of most countries to significantly control corruption is contributing to a crisis of democracy around the world.
“With many democratic institutions under threat across the globe – often by leaders with authoritarian or populist tendencies – we need to do more to strengthen checks and balances and protect citizens’ rights,” said Patricia Moreira, Managing Director of Transparency International. “Corruption chips away at democracy to produce a vicious cycle, where corruption undermines democratic institutions and, in turn, weak institutions are less able to control corruption.”
The 2018 CPI draws on 13 surveys and expert assessments to measure public sector corruption in 180 countries and territories, giving each a score from zero (highly corrupt) to 100 (very clean).
CPI highlights
More than two-thirds of countries score below 50, with an average score of only 43. Since 2012, only 20 countries have significantly improved their scores, including Estonia and Côte D’Ivoire, and 16 have significantly declined, including, Australia, Chile and Malta.
Denmark and New Zealand top the Index with 88 and 87 points, respectively. Somalia, South Sudan, and Syria are at the bottom of the index, with 10, 13 and 13 points, respectively. The highest scoring region is Western Europe and the European Union, with an average score of 66, while the lowest scoring regions are Sub-Saharan Africa (average score 32) and Eastern Europe and Central Asia (average score 35).
“Our research makes a clear link between having a healthy democracy and successfully fighting public sector corruption,” said Delia Ferreira Rubio, Chair of Transparency International. “Corruption is much more likely to flourish where democratic foundations are weak and, as we have seen in many countries, where undemocratic and populist politicians can use it to their advantage.”
To make real progress against corruption and strengthen democracy around the world, Transparency International calls on all governments to:
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strengthen the institutions responsible for maintaining checks and balances over political power, and ensure their ability to operate without intimidation;
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close the implementation gap between anti-corruption legislation, practice and enforcement;
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support civil society organisations which enhance political engagement and public oversight over government spending, particularly at the local level;
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support a free and independent media, and ensure the safety of journalists and their ability to work without intimidation or harassment.
Sub-Saharan Africa: A continuous struggle in fighting corruption across the region
This year’s Corruption Perceptions Index (CPI) presents a largely gloomy picture for Africa – only eight of 49 countries score more than 43 out of 100 on the index. Despite commitments from African leaders in declaring 2018 as the African Year of Anti-Corruption, this has yet to translate into concrete progress.
Seychelles scores 66 out of 100, to put it at the top of the region. Seychelles is followed by Botswana and Cabo Verde, with scores of 61 and 57 respectively.
At the very bottom of the index for the seventh year in a row, Somalia scores 10 points, followed by South Sudan (13) to round out the lowest scores in the region.
With an average score of just 32, Sub-Saharan Africa is the lowest scoring region on the index, followed closely by Eastern Europe and Central Asia, with an average score of 35.
Corruption and a crisis of democracy
Sub-Saharan Africa remains a region of stark political and socio-economic contrasts and many longstanding challenges. While a large number of countries have adopted democratic principles of governance, several are still governed by authoritarian and semi-authoritarian leaders. Autocratic regimes, civil strife, weak institutions and unresponsive political systems continue to undermine anti-corruption efforts.
Countries like Seychelles and Botswana, which score higher on the CPI than other countries in the region, have a few attributes in common. Both have relatively well-functioning democratic and governance systems, which help contribute to their scores. However, these countries are the exception rather than the norm in a region where most democratic principles are at risk and corruption is high.
Improvers
Notwithstanding Sub-Saharan Africa’s overall poor performance, there are a few countries that push back against corruption, and with notable progress.
Two countries – Côte d’Ivoire and Senegal – are, for the second year in a row, among the significant improvers on the CPI. In the last six years, Côte d’Ivoire moved from 27 points in 2013 to 35 points in 2018, while Senegal moved from 36 points in 2012 to 45 points in 2018. These gains may be attributed to the positive consequences of legal, policy and institutional reforms undertaken in both countries as well as political will in the fight against corruption demonstrated by their respective leaders.
With a score of 37, Gambia improved seven points since last year, while Seychelles improved six points, with a score of 66. Eritrea also gained four points, scoring 24 in 2018. In Gambia and Eritrea, political commitment combined with laws, institutions and implementation help with controlling corruption.
Decliners
In the last few years, several countries experienced sharp declines in their CPI scores, including Burundi, Congo, Mozambique, Liberia and Ghana.
In the last seven years, Mozambique dropped 8 points, moving from 31 in 2012 to 23 in 2018. An increase in abductions and attacks on political analysts and investigative journalists creates a culture of fear, which is detrimental to fighting corruption.
Home to one of Africa’s biggest corruption scandals, Mozambique recently faced indictments of several of its former government officials by US officials. Former finance minister and Credit Suisse banker, Manuel Chang, is charged with concealing more than US$2 billion dollars of hidden loans and bribes.
Many low performing countries have several commonalties, including few political rights, limited press freedoms and a weak rule of law. In these countries, laws often go unenforced and institutions are poorly resourced with little ability to handle corruption complaints. In addition, internal conflict and unstable governance structures contribute to high rates of corruption.
Countries to watch
Angola, Nigeria, Botswana, South Africa and Kenya are all important countries to watch, given some promising political developments. The real test will be whether these new administrations will follow through on their anti-corruption commitments moving forward.
With a score of 27, Nigeria remained unchanged on the CPI since 2017. Corruption was one of the biggest topics leading up to the 2015 election and it is expected to remain high on the agenda as the country prepares for this year’s presidential election taking place in February.
Nigeria’s Buhari administration took a number of positive steps in the past three years, including the establishment of a presidential advisory committee against corruption, the improvement of the anti-corruption legal and policy framework in areas like public procurement and asset declaration, and the development of a national anti-corruption strategy, among others. However, these efforts have clearly not yielded the desired results. At least, not yet.
With a score of 19, Angola increased four points since 2015. President Joao Lourenco has been championing reforms and tackling corruption since he took office in 2017, firing over 60 government officials, including Isabel Dos Santos, the daughter of his predecessor, Eduardo Dos Santos. Recently, the former president’s son, Jose Filomeno dos Santos, was charged with making a fraudulent US$500 million transaction from Angola's sovereign wealth fund. However, the problem of corruption in Angolan goes far beyond the dos Santos family. It is very important that the current leadership shows consistency in the fight against corruption in Angola.
With a score of 43, South Africa remains unchanged on the CPI since 2017. Under President Ramaphosa, the administration has taken additional steps to address anti-corruption on a national level, including through the work of the Anti-Corruption Inter-Ministerial Committee. Although the National Anti-Corruption Strategy (NACS) has been in place for years, the current government continues to build momentum for the strategy by soliciting public input.
In addition, citizen engagement on social media and various commissions of inquiry into corruption abuses are positive steps in South Africa. The first commission of inquiry, the Zondo Commission, focuses on state capture, while the second focuses on tax administration and governance of the South African Revenue Service (SARS). Given that previous commissions of inquiry produced few results, the jury is still out on whether the new administration will yield more positive change.
Another example of recent anti-corruption efforts in South Africa is the Special Investigating Unit (SIU) report on corruption in the Gauteng Department of Health. While the report never saw the light of day under previous administrations, under President Ramaphosa it exposed several high profile individuals, including members of the ruling party.
In both Kenya and South Africa, citizen engagement in the fight against corruption is crucial. For example, social media has played a big role in driving public conversation around corruption. The rise of mobile technology means ordinary citizens in many countries now have instant access to information, and an ability to voice their opinions in a way that previous generations did not.
In addition to improved access to information, which is critical to the fight against corruption, government officials in Kenya and South Africa are also reaching to social media to engage with the public. Corruption Watch, our chapter in South Africa, has seen a rise in the number of people reporting corruption on Facebook and WhatsApp. However, it remains to be seen whether social media and other new technologies will spur those in power into action.
Recommendations
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Governments in Sub-Saharan Africa must intensify their efforts and keep in mind the following issues, when tackling corruption in their countries:
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Demonstrate visible commitment to anti-corruption from political leaders, notably in Burundi, Congo and Mozambique.
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Protect human rights defenders, political analysts, anti-corruption activists and investigative journalists and enable them to speak out on corruption issues.
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Improve the health of democratic institutions. This includes supporting participation, transparency and trust, along with necessary checks and balances.
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tralac’s Daily News Selection
Diarise: Joint SADC-EU Council meeting (19 February, Cape Town)
An update on the 2019 Conference of African Ministers of Finance, Planning & Economic Development (20-26 March, Marrakech): besides the plenary sessions, at least 16 side events will take place
Ahead of the Sixth COMESA Research Forum (scheduled to take place in Kigali in August): COMESA posts a call for papers under the theme: Promoting intra-COMESA trade through innovation
Today’s featured trade policy tweets – from @ECA_OFFICIAL:
Happening now in Addis Ababa: ECA and UNCTAD train the trainers seminar on services trade in Africa; measuring the contribution of services to regional value chains. One of the main stumbling blocs to the implementation of trade services-related policies in many countries, is the lack of understanding and quantification of services trade, and more generally the role services play in regional and global value chains, says @snkaringi. “It is therefore important that we build and strengthen the capacity within the continent to measure and quantify services trade, especially in the broader context of services value chains if we are to turn the AfCFTA dream into a reality.”
Profiled EAC tender/EOIs:
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Consultancy services to develop an EAC Regional Agricultural Investment Plan Implementation Plan
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Gaps and needs assessment for development of East African standards for coffee, tea, cocoa, horticultural products and spices value chains
African policymakers must pay more attention to counterfeit drugs (ENACT)
‘In Africa, the domestic pharmaceutical market is growing quickly. This creates new opportunities and challenges for the continent,’ says Robin Cartwright, lead author of the policy brief, The rise of counterfeit pharmaceuticals in Africa. Currently, only 37 out of 54 African states have some level of pharmaceutical production, but as new, legitimate firms enter these markets, so will additional counterfeiters. The case of Nigeria shows how a bespoke and comprehensive policy backed by political will can bring about real solutions. Nigeria managed to achieve an 80% reduction in counterfeit drug circulation by implementing targeted regulatory activities. Among other steps, the Nigerian food and drug agency, NAFDAC, banned imports of medicines through all but two national points of entry and furnished customs officials with mobile ‘minilabs’, enabling them to identify falsified drugs. Like Nigeria, other African nations should enact legislation that criminalises the manufacture and sale of counterfeits. Legislation should also provide clear authority and responsibility for the investigation, detection and seizure of counterfeit products. Given their ability to authenticate drugs in the supply chain, track-and-trace systems of the type officially sanctioned and used in EU and USA have shown great potential to thwart the penetration of counterfeits.
The Rosewood Trade: the illicit trail from forest to furniture (e360)
The most widely traded illegal wild product in the world today is rosewood, an endangered hardwood prized for its use in traditional Chinese furniture. International nonprofits such as Forest Trends and Global Witness are advocating for tighter timber legislation, modeled on the EU Timber Regulation or the U.S. Lacey Act, that forces companies to take responsibility for the sourcing of their wildlife-based products. They are also hoping that China will assign timber trade regulation and enforcement to a well-funded agency or ministry; currently, the task is assigned to low-level bureaucrats in the State Forestry Administration. Madagascar is in the process of installing its own new set of bureaucrats. The incoming president, who was sworn in on 19 January, is the same man who led the country from 2009 until 2013 — the most intensive period of rosewood logging in the country’s history. He’s thought to be close to the timber barons, and conservationists fear that another major rush to the rainforests could commence. Of course, a lot depends on how much the Chinese want the wood.
Nigeria: Industrialists to FG – sign African free trade pact now (Daily Trust)
African trade data releases: Botswana and Ghana
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Botswana’s November 2018 international merchandise trade statistics(pdf). In November 2018, total imports were valued at P7, 387.0 million while total exports were valued at P3, 433.4 million, resulting in a trade deficit of P3, 953.6 million. Total imports for November rose by 1.2% compared to the revised October 2018 value of P7, 298.6 million. Diamonds contributed the most to total imports, at 36.7%, and constituted 82.4% of total exports during the period under review. SACU was the main source of imports into Botswana during November 2018. Within the SACU region, South Africa was the largest contributor to Botswana total imports, having contributed 60.1%. The major destinations at regional level for Botswana exports were Asia, SACU and the EU with a share of 54.8%, 19.5%, and 17.7% respectively, during the period under review. [Cape Verde: Exports up 44.3% in 2018, with Spain the main destination]
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Ghana’s 2018 exports improve significantly – BoG data. Figures from the Bank of Ghana show that Ghana’s exports increased significantly between 2017 and 2018. Substantial improvement in Ghana’s export receipts from oil, helped in adding more than $1bn to Ghana’s export figures for 2018. The country in 2017 saw total exports reach $13.835bn, whereas in 2018 the country exported goods worth $14.868bn. This represents an increase of 7.5% in exports over the period. Total imports also witnessed an increase in 2018 as compared to imports in 2017. From $12.647bn recorded in 2017, total imports increased by $3.5bn. As a result, Ghana’s trade figures for 2018 show that the country recorded a trade surplus of $1.7bn. This translates into 2.7% of the country’s GDP for 2018. The Central Banks’s latest economic data show that the country’s increased exports was largely driven by the oil sector. [For further details see Table 6: External Sector Developments (pdf, BoG)
India-South Africa trade issues highlighted in the joint communique (The Presidency)
Welcomed the holding of the inaugural meeting of the Joint Working Group on Trade and Investment. Welcomed the significant investment and presence of a large number of Indian companies and business entities in South Africa and the growing number of South African investments in India. In this regard, [India and SA] agreed to enhance bilateral investments between the two countries within the context of the MoU between Invest SA and Invest India on enhancing bilateral investment relations. Agreed to cooperate, share best practices, technology and expertise on the Ease of Doing Business Reform Programme and committed to expanding cooperation in the fields of trade and investments between business entities in South Africa and India. Agreed to cooperate in the field of Small and Medium Enterprises which play an invaluable role in job creation and creating trade and investment opportunities. Agreed that both countries should explore solutions aimed at boosting trade and investment: in this context, President Ramaphosa agreed to simplify and reform South African business visa regime [South Africa-India Business Forum: speech by President Ramaphosa]
Making it easier for women in Malawi to formalize their firms, access financial services (World Bank)
Senegal and the IMF:
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pdf Staff Report for the 2018 Article IV Consultation (1.28 MB) . The PSE II growth strategy aims to develop clusters of economic activity, with SEZs now up and running. Planned investments in the three established SEZs: Diamniadio, Diass, and Sandiara amount to about 3.7% of GDP (see text table on Special Economic Zones), with companies coming from several countries, including China and Tunisia, and representing different sectors like plastics, food processing, bank cards, medical services and research. It will be important for the SEZ rules regarding both imports and exports to be simple and consistent (e.g., at the moment, the three SEZs have slightly different rules regarding the percentage of exports in total sales that are required to benefit from incentives). More generally, staff emphasized that SEZs should be governed by transparent rules, with no granting of ad hoc tax exemptions and all companies paying a reasonable corporate tax rate. In the agricultural sector, three integrated agropoles are being launched to help the sector develop high value-added in agrobusiness and reduce reliance on imported foodstuffs. A somewhat similar approach is planned for the tourism sector. All these initiatives play a role in advancing economic activity outside Dakar. The development of the plateformes d’investissement, which aims to give enterprises and households access to administrative services outside of Dakar, is also consistent with this strategy.
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Themes explored in the pdf Selected Issues report (679 KB) : Revenue mobilization and inequality in Senegal, Gender gaps in Senegal: from education to labor market, Natural resources in Senegal before and after the recent oil and gas discoveries
Free zones lift UAE non-oil trade by 2.5% to Dh1.2 trillion (Khaleej Times)
The UAE’s non-oil foreign trade grew 2.5% to Dh1.2 trillion in the first nine months of 2018 as compared to Dh1.17 trillion during the same period in 2017. This was driven by increased trading activity from companies based in free zones, according to Federal Customs Authority (FCA) data released on Sunday. Non-oil foreign trade from free zones accounted for 37% valued at Dh439.2 billion while trade from customs warehouses was equivalent to 2%, or Dh8.4 billion of the total. Total non-oil foreign trade through the mainland reached Dh726.4 billion, accounting for 62% of the total trade. The preliminary statistics of the Authority indicated that the Asia-Pacific region was at the forefront of trading partners during the period, accounting for 42% of total non-oil trade with a share of Dh460.6 billion, while the region of Europe was second with a share of Dh250.2 billion (23%) of the total, Mena with Dh207 billion (19%), America and the Caribbean region with Dh102 billion (9.2%) of the total, the region of East and South Africa worth Dh46.4 billion (4.2%) and West and Central Africa representing 3.6%.
Today’s Quick Links: Nigeria: NESG’s macro-economic outlook for 2019 Nigeria’s rising foreign debt profile bad for economy: Senate panel Renault considers establishing assembly plant in Ghana UBA, Jetro collaborate to promote MSMEs in Africa Kenyan traders want long-running business war with Tanzania solved Kenya’s sugar imports drop 71% on production |
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India-South Africa Joint Statement/Joint Communiqué
Of the State Visit of President Cyril Ramaphosa to India, 25 January 2019
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At the invitation of Prime Minister Shri Narendra Modi, the President of the Republic of South Africa His Excellency Mr. Matamela Cyril Ramaphosa, accompanied by first lady Dr. Tshepo Motsepe, 09 Cabinet Ministers, senior officials and a large business delegation is on a State Visit to the Republic of India on 25-26 January 2019. President Ramaphosa on his first State visit to India is also the Chief Guest at India’s 70th Republic Day Parade on 26 January 2019.
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President Ramaphosa was accorded a ceremonial welcome on January 25, 2019 at the forecourt of the Rashtrapati Bhawan, New Delhi. President Kovind is hosting a banquet dinner on January 25, 2019 in honour of the visiting President of South Africa. President Ramaphosa accompanied by Dr. Motsepe also paid respects to the Father of the Nation, Mahatma Gandhi at Rajghat whose 150th birth anniversary is being celebrated both nationally and internationally.
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President Ramaphosa and Prime Minister Modi held delegation level talks at Hyderabad House on January 25, 2019. The two leaders held discussions in the spirit of the strategic partnership, strong friendship and historical links between the two countries. Both leaders acknowledged the significance of the 100th birth anniversary celebrations of Nelson Mandela and the 150th birth anniversary celebrations of Mahatma Gandhi as an invaluable legacy of peace, non-violence and compassion.
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President Ramaphosa and Prime Minister Modi jointly addressed the India-South Africa Business Forum on January 25, 2019, with a focus to grow business ties between the two countries. President Ramaphosa also delivered the inaugural IBSA Gandhi-Mandela Freedom Lecture, in the presence of Prime Minister of India.
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During the visit, a Three-Year Strategic Programme of Cooperation (2019-2021) was signed by the two sides, aimed at further enhancing the strategic partnership between the two countries.
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During the visit, Prime Minister Modi and President Ramaphosa:
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recalled the Strategic Partnership established between India and South Africa through the Red Fort Declaration of March 1997 and the Tshwane Declaration of October 2006.
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expressed satisfaction at the deepening and widening of this comprehensive bilateral partnership.
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emphasized the need to further deepen relations in the political, economic, defense, scientific, consular and socio-cultural spheres.
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agreed that the 10th Session of the India-South Africa Joint Ministerial Commission will be held in 2019 in New Delhi led by the Foreign Ministers of both the countries.
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expressed satisfaction at the steady pace of cooperation in the defence sector encompassing a wide range of engagements including defence production, joint collaboration, manufacturing, research and development, training and joint exercises.
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recognized the importance of increased bilateral naval cooperation and closer synergy within the context of Indian Ocean Naval Symposium (IONS) which, by keeping the sea lanes secure against illegal actors, will ensure unhindered passage for trade and continued prosperity of the entire Indian Ocean Region.
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acknowledged the increasing engagement between the two navies in recent years which inter alia has translated to increased interactions in maritime operations and training. PM Modi welcomed the participation of the South African National Defence Force in the First Multinational India-Africa Field Training Exercise (IAFTX) in March 2019 at Pune, India.
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welcomed the holding of the inaugural meeting of the Joint Working Group on Trade and Investment (JWGTI).
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welcomed the significant investment and presence of a large number of Indian companies and business entities in South Africa and the growing number of South African investments in India. In this regard, agreed to enhance bilateral investments between the two countries within the context of the Memorandum of Understanding between Invest SA and Invest India on enhancing bilateral investment relations.
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agreed to cooperate, share best practices, technology and expertise on the Ease of Doing Business Reform Programme.
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committed to expanding cooperation in the fields of trade and investments between business entities in South Africa and India
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agreed to cooperate in the field of Small and Medium Enterprises (SMEs) which play an invaluable role in job creation and creating trade and investment opportunities.
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acknowledging the holding of the first India-South Africa Business Summit in South Africa in April 2018 and the Invest in India Business Forum in November 2018, invited the private sectors to invest in key economic sectors of India and South Africa
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agreed that both countries should explore solutions aimed at boosting trade and investment. In this context, President Ramaphosa agreed to simplify and reform South African business visa regime.
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acknowledged the impressive progress achieved in cooperation in Science and Technology and innovations.
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agreed to enhance cooperation in the field of the Oceans Economy and to cooperate in multilateral forums on the Blue Economy including in the framework of Indian Ocean Rim Association (IORA).
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expressed satisfaction at the growing cooperation in the energy sector, and the potential to expand cooperation in the renewable energy sector as well as oil and gas.
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agreed to strengthen cooperation in the area of mining, deep mining and mineral beneficiation.
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acknowledged that the International Solar Alliance (ISA) is a common platform for cooperation among solar resource rich countries. India invited South Africa to join the ISA.
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agreed to strengthen agriculture and fisheries cooperation in areas such as crop and animal production, food security, aquaculture and aquatic product processing.
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agreed to work towards addressing skills development through the investment of resources and exchange of best practices.
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welcomed the setting up of the “Gandhi – Mandela Centre of Specialization for Artisan Skills” in South Africa with Indian assistance.
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Decided to further strengthen academic engagement between institutions on both sides. President Ramaphosa appreciated India’s contribution to the higher education of South African youth through the fully paid scholarships offered under the ICCR and short term training programmes under IAFS and ITEC Schemes.
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the two sides further agreed to conclude an MoU on Cooperation in Higher Education.
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lauded the valuable contribution of the people of Indian origin in South Africa.
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expressed the desire to broaden people-to-people interactions and to increase two-way tourism by addressing challenges with regard to consular and immigration related issues. In this context, the two sides agreed to conclude an agreement on simplification of visa requirements.
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expressed their intent to explore avenues to resume direct air connectivity between South Africa and India.
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welcomed the launching of “India for Humanity” initiative by India in the context of Gandhiji’s 150th birth anniversary to provide artificial limbs by “Jaipur Foot” and welcomed India’s offer to hold a camp in South Africa.
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underscored the need for continuing consultations and the exchange of views between South Africa and India in order to build partnerships in multilateral forums and to ensure that the agenda of the South is prioritized.
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committed themselves to promoting reformed multilateralism through cooperation and coordination at multilateral fora and in international organisations.
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committed to cooperate in all relevant multilateral forums through the groupings of G20, BRICS, IBSA, BASIC, NAM, WTO and the Commonwealth, as well as the strengthening of the Indian Ocean Rim Association (IORA).
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reaffirmed their commitment to enhance the voice and representation of emerging and developing economies, including those in Africa, in the decision-making bodies of multilateral institutions.
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Prime Minister Modi congratulated South Africa on becoming a non-permanent member of the UN Security Council for 2019-20 and assured South Africa of India’s support in the performance of its responsibilities in this role.
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welcomed the successful holding of the BRICS Summit in Johannesburg in July 2018, agreed to further enhance cooperation and coordination within BRICS with a view to reform and enhance global political and economic governance.
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Congratulated Brazil on taking over as Chair of BRICS for 2019 and reiterated their support for Brazilian Chairmanship.
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welcomed the holding of 15 events by IBSA countries in the context of the 15th anniversary of IBSA partnership.
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expressed concern at the slow pace of UN reforms and committed themselves to securing their representation in an expanded UN Security Council to achieve a more representative and equitable UN Security Council Membership.
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underlined the need for jointly working towards reform in the global governance architecture such as WTO, international financial systems etc. in order to advance a development-centered agenda that promotes inclusive growth.
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reiterated their commitment to working together on strengthening cooperation to address fugitive economic offenders, including through international organisations and institutions such as G20, FATF and others.
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agreed that terrorism constitutes a serious threat to international peace, security and stability and that no country is immune to the threat that terrorism represents.
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noted the need for concerted action by the global community against terrorism through early agreement and adoption of the UN Comprehensive Convention on International Terrorism, as well as the implementation of the United Nations Global Counter-Terrorism Strategy in a balanced and integrated manner.
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condemned terrorism in all its forms and manifestations regardless of its motivations, whenever, wherever and by whosoever committed.
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welcomed signing of 2 MoUs between a leading policy research institute of India, namely, Research & Information System for Developing Countries (RIS) based in Delhi with two premier South African think tanks, namely, the Institute for Global Dialogue (IGD) in Pretoria and South Africa Institute for International Affairs (SAIIA) in Johannesburg. The 3 research institutions would carry forward work under track 1.5 and, among other things, focus on areas to further promote practical cooperation with Africa identified in Delhi Declaration 2015 at the end of 3rd India Africa Forum Summit.
- President Ramaphosa expressed his gratitude to the Government and people of India for the warmth and generous hospitality extended to him and his delegation during the visit, and extended an invitation to Prime Minister Modi to pay an official visit to South Africa on mutually convenient dates.
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South African President Cyril Ramaphosa’s first State Visit to India
President Cyril Ramaphosa, during his media remarks on 25 January 2019 following his first State Visit to India as President of the Republic of South Africa, said that fruitful talks aimed at deepening the bilateral cooperation between South Africa and India were held.
“During our deliberations, the Prime Minister and I were in agreement that considerable scope exists for our two countries to grow our bilateral economic relationship.
“While trade has increased significantly over the last few years, and India is currently our second largest trading partner in Asia, there are a number of areas of future cooperation. These include agro-processed goods, defence procurement, mining equipment and technology and cooperation in the financial services sector.
“During our talks we also reviewed the existing cordial bilateral relations between South Africa and India, as well as the close cooperation within a number of multilateral groupings including BRICS, IBSA, the Indian Ocean Rim Association and the G20.
“In order to ensure concrete deliverables the Prime Minister and I concluded this morning a Three Year Strategic Programme of Cooperation aimed at deepening the bilateral engagement between India and South Africa and ensuring that a result-orientated partnership benefits the people of both countries.
“We have instructed our Ministers and officials to commence immediate implementation of this Programme to take our bilateral relationship to a new level.”
Gandhi Mandela Freedom Lecture
President Ramaphosa delivered the first India-Brazil-South Africa Gandhi Mandela Freedom Lecture during his State Visit to India on Friday.
“Since the end of apartheid in 1994, India and South Africa have had close political, cultural, trade and strategic ties. This cooperation has been further deepened since South Africa joined the BRICS group in 2010,” he said.
“Today’s lecture pays tribute to the life and times of two of the greatest leaders and statesmen of their generations, and perhaps of all time. Mohandas Karamchand Gandhi, fondly known as Gandhiji, and Nelson Rolihlahla Mandela, known to all as Madiba. Their legacies go far beyond their stature as the founding fathers of our two great independent nations, India and South Africa.”
On global issues and cooperation, President Ramaphosa stated: “As we take up our non-permanent seat at the UN Security Council, South Africa is acutely aware of the responsibility we have been entrusted with. In Madiba’s honour, we have chosen for our term the theme: ‘continuing the legacy: Working for a Just and Peaceful world’.”
“The African Union’s Agenda 2063 aspires to an end of conflict and the silencing of the guns on the continent by 2020. Serving on the UN Security Council affords us the opportunity to meaningfully contribute towards this goal.
“We are determined to ensure that Africa is not relegated to the periphery of world affairs. We will advance our foreign policy in a manner that champions the interests of Africa and her peoples.
“Through our cooperation on a range of platforms such as BRICS, IBSA, the Indian Ocean Rim Association, the G20, the G77 plus China and the Non-Aligned Movement, we will continue to work together in pursuit of a world free of poverty.
“The India-Brazil-South Africa Dialogue Forum in particular is a practical expression of our shared values of democracy, justice, human rights, and good governance. It prioritises inclusiveness, human development, peace, transparency, social justice and equity.
“As like-minded emerging economies we recognise that we have a collective role to play in addressing and correcting the imbalances in the global economy.
“As South Africa, we look forward to deepening our relations with India through stronger commercial and people-to-people ties. We need to focus on growing our trade, increasing investments in each other’s economies.
“We can be proud of the road our two countries have traversed; two sister countries separated by an ocean, but bound by history, by the collective energies of our people, and by the deep friendship and respect we hold for each other.”
South Africa-India Business Forum
Speaking at the South Africa-India Business Forum held in Delhi, India on 25 January 2019, President Ramaphosa said the two countries have worked to transform their relationship forged in struggle into a partnership for peace and economic prosperity, but more needs to be done.
The President urged the two countries to strive to forge a developmental path paved with pragmatism and a renewed sense of purpose as the challenges now faced by both countries have become greater and more complex.
He also touched on trade relations, the investment relationship, untapped opportunities between the two countries, and South African companies in India. Below are his full remarks.
Remarks by President Cyril Ramaphosa
“Thank you for giving me the opportunity to address this important forum, which brings together business people who are committed to the economic growth and development of our two countries.
South Africa and India have a partnership that spans over two centuries, dating as far back as the 1800s.
Ours is a relationship embedded in the history of shared struggle and common colonial subjugation.
This partnership is now anchored in common values and a shared vision of social and economic emancipation for all our people.
In the two decades since the first visit to India by President Nelson Mandela, our countries have worked to transform a relationship forged in struggle into a partnership for peace and economic prosperity.
The commitment to achieve this goal is articulated in the Red Fort Declaration on Strategic Partnership between our two countries.
In reference to the significance of this Declaration, President Nelson Mandela said:
“The Red Fort Declaration serves as a clarion call for the developing world to mobilise resources in support of a new agenda aimed at economic development and growth, harmony and unity amongst nations of the South.”
It was a vision that recognised the interdependence and common destiny of the countries on the periphery of global economic activity.
This call to action is as relevant today as it was when it was signed 22 years ago.
We can be pleased that we have made inroads in creating a place for countries of the global south in the international community.
Today, India and South Africa cooperate in multilateral formations such as BRICS, IBSA, G20 the Indian Ocean Rim Association for Regional Cooperation.
As we enter a new era of this partnership, we should strive to forge a developmental path paved with pragmatism and a renewed sense of purpose, because the challenges we face have become greater and more complex.
We continue to face great levels of poverty, inequality and unemployment, particularly among women and the youth.
We are confronted with significant changes brought about by the Fourth Industrial Revolution.
We have to contend with rapid environmental changes, which threaten our biodiversity and agricultural production.
We have to increase our production capacity while taking into account the changing and increasingly unstable nature of the international trading environment.
However, while these rapid changes create challenges, we must not be blinded to the opportunities that lie behind and in the midst of such difficulties.
There remain many unexplored opportunities that can propel us to a better tomorrow.
South Africa and India have complementarities and comparative advantages which can be exploited for mutual benefit, particularly in trade, investment, technical exchanges in information and communications technology, and skills development.
India is an important destination for South African exports and is our fifth largest global market for goods.
I am pleased to note the steady increase in trade between our respective countries from R80 billion to R107 billion over a five-year period from 2013 to 2017.
This progress is the result of the broadening of economic space for bilateral trade, increased competitiveness in our respective industries, and our strategic cooperation in fora such as BRICS, which have targeted programmes for increasing trade and investment.
I welcome the current initiatives by our respective ministers of trade to increase bilateral trade and to explore sector-specific collaboration to boost our manufacturing and trade relations – with an emphasis on increasing trade in value added goods and services.
South Africa’s investment relationship with India has also deepened, with more than 150 Indian firms operating in South Africa.
Companies such as Tata, Cipla and Mahindra have found a home in South Africa.
We recognise and appreciate Vedanta Resources’ investment of $1.6 billion in the Gamsberg Zinc mine in the Northern Cape province, of which $400 million has already been spent.
This investment by Vedanta has triggered a new wave of industrial and economic development in that part of our country.
Untapped opportunities still remain in sectors such as agriculture and agro-processing, automotive, pharmaceutical, aerospace and defence industries, infrastructure, energy, ICT, electronics, metals and mining, creative industries and the ocean economy.
We successfully hosted the inaugural South Africa Investment Conference last year and are heartened by the commitment shown to South Africa’s development by companies from India and elsewhere.
As government we are cognisant of the need to intensify our efforts to create an enabling environment for business to thrive.
To this end, we have finalised a new Mining Charter and have provided a detailed plan on the country’s future energy requirements.
We have also signed a number of renewable energy supply agreements to address challenges in a sector that is critical for our economy’s growth.
We are taking policy certainty and consistency very seriously and we act decisively and with speed whenever concerns are raised about these.
We remain steadfast in our commitment to attain the goals set out in Africa’s socio-economic developmental blue print, Agenda 2063.
Africa is a continent of opportunity.
We are therefore encouraged by India’s commitment to the development of the African continent though the India-Africa Forum.
This forum must embolden Indian companies to form partnerships with South Africa’s financial institutions and the private sector to jointly collaborate on projects that can build Africa’s productive capacity and infrastructure.
We recently hosted the Africa Investment Forum, championed by the Africa Development Bank to raise capital and accelerate investment to transform Africa’s economic, agricultural and industrial sectors.
The outcome of this Forum was a portfolio of investment projects throughout the African continent that are ready for partnerships with global investors, including those from India.
We have also signed the agreement on the African Continental Free Trade Area, which will promote intra-Africa trade and create larger economies of scale, a bigger market and improve the continent’s prospects to attract investment.
It is our desire to see Indian companies that are investing in South Africa also benefiting from the vast opportunities that this agreement will bring.
We recognise and appreciate the reforms undertaken by India on improving the investment environment, which will encourage more South African companies to enter the Indian market.
We currently have 29 South African companies invested in India and wish to double this number in the coming years.
South African firms with a presence in India include Sanlam, Life Healthcare, Momentum, Airports Company of South Africa, First Rand Bank, Old Mutual, and Naspers, among others.
I have brought with me, as part of my delegation, a cross-section of South African companies that are looking for new investment opportunities in India.
This is in line with the policy decision we took during the BRICS Summit held in South Africa in 2018 to pursue investment-led trade amongst the BRICS member countries.
Trade that is led by investments is where our future growth lies.
Where our investments go, our exports follow in the form of capital equipment, agro-processed goods and ICT services, among other.
I am very pleased with the outcomes of the deliberations held today between our respective business people and am looking forward to announcements of South African investments in India as I am looking forward to new and further Indian investments in South Africa.
Let us take these commitments forward to build a prosperous South Africa and a prosperous India with opportunities for all our people.
I thank you.”
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African policymakers must pay more attention to counterfeit drugs
A new study shows that poor and vulnerable populations, especially in Africa, suffer the most.
Substandard and fake medicines pose a significant threat to Africa. These products contribute to the global threat of drug-resistant illness and undermine Africa’s ability to achieve the Sustainable Development Goals (SDGs). They often have a tragic impact on individuals in need of effective antimalarials, antibiotics and other medicines.
The European Union-funded ENACT project’s research findings on the threat of counterfeit drugs in Africa were launched this week at a series of regional seminars in Ghana and Nigeria. The events were co-hosted by the Kofi Annan International Peacekeeping Training Centre in Accra and the Institute for Peace and Conflict Resolution in Abuja. A new policy brief provides recommendations to guide policy makers on how better to address this severe and growing problem.
Globalisation has made it harder to regulate, track and quality assure medical products. Medicines are manufactured, printed and shipped to and from a number of countries. Fraud can occur at any point in the supply and distribution chain.
“In Africa, the domestic pharmaceutical market is growing quickly. This creates new opportunities and challenges for the continent,” says Robin Cartwright, lead author of the policy brief, The rise of counterfeit pharmaceuticals in Africa. Currently, only 37 out of 54 African states have some level of pharmaceutical production, but as new, legitimate firms enter these markets, so will additional counterfeiters.
The trade in counterfeit medicines fuels a lucrative criminal economy, but the study found that processes for checking the quality of pharmaceutical products are neither systematic nor consistent.
A dearth of information makes it difficult to accurately assess the scope of the problem and formulate appropriate responses. It has been estimated that, worldwide, the counterfeit drug market is worth up to US$200 billion – making it the most lucrative sector in illegally copied goods.
Regardless of the size of the market, the research findings clearly show that the poorest and most vulnerable populations suffer the most. According to World Health Organization (WHO) statistics, 42% of detected cases of substandard or falsified pharmaceuticals occurred in Africa. The London School of Hygiene and Tropical Medicine says that fake malaria drugs cause up to 158 000 deaths every year in sub-Saharan Africa.
Counterfeiters find Africa an easier target, because it has not developed the armoury of responses seen in other parts of the world, including supply chain regulation, track-and-trace technology and enforcement regimes. Corruption adds another layer of complexity. In many cases, public officials are bypassed as the counterfeits reach retailers unhindered.
“While there has been some policy reflection, the links between corruption and healthcare require closer examination,” says Eric Pelser, ENACT Programme Head at the Institute for Security Studies.
The case of Nigeria shows how a bespoke and comprehensive policy backed by political will can bring about real solutions. Nigeria managed to achieve an 80% reduction in counterfeit drug circulation by implementing targeted regulatory activities. Among other steps, the Nigerian food and drug agency, NAFDAC, banned imports of medicines through all but two national points of entry and furnished customs officials with mobile ‘minilabs’, enabling them to identify falsified drugs.
Like Nigeria, other African nations should enact legislation that criminalises the manufacture and sale of counterfeits. Legislation should also provide clear authority and responsibility for the investigation, detection and seizure of counterfeit products. Given their ability to authenticate drugs in the supply chain, track-and-trace systems of the type officially sanctioned and used in EU and USA have shown great potential to thwart the penetration of counterfeits.
The EU’s MEDICRIME Convention is the only international legal instrument that has made it a criminal offence to produce and distribute fake medical products or commit similar crimes.
“International cooperation is essential for us to succeed in the struggle against this illicit market,” says Sotirios Bazikamwe, Governance Adviser of the Delegation of the European Union to Ghana. “The MEDICRIME convention of the Council of Europe is the sole international legislative instrument available to effectively and efficiently fight these criminal networks. We therefore call on all our partners to accede to it.”
ENACT is implemented by the Institute for Security Studies and INTERPOL, in affiliation with the Global Initiative against Transnational Organised Crime and funded by the European Union. The views expressed here are in no way to be taken to reflect the views or position of the EU.
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tralac’s Daily News Selection
Events listing, Part II
Profiled trade and development event listings: events happening outside of Africa
ITC and Commonwealth Secretariat: Women in the digital economy and international trade (29-30 January, Kuala Lumpur)
5th Powering Africa Summit (25-27 February, Miami)
CSAE Conference 2019: Economic development in Africa (17-19 March, Oxford)
EAC Trade Policy Review (20 and 22 March, Geneva)
UNCTAD’s Ecommerce Week 2019 (1-5 April, Geneva)
World Bank’s Civil Society Policy Forum (9-12 April, Washington)
WBG/IMF’s 2019 Spring Meetings (12-14 April, Washington)
2019 Forum on Responsible Mineral Supply Chains (23-25 April, Paris)
UNCTAD’s Multi-year Expert Meeting on Trade, Services and Development (1-3 May, Geneva)
UNCTAD’s Multi-year Expert Meeting on Transport, Trade Logistics and Trade Facilitation (6-10 May, Geneva)
Africa Energy Forum (11-14 June, Lisbon)
Annual Bank Conference on Development Economics 2019 (17-18 June, Washington)
2019 G20 Osaka summit (28-29, June, Osaka)
Global Review of Aid for Trade (3-5 July, Geneva)
Tokyo International Conference on African Development (28-30 August, Yokohama City)
WBG/IMF’s 2019 Annual Meetings (18-20 October, Washington)
EU-AU Ministers of Foreign Affairs Meeting: Joint Communiqué
The AU and EU held the first of a series of annual joint ministerial meetings in Brussels, Belgium, on 21 and 22 January 2019. Ministers stressed the importance of having this meeting as an annual event, which will contribute to strengthening the continent-to-continent partnership and addressing common challenges.
As closest neighbours, Europe and Africa are already prime trade, investment and development partners. The meeting was updated on the important progress made in the continental integration process through the launch of the African Continental Free Trade Agreement (AfCFTA), the Single African Air Transport market and the adoption of the Protocol on Free Movement of Persons, Right of Residence and Right of Establishment. The EU, having experienced the multiple benefits of regional integration and of an increasingly harmonised business and investment climate, reaffirmed its commitment to share its own experience and partnership in regional integration and cooperation, to which it will lend its full support. Ministers agreed on the importance of developing trade relations between Africa and Europe.
EPA: Test of unity as Kenya breaks away (The East African)
Kenya hopes to marshal support for its ambitious plan to trade with Europe during the EAC heads of state scheduled for 1 February, in Arusha, after efforts to get its partners to sign and ratify the Economic Partnership Agreement with the EU bore little fruit. The EastAfrican has learnt that Kenya is planning to table a proposal before the EAC Council of Ministers on 30 January, seeking to be allowed to enforce its own trade agreement with the EU as other partner states sort out their own issues. If Kenya’s proposal on variable geometry is adopted by the ministers, it will be forwarded to the heads of state for review and final decision. Kenya’s Principal Secretary in the Department of Trade, Dr Chris Kiptoo, confirmed to this paper that the country has settled for the principle of variable geometry but the proposal has to get the backing of all the EAC member states. The EastAfrican has learnt that some of the regional partners are of the view that such a move will compromise the principle of solidarity that binds EAC member states together. It is also feared that signing the pact as individual countries would weaken the region’s rules of origin principle and give rise to partner states operating on different trading regimes, compromising efforts towards regional integration.
SADC experts support East Africa on load control law (The Citizen)
International Customs Day 2019: selected updates
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Message from the World Customs Organization. Traditionally, to mark International Customs Day each year, the WCO Secretariat dedicates a theme that is pertinent to the challenges facing the global Customs community. The slogan chosen for 2019 is “SMART borders for seamless Trade, Travel and Transport.” At a time when the number of passengers and the volume of freight crossing borders is expected to increase exponentially, and technology has transformed the economic landscape in which Customs is evolving, WCO Members are encouraged to look at how they can best ensure the swift and smooth cross-border movement of goods, people and means of transport. Customs, working with other border agencies, plays a pivotal role in facilitating trade and travel, through simplified, standardized and harmonized border procedures, and in securing borders. It is, therefore, quintessential for Customs to take the lead in consolidating and further amplifying the ongoing efforts to ease the flow of goods and people across borders, thus turning globalization into a positive force.
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Mauritius launches coordinated border management service. A Coordinated Border Management Service, which aims at facilitating cooperation and promoting trade facilitation measures in terms of early clearance, reduction in costs and dwell time in the supply chain, was launched on Friday by the Minister of Industry, Commerce and Consumer Protection, Mr Ashit Gungah, at the Customs House in Mer Rouge. To this end, important border agencies will now be housed at the Customs, in Mer Rouge, for expedited clearance. The CBM Service will thus comprise the Government Pharmacist; the Mauritius Standards Bureau; the National Plant Protection Office; the Food Import Unit; and the Veterinary Services Division of the Ministry of Agro-Industry and Food Security.
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Nigeria’s FG sets N887bn revenue generation target for NCS in 2019. The Comptroller-General, Nigeria Customs Service, Hameed Ali, says the federal government has set a revenue generation target of N887 billion for the Service in 2019. He assured Nigerians that the figure will be significantly surpassed as the management had earlier set a higher self-target. Speaking at the opening of the 2019 International Customs Day, the Customs boss warned that it would no longer tolerate the incessant killing of its officers by smugglers, vowing to counter such attacks with appropriate force going forward. Ali said the Service intended to raise its revenue drive by acquiring non-intrusive equipment to boost trade facilitation and urged stakeholders to comply with trade rules.
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Reduce levy on imported brand new cars, Nigeria Customs begs FG. The Nigeria Customs Service has urged the Federal Government to reduce automotive levy on imported brand new vehicles from 35% to 10%. The Comptroller General of Customs, Col. Hameed Ali (Rtd), gave the advice at a news conference to mark International Customs Day (ICD) in Abuja on Monday. The Federal Government had put customs duty on brand new cars at 35% and levy to 35%, making importers to pay a total of 70% of the cost of a new car as levy and duty. Ali explained that this policy had discouraged importers as they had diverted their importations to neighbouring countries. He said that the policy had also heightened smuggling, hence reducing the revenue the service would have generated. According to him, the policy is put in place to encourage local automobile industries but that seems to be difficult to achieve.
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Zimra to set up virtual border posts. The Zimbabwe Revenue Authority is targeting to establish virtual border posts where travellers and their cargo will be cleared in less than five minutes. This was said by Zimra Commissioner-General Ms Faith Mazani while officiating at the International Customs Day commemorations in Victoria Falls last week. “The Electronic Temporary Import Permit project (e-TIP) has been so successful in dealing with border congestion at Beitbridge Border Post during this past festive season as it allowed travellers to pre-clear their vehicles online thereby reducing congestion. We are now working at improving the e-TIP system so that visitors will spend an average of between three to five minutes to get their temporary import permits processed,” said Ms Mazani. She said work would soon start at Beitbridge, Kazungula, Plumtree and Victoria Falls border posts towards establishing a One-Stop border concept. Ms Mazani said engagements were underway between the Government and Zimra on the need for patrol vehicles and drones to monitor border posts and seal porous ports of entry and curb corruption.
Uganda’s labour export now earns it $1.2 billion (The East African)
Remittances to Uganda last year grew to $1.21bn, boosted by receipts from labour exports to Middle Eastern countries, which over the years have grown to eclipse some of the traditional remittance sources, preliminary data from the central bank shows. Dr Adam Mugume, executive director of research at the Bank of Uganda told The EastAfrican that remittances from the Middle East are rising while receipts from regions that were traditional sources of transfers have dropped due to troubled economic conditions. “Out of the $1.21bn, more than half are remittances from the Middle East,” said Dr Mugume. But this figure, he added, represents stagnation” in remittances due to weak receipts from elsewhere, especially European countries. Bank of Uganda officials say this data is based on figures reported by money transfer operators in the first 11 months of 2018 and estimates for December, which reflect an improvement of 4.1% on the previous year’s receipts. The central bank says estimates for December 2018 alone were $227.9m.
Kenya: Diaspora forex inflows exceed CBK projection (Daily Nation)
Diaspora remittances for June for the first time in three years beat those of December, lifting cumulative inflows above Central Bank of Kenya target. Fresh figures released by the CBK show Kenyans living in the diaspora sent home $244m (Sh24.79 billion) in December last year, a growth of 20% sent on the previous similar month. “North America, Europe and the rest of the world accounted for 45%, 32% and 23%, respectively, of the total remittances in December 2018,” said the regulator. However, this was dwarfed by the $266.2 million (Sh27.08 billion) that was sent home in June according to data from CBK. This is the first time since 2015 for December remittances to be lower than those of any other month.
India’s mid-year external sector review (Reserve Bank of India)
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EPA: Test of unity as Kenya breaks away
Kenya hopes to marshal support for its ambitious plan to trade with Europe during the East African Community (EAC) Heads of State Summit scheduled for February 1, in Arusha, after efforts to get its partners to sign and ratify the Economic Partnership Agreement with the European Union bore little fruit.
The EPA, whose signing and ratification has stalled since October 2016, allows duty-free, quota-free access of EAC products to the European market.
Kenya, the region’s biggest exporter to the European market, has been allowed temporary access to the European market under special arrangements after Tanzania, Uganda and Burundi failed to sign and ratify the agreement citing various country-specific concerns.
The pact requires all EAC countries to sign and ratify for it to take effect, but only Kenya has signed and ratified while Rwanda has signed but not ratified.
As a result, Kenya is asking that EAC partner states adopt the variable geometry, a move that would be viewed as counter to regional integration.
The Principle of Variable Geometry allows member countries to enforce the trade agreement with the EU as individuals rather than a bloc, implying that Kenyan products will start accessing the EU market under EPA.
Differences
The EU has asked the EAC partner states to iron out their differences and agree on the way forward on the trade agreement.
“The next EAC Summit in 2019 is expected to discuss the EPA issue and the way forward,” the EU said in its latest pdf EPA update report (218 KB) dated November 2018.
The EastAfrican has learnt that Kenya is planning to table a proposal before the EAC Council of Ministers on January 30, seeking to be allowed to enforce its own trade agreement with the EU as other partner states sort out their own issues.
If Kenya’s proposal on variable geometry is adopted by the ministers, it will be forwarded to the heads of state for review and final decision.
Kenya’s Principal Secretary in the Department of Trade Dr Chris Kiptoo confirmed to this paper that the country has settled for the principle of variable geometry but the proposal has to get the backing of all the EAC member states.
“We have already signed and ratified this agreement. We don’t have any problem. If the other countries have issues then I think the principle of variable geometry should apply so that those who are ready can sign and proceed but the proposal has to be endorsed by all member countries,” said Mr Kiptoo.
The EastAfrican has learnt that some of the regional partners are of the view that such a move will compromise the principle of solidarity that binds EAC member states together.
It is understood that Uganda, which has expressed interest to sign the agreement, is keen on the principle of solidarity, which requires all countries to sign and act as one.
It is also feared that signing the pact as individual countries would weaken the region’s rules of origin principle and give rise to partner states operating on different trading regimes, compromising efforts towards regional integration.
EAC’s commitment to the EPA has however come into sharp focus after it emerged that Kenya has won a timeless access to the EU market under the Market Access Regulations.
On the other hand, Uganda, Rwanda, Burundi and Tanzania, which are considered least developed countries, continue having duty-free and quota-free access to the EU under the Everything but Arms arrangement.
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EU-AU Ministers of Foreign Affairs Meeting: Joint Communiqué
Europe and Africa are each other’s closest neighbours. What happens in Africa matters in Europe, and vice versa.
As equal partners with mutual interests, the two sides are working together to tackle today’s challenges, from investing in youth, fostering sustainable development and strengthening peace and security to boosting investment on the African continent, good governance and better managing migration: a partnership that works on the basis of reciprocal commitments.
European and African Ministers of Foreign Affairs met in Brussels, Belgium recently to discuss the strengthening of continent-to-continent relations and how to address common challenges.
Joint Communiqué
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As agreed at the African Union (AU) – European Union (EU) Summit, held in Abidjan, Cote d’Ivoire, on 29 and 30 November 2017, the AU and EU held the first of a series of annual joint ministerial meetings in Brussels, Belgium, on 21 and 22 January 2019. The meeting gathered the Ministers of Foreign Affairs of the Member States of the European Union (EU) and the African Union (AU) and was co-chaired by the High Representative of the European Union for Foreign Affairs and Security Policy, Federica Mogherini, and the Minister of Foreign Affairs and International Cooperation of Rwanda and Chair of the African Union Executive Council, Richard Sezibera, with the participation of Commissioner of Peace and Security Smail Chergui, representing AU Commission Chairperson Moussa Faki Mahamat, and in the presence of EU and AU Commissioners.
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Ministers stressed the importance of having this meeting as an annual event, which will contribute to strengthening the continent-to-continent partnership and addressing common challenges. Ministers reiterated their common interest and opportunity for a strong and mutually beneficial partnership in the spirit of shared ownership, responsibility, reciprocity and mutual accountability and transparency.
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Ministers recalled the 5th AU-EU Summit, held in Abidjan on 29-30 November 2017, under the theme Investing in Youth for Accelerated Inclusive Growth and Sustainable Development, which initiated a step change in the AU-EU partnership and identified the strategic priority areas for cooperation until the next EU-AU Summit envisaged to be organised by the EU in 2020.
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Ministers acknowledged progress on the development of the Abidjan Action Plan and look forward to its finalisation by the two Commissions by the next College-to College-meeting. They took note of the implementation of a number of joint initiatives under the strategic priorities identified during the Abidjan Summit and agreed to continue the implementation of the Abidjan outcomes. They took stock of the followup undertaken since Abidjan in each of the following priority areas for the AU-EU continent-to-continent partnership.
A. Economic cooperation
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As closest neighbours, Europe and Africa are already prime trade, investment and development partners. In Abidjan, it was agreed to redouble joint efforts to advance sustainable and inclusive growth, economic transformation and development. In particular, the two partners agreed to cooperate on enhancing the investment climate, as well as mobilising investments in the fields of agriculture, infrastructure, energy, digitalisation, industry and air transport, among other sectors.
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The meeting was updated on the important progress made in the continental integration process through the launch of the African Continental Free Trade Agreement (AfCFTA), the Single African Air Transport market and the adoption of the pdf Protocol on Free Movement of Persons, Right of Residence and Right of Establishment (3.80 MB) . The EU, having experienced the multiple benefits of regional integration and of an increasingly harmonised business and investment climate, reaffirmed its commitment to share its own experience and partnership in regional integration and cooperation, to which it will lend its full support. Ministers agreed on the importance of developing trade relations between Africa and Europe.
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In a related manner, the meeting was informed of the launch of, and the progress on, the European Initiative ‘ pdf Africa-Europe Alliance for Sustainable Investment and Jobs (302 KB) ’, and encouraged both sides to engage in further consultations to ensure that implementation of the Alliance concept responds to the priorities of both continents.
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The meeting was updated on the progress of the EU External Investment Plan, which is deploying EUR 4.1 billion to leverage an estimated EUR 37 billion in African and European private investments.
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Ministers also welcomed the sub-regional cooperation and integration initiatives, with a view to creating an integrated and competitive African market and fully aligned with the AfCFTA, and the contribution they can make to stability, prosperity and sustainable development on the African continent.
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Ministers committed to joining efforts to combat corruption in the two continents and promote international cooperation to combat illicit financial flows and tax avoidance and evasion, as well as to strengthen cooperation on asset recovery.
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Ministers reiterated that to achieve the right skilled labour force, as agreed in Abidjan, it is important to invest in youth through market-responsive education and training opportunities, especially for women and girls, including by rolling out more vocational training and education programmes as well as R&D and scientific exchanges, with the involvement of the private sector. Participants further agreed on the importance of internationalisation and harmonisation of higher education in Africa to develop a culture of mobility with a view to increasing quality of education and comparability. In this respect, mobility of students and staff shall be further supported since it is seen as a key driver of socio-economic development as it helps to equip young people with relevant skills to build their future. Programmes like Erasmus+ facilitate the delivery of those results, and could inspire other programmes towards those aims.
B. Resilience, peace, security and governance
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Ministers agreed that cooperation in the field of peace and security during all phases of the conflict cycle is a central pillar of the AU-EU partnership. New threats to international and regional peace and security, in particular the spread of terrorism, piracy, radicalisation, violent extremism, the illegal arms trade and organised crime, have an impact on the stability of both continents. These threats require concerted efforts, in accordance with international law, including international human rights law.
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Respect for democratic principles and the rule of law and the involvement of civil society are important for stability and sustainable development to meet the political and economic expectations of a growing youth population. The AU-EU Memorandum of Understanding on Peace, Security and Governance signed in May 2018 puts the 3 institutional partnership on a solid and structured basis, taking into account the complexity of the emerging threats and the need to address their root causes.
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All these efforts will contribute to Africa’s ambition of Silencing the Guns by 2020. Continued support to stability in crisis-affected regions and countries, including the Sahel, Libya, the Great Lakes region, CAR, South Sudan and Somalia, needs to be reinforced through coordinated engagement, in support of African efforts to promote lasting peace, security and stability on the continent. Ministers welcomed the positive steps towards regional peace and stability, particularly the Ethio-Eritrean rapprochement and its wider impact for peace and security in the Horn of Africa, and agreed to support the process.
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Both sides confirmed their mutual commitment to the implementation of the Women, Peace and Security agenda, UNSCR 2250 on Youth, Peace and Security, as well as compliance with International Human Rights Law and International Humanitarian Law throughout this cooperation. Moreover, ministers stressed the importance of good governance, institution-building and respect for and promotion of human rights, including gender equality as important tools to prevent conflicts.
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Ministers acknowledged the contribution of the fruitful AU-EU cooperation towards the full operationalisation of the African Peace and Security Architecture (APSA) and expressed backing for enhancing the links between the APSA and the African Governance Architecture (AGA), in line with the AU reform process.
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Ministers welcomed the launch of the revitalised AU Peace Fund, the appointment of its Board of Trustees, and the commitment to mobilise resources from AU Member States to the target of USD 400 million by 2021 to finance AU operational peace and security activities. It was explained that the Fund should become a major instrument for Africa and its partners investing in peace and security in Africa.
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In the framework of the EU’s longstanding support for sustainable and predictable financing for African-led Peace Support Operations, both sides welcomed the commitment of EU Member States to replenish the African Peace Facility for the period 2019-2020. Ministers underlined the importance of ongoing negotiations in New York on the use of UN-assessed contributions for AU-led Peace Support Operations authorised by the UN Security Council. In this respect, ministers welcomed the adoption by the AU of its compliance policies in November 2018, as well as the commitment of the EU to support the ongoing AU efforts to operationalise the framework.
C. Migration and mobility
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Ministers welcomed the AU’s pdf Revised Migration Policy framework for Africa and Plan of Action 2018-2027 (2.70 MB) and the AU Protocol on free movement of persons, the African Agenda on Migration and the African Observatory and Research Centres on Migration, as well as the achievements to date and the mandate to update the Joint Valletta Action Plan (JVAP). They welcomed the work done by the EU Trust Fund (EUTF), intended to address the main challenges of the JVAP, and encouraged to continue monitoring the results and improving the implementation of its five pillars, as well as the effectiveness of the JVAP.
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The EU Member States which adhered to the UN Global Compact on Migration and UN Global Compact on Refugees and the AU welcomed their adoption of non-legally binding international cooperation frameworks, aimed to complement individual national strategies and acknowledging country-specific approaches to discussing migration-related challenges relevant to both continents.
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Ministers recognised the recent progress on designing the AU-EU continent-to-continent cooperation on migration, which can add value in terms of ensuring consistency and complementarity, among existing processes, including those of Rabat, Khartoum and the Horn of Africa. Both sides expressed support for broader cooperation in this respect.
D. Cooperation on the global scene
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Ministers shared the conviction that multilateralism is the most effective mode of international cooperation to address global issues, level the international playing field and contribute to common, sustainable and ambitious solutions to today’s challenges.
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Ministers recalled that at the summit in Abidjan, African and European leaders committed to boosting joint cooperation as equal partners on the global scene. In delivering on this commitment both sides agreed to work together to promote the crucial role of the rules-based global order with the UN at its core and to support effective multilateralism at a time when it is being particularly challenged.
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Ministers undertook to strengthen joint high-level policy dialogue to adopt a more coordinated approach and converging positions in international negotiations. They agreed to continue to implement and cooperate on priorities including the Paris Agreement on Climate Change, the Addis Ababa Action Agenda on financing development, the 2030 Agenda for Sustainable Development and its Sustainable Development Goals, and the AU Agenda 2063. A post-2020 Global Biodiversity Framework, ocean governance, implementation of the Iran nuclear deal (Joint Comprehensive Plan of Action – JCPOA) are, among others, examples of areas where cooperation can make a difference.
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Ministers in particular welcomed the adoption of the Paris Agreement work programme in Katowice in December 2018, and looked forward to jointly exploring ways to secure ambitious implementation of the Paris Agreement in all its aspects.
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Dialogue and working together on the global scene can also provide support to the multilateral trading system and the process of WTO reform, with benefits for both Africa and Europe. The AU and the EU should also work together to support the process of UN reform, including efforts on reform of the UN Security Council and the revitalisation of the work of the General Assembly. In parallel, the work on AU-EU-UN trilateral cooperation is a positive development, as illustrated by the Task Force on Libya.
E. Post-2020
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Ministers recalled the commitment made in Abidjan to promote an even stronger mutually beneficial partnership between the two Unions. They recalled that the AU Assembly of Heads of State at its extraordinary session, held in Addis Ababa on 18 November 2018, expressed its will to continue the AU-EU continent-to-continent partnership post-2020, backed by commitments on both sides and appropriate instruments and frameworks. While acknowledging the engagement of African states and regions in different cooperation frameworks and the need to preserve their interests, specificities, diversities and acquis, ministers confirmed that the AU and EU would continue to work towards enhancing the continent-to-continent partnership, post-2020, with a view to the next AU-EU Summit.
F. Closing
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Ministers expressed satisfaction regarding the expanding cooperation between the AU and the EU in all areas and agreed that this reflects the common interests of the two continents and the need to work together to achieve shared goals.
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The participants manifested their commitment to a closer and stronger partnership between the EU and the AU and also welcomed initiatives undertaken by Member States in that respect.
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The ministers commended the co-chairs for the organisation of this successful first annual ministerial meeting and looked forward to the second ministerial meeting, due to take place in Africa before the end of this year, as agreed in Abidjan, to report on implementation of Abidjan outcomes and review deliverables for the next AU-EU Summit envisaged in 2020.
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SMART borders for seamless Trade, Travel and Transport: International Customs Day 2019
Message from World Customs Organisation (WCO) Secretary-General Kunio Mikuriya, 25 January 2019
Traditionally, to mark International Customs Day (ICD) each year, the WCO Secretariat dedicates a theme that is pertinent to the challenges facing the global Customs community. The slogan chosen for 2019 is “SMART borders for seamless Trade, Travel and Transport.”
At a time when the number of passengers and the volume of freight crossing borders is expected to increase exponentially, and technology has transformed the economic landscape in which Customs is evolving, WCO Members are encouraged to look at how they can best ensure the swift and smooth cross-border movement of goods, people and means of transport.
Customs, working with other border agencies, plays a pivotal role in facilitating trade and travel, through simplified, standardized and harmonized border procedures, and in securing borders. It is, therefore, quintessential for Customs to take the lead in consolidating and further amplifying the ongoing efforts to ease the flow of goods and people across borders, thus turning globalization into a positive force. To that end, the WCO is committed to promoting the transformation of frontiers into “SMART borders,” with Customs acting as the central connecting and coordinating hub.
The concept of SMART borders also highlights Customs’ role in supporting the UN 2030 Agenda for Sustainable Development. By creating a level playing field for all stakeholders through simplified, standardized and harmonized procedures, it ensures timely delivery of raw materials to industry, reduces unfair competition in local communities, and opens up opportunities for marginalized communities to access new markets. It creates transparent and predictable conditions for trade, and facilitates legitimate business that will in turn contribute to economic growth and job opportunities.
By introducing the concept of SMART borders, we want to invite the Customs community to reflect on how Customs could reengineer business processes while applying new technologies, and work “smartly” to achieve an interconnected global value chain that fosters economic growth in an inclusive manner. The SMART borders concept is aimed at encouraging WCO Members to delve into the realm of technology in order to find solutions to facilitate the flow of people, goods and conveyances at borders, while following the guiding principles for SMART borders, namely: Secure, Measurable, Automated, Risk Management-based and Technology-driven.
The first letter of the acronym SMART, “Secure,” refers to our appeal to Customs to continue working with other border agencies as a means to strengthen mutual trust and transparency in our efforts to secure and facilitate legitimate trade. Cooperation should be at the heart of Customs’ rhetoric in favour of a fully integrated global value chain that is conducive to economic growth. The rapid and safe movement of people and goods across borders encourages trade, travel and transport, and Customs have the dual task of facilitating this flow while securing it by effectively combatting terrorism and other security threats at borders.
Alongside security, we are promoting a performance-based culture that rests on self-evaluation and objective measurement by exhorting Customs to ensure that elements of the trade flow and organizational performance are “Measurable”. Measuring performance is essential for well-conceived decisions that can be easily implemented and evaluated. Customs needs a tailor-made tool, based on a globally accepted benchmark that is independently verifiable. The WCO will initiate discussions to that effect in view of developing such a performance-measurement tool.
Being “SMART” invariably refers to the need for Customs to develop, use and implement solutions that are “Automated”. In the pursuit of a less cumbersome border environment where data is mined, shared and effectively analyzed, Customs should rely on automated processes and not neglect the importance of conducting further studies to analyze the impact of cyber security threats. The focus should also extend to emerging areas such as digital forensics and internet privacy.
Ensuring the easy flow of goods and people, strengthening supply chain integrity, and mitigating potential security threats are achievable through a “Risk Management-based” approach. However, Customs needs to be more dynamic in identifying potential risks and reducing reliance on physical inspection of consignments by conducting further studies on predictive analytics, profiling techniques, the use of biometrics, and other relevant areas. Such an approach facilitates legitimate trade, strengthens supply chain integrity, and mitigates potential security threats.
Last, but not least, “Technology” should be the main driver of the Customs agenda so that WCO Members are better equipped to respond to the new challenges and opportunities of the digital age. Customs should relentlessly pursue further studies and carry out further proof of concept exercises to explore the use of emerging technologies in order to stay in the lead. Previously emerging technologies such as Blockchain, 3D printing or cloud computing are now being put to good use and new ones are already emerging, such as the use of geo-spatial data, artificial intelligence, robotics, and drones.
Though the approach is new, the different aspects of securing borders, measuring performance, developing automated processes, focusing on risk management, and carrying out research on emerging technologies have been on the WCO’s agenda for a number of years, and many WCO tools, instruments and initiatives can readily assist Customs administrations in working “smartly.”
Such instruments and initiatives include the revised WCO International Convention on the Simplification and Harmonization of Customs Procedures, the WCO SAFE Framework of Standards to Secure and Facilitate Global Trade, the WCO Security Programme, the WCO SAFE Package 2018, the WCO Time Release Study (TRS), the WCO IT Guide for Executives, the WCO Guidance on the Use of ICT for TFA Implementation, the WCO Cross-Border E-Commerce Framework of Standards, and the WCO Digital Customs Suite, among others.
The WCO will also intensify capacity building activities, to ensure that Customs is prepared, equipped and adequately trained to face the challenges addressed in this message. It is imperative that Customs allocate resources to non-fiscal areas such as security and protection of society, which will in turn attract more trade and investment and thus generate economic prosperity.
Over the course of 2019, I invite all WCO Members to promote and share information on their efforts towards achieving “SMART borders” as well as highlight challenges faced and showcase projects that will inspire others. Such activities go a long way in bringing the global Customs community together, forging a spirit of partnership and cooperation, both of which are essential to achieving success in today’s international trading landscape.
On the part of the WCO Secretariat, we will continue to enhance the promotion of relevant tools, instruments and initiatives as well as support all WCO Members through capacity building and other related activities. Through these efforts, I am quite sure that we will achieve our many and varied goals.
Wishing you all a very joyful International Customs Day!