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tralac’s Daily News Selection
Today’s event listings:
Underway, in Cairo: African Civil Aviation Commission and preparatory technical committees (17-20 December), under the framework of the COMESA airspace integration project
Underway, in Addis: Day 1 of the experts meeting on industrialisation in Africa for a peer review of #AfricaDynamics2019 on Productive Transformation and Regional Integration. We look forward to working closely with different stakeholders from across the world.
Underway in Accra: The future of work in Sub-Saharan Africa. Selected highlights:
pdf Background paper (1.13 MB) . In this paper, we explore the challenges and opportunities of the Fourth Industrial Revolution for SSA as the region seeks to create jobs for its booming population, tackle the adverse effects of climate change, and face an external environment that may become less supportive. Our approach combines a look at history, economic modeling, empirical evidence, and scenario analysis. The paper’s chapters can be read together or selectively, with each chapter starting with a summary of the main findings. The next three chapters of the paper look separately at labor market developments in SSA over the last two decades (Chapter 1), the nature and potential impact on SSA of the Fourth Industrial Revolution (Chapter 2), and the possible effects of demographics and urbanization, climate change, and the future course of global economic integration on the region (Chapter 3). To explore the Fourth Industrial Revolution, Chapter 2 makes use of both a simple economic model and partial equilibrium analysis of exports’ vulnerability to automation. The final two chapters of the paper then seek to bring together these disparate, uncertain, but very real major changes (see Figure 1). Chapter 4 presents three realistic scenarios for SSA over the next two decades, which incorporate different possible technological, climate, and integration trends. Against this backdrop, Chapter 5 develops policy ideas for sub-Saharan Africa to generate the needed 20 million jobs per year in such uncertain times.
Extracts: There is an additional policy lever that sub-Saharan Africa has at its disposal in this model. That lever is overall productivity growth, which is influenced by many factors, including infrastructure, skill levels, and the institutional and regulatory framework. The model suggests that this lever is potentially strong enough to achieve convergence even if the impact of automation provides a headwind. How much overall productivity growth is needed? The rate of productivity gains realized between 2000 and 2014, 0.9% on average, would not be enough to close the gap with advanced economies (historic productivity growth in Figure 12). However, pushing ahead with trade integration and efficiency gains from reduced misallocation of factors of production could boost convergence and reduce the gap in productivity between sub-Saharan Africa and advanced economies by half in two decades, from a factor of 1 to 15 to a factor of 1 to 7 (potential productivity growth in Figure 12). In this scenario, sub-Saharan Africa would bring its income position relative to the United States to a level that would be slightly ahead of where India currently is.
The numbers: Assessing the impact of the Fourth Industrial Revolution on exports from Sub-Saharan Africa. We construct two indices to gauge the vulnerability of SSA’s exports to automation in advanced economies. The indices are based on different measures of the automatability of occupations that have been suggested in the literature by Frey and Osborne (2017) and Brynjolfsson, Mitchell, and Rock (2018). These indices are mapped to industries, and then to export goods to ascertain how vulnerable an export sector is to automation. The two resulting export vulnerability indices provide starkly different results. Whereas the Frey and Osborne–based index suggests that SSA’s exports, and those of low-income and developing countries in general, are relatively more vulnerable to automation than exports of more developed countries (Figure 13), the Brynjolfsson, Mitchell, and Rock–based export vulnerability index shows the opposite (Figure 14). The contrasting findings reflect the different underlying assumptions on how technology impacts jobs.
Future drivers of growth in Rwanda: innovation, integration, agglomeration, and competition (World Bank)
The report identifies four essential drivers of growth - innovation, integration, agglomeration, and competition - and reforms in six priority areas: human capital development, export dynamism and regional integration, well-managed urbanization, competitive domestic enterprises, agricultural modernization, and capable and accountable public institutions. [ pdf Download the Overview (1.74 MB) ] [East Africa: Regional Private Sector Association highlights priority areas to drive trade]
Dangote’s Mansur Ahmed leads African Manufacturers (ThisDay)
The African Union Trade Commissioner has appointed the executive director of Dangote Group and chairman of Manufacturers Association of Nigeria, Mr Mansur Mohammed Ahmed, as the interim Chairman of the African Manufacturers Association. This appointment was announced on the sidelines of the on-going Intra-African Trade Fair in Cairo by Mr Muchanga, an AU Commissioner. [Meet Africa’s Industrialist of the Year: Quinton Uren]
Africa will still move forward if Nigeria does not sign AfCFTA – OBJ (Signal)
Former President Olusegun Obasanjo says it is absurd that Nigeria, Africa’s largest economy, has not signed the AfCFTA. He said Africa will still move on, with or without Nigeria. Obasanjo is the chairman of the Advisory Council of the Intra Africa Trade Fair. On Sunday, Obasanjo spoke in a session at the maiden IATF in Cairo with delegates, exhibitors and the media. When asked what needs to be done to get Africa’s biggest economy to join the AfCFTA, Obasanjo said that the final negotiation was led by Nigeria, taken to the Nigerian executive council and passed, but at the point of signing: “Nigeria one way or the other developed cold feet. I cannot understand it. I have said better late than never. I sincerely hope and pray that Nigeria will be at the table before AfCFTA comes into effect.”
He said it would be a “bad thing” for Nigeria to be absent from the agreement. He, however, said that with or without Nigeria, Africa will cope. “I went around the pavilions, and Nigeria’s pavilion was fantastic and large with SMEs and government. But how can you be talking about Intra Africa trade when you are not a part of the Africa Continental Trade Agreement? It is absurd. I will say that maybe the signs are getting clearer to the present government of Nigeria that you cannot absent yourself from what is the way for the rest of Africa. And don’t forget we started this from 1963, and in all other things Nigeria has been in the forefront – Lagos Plan of Action, NEPAD, ECOWAS, and everything. So, what has gone wrong?” [Obasanjo, in appearance at Intra-African Trade Fair, urges quick ratification of AfCFTA]
WTO reforms may go against the interest of Africa (New Times)
On behalf of the African Group, South African envoy to WTO, Xavier Carim, told Sunday Times that they have seen proposals from EU, Canada and a group of other countries, as well as US, Japan and EU. “When we look at these proposals, we see them as making the imbalance that we have even worse. They should make it difficult for developing countries to advance,” he said. South Africa is currently coordinating the African Group at WTO. Last year, Rwanda was coordinating the African Group. Carim cited that the proposed reforms seem not to address the issues that are critical to African countries in the WTO – correcting distortions in agricultural trade, public stockholding programmes that African countries want to implement, and improvements to existing agreements that would allow Africa more policy space to industrialise. “All of the things which we have been pushing for a long time are not expecting advances. Our efforts on them have been frustrated.” [tralac October Newsletter: pdf The Multilateral Trading System – quo vadis? (1.10 MB) ] [Peter Fabricius: Should Africa back World Trade Organisation reforms?]
Namibia’s Q3 trade statistics (pdf, Namibia Statistics Agency)
The overall export and import values for q3-2018 were estimated at N$24.313bn and N$27.628bn respectively. The trade balance (exports minus imports) for q3-2018 amounted to a deficit of N$3.315b compared to deficits of N$8.369bn recorded in q3-2017 and N$1.120bn observed in q2-2018 (Chart 1). Y-on-Y, the merchandize trade balance showed a remarkable improvement of 60%. The improvement was mainly driven by exports which strengthened by 56% over the course of the year outweighing imports that grew by 16%. On contrary, q-on-q trade deficit deteriorated by 196% as the country import bill increased (Chart 1) from q2-2018 to q3-2018. During q3-2018, Namibia’s top five export destinations were China, South Africa, Botswana, Marshall Islands and Belgium. Together, these countries made up 69% of the value of all exported goods, with China lodging on top of the list as the largest export destination, accounting for 23% of the total exports. South Africa ranked second with 17%, followed by Botswana with 11% of total exports. Marshall Islands and Belgium each absorbed 9% of Namibia’s total exports. [See: Trade with Export Processing Zone (p10), Trade by economic regions (p13), Trade by mode of transport (p15)]
Anzetse Were: African ‘agency’ crucial as foreigners court continent (Business Daily)
Thirdly, because there are so many different types of actors with agency in Africa, there can be disagreement within Africa as to whose agency is best for the continent. Further, because there are so many centres of agency, their interests can be pitted against each other. For example, African governments can disagree with each other and exercise their agency in manners that undercut each other, and the agency of certain elements of private sector may not align with the interests of government, for example. Thus, it is crucial that different African actors understand the importance of being clear as to what their priorities are and expect resistance for other African actors. This is not to say there are no key issues on which some consensus can be found but the effort to create this has to be deliberate as it will likely not emerge organically.
Angola looks beyond China for aid and investment (Nikkei Asian Review)
Angola aims to reduce its heavy dependence on Chinese capital and diversify its sources of funding, the country’s energy minister said in a recent interview in Tokyo with Nikkei. Joao Baptista Borges, Angola’s minister of energy and water, said the country plans to “receive loans from other countries,” in order to cut back on credit from China, which holds nearly 70% of its external debt. The southwest African country wants to attract more investment and loans from Japan, Europe and the U.S., based on a new private investment law enacted in June, Borges said.
An interview with Ambassador Herman Cohen: US-Nigeria relations under the Trump administration, Nigeria’s low power generation, the 2019 elections (Nigerian Voice)
Q: How has the Corporate Council of Africa of which you are the founding member fared in cementing business relationship between the US and Africa? A: CCA is doing a lot of good work especially, in support of the African Growth and Opportunity Act (AGOA), which gives African manufactures an advantage in sales to the US. There is still a lot of work to be done in attracting US capital to invest in production facilities in Africa aiming for the US market. The internal environments for private investors in Africa need to be improved, especially for local African entrepreneurs. Often, African investors are seen as enemies of the power elites, rather than as partners. I will say that Nigeria has one of the best investment environments in Africa, but it is not focusing sufficiently on exports.
Today’s Quick Links: Côte d’Ivoire to invest $796m in ECOWAS biometric cards Graça Machel: Realising the promise of the demographic dividend IATF 2018: African leaders urged to recommit to boosting continent’s agriculture sector; ECA hosts trade finance for female entrepreneurs workshop UPU selects first countries to benefit from new financial inclusion programme (including Benin, Côte d’Ivoire, Ghana, Rwanda) The AfDB posts an EOI for fisheries consultant to review and analyze national and regional blue economy investments in Africa Trade and regional integration in the Arab States: conference documentation |
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Looking ahead to chart today’s course: The future of work in sub-Saharan Africa
Opening Remarks by Christine Lagarde, Managing Director of the International Monetary Fund, at The Future of Work in sub-Saharan Africa conference in Accra, Ghana
Your excellency, Vice-President Bawumia, Minister Gyan-Baffour, honored guests – it is my pleasure to welcome you to our conference on the Future of Work in sub-Saharan Africa.
Why are we discussing the future of work? You might argue that policymakers face enough challenges just thinking about today’s jobs. But sometimes you need to step into the future, look back from there at the present, and gain a new perspective on how to tackle both today’s and tomorrow’s challenges.
In the words of the African proverb, “The eye crosses the river before the body.” So, let us look into the future, decide where we want to go, and then chart the right course to get there.
In my remarks this morning, I will first look at the forces that will shape the future of work in sub-Saharan Africa.
Next, I would like to introduce three different scenarios of how these forces might impact the economic prosperity of the region.
Finally, I will suggest some policy areas that governments can pursue to create an environment for inclusive growth and job creation moving forward. I hope these ideas spark your thinking during this conference.
I. A Quick Look Back
But before we get to the future, let us take a quick look back.
Sub-Saharan Africa has seen relatively robust growth for almost two decades. The region has created almost 9 million jobs per year since 2000, on par with the rise in the labor force. The share of the population living in extreme poverty decreased from 59 percent in 1993 to 41 percent in 2015.
Ghana has done particularly well – in fact it is one of only 9 sub-Saharan African countries that met the Millennium Development Goal of halving extreme poverty.
At the same time, most of the new jobs throughout the region are in agriculture and traditional services. Far too few have been in better-paying manufacturing jobs and modern services.
II. Global and Regional Forces Shaping the Future
So, how can we ensure that the coming decades will generate strong economic growth? We can start by looking at the major forces shaping this region’s destiny.
The first is demographics.
Sub-Saharan Africa’s population is expected to increase from about 1 billion today to 1.7 billion by 2040. The labor force will increase at double the rate of the last decade. As a result, sub-Saharan Africa needs to create 20 million jobs per year to keep up with its growing labor force.
If successful, this region could enjoy a prolonged period of high growth – the so-called demographic dividend.
The second force is technology.
We know that advances in machine learning, artificial intelligence, and robotics are poised to dramatically transform the job market. In fact, in many places this process is well underway.
Some argue that this new industrial revolution will prove no different from previous ones. Technology will improve living standards over the long run. New jobs will emerge to replace old ones.
Others fear that automation will replace humans in a variety of tasks, leading to job losses and rising inequality. I confess that I myself am more of a techno-optimist than a techno-pessimist. I believe we can run with the machines, not against them. But we will need strong policy action. There is little doubt that the transition will be challenging for those who do not stay ahead of the curve.
And this brings me to the final major force that will shape the region – climate change.
IMF research shows that climate change is expected to hit low-income countries the hardest: a 1-degree Celsius rise in temperature could cause low-income countries to experience a 1.5 percent fall in GDP on average.
This means that right here in Ghana, without mitigating measures, rising temperatures and changing humidity levels may threaten cocoa production. This would undermine Ghana’s export base and the livelihood of tens of thousands of farmers.
III. Three Possible Futures
Making policy decisions in the face of such highly uncertain trends is challenging.
One way to approach the problem is by imagining different futures, and then looking back from these futures to think through today’s challenges. That is what our most recent African Regional Outlook report does.
We at the IMF have developed three scenarios, sketching different paths for the future of work in sub-Saharan Africa. Think of these as alternative versions of the future that could happen, depending on how policymakers tackle the forces of demographics, technology, and climate change.
The first scenario is called Africa Adrift.
This is a world in which automation leads to reshoring of manufacturing to advanced economies which means that the traditional manufacturing export-led growth model will be unviable. Large investments in infrastructure that promotes manufacturing exports are wasted.
This leaves African countries indebted and ill-positioned to take advantage of the new opportunities in the digital economy. With limited resources, governments fail to make the necessary investments in connectivity and education.
The second scenario is called Africa for Africa.
This is a world where trade tensions increase and inward-looking policies become more common place in many parts of the world. These changes are fueled by technology radically displacing workers and increasing income inequality.
African leaders respond to the challenging external environment by taking decisive action to boost regional trade, which in turn helps cushion the negative effects for the region’s citizens.
In fact, we are already seeing some evidence of this scenario today, including the recent signing of the Continental Free Trade Agreement. The new agreement is a positive first step towards creating an integrated pan-African market.
The final scenario is Africa Arisen.
This is a world in which technology increases productivity for all, and global economic cooperation leads to decisive action to mitigate the adverse effects of climate change.
Sub-Saharan Africa successfully harnesses new technologies and creates an emerging vibrant middle class.
Again, we see some elements from this scenario in sub-Saharan Africa today.
Right here in Ghana is Farmerline, an innovative agro-tech company. They use cellphones to provide up to the minute information to farmers across all steps of the value chain, including weather forecasts, market prices, and help with financial services.
These innovations can improve productivity, reduce the power of middlemen, and enable farmers to gain a larger share of the market value.
Technology is also helping to revolutionize sectors like healthcare. Zipline in Rwanda uses drones to deliver blood and medical supplies to remote health facilities in a timely manner.
And, of course, we have seen the power of fintech to accelerate financial inclusion. Just think of m-pesa in Kenya and how widely used it was before services like Apple Pay became common in the west.
IV. Policies for Today and Tomorrow
So, these are just three of many possible futures. They provide a snapshot of how today’s uncertain forces can shape sub-Saharan Africa’s future. They give us a vantage point to explore how our policy choices can influence tomorrow. Allow me to highlight just two of these policy areas briefly – education and digital connectivity.
In the Africa Arisen scenario, the region succeeds in harnessing the benefits from new technologies. To get there we will need a well-trained labor force with the right skills.
Here, I am reminded of the words of one of Ghana and Africa’s greatest sons, the late Kofi Annan:
“Knowledge is power. Information is liberating. Education is the premise of progress, in every society, in every family.”
Despite successes in primary education, sub-Saharan Africa lags behind in secondary education. The share of children in the region who attend secondary school is just 30 percent, the lowest in the world.
And simply increasing enrollment is unlikely to be enough. We need to promote digital literacy and identify the skills that will allow the next generation to work with and take advantage of technology rather than be replaced by it.
One example comes from right here in Ghana. The government recently introduced the ambitious free Senior High School program. This program can play a pivotal role in improving educational outcomes if implemented in a sustainable way.
A second area to focus on is digital infrastructure.
Knowledge and information are the new resources of the future. Digital access fosters innovation in all sectors of the economy.
Africa has made progress bypassing landlines and leapfrogging directly to mobile phones. At the same time, only 20 percent of the population has internet access, less than half the world average. Broadband services often remain prohibitively expensive.
Traditional infrastructure remains essential to connect the farm and factory gates with global trade routes. But digital infrastructure is just as essential for the traditional sectors and even more so for the new opportunities created in the digital economy.
We know there is a critical financing need to develop physical, digital, and social infrastructure. Our research has shown that there is potential to raise 3 to 5 percent of GDP in domestic revenues by improving the efficiency of the tax system and through institutional reforms. The IMF can help to achieve this potential through technical assistance, including by helping governments leveraging technology.
We are already starting. Recently we hosted hackathons in Senegal, Uganda, and Côte d’Ivoire. These creative brainstorming sessions which brought together programmers and other experts produced fascinating ideas on how to use technology to boost tax collection and improve efficiency.
Conclusion
So, where does this leave us? With a lot of work to do, but also a lot of hope. My remarks today are just the starting point.
There are of course many other important policy areas to cover: from promoting intra-regional trade to fostering smart urbanization so cities become incubators of innovation to expanding social safety nets. I look forward to the discussions during the day on these issues.
The core question we face is difficult and does not have a single answer:
What can policy-makers do today to provide an environment in which tomorrow’s high-quality jobs are created and workers are being equipped to benefit from these jobs?
If we think about the future, we can find the solutions.
Thank you.
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Former Nigerian President Obasanjo, in appearance at Intra-African Trade Fair, urges quick ratification of AfCFTA
Former Nigerian President Olusegun Obasanjo yesterday in Cairo urged all African countries to ensure the quick ratification of the African Continental Free Trade Agreement (AfCFTA) and to implement policies that facilitate and support intra-African trade.
Chief Obasanjo, who is also the Chairman of the Advisory Council of the Intra-African Trade Fair (IATF 2018), was speaking in a conversation session on the sixth day of the trade fair, which is organised by the African Export-Import Bank (Afreximbank), in collaboration with the African Union Commission (AUC), and hosted by the Government of Egypt.
He described the AfCFTA as an instrument of tremendous transformation which would change the structure of Africa and said that the IATF would help towards the achievement of its ratification.
With the AfCFTA, Africa would be saying that it no longer accepted the structure given by its colonisers, he said. “One of the things I hope we will be able to get as quickly as possible is availability of visas-on-arrival or a common visa for a number of countries. It hurts that those who want to trade within Africa need to have so many visas.”
He also highlighted the challenge posed by differing trade regulations in different African countries, noting, “When you want to import or export, there are many different regulations from country to country, and we need to get away from that. What we are doing now will help us get away from that as soon as possible.
Chief Obasanjo described 2018 as one of the most significant years for Africa with the signing of the AfCFTA in Kigali in March and the inauguration of the first IATF’. He argued that it was time to move beyond rhetoric and take concrete actions to tackle the challenges impeding intra-African trade.
He rejected the notion that Africa lacked the resources to finance its development, saying, “I believe the resources are here in Africa. It’s a matter of how Africa accesses the available financial resources. Money is cowardly – it only goes where it feels safe and wanted.”
Chief Obasanjo commended Afreximbank for its effectiveness in moving forward the intra-African trade agenda and attributed that success to the culture of continuity in the Bank where all the past Presidents have continued to work with and support the current President in pursuit of the development of intra-African trade.
He expressed regret that Nigeria had yet to ratify the AfCFTA, even though the final negotiations for the agreement were led by Nigeria and the final agreement was taken to the country’s executive council and it was passed.
“It is my sincere wish that Nigeria will be at the table before the AfCFTA comes into effect,” he said. “I went around the (IATF) pavilions and the Nigerian pavilion was large. How can you be talking about the IATF when you are not part of the AfCFTA? You cannot absent yourself from what is the way for the rest of Africa”.
Chief Obasanjo also touched on the need to address the global perception of Africa, arguing that the only way to change it was to lift the standard of living of every African. According to him, this is not possible if we choose to swim alone.
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ECA hosts Trade Finance for Female Entrepreneurs workshop at IATF 2018
Female entrepreneurs around the globe typically face greater barriers to accessing trade finance than their male counterparts, more so in the developing world where cultural norms continue to affect their desire to do well in their chosen careers.
The World Bank Women, Business and the Law database shows that in all regions, a significant proportion of countries do not prohibit discrimination based on gender or marital status in access to credit.
In a bid to find help find solutions to this problem, the Economic Commission for Africa (ECA), through the African Trade Policy Centre (ATPC), organized a workshop to discuss trade finance for female entrepreneurs at the Intra-African Trade Fair (IATF) in Cairo, Egypt.
Participants and panelists discussed how trade and gender interact through the ability of entrepreneurs to access financial services, and what governments, the private sector and development community can do to help promote gender-inclusive trade financing.
ATPC Coordinator, David Luke, in his opening remarks highlighted that Africa was one of the regions with the highest number of female entrepreneurs but that was not matched with the financial support they get from financial institutions.
Implicit discrimination by national financial systems due to cultural norms, he said, can exacerbate the gender-divide in access to credit.
“We need to ensure affordable access to finance for female entrepreneurs. It is crucial to helping women-owned businesses to scale-up, invest in new production processes, improve their competitiveness and access world markers, among many other positives,” said Mr. Luke.
Citing the MasterCard Index of Women Entrepreneurs 2018, he mentioned that the percentage of female established business ownership in Africa, excluding North Africa, increased from 8 percent in 2014 to 10.7 percent in 2016. This percentage is higher than all other regions apart from East and South Asia and the Pacific.
Yet in Africa, he said, most of the female entrepreneurs operate in the informal sector.
“Another big challenge faced by women entrepreneurs is limited access to finance due to gender disparities, exclusion, discriminatory practices prevailing unfortunately in many countries. As a result, discontinuity in women-owned businesses is a common occurrence in many parts of the continent,” Mr. Luke added.
Gwen Mwaba, Director Trade Finance, Afrexim Bank, concurred with Mr. Luke’s sentiments on the significant contribution of women to economic activities in Africa, in addition to their family responsibilities.
“The success of female entrepreneurs will depend largely on the availability of financial services and products tailored towards their needs,” she said, adding providing an environment for women to mentor other women and girls was crucial.
Ms. Mwaba noted that women owned-businesses were mainly in the Small and Medium Enterprises (SMEs) sector which in general faces severe constraints to access finance. She said Afreximbank was taking deliberate steps to address this issue through lines of credits provided through commercial banks.
The efforts are complemented by greater collaboration between Afreximbank and other banks such as the African Development Bank, the Asian Development Bank and the International Finance Corporation to synergize initiatives that aim to close financial gaps across the developing world.
Ms. Mwaba added that Afreximbank has also started a project to develop a platform for transactions - cross-border payments - in local currencies that will facilitate regional trade and remove pressures that often come from transiting through international currencies for traders.
Ghana’s wealthiest business woman, Patricia Poku-Diaby, CEO of Plot Enterprise, shared with participants her experience as a cocoa processor in trying to access trade finance and how she made it to the top.
Her company specializes in cocoa processing into value-added products such as cocoa liquor and cocoa butter. Ms. Poku-Diaby said limited access to finance was a big issue for businesses across Africa.
For example, her company has worked diligently to obtain ISO 22000 certification, which is a comprehensive and internationally recognized standard for management systems dealing with food safety, yet access to trade finance remains a serious impediment for her businesses.
“It has not been easy. It still is not easy, especially as we operate in a sector that is mainly controlled by multinational corporations which enjoy much lower financing costs in international markets,” she said.
Ms. Poku-Diaby also highlighted the volatile nature of cocoa bean prices as an additional challenge for cocoa processing businesses, especially African ones that have no easy access to commodity price risk management instruments such as forward contracts.
She praised Afreximbank for backing her when most would not.
Tesfai Abeba, Director Women Economic Empowerment and Marketing at Ethiopia’s Enat Bank, shared her bank’s efforts in trying to empower women entrepreneurs in her country. Of Ethiopia’s 137 000 micro small and medium enterprises, 37 000 were owned by women.
Key challenges facing women entrepreneurs in Ethiopia include legal and regulatory barriers, access to finance, gender bias resulting from cultural norms and skills gaps.
“Enat Bank has deployed efforts to address some of these issues. We have created a department fully dedicated to women businesses with products including collateral free loans and services tailored to their needs,” said Ms. Abeba.
The Bank has also provided loans for non-financial services such financial literacy programmes; creation of network for women; and other capacity building activities for women. Women are well represented at levels within the bank structure from top management to clerical positions.
Rini Satriani, Head of Research, Indonesia EximBank, shared the experience of inclusive financing for female entrepreneurs in Indonesia where women represent about half of the country’s total population.
She said there was a declining trend in disparity between women and men in her country with the former increasingly taking leading roles in government and senior managerial positions in the private sector.
But, she noted, the majority of female entrepreneurs in the country were still entrenched in “handmade” businesses largely in the informal sector.
“This makes it very difficult for women entrepreneurs to easily get access to loans from financial institutions,” she said, adding challenges around accessibility to markets and availability of inputs including raw materials remained impediments to women entrepreneurs in Indonesia.
As potential solutions, Ms. Satriani said governments need to initiate programmes jointly with the private sector to facilitate women’s access to finance. Financial institutions, she said, should develop products and services tailored to women entrepreneurs while building their capacity in various aspects of entrepreneurship.
There was consensus between the panelists and delegates that empowering women remains key for Africa’s prosperity and that addressing the challenges women entrepreneurs face requires, among others, the need to promote mutual support among women through establishment of networks, developing financial products tailored towards women’s needs; building capacity of women in all aspects of entrepreneurships; and providing priority support to businesses employing more women.
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tralac’s Daily News Selection
Ahead of Monday’s IMF conference, The future of work in sub-Saharan Africa, in Accra, Ghana: a podcast with Axel Schimmelpfennig
AfCFTA updates from this past week’s AMOT ministerial:
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African trade ministers issue ‘Cairo Package’. Egypt’s Minister of Trade and Industry Amr Nassar said that the meetings of the 14th Negotiations Forum for the AfCFTA, the 7th Senior Officials’ Meeting, and the meeting of African Trade Ministers all witnessed a positive atmosphere. Nassar clarified that the meetings resulted in a consensus on a large number of outstanding topics, especially regarding mechanisms of trade liberalization in the African continent and opening African markets to the exports of member states. The results of the meetings were all included in an integration package under the name of “Cairo Package”. Nassar referred that these were the first African negotiations on the liberalization of trade in services, where liberalization is set to be implemented on five priority sectors, including tourism, transport, telecommunications, financial services and business services. Nassar pointed out that the negotiations on the liberalization of trade in services are very important for Egyptian service sectors, which are more advanced than those in the countries of the continent, especially the banking, telecommunications and information technology sectors. Nassar said that a joint ministerial declaration was adopted, urging African countries to prepare a common vision to activate the role of the WTO in supporting African countries to ensure that African countries affirm their entitlement to integration into the international trading system. [Related: Egypt’s plan for Africa]
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Francis Mangeni: Fast-tracking implementation of the African Free Trade Area. It has been agreed that 7% of product lines will be sensitive products, with much longer transition periods, and 3% will be totally excluded from the AfCFTA. These products should not exceed 10% of the values of imported products. The very good news though is that the 90% of product lines will be subject to straightforward linear reductions over the transition periods, namely, 5 years for developing countries, 10 to 13 years for least developed countries and possibly 15 years for a small group other countries. An immediate step is to produce the tariff reduction schedules according to these transition periods. The reductions can then start in 2019 when the Continental FTA Agreement enters force. In conclusion then, remarkable progress has been made towards ratification of the African Free Trade Area, which should enter into force next year 2019. As the priority shifts towards fast tracking its implementation, capacity building including targeted practical training of users in the public and private sectors, and building on existing regional free trade areas will assist the process. [Dr Mangeni is Director of Trade and Customs at the COMESA Secretariat] [Related: WTO lists benefits of AfCFTA for Nigeria, others; Paul Kagame: Regional integration is about give and take, not just taking]
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@mihretum (Chief Trade Negotiator, Office of the Prime Minister, Ethiopia). “The progress is real and the vision of an integrated Africa is close to becoming a reality. AfCFTA can be as weak or strong as its members wants it to be. Ethiopia will play a progressive and constructive role befitting its unrivaled history of championing African causes.”
Future of Africa e-commerce looks bright as Nairobi event ends (UNCTAD)
Africa’s next steps on the path to engaging in and benefitting from e-commerce were outlined on 14 December by UNCTAD in its Nairobi Manifesto on the Digital Economy and Inclusive Development in Africa, issued at the conclusion of the first Africa eCommerce Week in Nairobi, Kenya. “The digital economy, including e-commerce, is proliferating in Africa, creating new opportunities for entrepreneurs and businesses to expand their market access and join value chains,” the manifesto states. “Jobs are being created and new business models are emerging.” [Download: pdf Nairobi Manifesto on the Digital Economy and Inclusive Development in Africa (340 KB) ]
Africa’s rising debt (GEG Africa)
The Trump Administration’s New Africa Strategy:
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Remarks by National Security Advisor Ambassador John Bolton. Under our new Africa strategy, we will target US funding toward key countries and particular strategic objectives. All US aid on the continent will advance US interests, and help African nations move toward self-reliance. Our first priority, enhancing US economic ties with the region, is not only essential to improving opportunities for American workers and businesses; it is also vital to safeguarding the economic independence of African states and protecting US national security interests. Great power competitors, namely China and Russia, are rapidly expanding their financial and political influence across Africa. They are deliberately and aggressively targeting their investments in the region to gain a competitive advantage over the United States.
Here are some of the specific, bold actions we will take under our new strategy to address the three priority areas I have just highlighted. To expand our economic relationships in the region, we are developing a new initiative called “Prosper Africa,” which will support US investment across the continent, grow Africa’s middle class, and improve the overall business climate in the region. In addition, we will encourage African leaders to choose high-quality, transparent, inclusive, and sustainable foreign investment projects, including those from the United States. We will leverage our expanded and modernized development tools to support access to financing and provide strong alternatives to external state-directed initiatives.
In the coming years and months, we also intend to pursue modern, comprehensive trade agreements on the continent that ensure fair and reciprocal exchange between the United States and the nations of Africa. We will begin these negotiations on a bilateral basis, and focus on creating mutually beneficial partnerships. Our new economic initiatives in Africa will help support American jobs and expand market access for US exports, while promoting sustainable growth in African countries. We will focus our economic efforts on African governments that act with us as strategic partners, and, which are striving toward improved governance and transparent business practices.
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A response by @CohenOnAfrica. “Most important point in John Bolton’s statement on US-Africa policy: US wants equal trade benefits. This marks the beginning of the end of AGOA in its current form, which gives Africa the right to export duty-free to the US while maintaining tariff barriers against US exports.”
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Bloomberg Africa: America’s moment of truth in Africa – it’s losing out to China
East African bloc agrees to make trade cheaper, faster and simpler (UNCTAD)
Burundi, Kenya, Rwanda, the United Republic of Tanzania, and Uganda agreed on 13 December to make trade between them and with other countries cheaper, faster and more straightforward in a significant boost for economic integration in East Africa and continental trade facilitation. Meeting in Nairobi, representatives of the nations – who are members of the EAC customs union and common market – said they would implement trade facilitation reforms including reducing “non-tariff barriers” such as burdensome and incompatible product regulations. UNCTAD Secretary-General Mukhisa Kituyi – a Kenyan former trade minister – moderated the ministerial meeting, which took place in parallel with the first UNCTAD Africa eCommerce Week taking place in Nairobi from 10-14 December. Meanwhile, UNCTAD and TMEA also renewed their cooperation agreement for 2019-2021. They decided to continue to work on trade facilitation, trade portals, enquiry points, trade and gender issues, and to explore working in other fields such as transport.
Regional value chains in North Africa: a new ECA analysis
The report studies opportunities and challenges (pdf) related to the creation of regional value chains in 10 sectors selected in accordance with their importance for the sub-region’s economies and their potential for development. These sectors include: aeronautics, the car industry, textiles and clothing, phosphates, oil and natural gas, renewable energies, fruits, vegetables and derived products, essential oils and derived products, fisheries and finally cereals and sugar. “North Africa is currently among the least integrated sub-regions on the continent. This situation does not reflect how close North African countries are on the geographic, cultural and linguistic levels,” said Lilia Hachem Naas, Director of the ECA Office for North Africa.
Ethiopia: Task force emerges to revamp tax regime (Addis Fortune)
The task force started operations two weeks ago and is studying and reviewing prior assessments and studies prepared for the taxation system in Ethiopia. The new body is tasked to reform the tax system in the country and will focus on revising investment incentives. Led by Eyob Tekalign, state minister of finance in charge of budget, the task force was formed with the recommendation of the macroeconomic committee, chaired by Prime Minister Abiy Ahmed. It has been a long-standing issue but has been pushed to the front with the goal of increasing domestic revenue mobilisation,” said a source close to the case. In the current fiscal year, the Ministry of Revenues plans to cover 68% of the total budget of the nation, 346.9 billion Br, from tax revenue, of which 213.9 billion Br is expected to be generated from domestic tax revenue sources. The plan, despite the performance history of the Ministry in the past fiscal year that fell 50 billion Br short of the targeted tax revenues, is one-third of the target.
Nigeria: Merchandise trade rose significantly in Q3, 2018 (Proshare)
Nigeria’s external trade totaled N9,025.97bn during the third quarter of 2018. Compared to the value of N6,903.7bn recorded against the second quarter, a rise of N 2,122.28bn, or 30.7%, was indicated. The total export component recorded N4,853.6bn, representing an increase of 7.8% over Q2, 2018 - and 35.7% over Q3, 2017. The import component stood at N4,172.3bn in Q3,2018 showing 73.8 % higher than Q2,2018. This was due to importation of submersible drilling platforms in August. Nigeria consumed goods mainly from China, Netherlands, Belgium, and United States which, respectively, accounted for N591.4bn (14.17%), N483.2bn (11.58%), N291.7bn (6.99%) and N224.2bn (5.37%). China moved from its position as the top importing partner for Nigeria during this quarter because of the submersible drilling platform imported from South Korea. Import trade from African countries stood at N138.7bn, or 3.3%, while imports from ECOWAS amounted to N16.9bn. However, within Africa, Nigeria exported goods valued at N341.1bn to ECOWAS member states - which represents 47.69 % of the total export trade to Africa. [CBN’s Emefiele outlines policy thrust for 2019; woos foreign investors]
2018 Asia-Pacific Trade and Investment Report: Easing US-China trade tensions could save millions of jobs (UN)
The 2018 Asia-Pacific Trade and Investment Report, issued by ESCAP, suggests that an escalating “tariff war” and resulting drop in confidence next year, could cut nearly $400bn from the global gross domestic product, drive regional GDP down by $117bn. The report also noted trade tensions have already had had a major impact, resulting in disruptions to existing supply chains and dampening investment. Trade growth slowed after the first half of 2018, and FDI flows to the region are also expected to continue on a downward trend next year, following a 4% drop overall this year.
Keeping track of global trade in real time (pdf, OECD)
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Future of Africa e-commerce looks bright as Nairobi event ends
First Africa eCommerce Week closes with UNCTAD issuing the Nairobi Manifesto on the Digital Economy and Inclusive Development in Africa.
Africa’s next steps on the path to engaging in and benefitting from e-commerce were outlined on 14 December by UNCTAD in its Nairobi Manifesto on the Digital Economy and Inclusive Development in Africa, issued at the conclusion of the first Africa eCommerce Week in Nairobi, Kenya.
“The digital economy, including e-commerce, is proliferating in Africa, creating new opportunities for entrepreneurs and businesses to expand their market access and join value chains,” the manifesto states. “Jobs are being created and new business models are emerging.”
“At the same time, the evolving landscape is creating new risks and challenges,” it adds. “The development gains from e-commerce are not automatic, and the increased use of digital technologies can result in new divides and wider income inequalities.”
With its focus on the inclusive social and economic benefits to be made from new forms of trade, the Nairobi Manifesto charts a course for African countries with policy recommendations in nine critical areas:
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E-commerce readiness assessment and strategy formulation
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Information and telecommunications technology infrastructure and services
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Payment solutions
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Trade logistics: transport and trade facilitation
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Legal and regulatory frameworks
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E-commerce skills development
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Access to financing
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E-commerce and women’s empowerment
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Measuring e-commerce and the digital economy
UNCTAD’s Africa eCommerce Week, co-organized with the African Union and the European Union, comprised more than 60 sessions convened to examine ways of enhancing the readiness of African countries to trade online and digitize their economies.
“Partner governments are now moving in the right direction, in step with what private actors and civil society put forward, but also producing rigorous regulatory frameworks,” UNCTAD Deputy-Secretary General Isabelle Durant said at the close of the five-day event.
“In organizing this event, we have decided to put ourselves on the dynamic side of history by considering the risks of the digital world but also by addressing them,” she said.
Christian Minoungou, senior policy officer in the Department of Infrastructure and Energy of the African Union Commission, said the AU was proud to be part of Africa eCommerce Week and would continue its work to promote the digital economy and foster development in Africa.
“This type of event will really help raise awareness of some of the key policy issues,” Alessandro Tonoli, trade adviser for the EU Delegation to Kenya, said. “A dialogue between stakeholders is essential if we want to achieve any meaningful result. I took part in the panel on women’s empowerment, and it was the most exciting I have ever participated in.”
Peter Njoroge of Kenya’s ministry of industry, trade and cooperatives said: “This forum has been a major milestone event, especially for Kenya. The forum has been informative, and many ideas on e-commerce and the digital economy have been shared.”
More than 2,000 people from 60 countries took part, including Kenyan President Uhuru Kenyatta, Andrus Ansip, European Commissioner for the Digital Single Market, heads of international organizations, more than 800 government officials, more than 700 business leaders and representatives of the private sector, and more than 250 members of civil society, youth and academia.
The winners of the E-commerce Mobile Application Africa Award for young university students in Africa were also announced during the closing events. They were:
1st: Iwanga (Mauritania) – voice recognition for e-commerce
2nd: E-ConnectAgri (Senegal) – online agriculture market
3rd: TaxiBokko (Cameroon) – taxi-sharing app in Wolof
Hosted by the Government of Kenya at the United Nations Office in Nairobi and financially supported by the European Union and Germany, Africa eCommerce Week was held in collaboration with partners of the eTrade for all initiative.
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African trade ministers issue ‘Cairo package’
Egypt’s Minister of Trade and Industry Amr Nassar said that the meetings of the 14th Negotiations Forum for African Free Trade Area (AfCFTA) hosted by Cairo, the 7th Senior Officials’ Meeting, and the meeting of African Trade Ministers all witnessed a positive atmosphere.
Nassar clarified that these meetings resulted in a consensus on a large number of outstanding topics, especially regarding mechanisms of trade liberalization in the African continent and opening African markets to the exports of member states.
The results of the meetings were all included in an integration package under the name of “Cairo Package”.
The minister said that the meetings witnessed a strong presence from all African countries with the presence of about 30 African trade ministers, trade commissioner of the African Union and heads of African regional organizations, where delegations praised the good organization of the meetings.
Furthermore, the mechanism and timing of liberalizing goods in Africa were agreed upon during the meetings, aiming to accelerate the liberalization process as an essential step for achieving African integration and establishing a unified African market, Nassar clarified.
Nassar referred that these were the first African negotiations on the liberalization of trade in services, where liberalization is set to be implemented on five priority sectors, including tourism, transport, telecommunications, financial services and business services.
Nassar pointed out that the negotiations on the liberalization of trade in services are very important for Egyptian service sectors, which are more advanced than those in the countries of the continent, especially the banking, telecommunications and information technology sectors.
The minister pointed out that the privileges granted in the field of liberalization of trade in services are unprecedented, and have not been granted to any of the other countries outside the continent, which gives Egypt the precedence of a strong and effective presence in these countries.
Nassar said that a joint ministerial declaration was adopted, urging African countries to prepare a common vision to activate the role of the World Trade Organization in supporting African countries to ensure that African countries affirm their entitlement to integration into the international trading system.
For their part, African trade ministers stressed that what was reached under the African Free Trade Agreement is a strong push to compel the world to listen to the voice of Africa and to hear its demands.
Egypt’s hosting of these meetings comes as a prelude to Egypt’s presidency of the African Union during 2019. Egypt aims at complementarity and cooperation with African brothers in various fields, especially with regard to opening markets for Egyptian exports of goods, services and developing trade exchange in the continent, as well as the establishing joint investment projects.
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East African bloc agrees to make trade cheaper, faster and simpler
Meeting in Nairobi, East African Community (EAC) ministers pledge to undertake trade facilitation reforms in line with continental and WTO agreements.
Burundi, Kenya, Rwanda, the United Republic of Tanzania, and Uganda agreed on 13 December to make trade between them and with other countries cheaper, faster and more straightforward in a significant boost for economic integration in East Africa and continental trade facilitation.
Meeting in Nairobi, Kenya, representatives of the nations – who are members of the East African Community (EAC) customs union and common market – said they would implement trade facilitation reforms including reducing “non-tariff barriers” such as burdensome and incompatible product regulations.
“I feel so proud because this is an opportunity for the EAC countries, many of which are landlocked, to sell their products within the region, in Africa, and across the whole world,” said Frederick Ngobi Gume, Uganda’s Minister for Cooperatives, whose country is currently chair of the EAC.
“It also gives us an opportunity to simplify the import and export of commodities. Such an approach reduces bureaucracy, with online clearances reducing contacts at the border. This initiative will go a long way to stimulate trade within the EAC and further afield.”
Chris Kiptoo, principal secretary at Kenya’s department for trade said: “Kenya recognizes trade facilitation as an important tool to simplify trade regulations and procedures to reduce the cost of doing business and improve the competitiveness of Kenya’s business environment, promote exports and attract investments into Kenya.”
UNCTAD Secretary-General Mukhisa Kituyi – a Kenyan former trade minister – moderated the ministerial meeting, which took place in parallel with the first UNCTAD Africa eCommerce Week which took place in Nairobi from 10-14 December.
“The EAC is a driving force in Africa, displaying good practice in the implementation of trade facilitation reforms,” Dr. Kituyi said. “The EAC Secretariat has shown strong leadership, and I am confident this will continue for smooth implementation at both national, regional and, eventually, continental levels.”
Frank Martsaert, chief executive officer of TradeMark East Africa (TMEA) which provided support to the ministerial meeting, said that since 2010 “we have had a strong partnership with the EAC Secretariat and partner states to increase trade and deepen the regional integration agenda through investment in hard and soft trade infrastructure. Together with UNCTAD, we look forward to continued partnership and support to the region’s trade facilitation agenda as highlighted in the Ministerial Declaration”.
Building blocs
The EAC move comes after most African countries signed the African Continental Free Trade Agreement (AfCTFA) in March 2018. The AfCFTA envisages establishing an Africa free trade area by building on regional blocs such as the EAC where trading nations already work together. The EAC declaration also aligns with the World Trade Organization’s Trade Facilitation Agreement, which entered into force in February 2017.
In the declaration, EAC countries commit to supporting national trade facilitation committees as the primary vehicle for coordinating the implementation of trade facilitation measures.
“Kenya is committed to the implementation of World Trade Organization Trade Facilitation Agreement both at the national, regional and continental level,” Mr. Kiptoo said.
“This trade facilitation initiative affords us a good opportunity to deepen our regional and continental economic integration agenda to boost intra-Africa Trade. There is needed to seize the opportunity to realize Africa’s prosperity dreams.”
Intra-EAC trade, while low compared to regions outside Africa, is the highest among regional economic communities in Africa at 19.35% of exports.
“UNCTAD has supported the institutional architecture of trade facilitation in the East Africa region for many years,” Dr. Kituyi said. “For example, we have helped launch trade portals, which simplify trade procedures and reduce the time and cost of trade transactions in Kenya, Rwanda and Uganda – and soon in Tanzania.”
The Nairobi meeting is thought to be the first time a regional bloc in Africa has gathered at this level to pledge to undertake trade facilitation reforms in light of the AfCFTA and the WTO’s Trade Facilitation Agreement.
UNCTAD and the EAC Secretariat organized the meeting with the support of TMEA and the International Trade Centre.
Meanwhile, UNCTAD and TMEA, a non-profit organization established to support the growth of regional and international trade in East Africa, also renewed their cooperation agreement for 2019–2021.
They decided to continue to work on trade facilitation, trade portals, enquiry points, trade and gender issues, and to explore working in other fields such as transport.
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tralac’s Daily News Selection
IMF’s Chart of the Week: Sub-Saharan Africa’s growth is a tale of different experiences
President Trump’s new Africa strategy was unveiled today in Washington:
Remarks by Ambassador John Bolton: “Under the President’s new Africa Strategy, we will expand economic ties on the basis of mutual respect, help African nations take control of their economic destinies and security needs, and ensure that US foreign assistance in the region gets results for the American people. Our goal is for the nations of the region to take ownership over peace and security in their own neighborhood. Under the Administration’s new approach, every decision we make, every policy we pursue, and every dollar of aid we spend will further US priorities in the region.” [Twitter thread by VOA’s Steve Herman; Twitter: #AfricaStrategy]
Related hearings, yesterday, on Capitol Hill:
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Development, diplomacy, and defense – promoting US interests in Africa: Foreign Affairs subcommittee hearing. Witness statements by Tibor Nagy (State Department), Ramsey Day (USAID)
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Implications of China’s presence and investment in Africa: Senate Armed Services Committee hearing. Witness statements by Yun Sun (The Stimson Center), Judd Devermont (CSIS), Josh Meservey (Heritage Foundation)
The Brexit that refuses to arrive (tralac)
On Wednesday, 12 December (107 days before Brexit happens), a deeply divided Conservative Party voted, under a special procedure allowing a leadership challenge by secret ballot, to keep Prime Minister Theresa May as their leader (for now). As far as the EU is concerned, the UK should implement what they have negotiated. But the UK Government cannot ratify the withdrawal deal until Parliament has approved it, which will happen before 21 January 2019. If Parliament does approve the Withdrawal Agreement, it can be implemented. How will that happen and what are the implications? And what are the implications of these developments for the SACU Member States and for Mozambique, currently enjoying preferential access to the European Union market under the SADC-EU Economic Partnership Agreement? [The author: Gerhard Erasmus]
Think20 Japan ignites G20 policy innovation (AfDB)
Strengthening public investment management and increasing domestic revenue in Africa were major topics on the agenda (pdf) of the Think20 Inception Conference attended by a senior leadership team of the AfDB. Director General of the Bank’s Southern Africa Bureau, Kapil Kapoor, presented policy briefs covering Fiscal and Debt Sustainability and the Compact with Africa at the conference (4-5 December, Tokyo). The conference is a precursor to the 2019 G20 meetings. In his draft paper on “Fiscal and debt sustainability,” Kapoor emphasized strengthening public investment management, increasing domestic revenue mobilization and domestic savings. A second paper on the Compact with Africa, summarized reforms implemented by Compact countries, investment they have received and the need for greater engagement with the private sector and African experts and institutions.
Members of the Africa Task Force agreed broadly with the papers presented and provided input which will be further incorporated towards finalization of the documents. Kapoor will serve as the co-chair of the Cooperation with Africa Task Force together with the JICA Research Institute. Cooperation with Africa is a broad agenda consisting of seven priority areas, namely: debt sustainability, Compact with Africa, industrial development and ICT, agricultural development, governance conditions and social effects, health, and tax challenges of digitization in Africa. Japan 2019 will present its final findings at the T20 Japan meeting in May 2019, prior to the G20 meeting scheduled for late June 2019 in Osaka, Japan.
pdf First African forum for national trade facilitation committees (NTFCs): final report (412 KB) (UNCTAD)
Ms Shamika Sirimanne (Director, Division on Technology and Logistics, UNCTAD) presented the main highlights from the Forum. As all speakers highlighted, NTFCs are key for the success of trade facilitation and it is becoming evident that NTFCs are critical to the success of trade facilitation reform. It means that ineffective NTFCs may have the opposite effect. Trade facilitation is complex by nature as it spans across sectors and government ministries. Countries recognized the need for an effective coordinating mechanism to ensure a holistic implementation of the TFA agreement in a structured and coordinated way. NTFCs are not new – in many countries they existed already before the WTO TFA, but the TFA has added motivation and momentum to their creation and roles, and even more now with the launching of the African Continental Free Trade Agreement.
Many trade facilitation measures involve regional collaboration and collaboration with neighbouring countries. The WTO TFA helps regional integration in Africa, without adding to the spaghetti bowl of regional agreements. In practice, the AfCFTA and REC provisions on trade facilitation are WTO TFA plus. The requirements for NTFCs in the annex on trade facilitation to the AfCFTA Protocol on Trade in Goods are exactly the same as those in the WTO TFA. Yet, emerging conflict environments, particularly in West and Central Africa present serious challenges to the successful implementation of trade facilitation measures. There is need to pay closer attention to these conflicts. The AfCFTA implementation will require a great deal of coordination among different public and private stakeholders at the national and regional level, ensuring coherence with other relevant instruments.
The private sector can play the role of a technical expert, an end-user or a reform partner. To unlock maximum benefit from trade facilitation reform, there must be a mix of political will, trust building and capacity building emanating from both private sector and government. We must note that the private sector includes different players, including users and providers of services, large and small companies, importers and exporters, all with different interests. At national level, the private sector can struggle to find a coherent message and communicate constructive criticism for trade facilitation reforms. To achieve this, a good practice can be that the Chamber of Commerce set up working teams to focus exclusively on cross-industry trade facilitation issues. Same mechanism should be held at regional levels to reduce costs.
IATF 2018: Intra-African trade the engine for developing Africa (UNECA)
In a speech read on her behalf at a gala dinner for delegates attending the inaugural Intra-African Trade Fair in Cairo, Ms Songwe said the AfCFTA will help to address Africa’s economic challenges and allow for the greater, prosperous flow of trade within the continent. She said gaps currently remain in the modalities for trade in goods in the AfCFTA. “What is needed is for our able technocrats and negotiators to see through the vision of our Heads of State, and bring the Agreement to an operative conclusion. Yet in doing so, let us not cut corners; we must hold fast to the grand ambition behind this project. As we build on the momentum of the negotiations, and the landmark Heads of State Summit in Kigali in March this year, we must ensure that the final touches to the Agreement truly deliver upon the liberalization of our intra-African trade.” In particular, she said, member States have agreed to liberalize 90% of their intra-African trade, but still need to decide how to deal with the remaining 10%. “Getting the AfCFTA right will entail ensuring that the approach to this remaining 10% is appropriate for boosting trade. Our research at ECA implies that we should be ambitious in these matters, and that not only will a more ambitious outcome boost African welfare the most, but will also see the gains from the AfCFTA spread strongly to many of Africa’s smaller and less developed nations.”
South Africa deposits Tripartite TFTA ratification instrument (COMESA)
South Africa has deposited the Instrument of Ratification of the EAC-COMESA-SADC TFTA Agreement, bringing the number of countries that have done so to four. The other countries that have ratified and deposited the instrument are Kenya, Egypt and Uganda. The handover ceremony of the instrument of ratification took place in Cairo, on the margins of the African Ministers of Trade Meeting. South Africa’s Minister of Trade and Industry Hon. Rob Davies handed over the ratification to the current Chairperson of the EAC-COMESA-SADC Tripartite Taskforce, Ms Chileshe Kapwepwe, who is the Secretary General of COMESA. Ms Chileshe Kapwepwe commended the government of South Africa for being the first SADC country to ratify and deposit the TFTA Agreement. She revealed that six more countries will soon ratify the Agreements paving the way for the region to have ease movement of goods, services and people.
On the SADC Tribunal: SALC’s response to the judgment by South Africa’s Constitutional Court
SALC welcomes the judgment for upholding the rights of individual South African citizens to access the Tribunal for legal redress. The importance of this decision (pdf) cannot be overstated; it is precedent setting, not only for South Africa but also as a reference point for governments in the Southern African region. “We call upon the Presidency to not only comply and take steps to implement the judgment but to also use this judgment to lobby his SADC counterparts to consider the principles laid down by the Constitutional Court in calling for the reinstatement of the SADC Tribunal.” [Law Society of South Africa statement]
Afreximbank, Heirs Holdings sign $600m financing agreement (Afreximbank)
Heirs Holdings, which has significant investments across Africa in the financial services, resources, real estate and hospitality and power sectors, plans to deploy the facilities to further support its power, oil and gas strategy, as it positions itself as an African leader in integrated natural resources.
Africa eCommerce Week: Mobile money holds key to financial inclusion in Africa (UNCTAD)
Njuguna Ndung’u, head of the Africa Economic Research Consortium and former governor of the Central Bank of Kenya, said that financial inclusion was a public policy objective but it relied on the private sector to take it forward. Governments must adapt to what the private sector provides in the payment solutions market, and consolidation of the two sides was vital. “The moment you have an easy, effective and safe payment solution, financial inclusion follows,” he said. Once the central banks realized that commercial banks were providing a platform to manage mini-accounts, they understood that the public policy goal of financial inclusion was being reached, Mr. Ndung’u said.
Elizabeth Rossiello, founder and chief executive officer of BitPesa, a digital foreign exchange and payment platform that leverages blockchain settlement for fast, cost-effective payments to and from Africa, said that her company was growing by leaps and bounds but still faced regulatory and infrastructure barriers across the continent. “I think the problem is that innovation is happening so quickly that it comes at governments like a firehose.” In some countries she had been able to work with governments on licencing to enter the market, in others she could not enter until the government developed the licence. Ms Rossiello also said third party entities would always fill the gaps between different financial services operators like payment solution providers, banks and post offices. The future of financial inclusion in Africa relied on connecting and updating the moving parts and newly introduced functions of the system.
Africa’s consumer market potential: trends, drivers, opportunities, and strategies (Brookings)
In fact, consumer expenditure on the continent has grown at a compound annual rate of 3.9% since 2010 and reached $1.4 trillion in 2015. This figure is expected to reach $2.1 trillion by 2025, and $2.5 trillion by 2030. Also, in 2030, if the AfCFTA is properly implemented, a single continental market for goods and services will be operational, offering corporations different points of entry to the continent and a potential market of 1.7 billion people. Extract (pdf): The current state of Africa’s consumer market and the demographic changes that are already underway mean that certain markets are poised for investment over the next few decades. In just five countries – Algeria, Egypt, Morocco, Nigeria, and South Africa – an estimated 56 million households will reach the status of middle class by 2020, with disposable incomes of more than $680bn. In sub-Saharan Africa, nine countries will account for nearly 75% of all consumer spending by 2020 - Nigeria, Senegal and Ghana in West Africa; Kenya, Uganda and Ethiopia in the East; and the southern states of Angola, Zambia, and South Africa. [The author: Landry Signé]
Cautious optimism extends into 2019: airlines heading for a decade in the black (IATA)
The International Air Transport Association forecasts the global airline industry net profit to be $35.5bn in 2019, slightly ahead of the $32.3bn expected net profit in 2018 (revised down from $33.8 billion forecast in June). African carriers are expected to report a $300m net loss in 2019 (slightly improved from the $400m net loss in 2018). The expected net loss per passenger is $3.51 (-2.1% net margin). This makes Africa the weakest region, as it has been over the past four years. Performance is improving, but only slowly. Losses are expected to be cut in 2019 as fuel prices decrease. The region benefits from higher-than-average yields and lower operating costs in some categories. However, few airlines in the region are able to achieve adequate load factors to generate profits. [Single African Air Transport Market handbook launched in Livingstone]
People in Africa’s largest economies oppose more migration into their countries (Quartz)
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South Africa deposits Tripartite FTA Ratification instrument
The Republic of South Africa has deposited the instrument of Ratification of the EAC-COMESA-SADC Tripartite Free Trade Area (TFTA Agreement) bringing the number of countries that have done so to four. The other countries that have ratified and deposited the instrument are Kenya, Egypt and Uganda.
The handover ceremony of the instrument of ratification took place in Cairo, Egypt on the margins of the African Ministers of Trade Meeting at Al Manara International Conference Center. South Africa’s Minister of Trade and Industry Hon. Rob Davies handed over the ratification to the current Chairperson of the EAC-COMESA-SADC Tripartite Taskforce (TTF) Ms Chileshe Kapwepwe, who is the Secretary General of COMESA.
Minister Davies described the TFTA as an explicit development integration framework that will not only address trade but will also deal with significant barriers to trade that need to be resolved in turn to increase intra-Africa trade.
“It was the tripartite initiative that led to the work of broadening the integration beyond our existing regional communities and working towards establishment of large free trade areas across our continent, the initiative that is now taken forward by the African Union,” said Minister Davies.
“We as South Africa are delighted to be depositing this ratification instrument because we believe it is good for the country, region and entire continent. We need to trade more amongst ourselves without any barriers,” he added.
Davies reiterated that numerous benefits would accrue to South Africa as a result of the Agreement. South Africa’s trade with TFTA countries represents about 16% of its trade with the world. In 2017, total trade with TFTA countries was in excess of $27.6 billion. The bulk of the trade is with within SADC.
Davies noted that the TFTA will help the EAC-COMESA-SADC region address issues concerning removing barriers to trade, having adequate infrastructure and developing appropriate production structures.
Chairperson of the TFTA Taskforce Ms Chileshe Kapwepwe commended the government of South Africa for being the first SADC country to ratify and deposit the TFTA Agreement. She said the TFTA offers a bigger market and it will enable countries to trade more duty free a move that will increase the levels of intra-Africa trade.
“It is therefore a day of celebration as we witness the deposition of the instrument of ratification by the Republic of South Africa and I can only urge the remaining countries to follow in these steps and ratify as soon as possible,” Ms Kapwepwe added.
She revealed that six more countries will soon ratify the Agreements paving the way for the region to have ease movement of goods, services and people.
The TFTA was launched in June 2015 with the aim of bringing together, in one common market, countries in the three regional economic blocs namely the East African Community (EAC), the Common Market for Eastern and Southern Africa (COMESA) and the Southern African Development Community (SADC).
For the TFTA to enter into force, fourteen signatures and fourteen ratifications are needed. So far the taskforce has received 24 signatures and the ratifications now become four.
The Tripartite FTA brings together a population of 700 million people with an estimated Gross Domestic product of well over US$1.4 trillion.
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President Donald J. Trump’s Africa Strategy advances prosperity, security, and stability
Remarks by National Security Advisor Ambassador John R. Bolton on the Trump Administration’s New Africa Strategy
I’m delighted again to be here at the Heritage, an institution that really has contributed so much to the public policy debate for many decades now in the United States. And I’m particularly pleased to be here to unveil the Trump administration’s new Africa Strategy, which the President approved yesterday, and which the administration will begin executing immediately.
This strategy is the result of an intensive interagency process, and reflects the core tenets of President Trump’s foreign policy doctrine. Importantly, the strategy remains true to his central campaign promise to put the interests of the American People first, both at home and abroad.
The White House is proud to finalize this strategy during the second year of President Trump’s first term, about two years earlier than the prior administration’s release of its Africa strategy.
We have prioritized developing this document because we understand that lasting stability, prosperity, independence, and security on the African continent are in the national security interest of the United States.
Under our new approach, every decision we make, every policy we pursue, and every dollar of aid we spend will further U.S. priorities in the region. In particular, the strategy addresses three core U.S. interests on the continent:
First, advancing U.S. trade and commercial ties with nations across the region to the benefit of both the United States and Africa.
We want our economic partners in the region to thrive, prosper, and control their own destinies. In America’s economic dealings, we ask only for reciprocity, never for subservience.
Second, countering the threat from Radical Islamic Terrorism and violent conflict.
ISIS, al-Qaida, and their affiliates all operate and recruit on the African continent, plotting attacks against American citizens and targets. Any sound U.S. strategy toward Africa must address this serious threat in a comprehensive way.
And third, we will ensure that U.S. taxpayer dollars for aid are used efficiently and effectively.
The United States will no longer provide indiscriminate assistance across the entire continent, without focus or prioritization. And, we will no longer support unproductive, unsuccessful, and unaccountable U.N. peacekeeping missions.
We want something more to show for Americans’ hard-earned taxpayer dollars.
Under our new Africa strategy, we will target U.S. funding toward key countries and particular strategic objectives. All U.S. aid on the continent will advance U.S. interests, and help African nations move toward self-reliance.
Our first priority, enhancing U.S. economic ties with the region, is not only essential to improving opportunities for American workers and businesses; it is also vital to safeguarding the economic independence of African states and protecting U.S. national security interests.
Great power competitors, namely China and Russia, are rapidly expanding their financial and political influence across Africa. They are deliberately and aggressively targeting their investments in the region to gain a competitive advantage over the United States.
From 2016-2017, China’s foreign direct investment toward Africa totaled $6.4 billion dollars. And, over the past several years, China has devoted considerable state-directed and state-supported financing to projects in the region.
China uses bribes, opaque agreements, and the strategic use of debt to hold states in Africa captive to Beijing’s wishes and demands. Its investment ventures are riddled with corruption, and do not meet the same environmental or ethical standards as U.S. developmental programs.
Such predatory actions are sub-components of broader Chinese strategic initiatives, including “One Belt, One Road” – a plan to develop a series of trade routes leading to and from China with the ultimate goal of advancing Chinese global dominance.
In Africa, we are already seeing the disturbing effects of China’s quest to obtain more political, economic, and military power.
The nation of Zambia, for example, is currently in debt to China to the tune of $6 to $10 billion dollars. China is now poised to take over Zambia’s national power and utility company in order to collect on Zambia’s financial obligations.
Similarly, from 2014 to 2016, Djibouti’s external public debt-to-GDP ratio ballooned from fifty percent to eighty-five percent, with most of that debt owed to China.
In 2017, China established a military base in Djibouti that is only miles from our U.S. base, Camp Lemonnier, which supports critical U.S. operations to counter violent terrorist organizations in East Africa.
In May, U.S. officials accused China of using military-grade lasers from this base to target and distract U.S. pilots on ten different occasions. Two of our American pilots suffered eye injuries from exposure to laser beams.
And soon, Djibouti may hand over control of the Doraleh Container Terminal, a strategically-located shipping port on the Red Sea, to Chinese state-owned enterprises.
Should this occur, the balance of power in the Horn of Africa – astride major arteries of maritime trade between Europe, the Middle East, and South Asia – would shift in favor of China. And, our U.S. military personnel at Camp Lemonnier, could face even further challenges in their efforts to protect the American people.
Russia, for its part, is also seeking to increase its influence in the region through corrupt economic dealings. Across the continent, Russia advances its political and economic relationships with little regard for the rule of law or accountable and transparent governance.
It continues to sell arms and energy in exchange for votes at the United Nations – votes that keep strongmen in power, undermine peace and security, and run counter to the best interests of the African people.
Russia also continues to extract natural resources from the region for its own benefit.
In short, the predatory practices pursued by China and Russia stunt economic growth in Africa; threaten the financial independence of African nations; inhibit opportunities for U.S. investment; interfere with U.S. military operations; and pose a significant threat to U.S. national security interests.
Equally concerning at this time, the lack of economic progress in the region has accompanied the proliferation of Radical Islamic Terrorism, and other forms of violent conflict, across Africa.
Countering these serious threats is the second priority under our new Africa strategy.
In recent years, ISIS, al-Qaida, and other terrorists operating in Africa have increased the lethality of their attacks, expanded into new areas, and repeatedly targeted U.S. citizens and interests.
In Mali, JNIM, Jama’at Nusrat al-Islam wal-Muslimin – which describes itself as an al-Qaida affiliate – is increasing in strength and has killed and wounded scores of peacekeepers, partner forces, and innocent civilians, in addition to kidnapping Westerners and threatening U.S. allies.
In Libya, the local ISIS-affiliate has found fertile ground to recruit new terrorists and plot attacks against the United States.
In South Sudan, an ongoing civil war has ravaged a young nation, displaced millions, and led to the deaths of hundreds of thousands of people.
The continuing threat from terrorism and other violent conflicts across the region puts American lives at risk, and drains vital American resources.
Between 2014 and 2018, the United States provided approximately $3.76 billion dollars in humanitarian aid to South Sudan and refugees in neighboring countries.
This number represents only a small amount of the total aid that the United States devotes to Africa.
In fact, in Fiscal Year 2017, the Department of State and USAID provided approximately $8.7 billion dollars in development, security, and food assistance to Africa.
In Fiscal Year 2016, we provided approximately $8.3 billion dollars.
Between 1995 and 2006, U.S. aid to Africa was roughly equal to the amount of assistance provided by all other donors combined.
Unfortunately, billions upon billions of U.S. taxpayer dollars have not achieved the desired effects.
They have not stopped the scourge of terrorism, radicalism, and violence.
They have not prevented other powers, such as China and Russia, from taking advantage of African states to increase their own power and influence.
And, they have not led to stable and transparent governance, economic viability, and increasing development across the region.
From now on, the United States will not tolerate this longstanding pattern of aid without effect, assistance without accountability, and relief without reform.
Instead, we are pursuing a new path, one that, we hope, finally gets results.
Americans are a generous people, but we insist that our money is put to good use.
Our third priority, therefore, is ensuring that all U.S. assistance dollars sent to Africa are used efficiently and effectively to advance peace, stability, independence, and prosperity in the region.
Here are some of the specific, bold actions we will take under our new strategy to address the three priority areas I have just highlighted.
To expand our economic relationships in the region, we are developing a new initiative called “Prosper Africa,” which will support U.S. investment across the continent, grow Africa’s middle class, and improve the overall business climate in the region.
In addition, we will encourage African leaders to choose high-quality, transparent, inclusive, and sustainable foreign investment projects, including those from the United States. We will leverage our expanded and modernized development tools to support access to financing and provide strong alternatives to external state-directed initiatives.
America’s vision for the region is one of independence, self-reliance, and growth – not dependency, domination, and debt.
We want African nations to succeed, flourish, and remain independent in fact and not just in theory.
In the coming years and months, we also intend to pursue modern, comprehensive trade agreements on the continent that ensure fair and reciprocal exchange between the United States and the nations of Africa. We will begin these negotiations on a bilateral basis, and focus on creating mutually beneficial partnerships.
Our new economic initiatives in Africa will help support American jobs and expand market access for U.S. exports, while promoting sustainable growth in African countries.
We will focus our economic efforts on African governments that act with us as strategic partners, and, which are striving toward improved governance and transparent business practices.
As our partner nations develop economically, they will be better prepared to address a range of security threats, including terrorism and militant violence.
Under our new strategy, we will also take several additional steps to help our African friends fight terrorism and strengthen the rule of law. We will assist key African governments in building the capacity of partner forces and security institutions to provide effective and sustainable security and law enforcement services to their citizens.
Our goal is for the nations of the region to take ownership over peace and security in their own neighborhood.
The G5 Sahel Joint Force, comprised of Mauritania, Niger, Chad, Burkina Faso, and Mali, which the United States supports, is a great example of the enormous potential for African joint security cooperation.
The G5 Sahel Joint Force is seeking to build regional capability to combat terrorism, transnational organized crime, and human trafficking in the Sahel.
As this force gains capacity, G5 countries must remain in the driver’s seat – this initiative cannot be outsourced to the U.N. for funding and other support.
We want to see more cooperative regional security organizations like these emerge around the world.
As part of our new Africa strategy, the United States will also reevaluate its support for U.N. peacekeeping missions. We will only back effective and efficient operations, that we will seek to streamline, reconfigure, or terminate missions that are unable to meet their own mandate or facilitate lasting peace. Our objective is to resolve conflicts, not freeze them in perpetuity.
And, we will not provide legitimacy to missions that give large payouts to countries sending poorly-equipped soldiers who provide insufficient protection to vulnerable populations on the ground.
The sexual exploitation and abuse by UN peacekeepers of the very populations that they were sent to protect has been, and remains, completely unacceptable. Continued malfeasance without consequences damages the integrity of the entire U.N. peacekeeping system. If we are truly committed to protecting innocent life in conflict zones, then we must insist on accountable, robust, and effective peacekeeping operations.
In April, the United States did just that regarding the decades-old U.N. peacekeeping mission in Western Sahara. We demanded a six month, rather than annual, renewal period for the mission, and we insisted on a stronger, more effective mandate tied to substantive political progress.
Because of our actions, the parties to the conflict and key neighboring countries agreed to meet for the first time since 2012. Last week, the U.N. Envoy hosted these talks in Geneva and the participants agreed to hold additional talks in early next year.
Moving forward, we will also ensure that bilateral U.S. security assistance targets nations that act as responsible regional stakeholders, and nations where state failure or weakness would pose a direct threat to the United States and our citizens. We want to use American dollars in the most efficient way to protect the interests of the American people.
Accordingly, we will make certain that ALL aid to the region – whether for security, humanitarian, or development needs – advances these U.S. interests.
Countries that receive U.S. assistance must invest in health and education, encourage accountable and transparent governance, support fiscal transparency, and promote the rule of law.
The administration will not allow hard-earned taxpayer dollars to fund corrupt autocrats, who use the money to fill their coffers at the expense of their people, or commit gross human rights abuses.
For example, the United States is now reviewing its assistance to South Sudan to ensure that our aid does not prolong the conflict or facilitate predatory behavior. We will not provide loans or more American resources to a South Sudanese government led by the same morally bankrupt leaders, who perpetuate the horrific violence and immense human suffering in South Sudan.
The administration is also developing a new foreign assistance strategy to improve the effectiveness of American foreign aid worldwide. American foreign assistance was originally designed to counter the Soviet Union during the Cold War, and most recently to fight terrorism after 9/11.
Today, we need to make adjustments to address the pressing challenge of great power competition, and to correct past mistakes in structuring our funding.
In developing our strategy, we are revisiting the foundational principles of the Marshall Plan. The Marshall Plan furthered American interests, bypassed the United Nations, and targeted key sectors of foreign economies rather than dissipating aid across hundreds of programs.
Our new foreign assistance strategy will ensure that all U.S. foreign aid, in every corner of the globe, advances U.S. interests.
Our goal is to move recipient states toward self-reliance, and prevent long-term dependency.
Structural reforms will likely be critical, including practicing fiscal responsibility, promoting fair and reciprocal trade, deregulating economies, and supporting the private sector.
We should emphasize bilateral mechanisms to maintain maximum American control over every American dollar spent.
Less needy recipients should graduate from foreign assistance, and assistance should decline to countries and organizations making poor policy choices.
In addition, we should target resources toward areas where we have the most impact to ensure efficient use of taxpayer dollars.
Countries that repeatedly vote against the United States in international forums, or take action counter to U.S. interests, should not receive generous American foreign aid.
The United States will respect the independence of other nations in providing humanitarian, security, and development assistance – we are not among those powers that pursue dollars for dependency. However, we draw the line at funding causes that harm our interests and our citizens.
Around the world, the United States seeks partners who are self-reliant, independent, and strong – nations that respect the interests of their people, the rights of their neighbors, and the principle of fairness and reciprocity in all agreements.
Under our new Africa Strategy, we will expand economic ties on the basis of mutual respect. We will help African nations take control of their own economic destinies and their own security needs. And, we will ensure that all U.S. foreign assistance in the region gets results for the American people.
I am honored to have had the opportunity to highlight the details of our plans here at Heritage today, and I look forward to taking your questions.
Thank you very much.
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IATF 2018: Intra-African trade the engine for developing Africa
Africa must forge ahead with the remaining technical negotiations for the African Continental Free Trade Area (AfCFTA) as African Union member countries continue to sign and ratify the agreement that is under-pinning the continent’s belief that intra-African trade is the catalytic potential of the accord, says Economic Commission for Africa (ECA) Executive Secretary, Vera Songwe.
In a speech read on her behalf at a gala dinner for delegates attending the inaugural Intra-African Trade Fair in Cairo, Egypt, Ms. Songwe said the AfCFTA will help to address Africa’s economic challenges and allow for the greater, prosperous flow of trade within the continent.
She said gaps currently remain in the modalities for trade in goods in the AfCFTA.
“What is needed is for our able technocrats and negotiators to see through the vision of our Heads of State, and bring the Agreement to an operative conclusion,” said Ms. Songwe in the speech read by ECA’s North Africa Director Lilia Naas Hachem.
“Yet in doing so, let us not cut corners; we must hold fast to the grand ambition behind this project. As we build on the momentum of the negotiations, and the landmark Heads of State Summit in Kigali in March this year, we must ensure that the final touches to the Agreement truly deliver upon the liberalization of our intra-African trade.”
In particular, she said, member States have agreed to liberalize 90% of their intra-African trade, but still need to decide how to deal with the remaining 10%.
“Getting the AfCFTA right will entail ensuring that the approach to this remaining 10% is appropriate for boosting trade. Our research at ECA implies that we should be ambitious in these matters, and that not only will a more ambitious outcome boost African welfare the most, but will also see the gains from the AfCFTA spread strongly to many of Africa’s smaller and less developed nations,” said the ECA Chief.
ECA analysts estimate that by removing tariffs, the AfCFTA has the potential to boost intra-African trade by over half, and that with the elimination of non-tariff barriers it may be doubled.
“Intra-African trade helps support the livelihoods of the individuals beyond such businesses, but it also extends beyond that to the high goal of poverty reduction economic prosperity, and achieving the ambitions of the Agenda 2063 in realizing an “Africa We Want”, as well as the Agenda 2030 of the United Nations, which strives for sustainable development in Africa and beyond,” said Ms. Songwe.
“Our work at ECA suggests that intra-African trade, and the AfCFTA can do just this. It indicates that intra-African trade has a critical role to play in weaning our trade away from its dependence on extractive commodities, and towards value-added and industrial goods that better promote job creation and African industrialization.”
The ECA analysis also reveals that even Africa’s smaller businesses can gain, by easing the constraints they face in trading, and helping them link into the regional supply chains of larger companies.
The gala marked the inauguration of the first ever Intra-African Trade Fair. The one-of-a- kind, 7-day fair is scheduled to showcase more than 1,000 exhibitors and host more than 70,000 visitors. Among attending the historic event are African Heads of State, Ministers, Central Bank Governors, CEOs, entrepreneurs, traders and small and mediums sized enterprises.
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Smaller African nations should not fear but embrace AfCFTA, says ECA’s Songwe
Smaller African economies should not fear the African Continental Free Trade Agreement (AfCFTA)but rather embrace the accord for the benefits it will bring to the continent through expanded intra-African trade, says Economic Commission for Africa (ECA) Executive Secretary, Vera Songwe.
In a speech read on her behalf at the 7th meeting of the African Union Ministers of Trade (AMOT) at the ongoing Intra-African Trade Fair in Cairo, Egypt, by David Luke, Coordinator of the ECA’s African Trade Policy Centre (ATPC), Ms. Songwe said there was nothing for smaller nations to fear.
“Beyond central technical considerations in relation to the design of AfCFTA modalities, ECA’s assessment reveals that smaller economies should certainly not fear the AfCFTA reforms but rather embrace it; particularly, as African LDCs would be those getting the largest increase in intra-African exports of industrial products,” she said.
“And of course, it must be underscored that such benefits will only materialize if the AfCFTA reforms are properly designed and effectively implemented.”
She continued: “Our analysis shows that the AfCFTA is win-win for all countries, big and small, agricultural and industrial, landlocked and coastal, in regard to both increases in exports and overall welfare or GDP.”
Ms. Songwe said the ECA is strongly committed to continue supporting AU member States towards the successful realization of the AfCFTA.
The ECA is currently assisting member States with the development and implementation of much needed national AfCFTA strategies, to ensure they can best benefit from the reforms.
“A strong emphasis must be placed on education and skills development in Africa to ensure that the adequate workforce is available, especially in industrial sectors, to transform the trade opportunities envisaged from the AfCFTA into reality,” she said, adding the role of the private sector to harness trade for Africa’s development must not be overlooked in the process.
“It is the private sector that trades, innovates and generates most jobs. Each member State must by now have in place an AFCFTA national implementation committee as recommended by the AU Summit that includes private sector participation,” said Ms. Songwe.
She said getting the AfCFTA right “certainly starts by ensuring that every single element which is part of the agreement, including modalities on trade in goods, is designed to best facilitate the maximization of the benefits of the reforms for African economies”.
In order to assist AU member States address these issues, ECA recently developed a toolkit suggesting several options or criteria to come up with lists of excluded, sensitive and non-sensitive products.
The institution also undertook an empirical analysis to assess the expected incidence on African economies of the different suggested options according to the two envisaged liberalization approaches, that is tariff line approach vs double qualification approach.
The Trade Ministers, in their AfCFTA negotiations, have already agreed to liberalize 90 percent of tariff lines. As regards the remaining 10 percent, the current proposal before the ministers of 7 percent of tariff lines to be designated as sensitive products, and three percent as excluded products representing not more than 10 percent value, is being hailed by the ECA as a good compromise.
“It shows meaningful liberalization given concentration of intra-Africa exports under a few tariff lines,” said Ms. Songwe.
Analysis
The ECA’s assessment of the AfCFTA modalities on goods suggests at least two key messages that should not be overlooked to get the most out of the AfCFTA reforms.
The findings demonstrate that a double qualification approach to liberalize trade in goods under the AfCFTA would generate larger trade-related benefits for African countries than a tariff line approach.
Liberalizing trade in goods within Africa using a double qualification approach would provide stronger potential to favor Africa’s industrialization process, especially as it ensures intermediates – which can be used to add value in the production process – are liberalized early and therefore rapidly utilized as relatively cheaper inputs towards value addition.
ECA’s analysis also clearly illustrates that African countries should keep their exclusion lists to a minimum in order to maximize the trade-related gains.
The results from the ECA’s empirical work further indicate that a 100 per cent liberalization would still generate greater benefits for African countries, suggesting that the absence of excluded lists is ultimately preferred.
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Continental free trade area to boost e-commerce in Africa
A high-level session at UNCTAD’s first Africa eCommerce Week showed that the continent has the potential to scale e-commerce enterprises – but its new free trade area will be key.
Opportunities abound for Africa to engage in and benefit from e-commerce and the digital economy as the African Continental Free Trade Agreement (AfCFTA) comes into force, speakers said at an 11 December 2018 session of UNCTAD’s Africa eCommerce Week in Nairobi, Kenya.
The High-level Dialogue on Trade and the Digital Economy in Africa addressed challenges such as the persisting infrastructure gap and the digital divide, inadequate regulatory and institutional frameworks, a weak enabling environment, and limited skills of both producers and consumers of digital products.
UNCTAD Secretary-General Mukhisa Kituyi said that global e-commerce had grown phenomenally, but even so, it remained constrained.
“It’s very clear that e-commerce and the digital economy do not happen by accident but as a result of purposeful actions,” he said. Governments must create a policy framework, invest in the right skills, protect the integrity of payment systems, and construct roads and delivery networks, he said.
“Today we must build momentum and governments cannot be left behind,” Dr. Kituyi said. When the Kenyan government said it would give a laptop to every schoolchild, only 20% of the country had electricity – now, although not all the laptops have been delivered, 80% of the country was electrified. In other words, he said, complaints about lack of infrastructure could have a reinforcing effect by satisfying a demand.
Dr. Kituyi said that the driving force must be “the developmental state” and an all-of-government approach to building enabling environments for digital economic activity.
“Today, broadband should be seen as a public utility,” he said.
It is possible!
European Commissioner for the Digital Single Market and Vice President of the European Commission Andrus Ansip said that it was important that mistakes made in the European Union were not copied in Africa.
He discussed the move to 3G (third generation connectivity) and the hiccups that slowed investment toward to 4G. Governments had stepped in to support the new generation technology.
“Affordable connectivity is the first precondition” of building the digital economy, he said. Europe’s new General Data Protection Regulation (GDPR) was now seen as a model of how to protect personal data online, he said.
The Digital Single Market in Europe also took time to build, he explained. Until it happened, Europe had lost start-ups to the United States. In creating an African digital single market, it will be necessary to avoid the fragmentation between small national markets that first beleaguered Europe: the AfCFTA, which was signed in March 2018, was a positive step in this direction, Mr. Ansip said.
Mr. Ansip said that Africa was full of creativity and it was important for governments on the continent to retain its entrepreneurs.
“Drinking water, roads, democracy – all of them deserve your attention, but Africans have the same dreams as people in my country, Estonia. We have made it. It is possible! You have to believe that you can be the best in the world.”
Ethel Cofie, chief executive officer of Edel Technology Consulting, said she saw the need to scale across national markets and for deregulation around payment systems.
“There is a lot of support needed,” Ms. Cofie said. The problem was that 80% of the venture capital entering the tech space in Africa went to just five countries and selected sectors like fintech. It was important to avoid creating a two-speed Africa that left some countries “in the dust” as capital came in, she said.
Not too big to fail
Daniel Annerose, chief executive officer of Manobi Africa, said that rural populations still dominated Africa and that digital technology offered a route to their economic emancipation. It also provided a way to improve performance, traceability and trust along the value chain in, for example, agriculture.
Ana Hinojosa, director of compliance and facilitation at the Customs Cooperation Council, said that border agencies everywhere were overwhelmed with small parcels and the solution was automation and non-invasive inspections.
In Africa, she said, customs services had practical concerns like the ability to raise the revenue needed and stop the smuggling of, for example, arms. They needed to boost their capacity to digitize and attract the funds to do so.
Universal Postal Union Director-General Bishar A. Hussein said that the postal service had existed since the dawn of civilization: with the formation of the UPU in the 19th Century, the service went global. Now, he said, it was the backbone of e-commerce. In fact, he said, the postal network was the starting point of the “inclusivity agenda” of the United Nations because it could reach the remotest village anywhere in the world.
The UPU had launched Ecom@Africa, he said, which was a new free-of-charge initiative to create a one-stop shop for e-commerce delivery in Africa.
Stephen Karingi, director of the Capacity Development Division of the United Nations Economic Commission for Africa (UNECA), said the African continental free area, foreseen by the AfCFTA, will require half of Africa to obtain a legal identity. This was a prerequisite of forming well-functioning e-commerce markets, he said.
“The continental free trade area will offer opportunities of scale and the free movement of people, goods and services,” he said.
Claire Messina, deputy executive director of the United Nations Secretary-General’s High-level Panel on Digital Cooperation, said that her starting point was that “no single actor” can achieve digital transformation. She also noted that digital transformation was not an end but a means to inclusion and support for human rights.
“There is a massive upscaling of citizens and governments needed to move from an analogue to a digital world,” she said. “Digitalization is actually a form of democratization and returns agency from states to people. Africa is in a good place because it is full of entrepreneurs.”
The session, organized by UNCTAD, UNECA, and the African Union, was moderated by Julie Gichuru, founder and chief executive officer of Arimus Media.
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tralac’s Daily News Selection
Starting tomorrow:
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Ministerial Retreat, in Nairobi, on trade facilitation in the EAC: ministers are expected to adopt a declaration of policy objectives for a regional trade facilitation strategy
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Assessment of the capacity building needs of AU member states and RECs to manage migration (pdf, 13-14 December, Victoria Falls, Zimbabwe)
Diarise: Southern African Business Dialogue (Dutch Ministry of Foreign Affairs, 10 January 2019, The Hague)
Intra-African Trade Fair highlights:
“We plan to have the shortest transition between entry into force of the [AfCFTA] agreement and operation of the market”: pdf Albert Muchanga, Commissioner for Trade and Industry (63 KB) at the opening ceremony
Africa eCommerce Week: five UNCTAD updates
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Mukhisa Kituyi commentary: Making digital development work for Africa
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High-level dialogue on trade and the digital economy in Africa. Stephen Karingi, director of the Capacity Development Division of the UNECA, said the African continental free trade area will require half of Africa to obtain a legal identity. This was a prerequisite of forming well-functioning e-commerce markets: “The continental free trade area will offer opportunities of scale and the free movement of people, goods and services.”
Claire Messina, deputy executive director of the UN SG’s High-level Panel on Digital Cooperation, said that her starting point was that “no single actor” can achieve digital transformation. She also noted that digital transformation was not an end but a means to inclusion and support for human rights. “There is a massive upscaling of citizens and governments needed to move from an analogue to a digital world,” she said. “Digitalization is actually a form of democratization and returns agency from states to people. Africa is in a good place because it is full of entrepreneurs.”
Ana Hinojosa, director of compliance and facilitation at the Customs Cooperation Council, said that border agencies everywhere were overwhelmed with small parcels and the solution was automation and non-invasive inspections. In Africa, she said, customs services had practical concerns like the ability to raise the revenue needed and stop the smuggling of, for example, arms. They needed to boost their capacity to digitize and attract the funds to do so.
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Tear down barriers and African e-commerce will thrive, say CEOs. Nicolas Martin, co-chief executive officer of African e-commerce giant Jumia, said while the most impactful actions were always the most long-term and expensive, there were low-hanging fruit to picked. For example, more needed to be done to tailor bespoke regulatory solutions for Africa in order to attract international investment and creative a conducive environment. He said the African investment climate “needed better PR”. He also said that simply implanting the 25-year old regulatory regimes of Europe into the six-year old market of Africa would be “suicide” for new businesses. “The coordinated effort of millions will bring about the change we need in Africa. The power of the marketplace is huge.” Richard Okot Okello, Uganda’s assistant commissioner for external trade, said cross-border connections remained too costly. “There is a lot that needs to be done,” he said. But without making better goods that are worth exporting, building digital trade platforms would only go so far, noting that so far e-commerce traffic favoured imports to Africa from abroad.
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pdf UNCTAD B2C E-commerce Index 2018 Focus on Africa (542 KB) . The top three African countries each has a distinctive strength in one of the four areas measured by the index. Highest ranked Mauritius has a considerable 13 point higher score than the next African country. This small island developing state scores relatively high in all four areas but particularly with regard to the share (90%) of the population having an account. In an effort to get more SMEs online, the Government launched a shopping portal in 2018 offering tax free purchases. Nigeria, the most populous African nation, ranks second, largely thanks to a significant increase in postal reliability as measured by the Universal Postal Union. As Africa’s largest B2C e-commerce market (in terms of both number of shoppers and revenue), reliable delivery of products is critical. South Africa is third, level with several other African countries (Cabo Verde, Gabon, Mauritius and Morocco) for its Internet penetration, with around six in ten inhabitants using the Internet in 2017. South Africa leads by some margin in the number of secure Internet servers per one million people, an indication of websites accepting online sales and payments.
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Madagascar, Uganda and Zambia set to exploit digital economy opportunities. For instance, Uganda’s mobile transactions amounted to a staggering $16.3bn, half the national GDP. But Zambia, where mobile money is gaining momentum, lags since Zambians prefer cash-on-delivery for e-commerce transactions. In Madagascar, only 6% of the population use the Internet and only 4% have bank accounts. But this means retailers are more likely to accept online payments via mobile phone. The Uganda assessment (pdf) recommends the establishment of a multi-sectoral task force on e-commerce to help create a common understanding of the opportunities and challenges associated with it. Doing so would also improve public-private coordination, the report outlines. The Zambia assessment (pdf) proposes accelerating the existing national addressing and postcode project. Since 2014, more than 60,000 house number and street number signs have been installed. Weak physical addressing remains a barrier for local e-commerce vendors. This means goods ordered online cannot always be delivered efficiently and reliably. The Madagascar assessment (pdf) highlights the need for a more efficient financing system for ICT and e-commerce start-ups. It recommends strengthening the dialogue between the private sector, the government’s Economic Development Board of Madagascar, technology start-ups and banks, who can together define the most common needs in the field of the digital economy. [ pdf Rapid eTrade Readiness Assessments of African LDCs: Key Statistics, Findings and Recommendations (1.54 MB) ]
Global economy updates
WTO’s Trade Policy Review Body: update on trade restrictive measures initiated by WTO members
The Director-General’s annual overview on trade-related developments presented to members on 11 December shows a significant increase in trade coverage of trade restrictive measures by WTO members from mid-October 2017 to mid-October 2018. While members continued to implement trade-facilitating measures, the trade coverage of the import-restrictive measures was more than seven times larger than that recorded in the previous annual overview. The report provides the first WTO-wide factual insight into the trade restrictive measures imposed in the context of current trade tensions and calls on WTO members to use all means at their disposal to de-escalate the situation. Extract from the DG’s speech: Let me be clear, however, that the trade coverage number does not shed light on the degree of restrictiveness of the measures adopted. Our report, therefore, does not measure the impact of the measures adopted. It simply quantifies the value of trade affected, with no qualitative analysis. [DG Azevêdo: 2019 will be a moment to renew and strengthen the WTO]
Migration and Development Brief 30: Accelerated remittances growth to low- and middle-income countries in 2018 (World Bank)
The Bank estimates that officially recorded remittances to developing countries will increase by 10.8% to reach $528% in 2018. This new record level follows robust growth of 7.8% in 2017. Global remittances, which include flows to high-income countries, are projected to grow by 10.3% to $689bn. Remittance flows rose in all regions, most notably in Europe and Central Asia (20%) and South Asia (13.5%), followed by Sub-Saharan Africa (9.8%), Latin America and the Caribbean (9.3%), the Middle East and North Africa (9.1%), and East Asia and the Pacific (6.6%). Growth was driven by a stronger economy and employment situation in the United States and a rebound in outward flows from Gulf Cooperation Council countries and the Russian Federation. Among major remittance recipients, India retains its top spot, with remittances expected to total $80bn this year, followed by China ($67bn), Mexico and the Philippines ($34bn each), and Egypt ($26bn). As global growth is projected to moderate, future remittances to low- and middle-income countries are expected to grow moderately by 4% to reach $549bn in 2019. Global remittances are expected to grow 3.7% to $715bn in 2019.
Remittances to Sub-Saharan Africa continued to accelerate in 2018 (pdf): Nigeria, the largest remittance recipient country in Sub-Saharan Africa and the sixth largest among LMICs, is expected to receive more than $25bn in official remittances by the end of 2018, an increase of more than $3bn compared with the previous year. Looking at remittances as a share of GDP, the Gambia has the largest share, followed by Comoros, Lesotho, Senegal, Liberia, Cabo Verde, Zimbabwe, Togo, Ghana, and Nigeria.
Agree to disagree: The spillover of trade policy into UNGA voting (UNCTAD)
In this paper we show that there are clear political spillovers from trade cooperation. Using a dataset from United Nations General Assembly votes, we illustrate that countries that cooperate in trade, also cooperate in politics. Our analysis (pdf) tilts the balance towards trade agreements as a tool for political cooperation. UNGA voting patterns between trading partners change when a trade agreement is enacted. Overall, regional trade agreements make countries 4% more likely to register the same vote in UNGA resolutions. Another dimension of the argument is that deeper forms of RTAs have greater impacts on voting synchronization. This result is strongest for Customs Unions, where overall voting synchronization increases by 11% among the RTA members, and by 22% for the disagree votes.
Trade and poverty reduction: new evidence of impacts in developing countries (WTO)
The report was launched by WTO DG Roberto Azevêdo and WB Chief Economist Penny Goldberg in Geneva. It presents eight case studies (pdf) showing how trade helps the extreme poor in the developing world, particularly those who live in conflict states, work in rural areas or in informal jobs, or are female. The country-specific approach of the new publication complements the global perspective in a previous joint report published by the two institutions in 2015. One case study in the publication highlights that women in Africa who work in exporting firms are paid better than those in non-trading firms. The case studies show that not all the poor are affected by international trade equally. The effects will depend on where they live (rural versus urban areas), where they work (industry, firm, formal/informal sector), their individual characteristics such as skill level and gender, and whether the highlighted trade policy change resulted in increased import competition or export opportunities.
In brief:
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ACP-EU Joint Parliamentary Assembly: Joint declaration of the ACP-EU Co-Presidents (pdf); MEPs agree on a partnership tailored to the international context
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Marrakech global migration conference: Governments adopt UN global migration pact; Governments urged to put first ever UN global migration pact in motion, post-Marrakech; The Migration Policy Framework for Africa (2018-2030)
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Inaugural Intra-African Trade Fair to drive continent’s development of export manufacturing
The first-ever Intra-African Trade Fair (IATF) to be held on the continent opened on Tuesday, 11 December 2018 in Cairo, Egypt with the President of the African Export-Import Bank (Afreximbank), Prof. Benedict Oramah, calling for the implementation of initiatives that will add meaning to that African Continental Free Trade Agreement (AfCFTA).
“We need to implement initiatives that will add meaning to that singular event, initiatives that will catalyse a strong production/industrial base for production of export manufacturing, initiatives that will improve our knowledge of, and access to, trade and investment information and initiatives that will facilitate movement of goods across borders in competitive terms,” Prof. Oramah told participants in the IATF opening ceremony.
The IATF2018, organized by Afreximbank in collaboration with the African Union and hosted by the Government of Egypt, is taking place until 17 December 2018 under the theme “Transforming Africa Through Agenda 2063 Anchored on Integrity in Business”.
Prof Oramah said that the signing of the African Continental Free Trade Agreement had sent a strong message to the world that Africa is ready to chart a new path, a path to economic independence and a willingness to look inward for industrial growth.
He said that Afreximbank was working to promote the emergence of robust continental supply chains and expressed confidence that the networking opportunities at the IATF would become a “potent force to begin to dismantle the well laid colonial structures that have disintegrated Africa for close to a century.”
Also addressing the opening ceremony were H.E. Olusegun Obasanjo, Former Nigerian President and IATF Advisory Council Chairman; H.E Albert M. Muchanga, AU Commissioner for the Department of Trade and Industry; and H.E. Mostafa Madbouly, Prime Minister of the Arab Republic of Egypt.
In his opening address, H.E. Obasanjo noted that the fair came after the successful signing of the AfCFTA, which seeks to enhance trade and economic growth across Africa, and expressed conviction that the IATF would contribute immensely to the implementation of the AfCFTA.
Chief Obasanjo described the trade fair as a crucial instrument in making the AfCFTA work and said that Africa should focus on “what trade is needed, where the markets are, the size of, and the standards in those markets, and how to join the value chains that serve them”.
“The African Continental Free Trade Agreement and events such as this Intra-African Trade Fair enthuse me about the prospects for Africa, and the opportunities to raise Africa’s bar to global competitiveness, which will be kick-started by intra-African free trade,” he said.
“It is our duty to create the environment where the entrepreneurial spirit of Africans can succeed. Stronger economies yield the rewards of better health, education, improved employment opportunities and prosperity for all. I want our future generations to have greater expectations, greater choices and greater opportunities to succeed. It should be their right and I want this to become the norm rather than the exception.”
He thanked Afreximbank and the AU for their foresight, initiative and hard work in promoting, organizing and opening the trade fair, from its announcement in Kigali in March 2018, to its implementation today.
In his statement, H.E. Albert Muchanga highlighted the importance of the IATF in bringing about economic transformation on the continent and called on all African Union Member States to ratify the AfCFTA and make a single African market of over 1 billion people a reality.
“If we are to create one African market, in line with the vision of the African continental free trade area, all African Union Member States must sign and ratify the agreement establishing the African Continental Free Trade Area. In this way, its landscape will be fully integrated.
“I am glad that the African Union Ministers responsible trade are here. I am sure they will do the needful and take us closer to realizing the vision of the African Union and Agenda 2063 which is: ‘an integrated, prosperous and peaceful Africa, driven by its own citizens, representing a dynamic force in the global arena’,” he emphasized.
He urged the six AU Member States which have not signed the AfCFTA Agreement yet to do so, and called on countries that have signed to proceed forward with the ratification. Commissioner Muchanga expressed his confidence that by February 2019, the 22 ratifications needed for the Agreement to enter into force will be granted.
H.E Mustafa Madbouly voiced the Egyptian Government’s pleasure at hosting the IATF. “The free trade zone is a great achievement for African integration and the number of participants in IATF 2018 is an indication of the necessity of this type of intervention,” he said. He applauded the IATF for working with African entrepreneurs, to build African wealth.
The opening ceremony was concluded with the official inauguration of the IATF Exhibition Centre with a ribbon cutting ceremony hosted by H.E Obasanjo.
Transactions worth about $25 billion are expected to be concluded at the IATF which has almost 1,100 registered exhibitors from 42 countries.
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Tear down barriers and African e-commerce will thrive, say CEOs
Participants at UNCTAD’s Africa eCommerce Week discover that e-commerce will flourish only when governments and businesses across the continent work together.
Barriers to domestic and cross-border e-commerce in Africa and how to lower them were thrashed out by business and government leaders on 11 December at UNCTAD’s Africa eCommerce Week in Nairobi, Kenya.
International Telecommunication Union Deputy Secretary General Malcolm Johnson said that any benefits that might flow from e-commerce required connectivity.
“More than 50% of the world is now connected to the internet,” he said. In Africa, however less than a quarter of people were, and rural areas in sub-Saharan were even more poorly served.
“One of the biggest problems is a lack of an incentive for people to get connected,” he said. Digital skills needed building so that people – especially women – could appreciate the returns available by getting online.
“People have to be persuaded as to why it’s to their advantage to spend the money to get connected.”
Jessica Anuna, a graduate of UNCTAD’s e-Founder Fellowship Initiative and who runs Klasha, an online fashion retailer for African millennials, said that the barriers to e-commerce were almost prohibitively high.
“It’s cheaper for me to ship from Asia than from within Africa,” she said.
However, Dylan Piatti, industry chief of staff at Deloitte Africa and chairman of the Ecommerce Forum Africa, said that “commonalities” were emerging in terms of what was needed for businesses entering the digital space. Cross-border data restrictions were an example, he said, calling for a pan-African solution.
“When is the best time to plant a tree?” he asked. “The answer is yesterday, today and tomorrow.”
The power of the marketplace
Chris Folayan, the chief executive officer of MallforAfrica, an online retailer, said that he thought the cost of getting online remained a major impediment holding Africa back.
“Implementing trust modules is also key,” he said, explaining that unless consumers can trust online services, they would not buy from them.
AfriLabs Foundation executive director Anna Ekeledo said that investment-friendly investment laws and more enlightened government funding models were needed to support tech hubs, start-ups and R&D.
African universities were getting on board, she said, but was required to connect their work to social needs.
Nicolas Martin, co-chief executive officer of African e-commerce giant Jumia, said while the most impactful actions were always the most long-term and expensive, there were low-hanging fruit to picked.
For example, more needed to be done to tailor bespoke regulatory solutions for Africa in order to attract international investment and creative a conducive environment. He said the African investment climate “needed better PR”.
He also said that simply implanting the 25-year old regulatory regimes of Europe into the six-year old market of Africa would be “suicide” for new businesses.
“The coordinated effort of millions will bring about the change we need in Africa,” Mr. Martin said. “The power of the marketplace is huge.”
Allan Rwakatungu, chief executive officer of Xente Tech Limited, a payments and shopping app, said that his product was popular in his home country of Uganda but the problem was to scale the business Africa-wide.
The size and diversity of Africa was an opportunity since digital models only made sense at scale, so trading environments in different countries needed to be harmonized, he said.
Elephant in the room
The chief executive officer of trade promotion agency TradeMark East Africa, Frank Matsaert, said that the formation of the African Continental Free Trade Area, foreseen in an all-Africa agreement signed in March 2018, was a response to Mr. Rwakatungu’s point.
“We need to get those policies in place and drive those outcomes,” he said. However, trade logistics networks remained inefficient in Africa since many were operated by cartels.
“In a world that is increasingly nationalistic, it’s important to remember that trade lifts all boats,” Mr. Matsaert said, identifying political will as the elusive element in faster progress toward implementation of regional and continental trade integration aspirations.
Richard Okot Okello, Uganda’s assistant commissioner for external trade, responded by explaining that cross-border connections remained too costly.
“There is a lot that needs to be done,” he said. But without making better goods that are worth exporting, building digital trade platforms would only go so far, he said, noting that so far e-commerce traffic favoured imports to Africa from abroad.
Mr. Okot Okello said he understood the need to improve road, energy and regulatory infrastructures so that hard-to-reach areas in Uganda and elsewhere could benefit.
For his part, Peter Munya, Kenya’s Cabinet Secretary for the Ministry of Industry Trade and Cooperatives, said “inclusion is the elephant in the room”.
Rural populations were still left out despite the work that had been done in Kenya to build fibre optic networks and make other advances, he said. Small and medium-sized enterprises found it hard to engage with trade logistics cartels, he added, but the Kenyan government was working hard to remedy such issues.
Speakers from the floor said that while the analysis of the problems was sound, practical solutions were often not forthcoming.
The session was moderated by Kenyan entrepreneur and media personality Julie Gichuru.
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Digital Africa must make its mark, Nairobi e-commerce event hears
UNCTAD’s Africa eCommerce Week in Nairobi, Kenya, focuses on what must be done to speed up the readiness of African countries to engage in and benefit from e-commerce.
Key findings from assessments of what African countries need to do to benefit from e-commerce and the digital economy were at the centre of discussions on 10 December at the first ministerial roundtable at UNCTAD’s African eCommerce Week in Nairobi, Kenya.
UNCTAD’s Rapid eTrade Readiness Assessments focus on practical steps that national governments, with the support of donor agencies, development banks and international organizations, can take to boost online trade.
The assessments show that vast reforms are needed to seize the development opportunities offered by e-commerce. But they also help African countries to identify opportunities, barriers and relevant policy measures required to improve their readiness to engage in and benefit from e-commerce.
Opening the 10-14 December conference, UNCTAD Secretary-General Mukhisa Kituyi said there was a sense of urgency that Africa was being left out of the discourse on e-commerce that had already taken place elsewhere.
“That’s why this meeting is important,” he said. Rapid eTrade Readiness Assessments were unique products that had been much in demand by African governments, he said.
“Faced with current global trade challenges, many countries are moving forward with e-commerce strategies, but it is important that governments include all stakeholders,” he said.
The demand for eTrade Readiness Assessments was spreading fast, and beyond the least developed countries, Dr. Kituyi said. “The appetite is growing, but the laggards lie on this continent.”
Dr. Kituyi added that it was important to remember that building e-commerce ecosystems in Africa was not only about consumers being enabled to buy goods “made in India, made in China” but for the world to buy merchandise “made in Africa”.
Historic opportunity
Economic Commission for Africa (ECA) Executive Secretary Vera Songwe said that the question was how African countries could build the systems that would allow them to compete in world markets, and to identify the right e-commerce strategies for them.
“We at the ECA say this must be done within the context of the African Continental Free Trade Agreement, and that Africa has a long way to go in intra-continental levels of trade compared to other global regions,” she said.
“As we start our drive to deeper trading we must ensure that no one is left behind,” to avoid the kind of backlash against globalization the rest of the world had seen, she said. “E-commerce allows us to do trade more inclusively.”
She said that harmonization was critical so that “Angola can talk to Egypt and Zimbabwe can talk to Senegal.”
The millions of Africans without any means of identification, online or off, was an issue that the ECA was working on she said, along with other ways to bring women and informal businesses into formal economic activity.
Universal Postal Union (UPU) Director General Bishar Hussein said: “The importance of the postal sector for the e-commerce sector has been underlined in the eTrade Readiness Assessments.”
In Africa, private initiatives to set up e-logistics services have met regulatory and legal barriers which national postal services can overcome, he said.
The UPU was active in supporting national postal infrastructure reform in Africa, and this was more important than ever as the e-commerce revolution rolled across Africa.
“We need to have a continental e-commerce strategy because without it we will fail,” he said. “Africa is not a dumping ground for things produced outside the continent. It can and must trade with itself, and we are ready to support this.”
International Trade Centre (ITC) Executive Director Arancha Gonzalez said: “Many people talk about the Fourth Industrial Revolution but in reality, we are living the First Digital Revolution: Africa must make its mark.”
The ITC could contribute to the work done in the eTrade Readiness Assessments by advancing “actionable strategies” in the countries where it works to support entrepreneurs and SMEs in Africa, she said.
Ms. Gonzalez said that the ITC could act as a bridge between e-commerce companies already operating in Africa, governments in the process of making new policies, and World Trade Organization talks.
“For the first time in history, Africa has the chance not to be a rule-taker and to shape WTO discussions on e-commerce,” she said.
Enhanced Integrated Framework (EIF) Deputy Executive Director Annette Mutaawe Ssemuwemba said: “The importance of e-commerce cannot be underemphasized.”
She said that the EIF was working on practical solutions in the mostly sub-Saharan countries where it operated and was also able to bring ideas from other least developed countries to bear in Africa – for example, an online potato market the EIF supports in Bhutan.
“We are not short of solutions, but now is the time to implement them at the practical level,” she said. “We must be innovative.”
Madagascar, Uganda and Zambia
New eTrade Readiness Assessments for Madagascar, Uganda and Zambia were launched at the meeting by Alessandro Vitale of UNCTAD. He sketched out the broad findings for representatives from each country who were present at the meeting.
“Uganda has made tremendous efforts in the region and we prioritize e-commerce in our national development plan,” Uganda’s minister for cooperatives Frederick Gume Ngobi said. His government was focused on agribusiness, tourism and updating skills, he said.
Noting signs of progress, he said Uganda had launched an e-trade portal to update people in business on formalization and other procedures and that rural electrification – a prerequisite for any digital progress – was making progress in Uganda.
Richard Randriamandranto, a special advisor to the prime minister of Madagascar, said introducing cheap trackable microchips in cattle might face resistance in a country such as Madagascar, but his government prioritized benefiting from this and other new technology.
“We are capable of having a revolution and leapfrogging forward,” he said, noting that the Rapid eTrade Readiness Assessment would greatly assist Madagascar to accelerate reforms.
Paul Mumba of Zambia’s ministry of commerce, trade and industry said he was happy to receive the Rapid eTrade Assessment which will help build a “robust” e-commerce future for his country.
“The government is working on enhancing the existing legal framework for e-commerce,” he said, including on updating cybercrime provisions. The goal was to guarantee the safety of electronic transactions, he said.
Street naming and house numbering schemes were advancing, and the Zambia post would be a key partner he said. Zambia would seek UNCTAD’s assistance in formulating the country’s e-commerce strategy, he said.
Inclusive economics
Speaking as a funder of UNCTAD’s work, Sweden’s ambassador to Kenya Anna Jardfelt said: “We believe that these assessments are an important baseline and diagnostic instrument.”
“Sweden is convinced that the digital revolution is opening opportunities for growth, job creation and achieving the Sustainable Development Goals, and e-commerce is an important part of this,” she said.
Ms. Jardfelt also said that Sweden’s experience could be shared with its partners, including promoting openness and transparency in developing public policy in the data age. “Let me also emphasize the gender perspective,” she said.
Ms. Jardfelt said her government was committed to supporting developing and least developed countries to engage in the digital future, including through its Aid for Trade commitments.
“We must bridge the digital gender divide where in LDCs 30% fewer women than men are online. This is smart economics since investment in gender equality yields highest returns of all.”
Representatives from numerous African countries and e-commerce stakeholders spoke from the floor to add their voices to the debate.
The session, which was livestreamed on YouTube and Facebook, was co-organized by UNCTAD and Germany and moderated by Daniela Zehentner-Capell of the German Federal Ministry for Economic Cooperation and Development.
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2018 African Economic Conference: outcomes
Economic integration is seen as a game-changer for achieving inclusive sustainable development. Read more in the pdf Overview of Conference Outcomes (1016 KB)
Côte d’Ivoire holds the UNSC Presidency for December: updates from two debates from its work programme
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UNSC debate stresses need for robust, coherent UN cooperation with regional bodies. Moussa Faki Mahamat, AUC Chairperson and one of several regional leaders briefing the Council, agreed that the world currently faces grave threats, citing climate change, migration and the rise of xenophobia, as well as transnational crime and terrorism – all of which can turn latent tensions into open conflict and are particularly acute in Africa. Emphasizing that the Council’s credibility and legitimacy depend on its ability to deal effectively with such crises, including through sustained preventive action, he cited the reluctance of some Member States – perceiving early intervention as a breach of sovereignty – as a major obstacle.
Jean-Claude Kassi Brou, ECOWAS President, outlined the challenges confronting that body, including the devastating civil wars in Liberia and Sierra Leone. They led ECOWAS to shift its mission towards the prevention, management and containment of crises, in addition to providing assistance to states in post-conflict recovery. The Community now employs an “Early Alert and Response” system and, when preventive diplomacy fails to yield the desired results, works with political actors to defuse crises through mediation, as it has done in Togo, Guinea-Bissau, Côte d’Ivoire and the Gambia.
Ethiopia’s representative – one of three African Council members helping to drive negotiations on that text – expressed hope that today’s debate will build the momentum needed for its adoption. The need for predictable, flexible, and sustainable financing of Council-mandated operations led by the AU has long been recognized, emphasizing that the timing is perfect for a decisive step forward. He added that the AU has demonstrated a real commitment to sharing the burden by injecting $75m into the AU Peace Fund – with the ultimate goal of $400m by 2021 – while also demonstrating determination to fulfil the Council’s conditions relating to conduct, discipline and the prevention of sexual exploitation and abuse. More than 60 speakers took the floor to share their experiences with, or future visions for, structured cooperation between the UN and regional and subregional organizations.
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National ownership, economic investment, key to post-conflict peacebuilding efforts. As the floor opened for the debate, many delegates noted that the United Nations Operation in Côte d’Ivoire – first deployed in 2004 – was able to formally withdraw in 2017, in contrast to other missions the mandates of which have lingered for decades. Some speakers expressed concern that serious and evolving terrorist threats in West Africa and the Sahel may jeopardize today’s efforts to recover from recovery conflict. Several called for stronger United Nations support for peace operations, spearheaded by the African Union, while others supported mandating the G‑5 Sahel joint force – currently combating extremists in that region – under Chapter VII of the United Nations Charter. Moussa Faki Mahamat, Chairperson of the African Union Commission, stated: ”Côte d’Ivoire’s experience is an eloquent demonstration that peace is within reach” when actors are determined to turn commitments into action. Countries in which recurrent conflicts persist would do well to learn from its experience, he said. Welcoming recent diplomatic progress in the Horn of Africa, he recalled that, similarly, Côte d’Ivoire’s political agreement extended a hand to “the enemies of yesterday”.
US-Africa: trade issues canvassed in yesterday’s briefing with Tibor Nagy (Assistant Secretary of State for the Bureau of African Affairs)
Q: Has the annual review for the countries’ eligibility to participate in the AGOA program been finalized? Nagy: That I really don’t know. I will have to check when I get back, so I wish I could give you a full answer on that. On the free trade agreements, here’s the background on that. Currently, the USA has no – that’s no – free trade agreements with any sub-Saharan African country. The only one we have with the continent of Africa is with Morocco, so this administration is very eager to pursue the first ever free trade agreement with a sub-Saharan country, which in effect would serve as a model. So we’re going through the process now of talking to a number of countries to try to decide which one would be an ideal country for a model, and you know there would be many considerations for such, but part of my visit to Addis Ababa was two parts: it was both bilateral with the Ethiopian government, but it was also with the AU, and while I was there for the AU, we had our annual high-level dialogue, and the whole issue of a US free trade agreement versus a continent-wide free trade agreement came up for considerable discussion, and we kept emphasizing the point that absolutely we support - the US supports - the continent-wide free trade agreement, because we support Africa’s attempts at regionalization, sub-regionalization, and continental consolidation. So we don’t want it to be in any way conflicting with or competitive with; we want it to be complementary to. So we’ll be undertaking bilateral discussions with potential countries, and then we’ll make a selection and take it from there. [Africa50, Energy Futures Initiative: launch of report on natural gas in Africa]
Germany-Africa: Linking policies on development and trade (D+C)
Italy-Africa: two updates
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AfDB President, Akinwumi A. Adesina, in interactive session with the Italy’s Minister of Finance. The support of Italy for the AfDB is paying off, in terms of development impacts that the Bank is achieving in Africa. Italy is today the 7th largest contributor to the African Development Fund, with a contribution of 246 million Euros pledged for the last replenishment in 2016. Italy is also an important shareholder of the African Development Bank since 1982. I would like to urge for greater and continued support of Italy for the African Development Bank. I am pleased that Italy is recognizing this potential and investing in Africa. Announced FDI from Italy for green field projects in Africa reached $10.4bn in 2017, up from $4bn in 2016, a 160% increase. But we need to work hard to turn around the trend of trade between Italy and Africa. Exports from Italy to Africa declined from $27bn in 2013 to $ 19.4bn in 2017, a decline of 28%. Africa’s export to Italy declined from $45bn in 2012 to $20.6bn in 2017, a decline of 54%. This is not the right trajectory. We must work hard to turn this around. This is especially critical given the AfCFTA.
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A vision for Africa’s future: mapping change, transformations and trajectories towards 2030 (ISPI)
This report (pdf) sets out a vision for Africa’s future based on five key traits: an archipelago of heterogeneous growth trajectories; the revolutionary impact of technological leapfrogging; regional integration and the growing role of sub-regional processes; the clustering of instability mainly around the core of the region; and the migration movements that originate from – but also predominantly remain within – the African continent. The study was conducted as part of a project funded by the Directorate General for Global Affairs of the Italian Ministry of Foreign Affairs and International Cooperation. Table of contents: Introduction (Paolo Magri); Mapping change in Africa (Giovanni Carbone); Africa’s multi-speed growth prospects: diverging policy options? (Thang Nguyen-Quoc, Arthur Minsat, Rodrigo Deiana); Sub-regions first: the role and evolution of RECs in Africa (Brendan Vickers); Faster than expected? Technological progress and connectivity in Africa (Michael Minges); Peace and security challenges in Africa (Clionadh Raleigh); Exploring intra- and extra-continental African migration: trends, drivers and policy options (Richard Mallett); Human development, education and mobility (Sara de Simone); Conclusions and policy implications (Giovanni Carbone, Tiziana Corda)
Carlos Lopes: Strengthening Africa’s climate resiliency (Project Syndicate)
By 2020, Africa will spend $7-15bn annually to adapt to climate change, and the price tag could hit $50bn by 2050. Fortunately, proactive policies and investments in sustainable development could unleash a wave of economic opportunity, which in turn could make adaptation more manageable. [Daniel Mundeva: Building Africa’s scientific talent]
Africa’s tourism potential: trends, drivers, opportunities, and strategies (Brookings)
This report (pdf) starts with an overview of tourism development in Africa and explores some of the key constraints that have prevented this sector from maturing. It identifies important stakeholders and potential opportunities for its future development. It also provides illustrative examples of countries representative of different trajectories of tourism development. Finally, with attention to current major policy reforms, the report draws conclusions about the future of the tourism sector in Africa. [The authors: Landry Signé, in collaboration with Chelsea Johnson] [Cathay Pacific customers to benefit as Moroccan airline joins Oneworld Alliance]
Sovereign debt, growth and development in Southern Africa conference: Public representatives must be held accountable for government debt (Daily Maverick)
Stakeholders from across the region recently converged in South Africa to initiate dialogue aimed at finding solutions to the unfolding sovereign debt crisis. In attendance were parliamentarians, academics, diplomats, industry experts and civil society groups from several Southern African countries to discuss the matter. The keynote speaker, Hung Tran, Managing Director at the Institute of International Finance, said 40% of low-income countries are at high risk of debt distress or are already in debt distress. This translates to 15 countries. The top six among them are Mozambique, Chad, Eritrea, Congo, South Sudan and Zimbabwe. The convenors of the conference will seek to strengthen regional dialogues on sovereign debt in Africa. The next step will be to build a mechanism to monitor sovereign debt developments, and empower various partners to hold their governments accountable for sovereign borrowing. [The author, Simi Siwisa, is executive director and convener of the Sovereign Debt Conference]
Angola and the IMF: Angola implements the IMF’s Enhanced General Data Dissemination System
Angola has implemented the recommendations of the IMF’s Enhanced General Data Dissemination System by publishing critical data through a “data hub” – National Summary Data Page. Publication of essential macroeconomic data through the NSDP will reduce data-reporting burdens of Angolan authorities to different agencies and the markets. The NSDP will provide national policy makers and domestic and international stakeholders, including investors and rating agencies, with easy access to information that the IMF’s Executive Board has identified as critical for monitoring economic conditions and policies.
Tanzania: IMF’s 2018 Financial System Stability Assessment
Notwithstanding such progress, financial stability challenges could be significant. Bank asset quality has deteriorated in recent years and provisioning needs have increased. Credit growth has decelerated, while dollarization of bank balance-sheets could create liquidity pressures under adverse shock scenarios. Vulnerabilities could amplify the impact of external and domestic shocks, including from tighter global financial conditions, lower trading partner growth, prolongation of domestic economic uncertainties, and delays in addressing difficulties related to fiscal management. Key near term FSAP priorities include measures to reduce nonperforming loans and increase provisioning and buffers to manage liquidity, credit, and concentration risks. These measures should be complemented by strengthening banking supervision and problem bank oversight. Measures to deepen financial markets and modernize the monetary policy framework should be combined with new prudential tools to enhance systemic liquidity management.
Today’s Quick Links: Harmonisation of customs processes in Eastern Africa key in trade facilitation: KRA Commissioner General Kenya’s fresh produce farmers gain entry into Korean market SA raises concern over Peugeot’s assembly plant in Namibia Mauritius establishing a regional centre of excellence on cybersecurity and cybercrime Ghana: President commission’s Africa’s largest diaper factory Extreme weather and poverty risk: evidence from multiple shocks in Mozambique ECOWAS science, technology and innovation experts meet on way forward for regional development Gulf Cooperation Council: Trade and foreign investment are keys to diversification and growth Age of Ingenuity: Reimagining 21st century international cooperation’. The Eighth Henry A. Kissinger Lecture, delivered by Christine Lagarde |
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At closing of the 2018 African Economic Conference, economic integration is seen as a game-changer for achieving inclusive sustainable development
Economic integration is a game-changing reality and African countries must fully embrace it to achieve sustainable and inclusive development that reduce poverty and inequality in all its dimensions.
Such is the main conclusion of the 2018 African Economic Conference (AEC) which closed on 5 November 2018 in Kigali, Rwanda.
“Regional and Continental Integration for Africa’s Development” was the theme of this year’s conference, jointly organized by the United Nations Development Programme, the United Nations Economic Commission for Africa and the African Development Bank.
The 2018 AEC brought together close to 400 participants, including African researchers, government officials, policy-makers, youth, civil society and private sector leaders. This is the first such gathering since the adoption of the African Continental Free Trade (AfCFTA) in March 2018, which plans for a single continental market for goods and services, with free movement of business persons and investments.
During panel discussions and presentations, AEC participants underscored the need to address impediments to greater regional and continental integration such as weak institutions, productive capacity and infrastructure connectivity; a mismatch between local consumption and production modes; the profusion of multilateral agreements to the detriment of homegrown agreements; the inadequate engagement of the African private sector; illicit capital flight and unnecessary policy regulations.
It was also noted that a greater level of integration could help African countries make their voices heard on the global stage and that the AfCFTA framework could go a long way towards correcting the imbalance the powers during negotiation between regional trading blocs.
Addressing the conference’s last plenary session, Ayodele Odusola, Chief Economist, UNDP Africa, said: “Integration should be a means not an end. We need to make sure that it is people driven and inclusive.”
Ms. Moono Mupotola, Director of Regional Integration Department at the African Development Bank noted that: “Since there is political will, policy makers and implementers of the African Continental Free Trade Area (AfCFTA) should try to come up with a perfect situation to start implementing what our political leaders have agreed.”.
Adam Elhiraika, Director of ECA’s Macroeconomics and Governance Division called on African countries to meet their commitments on signing and ratifying AfCFTA.
“We all know the benefits of facilitating free movement of goods, services and people when we open our borders and integrate. Africa’s GDP would increase as high as 6% every year,” he said. “We need to make sure that our leaders’ commitment and vision to form African Continental Free Trade is realized and implemented. One single continental market for goods and services means wealth and prosperity for all Africans.”
To date, 49 African countries have signed the landmark African Continental Free Trade agreement. Twelve out of the required 22 countries ratified it. The deadline for ratification is March 2019.
Highlights of the conference included the launches of the 2018 Africa Sustainable Development Report, the African Governance Report 2018, and the presentation of the 2018 Visa Openness Index which measures how open African countries are on visa policy.
Following an annual tradition, on the final day of the conference, awards were presented for the two best research papers presented at the conference as selected by conference participants based on innovation, academic rigor and policy impact.
The best conference paper award went to Blaise Gnimassoun, of the University of Lorraine, France for his paper, pdf Regional Integration: Do intra-African trade and Migration improve income in Africa? (5.64 MB)
The runner up research paper, pdf The Economic Diplomacy in Africa: The Impact of Regional Integration versus Bilateral Diplomacy on Bilateral Trade (809 KB) was authored by Sylvanus Kwaku Afesorgbor, of the University of Guelph in Ontario, Canada and the Centre for Trade Policy Analysis and Development Accra, Ghana.
Overview of the outcome from the 2018 African Economic Conference
Emerging Issues
Some of the emerging issues from the Conference include:
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Integration is a means, not an end: It must be people-driven – a strategy to help lift and keep people out of multi-dimensional poverty and exclusions – farmers, youth and women.
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Current levels of infrastructure and connectivity linkages hinder African integration and economic growth.
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Complementarity challenge: One of the structural impediments to Africa’s trade and economic integration is that Africa “produces what it does not consume – and consumes what it does not produce.” This again borders on lack of complementarity between production and consumption between neighbouring countries.
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Subsidiarity challenge: Most of existing trade and investment agreements (both bilateral and multilateral, including EPA and AGOA) make the African Continental Free Trade Agreement (ACFTA) subsidiary to these agreements, which make ACFTA implementation challenging.
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Inadequate engagement of the African private sector in the negotiation, discussion and design of the ACFTA – a major stakeholder responsible for trade and investment – may hinder effective regional integration.
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The proliferation of multiple trade and investment barriers across the 54-member states of African included in the ACFTA. Good news: the EAC is setting the pace on accelerating trade facilitation across member states.
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Inadequate cost-benefit analysis and lack of compensation mechanism: The inability of most countries to undertake a copious cost-benefit analysis and the absence of compensation mechanisms could weaken the implementation of strong political buy-in for regional integration.
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The rising trend of illicit capital flight on the continent is denying Africa resources required to build infrastructure and connectivity for regional integration on the continent and undermining capacity for domestic resource mobilization for inclusive growth and development.
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A tool to balance the power in globalization: Globalization can be brutal because of power asymmetries. For instance, the situation where EU, USA or China negotiating with each of most African countries – without a collective approach like ACFTA – could lead to unfavourable results for most African countries. A tool to balance power would help to address unequal negotiations.
Emerging Recommendations
These include, but are not limited, to:
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Advocating regional integration not as an end but a means to lift and keep 560 million Africans living in multidimensional poverty out of poverty. In this regard, participation in – and the distribution of benefits of regional integration must include farmers, youth and women. Inclusiveness in the design, implementation and monitoring of regional integration should be people-driven.
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Strengthening infrastructure and connectivity within the African continent is necessary for proper integration and stronger economic growth.
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Investing heavily on changing mindsets of Africans that often prefer ideas, goods and services from outside Africa to “African made products” – learning to “consume what is produced” and to “produce what is consumed” in Africa.
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Reviewing and revisiting all African trade agreements is necessary to provide African economies with the strongest opportunities to access international and intra-continental markets. This is to ensure all existing trade agreements serve as instruments to implement Africa’s regional integration.
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Developing mechanisms for compensating losers. To elicit political buy in of all losers, it is important to mitigate the potential costs from regional integration by ensuring benefits regional integration is distributed fairly.
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Harmonizing trade and investment policies and programmes to reduce transaction costs and facilitate trade. This includes promoting strong linkages between national and regional value chains through regional development.
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Promoting champions of regional integration at national, regional and continental levels. Being the largest trade agreement in the world, realizing its maximum benefits will require strong and sustained dedication from member states, including establishing national, regional and continental champions. This requires investing in communication on the opportunities and strengths of regional integration – and how to address its risks.
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Addressing regional public goods: The emerging risks like conflicts and security, pandemic diseases like Ebola and HIV/AIDS, and climate change adaptation and mitigation to be treated as public goods.
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Tacking illicit financial flows is key to mobilizing resources required to bridge the infrastructure deficit that could help boost regional integration. Solidarity and collective efforts to prevent, stop and return illicit financial flows stockpiled outside Africa could help enhance domestic resource mobilization, reduce debt stocks and direct resources towards national and regional public goods needed to deepen regional and continental integration.