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African Economic Conference 2018 focuses on Africa Visa Openness and integration
For millions of ordinary travellers, inter-African travel is still too often a nightmare. Be it border hassles, lack of road or air routes linking key cities, or the frustrations of being refused entry to a country because of visas, the end result is to curtail the free movement of people, viewed by the African Development Bank as one of the pillars of regional integration.
That freedom of movement is inextricably tied to the Bank’s vision to create the next global market in Africa. As the 2018 African Economic Conference (AEC) opens in the Rwandan capital Kigali, the theme this year, “Regional and Continental Integration for Africa’s development,” also aligns with another major Bank priority – placing infrastructure development at the centre of Africa’s regional integration efforts.
Host nation Rwanda has taken bold leadership steps to champion regional integration, announcing at the beginning of this year an entry visa on arrival for travelers from all African countries.
The third edition of the Bank’s Visa Openess Index Report, to be launched on day two of the meeting, will be an important opportunity to measure which countries are making improvements that support free movement of people across Africa.
“The Index has helped raise awareness and drive visa policy reforms across the continent to ease movement of people, unlocking opportunities for intra-African tourism, trade and investment. In so doing, the Bank is directly contributing to the objectives of the AU initiative for a Single African passport,” Gabriel Negatu, Bank Director General, East Africa Regional Development and Business Delivery Office said in his remarks during the opening plenary.
Speaking on behalf of Rwandan President Paul Kagame, Hon. Claudine Uwera, Minister of State in charge of Economic Planning, said the conference addressed a theme “close to our hearts.”
“This conference is important to charting the way for inclusive integration… that would benefit all. Governance will determine the development path for our countries,” Uwera added, noting the equally important role of political will and commitment from African leaders.
The annual African Economic Conference is the continent’s leading forum fostering dialogue and knowledge exchange in the search for solutions to the development challenges of Africa. It brings together leading academics, high ranking government representatives and development practitioners from across the globe.
AEC 2018 will highlight “transformative initiatives for accelerating progress in infrastructure integration that are inclusive and promote equity, including the removal of barriers for movement of people, goods, and services across borders.”
Other convening partners to the Conference, the United Nations Development Programme (UNDP) and the United Nations Economic Commission for Africa (ECA), commended Rwanda’s role as a front-runner for integration efforts in Africa and spoke on the urgent need to build on the momentum for an inclusive and equitable integration.
“The government of Rwanda is walking the talk and continues to set the pace,” said Ahunna Eziakonwa, Assistant Administrator at the UNDP Regional Bureau for Africa.
Also speaking at the plenary, Giovanie Biha, Deputy Executive Secretary, United Nations Economic Commission for Africa (ECA), said while there were still major steps ahead, “we are moving in the right direction.”
Highlighting the Bank’s emphasis on research and knowledge management as important drivers of policy dialogue, good policy planning and implementation, participation this year’s AEC is being organized under the leadership of the Bank’s Research Department and Regional Integration Complex.
Sessions over the three-day meeting will examine the social, cultural and political frameworks for successful integration, building on the landmark signing this year of the African Continental Free Trade Agreement the world’s potentially biggest free trade agreement, which aims to create a single continental market for goods and services, with free movement of business persons and investments across Africa.
Participants will also look at the role of the private sector and civil society institutions.
Given the urgency of regional integration – “no longer a choice”, according to its organizers – this year’s meeting is a must attend for those interested in Africa’s Development agenda.
“Important pages of our continent’s development history are being written,” Uwera said. “Let’s take this opportunity to move the continent ahead.”
The 2018 AEC is taking place at the Marriot Hotel in Kigali, Rwanda from 3-5 December. A selection of Conference Papers is available to download below. The full collection is available here.
AEC 2018: Regional and Continental Integration for Africa’s Development
Regional and continental integration remains a valuable strategy to help utilize Africa’s greatest asset optimally – the youth. Integration of people, trade, finance, infrastructure, to mention a few remains a potent tool to create the future today. Africa is now home to 1.3 billion people, and this will reach 2.5 billion in 2050. For integration to be well accepted, it must be all embracive and render tangible benefits to all Africans. In this regard, integration must be able to catalyse goals and aspirations of Africans, enabling them to build better lives.
In the wake of the launch of the African Continental Free Trade Area, the objective of the conference will be to advocate for and provide clear policy guidance based on research and best practices for a stronger partnership for faster integration in all its dimensions.
It will offer a unique avenue for researchers, policymakers and development practitioners to debate and build knowledge on solutions for continental integration. The debates would focus on using four pillars: Conceptual underpinning of Africa’s integration; Infrastructure and institution for Africa’s integration; Leveraging private sector for Africa’s integration; Partnerships for effective integration) to propel innovative solutions to impediments of Africa’s regional and continental integration.
Background
In March 2018, 44 African Countries committed to the launch of a common market for Africa – the African Continental Free Trade Area (AfCFTA), which follows the launch of an African Common Passport in July 2016. These are additional milestones towards Africa’s integration that will enable people to build better lives. Africa’s integration has considerable potential not only for driving more robust and equitable economic growth through markets, it holds the promise for reducing conflict on the continent.
Africa’s efforts towards regional and continental integration can be traced back to the formation of the Organization of African Unity over 50 years ago, and the subsequent African Union that reflect a compromise between Monrovia and the Casablanca groups which championed various dimensions of continental integration in the 1960s. This first step towards promoting continental unity was followed by an important milestone, the Abuja Treaty (1991) which underpins the African Economic Community.
Regional economic communities (RECs) are regarded as the building blocks of the African Economic Community. These RECs have underpinned tremendous progress on Africa’s integration, particularly in relation to trade liberalization and facilitation (West Africa economic and monetary Union, COMESA); free movement of people (ECOWAS), infrastructure (SADC, EAC), and peace and security (ECOWAS and SADC).
Despite this progress and strong affirmations of political commitment by African leaders, over the past five decades, most Africans believe continental integration achievements have been modest compared to set goals. Some of the key challenges associated with the slow pace of progress include lack of political will and the absence of resources and technical capacity to facilitate the implementation of commitments made by leaders. The citizens of the continent nonetheless would wish for more and faster integration across economic, social, cultural and political aspects of development. They want to be able to live and work, run a business, and travel with ease anywhere on the continent. They also want to be respected across the world and want the continent to play a prominent role in the global affairs.
This aspiration for an “integrated continent” is a key pillar of Africa’s Agenda 2063 and the theme of the 2018 AEC which focuses on “Regional and Continental Integration for Africa’s Development”. The discussion will build on the outcome of the 2013 Conference on “Regional Integration in Africa” and examine practical solutions to make the recently adopted African Continental Free Trade Area a reality. The conference outcome will contribute to ensuring that the AfCFTA becomes an instrument for promoting Africa’s inclusive development through nurturing institutions and partnerships that sustain actions for Africa’s integration in its multiple forms: economic, social, cultural, environmental and political.
The first key takeaway of the 2013 AEC is that Africa’s integration is no longer a choice. The continent must integrate to consolidate past gains and maximize the benefit of globalization with a view to becoming a major player in the global arena as envisioned by Agenda 2063. However, there a risks arising from a heightened focus on economic integration with less attention to social, cultural and political integration. In addition, there are overlapping memberships in RECs whose policy instruments are not harmonized. Furthermore, there is weak enforcement of existing treaties and Non-Tariff Barriers that continue to hinder free movement of goods, services and persons across borders.
The second takeaway is that whereas there is tangible progress, it is too slow due in part to differing country interests, ineffective and unresponsive institutions. An innovative approach that takes countries’ interests into account without being held hostage by them is required.
The third dimension is the preponderance of bilateral and multilateral agreements with the rest of the world that are not in harmony with regional and continental integration objectives. Under the bilateral/multilateral agreements African countries have the tendency to provide better offers than those exchanged and shared amongst themselves. African countries therefore are confronted by a challenge to ensure that existing and future trade and investments arrangements are in congruence with regional and continental integration.
The final takeaway was that integration ought to be people-centred with stronger partnerships with citizens, private sector players and civil society institutions to facilitate faster progress and sustainable outcomes. Trust in leadership and institutions will be a critical enabler for accelerated integration to happen. However, trust depends on effectiveness of institutions and leadership to deliver on set objectives of integration and their ability to use integration to drive development outcomes across the continent.
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G20 Leaders’ Declaration: Building consensus for fair and sustainable development
The G20 Leaders’ Summit concluded on 1 December 2018 in Buenos Aires with a press conference given by Argentine President Mauricio Macri. After two days of working sessions, the Summit’s host relayed the main points of the Declaration agreed by consensus, saying: “Today we have an Argentina more connected to the world than ever before.”
Ten years on from the first Leaders’ Summit, Macri stated that the G20 is “a common space for dialogue and working collaboratively,” and that the responsibility of the Argentine presidency was to “reach consensus.” He thanked all delegates and countries who participated in the G20 over the last year, and highlighted “the level of coordination and agreement at a time of much global tension.”
With respect to trade, the host president said that “what is being proposed is trade that is fair. And Argentina is the first country to believe that after so many years of isolation, our entire future is about trading, about connecting as many countries as possible.”
The Argentine President also spoke about climate change: “We agreed that every one of us has to continue addressing their commitments giving strong support to renewable energies, a sector in which Argentina is betting heavily.”
Macri then summarized the agreements made on the future of work, one of the pdf priorities of the Argentine presidency (931 KB) . “We are facing a technological revolution that is leading to the disappearance of certain types of job and replacing them with new ones, something which requires us to understand that we are going to have to be trained several times throughout our lives,” he said.
In the 80+ working meetings of the G20 2018, the Argentine presidency pushed forward a gender mainstreaming strategy. Macri celebrated the consensus on the empowerment of women, “not only because it is just, but because of the opportunity for growth and development.” He indicated that “for mass female inclusion, including from a financial perspective, digital inclusion will boost the growth of our countries and societies.”
“There were advances in understanding the importance of infrastructure. Without both physical and virtual infrastructure, there is no fairness, no inclusion. We are looking for new mechanisms, superior assets to promote investment in infrastructure,” stated Macri, in reference to another of the priorities of the Argentine presidency. He then moved on to call for the need to deter corruption.
Argentina, connected to the world
President Macri said the Leader’s Summit in Buenos Aires has come about at a time of global insertion for Argentina. “Today Argentina is more connected to the world as ever before.”
“Today we truly are part of the world; the world has given us a place, the world is interested, the world wants to participate, the world wants to join us, and we Argentines are delighted about the opportunities that are opening up to us.”
G20 Leaders’ Declaration
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Ten years since the first G20 Leaders’ Summit we met in Buenos Aires, Argentina, on 30 November-1 December 2018 to build consensus for fair and sustainable development through an agenda that is people-centred, inclusive and forward-looking.
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This year we have focused on the following pillars: the future of work, infrastructure for development, a sustainable food future and a gender mainstreaming strategy across the G20 agenda.
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We have addressed our agenda promoting dialogue and the search for common ground. Building consensus requires the commitment of the society as a whole. Our discussions have been enriched by our engagement with stakeholder communities.
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We welcome the strong global economic growth while recognizing it has been increasingly less synchronized between countries and some of the key risks, including financial vulnerabilities and geopolitical concerns, have partially materialized. We also note current trade issues. We reaffirm our pledge to use all policy tools to achieve strong, sustainable, balanced and inclusive growth, and safeguard against downside risks, by stepping up our dialogue and actions to enhance confidence. Monetary policy will continue to support economic activity and ensure price stability, consistent with central banks’ mandates. Fiscal policy should rebuild buffers where needed, be used flexibly and be growth-friendly, while ensuring public debt is on a sustainable path. Continued implementation of structural reforms will enhance our growth potential. We reaffirm the exchange rate commitments made by the Finance Ministers and Central Bank Governors last March. We endorse the Buenos Aires Action Plan.
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We renew our commitment to work together to improve a rules-based international order that is capable of effectively responding to a rapidly changing world.
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Transformative technologies are expected to bring immense economic opportunities, including new and better jobs, and higher living standards. The transition, however, will create challenges for individuals, businesses and governments. Policy responses and international cooperation will help ensure that the benefits of the technological transformation are widely shared. We endorse the Menu of Policy Options for the Future of Work which we will draw on, considering individual country circumstances, to: harness technology to strengthen growth and productivity; support people during transitions and address distributional challenges; secure sustainable tax systems; and ensure that the best possible evidence informs our decision-making.
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We remain committed to building an inclusive, fair and sustainable Future of Work by promoting decent work, vocational training and skills development, including reskilling workers and improving labour conditions in all forms of employment, recognizing the importance of social dialogue in this area, including work delivered through digital platforms, with a focus on promoting labour formalization and making social protection systems strong and portable, subject to national law and circumstances. We will continue to foster cognitive, digital and entrepreneurship skills, and encourage the collection and exchange of good practices. We will promote increasing labour force participation of underrepresented as well as vulnerable groups, including persons with disabilities. We will implement policies to improve the employment situation of young people, consistent with the G20 Antalya Youth Goal. We will take actions to eradicate child labour, forced labour, human trafficking and modern slavery in the world of work, including through fostering sustainable supply chains. We will endeavor to further create enabling conditions for resource mobilization from public, private and multilateral resources, including innovative financial mechanisms and partnerships, such as impact investment for inclusive and sustainable growth, in line with the G20 Call on Financing for Inclusive Business.
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Access to education is a human right and a strategic public policy area for the development of more inclusive, prosperous, and peaceful societies. We underline the importance of girls´ education. To equip our citizens to reap the benefits of societal and technological innovations we will promote coordination between employment and equitable quality education policies, so we can develop comprehensive strategies that promote key competences such as learning to learn, foundation and digital skills, in a lifelong learning perspective from early childhood. We acknowledge the need to foster evidence-based innovative pedagogies and methods for all levels of education.
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To maximize the benefits of digitalization and emerging technologies for innovative growth and productivity, we will promote measures to boost micro, small and medium enterprises and entrepreneurs, bridge the digital gender divide and further digital inclusion, support consumer protection, and improve digital government, digital infrastructure and measurement of the digital economy. We reaffirm the importance of addressing issues of security in the use of ICTs. We support the free flow of information, ideas and knowledge, while respecting applicable legal frameworks, and working to build consumer trust, privacy, data protection and intellectual property rights protection. We welcome the G20 Repository of Digital Policies to share and promote the adoption of innovative digital economy business models. We recognize the importance of the interface between trade and the digital economy. We will continue our work on artificial intelligence, emerging technologies and new business platforms.
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Infrastructure is a key driver of economic prosperity, sustainable development and inclusive growth. To address the persistent infrastructure financing gap, we reaffirm our commitment to attract more private capital to infrastructure investment. To achieve this, we endorse the Roadmap to Infrastructure as an Asset Class and the G20 Principles for the Infrastructure Project Preparation Phase. We are taking actions to achieve greater contractual standardization, address data gaps and improve risk mitigation instruments. In line with the Roadmap, we look forward to progress in 2019 on quality infrastructure.
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Building on the G20 Food Security and Nutrition Framework, we reaffirm our commitment to tackling the challenges of food security, which is crucial to achieving a world free of hunger and all forms of malnutrition. We will promote dynamism in rural areas and sustainable agriculture, conscious of the importance of sustainable soil, water and riverbanks management supported by individual countries voluntarily, taking into consideration the specific needs of family and small-holder farmers. We encourage the voluntary use and sharing of innovative as well as traditional agricultural practices and technologies. We highlight the importance of collaboration among public and private stakeholders to strengthen risk management, facilitate adaptation to a changing environment, protect biodiversity and provide effective responses to reduce the impacts of extreme weather on agriculture. We will increase efforts to engage with the private sector, the scientific community and all other relevant stakeholders to enhance value addition, productivity, efficiency, sustainability and upgrading in Agro-Food Global Value Chains and encourage initiatives to reduce food loss and waste.
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Gender equality is crucial for economic growth and fair and sustainable development. We are making progress in achieving our Brisbane commitment to reduce the gender gap in labour force participation rates by 25% by 2025 but affirm that more needs to be done. We will continue to promote initiatives aimed at ending all forms of discrimination against women and girls and genderbased violence. We commit to promoting women’s economic empowerment, including by working with the private sector, to improve labour conditions for all, such as through access to quality and affordable care infrastructure and parental leave, and reducing the gender pay gap. We also commit to promote women’s access to leadership and decision-making positions, the development of women and girls’ digital skills and increasing their participation in STEM (Science, Technology, Engineering and Mathematics) and high-tech sectors. We welcome the continued implementation of the Women Entrepreneurs Financing Initiative (We-Fi), and we thank the Business Women Leaders’ Taskforce for its work. Drawing from this experience, we will consider how to better engage with women entrepreneurs.
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Mobilizing sustainable finance and strengthening financial inclusion are important for global growth. We welcome the Sustainable Finance Synthesis Report 2018, which presents voluntary options to support deployment of sustainable private capital. We endorse the G20 Financial Inclusion Policy Guide, which provides voluntary policy recommendations to facilitate digital financial services, taking into account country contexts and the Global Partnership for Financial Inclusion Roadmap which outlines a process to streamline its work program and structure.
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We launch the G20 Initiative for Early Childhood Development and stand ready to join all stakeholders in enhancing quality and sustainably financed early childhood programs that consider the multidimensional approach of ECD, as means of building human capital to break the cycle of intergenerational and structural poverty, and of reducing inequalities, specially where young children are most vulnerable.
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We encourage the activities of World Health Organization (WHO), together with all relevant actors, to develop an action plan for implementation of health-related aspects of SDGs by 2030. We commend the progress made by the international community in developing and implementing National and Regional Action Plans on Anti-Microbial Resistance (AMR) based on One-Health approach. We recognize the need for further multi-sectoral action to reduce the spread of AMR, as it is increasingly becoming a global responsibility. We note the work done by the Global AMR R&D Hub and, drawing on this, we look forward to further examine practical market incentives. We will tackle malnutrition, with a special focus on childhood overweight and obesity, through national, community-based and collaborative multi-stakeholder approaches. We reaffirm the need for stronger health systems providing cost effective and evidence-based intervention to achieve better access to health care and to improve its quality and affordability to move towards Universal Health Coverage (UHC), in line with their national contexts and priorities. This may encompass, where appropriate, scientifically proven traditional and complementary medicine, assuring the safety, quality and effectiveness of health services. We will continue to strengthen core capacities required by International Health Regulations (IHR, 2005) for prevention, detection and response to public health emergencies, while recognizing the critical role played by WHO in this regard. We are committed to ending HIV/AIDS, tuberculosis and malaria, and look forward to a successful 6° replenishment of the Global Fund in 2019.
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We note the 2018 G20 Annual International Migration and Displacement Trends and Policies Report prepared by the OECD in cooperation with ILO, IOM and UNHCR. We will consider how to continue the dialogue on these issues under the next presidency.
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Large movements of refugees are a global concern with humanitarian, political, social and economic consequences. We emphasize the importance of shared actions to address the root causes of displacement and to respond to growing humanitarian needs.
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We reaffirm our commitment to leading the transformation towards sustainable development and support the 2030 Agenda as the framework for advancing this goal and the G20 Action Plan. The Buenos Aires Update outlines the G20 current collective and concrete actions towards achieving that Agenda, recognizing that South-South and triangular cooperation have an important role to implement it. We underline our continued support to the G20 Africa Partnership, including the Compact with Africa, and other relevant initiatives. We reaffirm our commitment to addressing illicit financial flows that have a detrimental effect on domestic resources mobilization and will continue to take stock of progress. We endorse the G20 High Level Principles on Sustainable Habitat through Regional Planning.
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A strong economy and a healthy planet are mutually reinforcing. We note the latest IPCC Special Report on the Impacts of Global Warming of 1.5 degrees centigrade. We recognize the importance of comprehensive adaptation strategies, including investment in infrastructure that is resilient to extreme weather events and disasters. In this sense, we support actions and cooperation in developing countries, especially those that are particularly vulnerable, including small island states such as those in the Caribbean. We discussed long-term low greenhouse gas emission development strategies and alignment of international finance flows. We also shared countries´ experiences and considered the 2018-2019 work program on adaptation, acknowledging that each country may chart its own path to achieving a low emission future. We look forward to successful outcomes of the UNFCCC COP24, and to engage in the Talanoa Dialogue.
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Signatories to the Paris Agreement, who have also joined the Hamburg Action Plan, reaffirm that the Paris Agreement is irreversible and commit to its full implementation, reflecting common but differentiated responsibilities and respective capabilities, in light of different national circumstances. We will continue to tackle climate change, while promoting sustainable development and economic growth.
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The United States reiterates its decision to withdraw from the Paris Agreement, and affirms its strong commitment to economic growth and energy access and security, utilizing all energy sources and technologies, while protecting the environment.
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We recognize the crucial role of energy in helping shape our shared future and we encourage energy transitions that combine growth with decreasing greenhouse gas emissions towards cleaner, more flexible and transparent systems, and cooperation in energy efficiency. We recognize the opportunities for innovation, growth, and job creation through increased investment into cleaner and sustainable energy sources -including renewables-, technologies and infrastructure. We acknowledge the role of all energy sources and technologies in the energy mix and different possible national paths to achieve cleaner energy systems under the term ‘transitions’. We will promote energy security, sustainability, resilience, efficiency, affordability and stability, acknowledging that there are varied sources of energy and technological advances to achieve a low emissions future. We continue to promote universal energy access by eradicating energy poverty, cooperating to provide displaced people and disaster-impacted and remote areas with access to it, and through enhanced implementation of G20 regional plans.
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Strong and effective international financial institutions help underpin growth and sustainable development. We reaffirm our commitment to further strengthening the global financial safety net with a strong, quota-based, and adequately resourced IMF at its centre. We are committed to concluding the 15th General Review of Quotas including a new quota formula by the Spring Meetings and no later than the Annual Meetings of 2019. We call on the IMF and World Bank to work with borrowers and creditors to improve the recording, monitoring and transparent reporting of public and private debt obligations. We look forward to the IMF review of programme conditionality and the review of its debt limits policy.
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We will continue to monitor cross border capital flows and deepen our understanding of the available tools, so we can harness their benefits while also managing the risks and enhancing resilience. We will continue to take steps to address debt vulnerabilities in low income countries by supporting capacity building in public debt and financial management, and strengthening domestic policy frameworks. We will work towards enhancing debt transparency and sustainability, and improving sustainable financing practices by borrowers and creditors, both official and private, including infrastructure financing. We support ongoing work by the IMF, WBG and Paris Club on LICs debt and the continued efforts of the Paris Club towards the broader inclusion of emerging creditors. We welcome the final report of the G20 Eminent Persons Group on Global Financial Governance.
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An open and resilient financial system, grounded in agreed international standards, is crucial to support sustainable growth. We remain committed to the full, timely and consistent implementation and finalization of the agreed financial reform agenda, and the evaluation of its effects. We will continue to monitor and, if necessary, tackle emerging risks and vulnerabilities in the financial system; and, through continued regulatory and supervisory cooperation, address fragmentation. We look forward to continued progress on achieving resilient non-bank financial intermediation. We will step up efforts to ensure that the potential benefits of technology in the financial sector can be realized while risks are mitigated. We will regulate crypto-assets for anti-money laundering and countering the financing of terrorism in line with FATF standards and we will consider other responses as needed. We thank Mr. Mark Carney for his service as FSB Chair and we welcome the appointment of Mr. Randal K Quarles, as Chair of the FSB and of Mr. Klaas Knot, as Vice Chair.
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We will continue our work for a globally fair, sustainable, and modern international tax system based, in particular on tax treaties and transfer pricing rules, and welcome international cooperation to advance pro-growth tax policies. Worldwide implementation of the OECD/G20 Base Erosion and Profit Shifting package remains essential. We will continue to work together to seek a consensusbased solution to address the impacts of the digitalization of the economy on the international tax system with an update in 2019 and a final report by 2020. We welcome the commencement of the automatic exchange of financial account information and acknowledge the strengthened criteria developed by the OECD to identify jurisdictions that have not satisfactorily implemented the tax transparency standards. Defensive measures will be considered against listed jurisdictions. All jurisdictions should sign and ratify the multilateral Convention on Mutual Administrative Assistance in Tax Matters. We continue to support enhanced tax certainty and tax capacity building in developing countries, including through the Platform for Collaboration on Tax.
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International trade and investment are important engines of growth, productivity, innovation, job creation and development. We recognize the contribution that the multilateral trading system has made to that end. The system is currently falling short of its objectives and there is room for improvement. We therefore support the necessary reform of the WTO to improve its functioning. We will review progress at our next Summit.
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Recalling our commitments from Hangzhou and Hamburg, we welcome the concrete policy solutions developed by the Global Forum on Steel Excess Capacity (GFSEC), facilitated by the OECD. We call on all members to implement the Berlin and Paris GFSEC Ministerial recommendations and commitments. We look forward to a substantive report by June 2019.
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We remain committed to prevent and fight corruption and lead by example. We agree on the new action plan 2019-2021 and endorse Principles on Preventing Corruption and Ensuring Integrity in State-Owned Enterprises and on Preventing and Managing Conflicts of Interest in the Public Sector. These will foster transparency and integrity in the public and private sectors. We will continue practical cooperation to fight corruption including in line with our G20 commitments. We will further explore the links between corruption and other economic crimes and ways to tackle them, including through cooperation on the return of persons sought for such offences and stolen assets, consistent with international obligations and domestic legal systems. We ask relevant international organizations to report back to us on those issues during the next presidency. We call for the effective implementation by all G20 countries of the UN Convention Against Corruption, including the criminalization of the bribery of foreign public officials, and note the work towards possible adherence to the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions.
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We reaffirm our strong condemnation of terrorism in all its forms and manifestations. We commit to the full implementation of The Hamburg G20 Leaders Statement on Countering Terrorism. We will step up our efforts in fighting terrorist and proliferation financing, and money laundering. We urge the digital industry to work together to fight exploitation of the internet and social media for terrorist purposes.
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We thank Argentina for its G20 Presidency and for hosting the successful Buenos Aires Summit and we look forward to our next meetings in Japan in 2019 and in Saudi Arabia in 2020.
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Afreximbank President says Africa can meet $300 billion annual cost of development plan
Africa has the money to meet the estimated $300 billion annual cost required for the attainment of the 10-year plan under the African Union’s Agenda 2063, Prof. Benedict Oramah, President of the African Export-Import Bank (Afreximbank), has said.
Addressing guests at the World Youth Forum 2018 organised recently in Sharm El Sheikh, Egypt, Prof. Oramah noted that Africa’s foreign exchange reserves currently stood at almost $500 billion and had consistently been above that figure until the commodity price shock in 2015/2016.
The continent also had about $800 billion under management by pension funds in the 12 African countries where the market was most developed, with that figure forecast to rise to $1.1 trillion by 2020, continued the President. In addition, Africa received $63 billion in migrant remittances annually, showing that the continent had more than $1 trillion that it could use to finance the $300 billion of investment that was required.
He said that the challenge was that the reserves were sitting outside Africa, earning little or nothing, and that when African countries tried to borrow the same money, they ended up paying very high rates.
Prof. Oramah said that the continent needed to look inward, asking, “Why can’t we do something about it? Why can’t we recycle some of our money? Why can’t we do what some of the Asian countries have done?”.
He announced that Afreximbank had attempted to answer those questions by giving itself an objective to raise $10 billion from Africa in five years to support its business. It had been surprised to have raised $5.7 billion in the first year.
The President said that Africa had to find a way to more effectively use the migrant revenue that was coming into the continent and highlighted the need to democratize investment opportunities in Africa. People should not look to governments alone to make investments but should bring in private money, he added.
President Oramah participated in a panel on “Agenda 2063: The Africa We Want” and was joined by Sameh Shoukry, Minister of Foreign Affairs of Egypt; Arnauld Alndji, Minister of Equal Opportunities, Youth and Gabonese Abroad of Gabon; Evelyne Butoyi, Minister of Youth, Posts and Information Technologies of Burundi; and Gunter Nooke, Personal Representative of the German Chancellor for Africa.
The session was attended by President Abdel Fattah El Sissi of Egypt who delivered his final comments at the Forum after the session.
Shoukry participates in the panel discussion “Agenda 2063: The Africa We Want” at the World Youth Forum
Foreign Ministry Spokesperson, Counselor Ahmed Hafez, stated that Minister Shoukry’s participation in the meeting takes place in light of Egypt’s keenness on the advancement of Africa and achieving comprehensive development in the continent.
Shoukry explained that the idea of “Agenda 2063” was initially launched when Heads of State and Government pledged during the AU Summit in 2013 to promote joint efforts in order to develop the African continent and achieve concrete progress in key areas related to inclusive development.
Hafez added that the Foreign Minister affirmed Egypt’s full commitment to supporting the implementation of the 2063 Agenda in the various fields, and particularly the related leading infrastructure projects aimed at achieving African integration.
In this context, he noted that the 2063 Agenda is a Pan-African ambitious and time-bound vision aimed at achieving a genuine breakthrough for the continent, explaining that Egypt spares no effort in order to implement the Agenda as the Egyptian President has launched Egypt’s Vision 2030 to achieve social justice for the Egyptian citizens, with the formation of a national committee to implement the 2063 Sustainable Development Agenda, headed by the Prime Minister.
Meanwhile, Egypt has already started the process of incorporating the objectives and projects of the African Agenda 2063 into its national strategy as the Ministry of Planning and Administrative Reform currently prepares an executive plan to integrate the objectives and programs of the Agenda, in cooperation with all the relevant ministries in this regard.
Moreover, the Spokesperson noted that, during the session, Shoukry tackled the social dimension of the 2063 Agenda, as he pointed out that the issues of empowering women and youth are considered the top priorities of the agenda, underscoring the need to empower youth, being the engine of the desired renaissance, especially as they constitute the majority of the continent's population.
Finally, Shoukry reviewed Egypt’s regional role in implementing the 2063 Agenda, while noting the country’s outstanding efforts in joint African action through its active participation in the pilot projects of the Development Agenda under its current membership in the African Union Troika. He also highlighted the serious national efforts in support for the agricultural and industrial sectors in increasing the employment rates in the continent through cooperation with the concerned international institutions and partners of Africa with a view to eradicating poverty.
In this regard, he praised the joint African steps taken to establish continental financial institutions such as the African Investment Bank, the African Stock Exchange, the African Monetary Fund, and the African Central Bank.
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AfCFTA ratification update, @AUTradeIndustry:
“Great and welcome news. Getting closer to 22. Senegalese cabinet last night adopted draft law authorizing ratification of AfCFTA Agreement. Next and final phase is adoption by Parliament. Looking forward to deposit of instrument of ratification during February 2019 AU Summit.”
20th EAC Heads of State Summit postponed
The 20th Ordinary Meeting of the Summit of the East African Community Heads of State that was slated for Friday, 30th November, 2018 at the Arusha International Conference Centre (AICC) in Arusha, Tanzania has been postponed to a later date. Making the announcement at the AICC’s Simba Hall, the Chairperson of the EAC Council, Hon Dr. Kirunda Kivejinja, said that the Summit would not take place due to a lack of quorum caused by the absence of the Republic of Burundi. Earlier previews: Trade disputes cloud EAC heads of state summit; Is Bujumbura boycotting EAC summit?; Apathy by member countries to blame for EAC financial woes; Cash-strapped EAC shelves EALA sitting in Zanzibar; Uhuru, Magufuli to open Namanga border centre
The East Africa Law Society (EALS) 2018 conference on the theme AfCFTA – challenges and opportunities for the legal profession is underway in Mombasa. Related: An African alliance of attorneys has launched an initiative aimed at combating transnational crimes on the continent.
AUC-US High Level Dialogue: selected outcomes
AU Commission Deputy Chairperson Amb. Quartey and US Assistant Secretary Nagy recommitted to deepening the partnership between the US and the AU, to achieve the AU’s vision of “an integrated, prosperous and peaceful Africa, driven by its own citizens and representing a dynamic force in the global arena.”
The US affirmed its support to the AfCFTA while acknowledging the progress attained on its establishment. The US also pledged to enhance discussion on how to complement and support the AfCFTA. Both sides agreed on the value of convening an annual forum for trade and investment to bring together the US and African private sectors to promote investment and expand AGOA implementation at the regional and continental levels.
Both sides agreed on the need to involve the African Union Development Agency/NEPAD Planning and Coordinating Agency in the African Capacity Building Foundation and the African diaspora in the AUC-US High-Level Dialogue. The two sides also agreed to develop a mechanism to involve the RECs in the High-Level Dialogue and propose a structure to promote interactions between the African and US private sectors. [Download: pdf Remarks by Amb. Kwesi Quartey (312 KB) and pdf Remarks by Tibor Nagy (249 KB) ]
Towards a regional database of cross-border financial flows in the EAC
Having a robust, reliable and up to date database to capture cross border financial flows in the EAC, will ensure that partners provide pertinent and accurate information that partner states will use to support the conduct of regional monetary policy in line with the objective of the EAMU protocol of promoting and maintaining monetary and financial stability in the region. The scope of the assignment: (i) Carry out a gap analysis on capturing the cross border financial flows in each of the six EAC Partner States; (ii) Carry out an assessment of the processes at EAC level for capturing cross border financial flows; (iii) Carry out an assessment of existing IT Infrastructures at the EAC Secretariat and in each Partner State to determine the resources requirements for the cross border financial flows database; (iv) Review the draft EAC conceptual framework for collecting the cross border financial flows against findings and produce a revised conceptual framework.
South Africa’s trade statistics for October 2018 (SARS)
The South African Revenue Service today released trade statistics for October 2018 recording a trade deficit of R5.55bn. The year-to-date (1 January to 31 October 2018) trade deficit of R8.82bn is a deterioration on the surplus for the comparable period in 2017 of R48.94bn. Exports year-to-date increased by 6.6% whilst imports for the same period showed an increase of 13.3%. The R5.55 billion trade deficit for October 2018 is attributable to exports of R122.32bn and imports of R127.87bn. Exports increased from September 2018 to October 2018 by R9.53bn (8.5%) and imports increased from September 2018 to October 2018 by R11.26bn (9.7%).
Tanzania faces ballooning import bill as exports drop (The East African)
Increased imports for transport equipment and building and construction materials have seen Tanzania’s current account deficit widen by $966m to $2.159bn in the year ending September 2018, compared with $1.193bn in the same period in 2017. The figure represents a 7.5% rise from August 2018, when the deficit was $2.009bn. The Bank of Tanzania (pdf) says all categories of imports went up, especially capital goods, transport equipment, building and construction materials, an increase attributed to the ongoing construction of the standard gauge railway, roads and bridges, airports and ports. In its latest economic review, the central banks says oil imports, which make up the largest share of imports into the country, accelerated by 8.1% to $1.973bn, largely blamed on the rise in prices in the world market caused by supply factors. At the same time, the export value of goods and services declined, mainly due to a decline in the export of non-traditional goods.
Eswatini: Government’s ambitious Ease of Doing Business target (The Times)
The incoming minister of Commerce, Industry and Trade, Minister Manqoba Khumalo, in his vision statement, disclosed that he seeks to attain, and sustain, an Ease of Doing Business index that will position Eswatini in the top 10 in Africa, and top three in Southern Africa. This is against the backdrop of the fact that Eswatini recently dropped five places in the Ease of Business. The World Bank, through its 16th edition of the Ease of Doing Business Report 2019, disclosed that the kingdom was ranked at 117 out of 190 countries. This effectively meant Eswatini’s business environment continued to diminish on a yearly basis when taking into consideration the fact that in 2018, the World Bank ranked the country at 112, which was a regression from the 2017 ranking of 111 out of 190 economies.
Safety, competitiveness, infrastructure key to aviation’s benefits in Africa (IATA)
The International Air Transport Association has urged governments in Africa to maximize the positive social and economic power of aviation by working together to promote safe, sustainable and efficient air connectivity. “African aviation supports $55.8bn of economic activity and 6.2 million jobs. To enable aviation to be an even bigger driver of prosperity across the continent, we must work closely with governments,” said Alexandre de Juniac, IATA’s DG and CEO, speaking at the 50th Annual General Assembly meeting of the African Airline Association in Morocco. Competitiveness: Airlines in Africa, on average, lose $1.55 for every passenger carried. Establishing competitive cost structures that enable growth and reducing blocked funds are essential to improving the competitiveness of African aviation. “Africa is an expensive place for airlines to do business. There is no shortage of examples illustrating the heavy burden that governments extract from aviation. Jet fuel costs are 35% higher than the rest of the world. User charges, as a percentage of airlines’ operating costs, are double the industry average. And taxes and charges are among the highest in the world. On top of that, $670m of airline funds are blocked. Too many African governments view aviation as a luxury rather than a necessity. We must change that perception,” said de Juniac.
Daniel Mahler: The shifting gravity of global poverty (World Bank Blogs)
Thirty years ago, 1 in 7 of the world’s extreme poor – those living on less than $1.90 a day – were in Sub-Saharan Africa. Over the years, as other regions successfully reduced their poverty levels, this number has increased and by 2015, 4 in 7 of the global poor were living in Sub-Saharan Africa. The newly published Poverty and Shared Prosperity Report warns that as many as 9 in 10 of the world’s poor may live in this region by 2030 if current trends continue. Why is global poverty gravitating towards Sub-Saharan Africa? There are several reasons for this, many of which are discussed in Chapter 1 (pdf) of the Poverty and Shared Prosperity report.
Forging a path beyond borders: The Global South (UNCTAD)
Climate finance
Climate finance from developed to developing countries: public flows in 2013-17 (OECD)
Public climate finance from developed to developing countries totalled $56.7bn in 2017, up 17% from $48.5bn in 2016, according to new data compiled by the OECD. A new data series for 2013-2017 shows that public climate finance has risen by 44% from $39.5bn in 2013. The year-on-year rise has been steady aside from a small dip in 2015. The data includes bilateral public climate-related aid from developed countries, multilateral climate finance attributable to developed countries, and officially supported climate-related export credits from developed countries.
Climate investment opportunities in cities: an IFC analysis
Cities in emerging markets alone have the potential to attract more than $29.4 trillion in climate-related investments in six key sectors by 2030, according to a new report by IFC, a member of the World Bank Group. The report analyzes cities’ climate-related targets and action plans in the six regions, identifying opportunities in priority sectors such as green buildings, public transportation, electric vehicles, waste, water, and renewable energy. It highlights innovative approaches that cities are already using -such as green bonds and public-private partnerships -to attract private capital and build urban resilience. The report includes detailed assessments of the climate-investment opportunities in six representative cities spanning a variety of geographies, sizes, and climate concerns:
OECD, UNEP and World Bank call for a radical shift in financing for a low-carbon, climate-resilient future
Which sectors have attracted most private investments in infrastructure in 2017? (World Bank Blogs)
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20th Ordinary Meeting of the EAC Heads of State postponed to a later date
The 20th Ordinary Meeting of the Summit of the East African Community Heads of State that was slated for Friday, 30th November, 2018 at the Arusha International Conference Centre (AICC) in Arusha, Tanzania has been postponed to a later date.
Making the announcement at the AICC’s Simba Hall, the Chairperson of the EAC Council, Hon Dr. Kirunda Kivejinja, said that the Summit would not take place due to a lack of quorum caused by the absence of the Republic of Burundi.
“According to Rule 11 of the Rules of Procedure of the Summit of the EAC Heads of State, quorum is made of all Partner States representation which is in consonance with decision making by consensus under Article 12 of the Treaty,” Dr. Kivejinja, who is also Uganda’s 2nd Deputy Prime Minister and Minister of EAC Affairs.
The decision to postpone the 20th Ordinary Summit was taken by President Yoweri Museveni of Uganda; President Uhuru Kenyatta of Kenya; President Dr. John Pombe Joseph Magufuli of Tanzania; Hon. Paul Moyom Akec, Minister of Trade, Industry and EAC Affairs representing South Sudanese President Salva Kiir Mayardit, and; Hon. Dr. Richard Sezibera, Minister of Foreign Affairs and International Cooperation, representing Rwandan President Paul Kagame, all of whom were present at the meeting venue in Arusha.
“The Heads of State regret the inconveniences caused to the distingushed delegates and guests,” said Dr. Kivejinja.
The Summit meeting was preceded by the 38th Meeting of the Council of Ministers which was also not attended by the Republic of Burundi.
Among the items which were on the Provisional Agenda of the 20th Summit of the EAC Heads of State were: the status of ratification of various protocols; the status of resolution of long outstanding non-tariff barriers, and; the progress report on the adoption of Political Confederation as a Transitional Model to the East African Political Federation.
Other items on the Agenda were: the roadmap for the accelerated integration of the Republic of South Sudan into the EAC, and the verification exercise for the admission of the Republic of Somalia into the Community.
The Summit was also to consider reports on modalities for the promotion of Motor Vehicle Assembly in East Africa aimed at reducing importation of used vehicles into the Community, and; the review of the textile and leather sector with a view to developing a strong and competitive domestic sector that gives consumers better choice than imported textile and footwear.
The Summit was also to review a progress report by the Council of Ministers on the Summit Directive on having two (2) Deputy Secretaries General at the Community recruited competitively on a rotational basis among the Partner States.
The Summit had been expected to assent to various Bills passed by the East Legislative Assembly, namely: the EAC Polythen Materials Control Bill, 2016; the Administration of the East African Court of Justice Bill, 2018; the EAC Monetary Institute Bill, 2018, and; the EAC Customs Management (Amendment) Bill, 2018.
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South Africa Merchandise Trade Statistics for October 2018
South Africa posts largest trade gap in 9 months
South Africa’s trade deficit widened to R5.55 billion in October of 2018 from a downwardly revised R3.83 billion in the previous month and compared with market expectations of a R2.25 billion shortfall. It was the largest trade gap since January, as imports rose faster than exports. Considering the first 10 months of the year, the country posted a R8.82 billion deficit.
Imports increased 9.7 percent month-over-month to R127.87 billion, mainly driven by higher purchases of vehicles and transport equipment (35 percent); chemical products (21 percent); original equipment components (11 percent); and machinery and electronics (8 percent). Meanwhile, imports declined for mineral products (-7 percent). Main import partners were: China (19.1 percent of total imports), Germany (9.1 percent), Saudi Arabia (6.7 percent), the US (5.7 percent) and Nigeria (4.9 percent).
Exports advanced 8.5 percent month-over-month to R122.32 billion, boosted by higher sales of mineral products (15 percent); vehicles and transport equipment (14 percent); prepared foodstuff (35 percent); and machinery and electronics (18 percent). On the other hand, exports dropped for vegetable products (-30 percent) and other unclassified (-59 percent). The most important export partners were: China (9.7 percent of total exports), Germany (9.4 percent), the US (6 percent), the UK (5.6 percent) and Japan (4.8 percent).
Excluding trade with neighboring Botswana, Lesotho, Namibia and eSwatini, the country recorded a trade gap of R12.97 billion in October.
The South African Revenue Service (SARS) today released trade statistics for October 2018 recording a trade deficit of R5.55 billion. These statistics include trade data with Botswana, Eswatini, Lesotho and Namibia (BELN).
The year-to-date (01 January to 31 October 2018) trade deficit of R8.82 billion is a deterioration on the surplus for the comparable period in 2017 of R48.94 billion. Exports year-to-date increased by 6.6% whilst imports for the same period showed an increase of 13.3%.
Including trade data with Botswana, Eswatini, Lesotho and Namibia (BELN)
The R5.55 billion trade deficit for October 2018 is attributable to exports of R122.32 billion and imports of R127.87 billion. Exports increased from September 2018 to October 2018 by R9.53 billion (8.5%) and imports increased from September 2018 to October 2018 by R11.26 billion (9.7%).
Exports for the year-to-date (01 January to 31 October) increased by 6.6% from R963.99 billion in 2017 to R1 027.94. billion in 2018. Imports for the year-to-date of R1 036.76 billion are 13.3% more than the imports recorded in January to October 2017 of R915.05 billion, leaving a cumulative trade deficit of R8.82 billion for 2018.
On a year-on-year basis, the R5.55 billion trade deficit for October 2018 is a deterioration from the surplus recorded in October 2017 of R4.18 billion. Exports of R122.32 billion are 17.8% more than the exports recorded in October 2017 of R103.83 billion. Imports of R127.87 billion are 28.3% more than the imports recorded in October 2017 of R99.65 billion.
September 2018’s trade deficit was revised downwards by R0.87 billion from the previous month’s preliminary deficit of R2.95 billion to a revised deficit of R3.83 billion as a result of ongoing Vouchers of Correction (VOC’s).
Trade highlights by category
The main month-on-month export movements: R’ million |
||
Section:
|
Including BELN:
|
|
Mineral Products
|
+R3 727
|
+ 15%
|
Vehicles & Transport Equipment
|
+R2 175
|
+ 14%
|
Prepared Foodstuff
|
+R1 653
|
+ 35%
|
Machinery & Electronics
|
+R1 531
|
+ 18%
|
Precious Metals & Stones
|
+R1 297
|
+ 6%
|
Base Metals
|
+R 460
|
+ 4%
|
Other Unclassified
|
-R 455
|
- 59%
|
Vegetable Products
|
-R2 113
|
- 30%
|
Total
|
+ R8 275
|
87%
|
Total Movement
|
+ R9 532
|
100%
|
The main month-on-month import movements: R’ million |
||
Section:
|
Including BELN:
|
|
Vehicles & Transport Equipment*
|
+R3 181*
|
+ 35%
|
Chemical Products
|
+R2 505
|
+ 21%
|
Machinery & Electronics
|
+R1 877
|
+ 8%
|
Original Equipment Components
|
+R1 024
|
+ 11%
|
Textiles
|
+R 964
|
+ 24%
|
Vegetable Products
|
+R 701
|
+ 43%
|
Base Metals
|
+R 578
|
+ 10%
|
Prepared Foodstuff
|
+R 410
|
+ 12%
|
Mineral Products
|
-R1 815
|
- 7%
|
Total
|
+R9 425
|
84%
|
Total Movement
|
+R11 255
|
100%
|
* The import trade numbers are over stated by R1.96 billion due to a BELN transaction that will be adjusted during the December trade statistics release.
Trade highlights by world zone
The world zone results from September 2018 (revised) to October 2018 are given below.
Africa:
Trade surplus: R14 869 million – this is an improvement of R718 million in comparison to the R14 151 million surplus recorded in September 2018.
America:
Trade deficit: R2 417 million – this is a deterioration of R 392 million in comparison to the R2 026 million deficit recorded in September 2018.
Asia:
Trade deficit: R22 116 million – this is a deterioration of R2 065 million in comparison to the R20 051 million deficit recorded in September 2018.
Europe:
Trade deficit: R2 401 million – this is a deterioration of R1 834 million in comparison to the R 567 million deficit recorded in September 2018.
Oceania:
Trade deficit: R 568 million – this is a deterioration of R 31 million in comparison to the R 537 million deficit recorded in September 2018.
Excluding trade data with Botswana, Eswatini, Lesotho and Namibia (BELN)
The trade data excluding BELN for October 2018 recorded a trade deficit of R12.97 billion. This was a result of exports of R108.61 billion and imports of R121.59 billion.
Exports increased from September 2018 to October 2018 by R8.06 billion (8.0%) and imports increased from September 2018 to October 2018 by R8.38 billion (7.4%).
The cumulative deficit for 2018 is R84.06 billion compared to R28.49 billion deficit in 2017.
Trade highlights by category
The main month-on-month export movements: R’ million |
||
Section:
|
Excluding BELN:
|
|
Mineral Products
|
+R3 439
|
+ 15%
|
Vehicles & Transport Equipment
|
+R1 993
|
+ 14%
|
Precious Metals & Stones
|
+R1 557
|
+ 8%
|
Machinery & Electronics
|
+R1 388
|
+ 20%
|
Prepared Foodstuff
|
+R1 363
|
+ 40%
|
Other Unclassified
|
-R 461
|
- 60%
|
Vegetable Products
|
-R2 207
|
- 34%
|
Total
|
+R7 072
|
88%
|
Total Movement
|
+R8 056
|
100%
|
The main month-on-month import movements: R’ million |
||
Section:
|
Excluding BELN:
|
|
Chemical Products
|
+R2 110
|
+ 19%
|
Machinery & Electronics
|
+R1 977
|
+ 8%
|
Vehicles & Transport Equipment
|
+R1 195
|
+ 13%
|
Original Equipment Components
|
+R1 024
|
+ 11%
|
Textiles
|
+R 783
|
+ 22%
|
Vegetable Products
|
+R 698
|
+ 44%
|
Base Metals
|
+R 532
|
+ 10%
|
Prepared Foodstuff
|
+R 363
|
+ 13%
|
Plastics & Rubber
|
+R 361
|
+ 7%
|
Mineral Products
|
-R1 834
|
- 7%
|
Total
|
+R7 209
|
86%
|
Total Movement |
+R8 382 |
100% |
Trade highlights by world zone
The world zone results for Africa excluding BELN from September 2018 (Revised) to October 2018 are given below.
Africa:
Trade surplus: R7 445 million – this is an improvement of R2 115 million in comparison to the R5 330 million surplus recorded in September 2018.
Botswana, Eswatini, Lesotho and Namibia (Only)
Trade statistics with the BELN for October 2018 recorded a trade surplus of R7.42 billion. This was a result of exports of R13.71 billion and imports of R6.29 billion.
Exports increased from September 2018 to October 2018 by R1.48 billion (12.1%) and imports increased from September 2018 to October 2018 by R2.87 billion (84.2%).
The cumulative surplus for 2018 is R75.24 billion compared to R77.42 billion in 2017.
Trade Highlights by Category
The main month-on-month export movements: R’ million |
||
Section:
|
BELN:
|
|
Prepared Foodstuff
|
+R 290
|
+ 23%
|
Mineral Products
|
+R 288
|
+ 14%
|
Chemical Products
|
+R 245
|
+ 24%
|
Vehicles & Transport Equipment
|
+R 182
|
+ 19%
|
Machinery & Electronics
|
+R 143
|
+ 8%
|
Base Metals
|
+R 138
|
+ 18%
|
Textiles
|
+R 120
|
+ 22%
|
Misc Manufactured Articles
|
+R 105
|
+ 34%
|
Vegetable Products
|
+R 95
|
+ 18%
|
Plastics & Rubber
|
+R 76
|
+ 15%
|
Wood Pulp & Paper
|
-R 148
|
- 31%
|
Precious Metals & Stones
|
-R 261
|
- 25%
|
Total
|
+R1 273
|
86 %
|
Total Movement
|
+R1 476
|
100%
|
The main month-on-month import movements: R’ million |
||
Section:
|
BELN:
|
|
Vehicles & Transport Equipment*
|
+R1 986*
|
+5 669%
|
Chemical Products
|
+R 395
|
+ 69%
|
Precious Metals & Stones
|
+R 276
|
+ 62%
|
Textiles
|
+R 181
|
+ 38%
|
Machinery & Electronics
|
-R 100
|
- 20%
|
Total
|
+R2 738
|
95%
|
Total Movement
|
+R2 873
|
100%
|
* The import trade numbers are over stated by R1.96 billion due to a transaction that will be adjusted during the December trade statistics release.
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African Union Commission and the United States commit to advance efforts towards stability and development in Africa
The African Union (AU) Commission and the United States of America convened the 6th annual High-Level Dialogue at the African Union Headquarters, Addis Ababa on 29 November 2018.
Led by the African Union Commission Deputy Chairperson Amb. Kwesi Quartey and the Assistant Secretary of State for African Affairs Tibor Nagy, both sides reaffirmed their commitment to strengthen African regional integration and enhance cooperation and synergy in advancing efforts towards stability and sustainable economic development in Africa, centered on mutual interest and shared values.
The High-Level Dialogue is an opportunity for the AU Commission and the U.S. to review progress on the implementation in the various aspects of cooperation under the four pillars of the AUC-U.S. Partnership in the areas of peace and security; economic growth, trade and investment; democracy and governance; and promoting investment opportunities and development. The cooperation is aligned with the African Union development framework, Agenda 2063.
The U.S. affirmed its support to the African Continental Free Trade Area (AfCFTA) while acknowledging the progress attained on its establishment. Since March 2018, 49 Member States of the African Union have signed the Agreement establishing the AfCFTA; 12 have ratified it. The U.S. also pledged to enhance discussion on how to complement and support the AfCFTA.
The African Union Commission welcomes the Congressional passage of the Better Utilization of Investments Leading to Development (BUILD) Act, which will deploy new development finance instruments, including expanding the lending limit to US$60 billion. Since October 2017, US$869 million of Overseas Private Investment Corporation investment has catalyzed US$2.12 billion in private sector investment.
The African Union Commission also welcomes the Millennium Challenge Corporation Modernization Act, to promote regional integration, trade, and economic growth. In addition, the United States noted that the Connect Africa Initiative, launched in July 2018, seeks to invest one billion USD over the next two years in the areas of information and communications technology; value chains; and transportation and logistics.
The AU highlighted efforts to encourage transformative investments for women, including a fund for women in business. Both sides agreed on the value of convening an annual forum for trade and investment to bring together the U.S. and African private sectors to promote investment and expand African Growth and Opportunity Act (AGOA) implementation at the regional and continental levels.
Both sides agreed to deepen collaboration to advance peace and security. The AU Commission briefed on the AU Peace Fund, noting that Member States have contributed approximately US$60 million to the Fund, the highest amount since the establishment of the Peace Fund in 1993. The Peace Fund finances mediation and preventive diplomacy, institutional capacity building and peace support operations.
The two sides recognized the sacrifices and contributions of African peacekeepers, and the ongoing efforts by the AU in upholding standards for human rights and conduct, ensuring financial transparency, and ensuring accountability. The two sides agreed to strengthen support for the stabilization process in Somalia as well as the conditions based-exit strategy of AMISOM, as part of the Somalia Transition Plan.
In the same context, the leaders also committed to continue support for the Multi National Joint Task Force (MNJTF) against Boko Haram and the G5 Sahel force to become effective in tackling the security challenges facing the Sahel region.
To counter transnational threats, the two sides agreed to increase collaboration including on combating terrorism, violent extremism, and radicalization, building on the advances of the annual U.S.-AU Countering Violent Extremism Week. Both highlighted the importance of curbing illicit arms and financial flows, which continue to fuel conflict in Africa. They also underscored the nexus between peace, security, governance and development.
Africa’s renewed efforts to fight corruption, strengthen democratic institutions and good governance were also discussed. The two sides acknowledged the progress to prevent and combat corruption in Africa, as well as the ongoing work under the 2018 AU theme of the year “Winning the fight against corruption: a sustainable path to Africa’s transformation”.
In the same context, the two sides welcomed the critical work of AU’s Democracy and Electoral Assistance Unit in support of the conduct of transparent electoral processes in line with the relevant AU instruments.
Both sides lauded the outcomes of the recent Extraordinary Summit on AU Reform, which instills ownership by Member States and greater efficiency.
The U.S. and the AU look forward to operationalization of the Hybrid Court for South Sudan to promote accountability. Both sides committed to strengthening democratic institutions as the bedrock to promote good governance, constitutionalism and rule of law as well as promotion and protection of human rights.
The two sides exchanged views on cooperation on youth empowerment, leadership development and entrepreneurship initiatives. Both leaders commended the work of the AU Commission in the successful recruitment, training and deployment of the 9th cohort of African Union Youth Volunteer Corps (AU-YVC) comprising 208 young Africans, 56% of whom are female.
To advance investment opportunity and development in Africa, the delegations emphasized the importance of expanding professional opportunities for young people through programs such as the Young African Leaders Initiative (YALI).
Both delegations discussed the significant progress achieved in the reduction of maternal and child mortality rates, promotion of gender equality and women’s empowerment, advancing the women, peace and security agenda in Africa, and collaboration on public health.
The AU also highlighted Assembly Decision 635 on achieving full gender parity and 35% youth representation by 2025 as well as the new AU strategy on gender equality and women’s empowerment to fast track progress.
Both sides agreed on the need to involve the African Union Development Agency (AUDA)/NEPAD Planning and Coordinating Agency (NPCA) in the African Capacity Building Foundation (ACBF) and the African diaspora in the AUC-U.S. High-Level Dialogue. The two sides also agreed to develop a mechanism to involve the Regional Economic Communities (RECs) in the High-Level Dialogue and propose a structure to promote interactions between the African and U.S. private sectors.
The two sides reaffirmed their commitment to the Africa Centers for Disease Control (Africa CDC) and Prevention and to enhance cooperation in surveillance, emergency preparedness and response, laboratory systems, information systems, and workforce development. Africa CDC has made commendable contributions, including technical support to Member States in response to outbreaks of infectious diseases.
The African Union’s efforts to mitigate the effects of fall armyworm on agricultural productivity under the Comprehensive Africa Agricultural Development Program (CAADP), was acknowledged, as well as its plans to promote food safety.
Furthermore, both sides committed to enhancing cybersecurity collaboration and protection of intellectual property rights at the continental level, building on relevant AU instruments including the Protocol on Cybersecurity and Data Protection.
AU Commission Deputy Chairperson Amb. Quartey and U.S. Assistant Secretary Nagy recommitted to deepening the partnership between the United States and the African Union, to achieve the AU’s vision of “an integrated, prosperous and peaceful Africa, driven by its own citizens and representing a dynamic force in the global arena.”
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Safety, competitiveness, infrastructure key to aviation’s benefits in Africa
The International Air Transport Association (IATA) urged governments in Africa to maximize the positive social and economic power of aviation by working together to promote safe, sustainable and efficient air connectivity.
“African aviation supports $55.8 billion of economic activity and 6.2 million jobs. To enable aviation to be an even bigger driver of prosperity across the continent, we must work closely with governments,” said Alexandre de Juniac, IATA’s Director General and CEO, speaking at the 50th Annual General Assembly (AGA) meeting of the African Airline Association (AFRAA) in Morocco.
Safety was highlighted as a positive example of progress through collaboration. “Africa has had no jet hull losses for two years running and is two years free of any fatalities on any aircraft type, it’s clear that progress is being made. But more needs to be done. We urge governments to recognize the IATA Operational Safety Audit (IOSA) in their safety oversight programs.”
Only 24 African states comply with at least 60% of ICAO Standards and Recommended Practices (SARPS). “That is not good enough,” said de Juniac, who encouraged states to make global safety standards a top priority.
Regarding competitiveness, de Juniac stated that airlines in Africa, on average, lose $1.55 for every passenger carried. Establishing competitive cost structures that enable growth and reducing blocked funds are essential to improving the competitiveness of African aviation.
“Africa is an expensive place for airlines to do business.... Too many African governments view aviation as a luxury rather than a necessity. We must change that perception,” said de Juniac.
On infrastructure, de Juniac said: “In Africa we have infrastructure problems in two extremes. In some cases it is overbuilt and expensive. In other cases, it is deficient and cannot meet demand. Dialogue between industry and government is critical to ensure that there is sufficient capacity to meet demand, that airline technical and commercial quality standards are met and that the infrastructure is affordable.”
IATA expressed strong support for the Single African Air Transport Market (SAATM) initiative. To date, 27 African governments have committed to SAATM and IATA encourages the remaining 28 African Union member states to come on board quickly to enjoy the potential benefits of a connected African economy.
Supporting the projected growth of aviation in Africa – a quadrupling of passengers over the next two decades – will require an expanded labor force. De Juniac called on governments to develop policies to build their training pipeline to support growth and tap into the power of women to help alleviate a growing skills shortage in the region.
Remarks by Alexandre de Juniac at the 50th Annual General Assembly meeting of the African Airline Association (AFRAA)
Morocco is a great place for the AFRAA AGA. It is one of the fastest growing economies in Africa. The government has understood the power of aviation to catalyze economic activity. And they set policies that enhance competition and foster the growth of connectivity.
As a result, tourism is a major source of jobs and growth. And Morocco has taken on a regional leadership role, with West-African countries relying on its growing hubs in Casablanca and Marrakesh. Other countries on the continent should be inspired by this successful model.
Cooperation with AFRAA
AFRAA and IATA are partners in supporting a safe, secure and sustainable air transport sector that contributes to Africa's economic growth and development. Indeed we recently strengthened our cooperation with an agreement to reinforce the importance of the implementation of global standards by African governments.
There are already two examples where our cooperation is at the top of the agenda.
The first is safety. The Abuja Declaration committed Africa’s governments to achieve world-class safety. With no jet hull losses for two years running and two years free of any fatalities on any aircraft type it is clear that progress is being made. There is, of course, still more to do. We are asking governments to drive additional improvements with two concrete actions:
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First, recognize IOSA in safety oversight. Egypt recently renewed its commitment to this. And we have made progress with Rwanda and Zimbabwe as well. We need more governments to follow their good example. With IOSA carriers outperforming those not on the registry by nearly three times, we have a convincing argument.
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The second is adoption of ICAO Standards and Recommended practices (SARPs). Only 24 African states comply with at least 60% of ICAO SARPS. Quite simply, that is not good enough for an industry that depends on global standards for safety. To support greater implementation we are encouraging governments across the continent to allocate resources, ensure the independence of safety oversight bodies and cooperate regionally where pooled resources can improve both speed and efficiency.
The other area of cooperation that I must highlight is on environmental sustainability. The Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) begins on January 1, 2019. From then, all airlines must begin reporting their emissions. If you need help in getting ready for this, please call on the IATA and AFRAA teams who are working together to support your needs.
In parallel, we are working to increase government participation. Encouragingly, nine governments in this region – Burkina Faso, Botswana, Gabon, Equatorial Guinea, Kenya, Namibia, Nigeria, Zambia and the latest, Cameroon – are committed to join CORSIA from the voluntary period. And globally, the 75 pioneering CORSIA states cover about 84% of aviation activity. That’s good, but we want to push that as close to 100% as possible. And our partner for doing that in Africa is AFRAA.
Agenda for Africa
Looking even more broadly than safety and sustainability, how can we maximize aviation’s ability to catalyze Africa’s growth and development?
Already aviation is a considerable force, supporting $55.8 billion of economic activity and 6.2 million jobs in Africa. That’s impressive. But we are only scratching the surface of what aviation can contribute to building Africa’s future. To enable aviation to be an even bigger driver of prosperity across the continent, we must work with governments:
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To improve competitiveness,
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To develop effective infrastructure,
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To modernize the regulatory framework with a focus on global standards, and
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To ensure a well-trained and diverse workforce.
Competitiveness
Let’s begin with competitiveness. The global airline industry is currently enjoying rather good times. We are expecting 2018 to be our 4th year of generating profits that exceed the cost of capital. It is still, however, a tough business with lots of volatility – including in the price of fuel.
The global average profit per passenger is $7.80. But airlines in Africa, on average, lose $1.55 for every passenger carried. This disparity has many causes. To begin with, Africa is an expensive place for airlines to do business.
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Jet fuel costs are 35% higher than the rest of the world.
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User charges reflect 11.4% of airlines operating costs in Africa – four times that of North America and double industry average.
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And taxes and fees are among the highest in the world.
There is no shortage of examples illustrating the heavy burden that governments extract from aviation:
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In Niger $80 from each ticket is paid to the government in fees, taxes and charges,
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Cameroon recently added a $37 development tax per passenger,
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DR Congo charges every arriving passenger $15 to promote tourism – rather counter-productive if you think of it,
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And Ethiopia’s $24 departure tax undermines the hub’s competitiveness.
There is some good news however. In May, Equatorial Guinea removed its 15% VAT on tickets. Still, too many African governments view aviation as a luxury rather than a necessity. We must change that perception. The value of aviation for governments is not in the tax receipts that can be squeezed from it. It is in the economic growth and job creation that aviation supports.
Another important element of competitiveness for airlines is the ability to reliably repatriate earnings – in line with international treaty obligations.
So having 10 African countries blocking a total $670 million of airline funds is a big concern. Many of these countries are facing severe economic challenges. But blocking airline funds puts connectivity at risk. And that invites even broader economic problems.
It is in everybody’s interest that airlines are paid on-time, at fair exchange rates and in full. And when problems are on the horizon, urgent dialogue is the first step, with creative and proactive mitigation plans following closely behind.
IATA has had success in Nigeria and Egypt where government actions completely cleared the backlog of funds. We urge other Governments to follow suit, particularly in Zimbabwe and Angola.
Infrastructure
Now I’d like to comment on infrastructure requirements which are:
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Sufficient runways, terminals and airspace capacity to meet demand,
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Technical and commercial service quality aligned with airline needs, and
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Affordability.
This is simply said, but not easily achieved.
In Africa we have problems in two extremes:
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At one end, when infrastructure is built, too often we see unnecessary and unfit infrastructure with a hefty price tag. Luanda’s new airport is shaping up to be a case in point. It is probably bigger than what is needed. There are gross cost overruns and delays. The strategy to avoid this is dialogue from the earliest stages of any infrastructure project.
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The other extreme is where critical capacity is missing. Ghana, Senegal and South Africa have taken a collaborative approach to infrastructure that is producing positive results for all stakeholders. But there remain critical bottlenecks in Addis Ababa, Dar Es Salaam, Lagos and Abuja. If planes cannot land, the economic benefits that they bring will fly elsewhere.
Even after governments have consulted to build infrastructure that everybody agrees is needed, we can still face challenges in how it is funded. The last IATA AGM passed a resolution that:
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Recognized airline disappointments with airport privatization,
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Called on governments to be cautious on future privatizations, and
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Urged broad and rigorous consultation to make the right decisions.
We are putting the resolution into practice in Nigeria where the government is considering a private-public partnership in the future development of airports in Lagos and Abuja. IATA is consulting directly with the government on this important project. This includes developing economic regulation to make it a success for all stakeholders and provide the connectivity that Nigeria needs to develop.
We hope that the result of this work will be a model for others to follow because it is clear that Africa needs more infrastructure investment. And it is important that we find the right funding and regulatory models.
Harmonized Regulation
Speaking of regulation, we continue our work to achieve the universal adoption of two important global standards:
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The Montreal Convention 1999 (MC 99) establishes a modern approach to liability and is a key enabler of our efforts to modernize air cargo by facilitating the use of electronic air waybills. Ghana, Niger, Tunisia and Uganda have recently ratified. We urge the 19 African states yet to ratify – to do so soon.
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The second is the Montreal Protocol 2014 (MP 14) which provides an international legal framework for dealing with and deterring unruly passenger incidents. African states were instrumental in its creation. And 8 of the 15 states adopting it so far are from the continent. But we still need to get 22 states to ratify to bring this treaty in to force.
There is also a completely “made in Africa” policy initiative which we are wholeheartedly supporting. That’s the African Union Single Africa Air Transport Market (SAATM) project.
You don’t need me to tell you how difficult it is to get around this continent. Distances that should take a few hours can take days simply because the connectivity does not exist. This inefficiency has an economic cost. The low density of the African intra-continental network makes it impossible to realize the potential benefits of a connected African economy.
SAATM – if implemented – gives Africa the potential for economic transformation.
Twenty-seven states have signed on to SAATM. Now they need to follow promises with action. History has shown that opening markets leads to rapid advances in connectivity. We can be confident that the results of 27 states implementing SAATM will make a powerful case for the remaining 28 to come on board quickly.
To help, IATA worked with the AU, AFCAC and AFRAA to create a guidance booklet on SAATM implementation. This will be launched later today. The aim is to help all stakeholders work together to take the best advantage of SAATM to boost African development on the wings of aviation.
Regulation affects almost every aspect of aviation, so a favorable regulatory environment is critical to the sustainability of the industry, particularly here in Africa. We urge Governments to embrace the ICAO Good Regulatory Practices Guidelines designed to improve the regulatory process and to reduce unnecessary or excessive burdens on the industry.
Workforce
The last point that I would like to address is the human talent that we will need to realize the potential for Africa’s future aviation industry. If we can tackle the issues discussed today – and I am sure that we can – then the number of passengers could quadruple over the next two decades.
Achieving that would require skilled aviation professionals in far greater numbers than we have today. And we all know that finding and retaining the right talent is a challenge even today.
IATA has long been active in this area. Over 2,400 African aviation professionals are trained each year either directly by IATA or via the International Airline Training Fund. So we are a good partner for governments seeking to develop policies to build their training pipeline to support growth.
A particular focus for us at this time is engaging more women in the workforce. Africa can be proud of its leadership in this area with women at the helm of four airlines. On October 31st this year, the first “IATA Women in Aviation Diploma Program” was launched in Johannesburg with 22 female airline executives. And we are currently partnering with Korn Ferry and other aviation organizations in a global study that will help the industry better understand what best practices lead to diversity in the workplace at all levels of seniority.
With these and other initiatives, we can be confident that Africa will have a well-trained and diverse workforce to power the industry forward.
The Business of Freedom
The last thought that I want to leave you with is a reminder of why we are here. Aviation is the business of freedom. The opportunities aviation creates to improve people’s lives are tremendous – especially in Africa. And it is no wonder that aviation is an enabler for so many of the UN’s Sustainable Development Goals.
It is important that the industry is able to drive growth and connectivity in Africa by working in lock-step with government to achieve:
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Competitive cost structures that enable growth,
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Effective infrastructure that can accommodate growth,
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Harmonized regulatory framework that opens markets and promotes growth, and
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A well-skilled diverse workforce that can drive growth.
Thank you.
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AfCFTA ratification update, @GovUganda: Today (Wednesday) the Instrument of Uganda’s ratification of the AfCFTA was officially handed over to the African Union Commission. Uganda is the 9th country to ratify this initiative, which will bolster trade opportunities for Ugandans.
AfCFTA: Big economies afraid of ‘cheating’, says ECA’s David Luke (New Times)
David Luke spoke to Business Times’ James Karuhangaabout about issues to be resolved before completing Phase One of negotiations, approaches to adopt for liberalising trade in goods under the deal and explained why big countries fear they could be cheated. Excerpts:
Q: Then what is complicating things on the agreement? Luke: What has complicated the rules of origin for the AfCFTA is that a number of countries, big countries that are especially in Southern Africa, and Nigeria, are afraid of cheating. Q: How can this be, or who would be cheating them? Luke: They don’t want a situation where, for example, China or India makes a deal for example with a small country to say that ‘goods coming from China will qualify because they made some small changes here and there.’ In some cases quite frankly, they just change the label on the product and put a local label and send it as qualifying. To avoid this, they want product-specific routes and not across-the-board cumulation of 15% or 30%, or any other. What this means is, in the customs declaration, there are about 6,000 tariff lines for all products. There is a whole classification in customs and it is called the harmonised system used worldwide. The difficulty with that is that obviously it takes time to sit down and agree that for this category this is the minimum that we accept. But it’s much more specific.
Nigerian Office for Trade Negotiations tweets: DG NOTN, Ambassador Osakwe, engages with the Technical Working Group of the Presidential Committee on a 21st Century Trade Policy for Nigeria and parameters for AfCFTA implementation. “A Nigerian 21st Century Trade Policy should be constructed on the solid foundations of trade integration, openness, digital economy, opposition to dead-end protectionism and accompanied by robust rules-based safeguards against injurious trade practices”
African Forum for National Trade Facilitation Committees: Committees are cornerstone of pan-African trade dream (UNCTAD)
Because the range of issues covered by trade facilitation provisions in the agreement are so broad, implementation can’t be the remit of one entity, said Willie Shumba, a chief customs expert and adviser for the AUC. “The need for a multi-stakeholder committee on trade facilitation at national level cannot be overemphasized,” Mr Shumba told government agencies and trade operators gathered for the First African Forum for National Trade Facilitation Committees. Issues to tackle include reducing quotas and other harmful non-tariff barriers to trade, setting up single-windows systems, ensuring freedom of transit and improving security and risk management. “The issues are not purely customs issues,” , adding that a host of stakeholders must participate, including trade and transport ministries, port and road authorities, the police, freight forwarders, chambers of commerce. Poul Hansen, who oversees UNCTAD’s work on trade facilitation, said that because there is strong coherence between the AfCFTA and the TFA, the same committee could feasibly work on the provisions under both. “I think it is worthwhile for countries to have a review of what is existing in their national landscape in order to not have what I would call committee clutter.”
PIDA Week 2018 ends with calls to accelerate implementation of game-changing infrastructure projects
ATI Forum: De-risking Nigeria’s investments and trade (Vanguard)
The Government of Nigeria and private sector investors will soon receive important support that will help boost key industries such as the banking sector as well as providing access to competitively priced credit and loan facilities for institutions in Nigeria. Relief is expected once Nigeria finalises its membership into ATI, which is nearing completion. ATI’s Chief Executive Officer, George Otieno commented: ”There are numerous benefits to Nigeria becoming a member of ATI. First, investors and international lenders will look favourably on this action and second the time couldn’t be better for our solutions. We can support the government to diversify the economy, boost banks liquidity, and even help the government to borrow internationally at more competitive rates. This year ATI’s products will stand behind around 5% of all new FDI into Africa so joining ATI literally boosts growth. Lastly, ATI is now paying dividends to shareholder making membership a near budget neutral decision for governments.” [Related: Nigeria perfects measures to join ATI with $20m commitment; Nigeria quits 90 foreign groups over economic agenda]
China, Uganda seek new efforts to boost trade, economic ties (Xinhua)
A group of 30 Chinese entrepreneurs on Wednesday concluded their three-day trip to Uganda to look for business opportunities. Uganda has held several Chinese investment forums with the aim of persuading the Asian country that it is among the best investment destinations in Africa. Lyu Xinhua, chairman of the Council for Promoting South-South Cooperation, said from their brief stay, members of the delegation have observed that Uganda’s investment climate, legal frameworks, affordable labor and infrastructure makes the country more attractive to Chinese investors. [Tanzania snubs Uganda’s invitation for bilateral talks]
Towards an IGAD cooperation, coordination platform for transnational security threats (IGAD)
The expectations from the four-day forum (26-29 November, Entebbe) is to draft a protocol/agreement on the establishment of the regional Criminal Investigation Services and/or the platform roadmap providing a plan of action towards its implementation through coordination and information sharing against trans-security threats. During the meeting, the team will also revisit the findings and recommendations of the Task Force report.
Liberia: Country Partnership Framework FY19-FY24 (World Bank)
The medium-term growth prospects remain positive, although substantial downside risks remain. GDP growth is projected to recover at an annual average rate of 3.8% over the period 2018-2020. The recovery is expected to be largely driven by agriculture, manufacturing and services sectors, as the economy begins to reap the benefits of improved access to roads and cheaper sources of electricity. Inflation is projected to decline from 11.5% in 2018 to 9.5% by 2020. Additionally, in line with projected improvements in the economy, poverty is expected to fall from 50.5% in 2018 to 48.6% in 2020. The CPF focuses on human development and intangible capital, while keeping the balance with investments in infrastructure to consolidate successes of the previous Country Partnership Strategy and reinforce the impact of the WBG program aimed at building human capital and boosting private sector development.
Updated, 2018 World Bank-IMF debt sustainability analyses: Liberia, The Gambia, Guinea
International trade statistics: trends in third quarter 2018 (OECD)
G20 international merchandise trade, seasonally adjusted and expressed in current US dollars, grew marginally in the third quarter of 2018, on the back of rising oil prices, with G20 exports rising by 0.3% and imports by 0.7%, following the minor contractions in the second quarter of 2018. Excluding large oil exporters, such as Russia and Saudi Arabia, G20 trade was flat suggesting that the steady expansion seen over the last two years may have stalled as recent protectionist measures begin to bite. [Various downloads available]
Can Blockchain revolutionize international trade? (WTO)
The publication (pdf) introduces the technology with a basic explanation of how, as a tamper-proof, decentralized record of transactions, it allows participants to collaborate and build trust with each other. It describes different classifications of Blockchains and their current and possible applications in the various areas covered by WTO rules. In doing so, it provides an insight into the extent to which this technology could help with trade facilitation, including how it can hasten the transition to paperless trade transactions. It considers Blockchain’s potential and limits in transforming services by looking at payment systems, insurance and the automation of contracts. The publication also discusses how Blockchain could help ease the administration of intellectual property rights and enhance government procurement processes. Other potential benefits identified by the publication include: [Blockchain can change the face of renewable energy in Africa: here’s how]
pdf Trade and the Commonwealth: developing countries (667 KB) (House of Commons)
Our report is structured as follows. Chapter 2 considers the EU’s unilateral preference schemes, and the possibilities for the UK’s own unilateral arrangements with developing countries after Brexit. Chapter 3 examines the EU’s EPAs and Chapter 4 looks at the role of the Commonwealth in the context of the UK’s relationship with developing countries. Chapter 5 looks at the relationship between trade and gender, particularly in a development context, and Chapter 6 explores the links between trade and development policy, including the coordination of policy between the Department for International Trade and other departments, especially the Department for International Development . Finally, Chapter 7 considers UK support for investment into, and trade with, developing countries. Extract:
There is a relationship between trade and gender. Women are disproportionately affected by trade policy decisions, particularly in developing countries. UK trade policy should seek to not only “do no harm” but to actively promote gender equality, for example by ensuring that women can “move up the value chain” and that trade liberalisation does not undermine labour rights. The UK has an opportunity to show leadership and develop a truly gender-responsive approach to trade policy and should make the most of this opportunity. The Department for International Trade should publish an analysis of its understanding of the relationship between gender and trade. We also consider that before any trade negotiation, DIT, in close collaboration with the Department for International Development, should conduct impact assessments relating to the impact of any agreement on gender inequality. There is not yet enough evidence of whether gender chapters in Free Trade Agreements have a positive impact, but the Government should evaluate such chapters where they are in place; analyse the circumstances in which they might be most effective; and use this analysis to guide future trade policy.
The potential economic impact of Brexit on the Netherlands (pdf, OECD)
Owing to the high uncertainty regarding the final trade agreement between the negotiating parties, the choice has been made to assume a worst case outcome where trade relations between the UK and EU are governed by WTO most favoured nation rules. In doing so, it provides an upper bound estimate of the potential negative economic impact stemming from disruptions in trade. Any final trade agreement that would result in closer relationships between the United Kingdom and the EU could reduce this negative impact. Simulations using the METRO model suggest that from an increase in tariff and non-tariff measures Dutch exports to the UK would fall by 17% and GDP declines by 0.7% in the medium term compared to baseline. [WTO: Parties to government procurement pact approve UK’s terms of participation post-Brexit]
Today’s Quick Links: Mauritius-EU Gender Action Plan: joint monitoring framework agreement After initial bluff, Nigeria off with largest delegation to AfCFTA Intra-African trade fair in Egypt Morocco: FDI increases, trade deficit deepens Kenya: Central bank sees lower trade deficit Nigeria: Maritime operators back SON in fight against counterfeiting, false declaration Why Nigeria needs Free Trade Zones around international airports Twiga Foods mobile phone platform: Technology helps African farmers sell what they sow Kigali Principles an African mechanism to solve continental conflicts better – Sezibera |
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PIDA Week 2018 ends with calls on Africa to accelerate implementation of game-changing infrastructure projects
Addressing Africa’s infrastructure gap remains an imperative that African governments should continue to take seriously if the continent is to realise the aspirations its people as enshrined in the continent’s blueprint for development, Agenda 2063 and the global agenda for sustainable development.
Ministers and delegates attending the fourth Programme for Infrastructure Development in Africa (PIDA) Week in Victoria Falls, Zimbabwe from 26-28 November agreed firm political commitment was necessary for the development of key trans-boundary infrastructure projects that will integrate the continent economically and socially for the benefit of its people.
“Given the infrastructure backlog in the continent, we have to keep up the efforts to accelerate development of key infrastructure projects. PIDA projects, especially transboundary infrastructure projects, will bolster regional integration and are a pre-requisite for unleashing Africa’s growth potential,” they agreed in their communiqué.
Africa, they said, has to increase projects under construction from the current 32 to 50 percent if it is to achieve its developmental aspirations.
The delegates said the continent should create an enabling environment for the private sector to have space to buy into the continent’s key priority projects. “The private sector will not come on board if issues of trust are not mitigated,” they agreed.
“Establishing good governance frameworks and mechanisms for Africa’s infrastructure projects will not only boost investor confidence, it will also guarantee timely delivery of projects within budget and to specification.”
Development
They also agreed that it is essential for the continent to develop bankable and smart infrastructure with cross border orientation to propel socio-economic growth on the continent with governments being urged to proactively all stakeholders, in particular communities to make the projects inclusive and true enablers for development.
De-risking of projects is necessary and critical to ensure they are bankable to attract capital that has remained largely elusive. Infrastructure, the delegates agreed, should not remain in the public sector domain with governments being urged to engage the private sector for long term projects.
The delegates emphasized the importance of strong institutions in Africa’s infrastructure development. “The relevant institutions should facilitate capacity building in key areas of infrastructure development in the continent. This will boost technical capacity and skills at all levels of the project life cycle as well as relevant institutions to ensure efficient development and management infrastructure,” reads the communiqué.
The PIDA Quality Label received recognition as a framework needed to ensure projects fulfil set criteria.
To realize NEPAD’s 5 percent Agenda and the African Infrastructure Guarantee Mechanism (AIGM), the delegates recommended the establishment of PIDA project specific working groups to focus on data transparency and dissemination; advocacy work; project development; review and funding; partnerships and capacity building.
The partners, including the African Union Commission (AUC), NEPAD Agency, the African Development Bank (AfDB), and the Economic Commission for Africa (ECA), vowed to continue working together to put in place sustainable capacity building mechanisms for key infrastructure sectors on the continent and to invest in efforts to accelerate development of key infrastructure projects.
They also pledged to launch and use the PIDA Job Creation Toolkit as a part of the package and means to attract and convince pertinent stakeholders, including financiers and development partners on the benefits of key PIDA priority projects in the construction phase.
They recommended:
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that PIDA PAP 2 (2020-2030) draws from the ongoing review and consultative process and ensure that it is has a realistic list of projects that should be inclusive of all sectors;
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the integration of several key issues including smart and integrated corridor approaches, renewable energy; youth and gender sensitivity potentials of projects in the development of the Second Phase of the PIDA;
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and a strong communications strategy to communicate progress on priority PIDA projects and facilitate sharing of lessons and experiences on the implementation of PIDA projects.
In his closing remarks, Zimbabwe’s State Minister for Matebeleland North Province, Richard Moyo emphasized the need for Africa to accelerate the implementation of PIDA projects.
“This will allow us to add impetus to the continent’s integration process. We need to have the right infrastructure mix and align our national infrastructural projects to the PIDA programme for collective gain,” he said, adding nothing was impossible if Africa united and stayed focused on what it would have agreed to.
Nepad Chief Executive Officer, Mr. Ibrahim Assane Mayaki, also reiterated the need for the continent to accelerate the delivery of infrastructure projects as one.
“We also need to continue enabling a constructive dialogue with all the partners, including the private sector so that we can deliver concretely,” he said, adding over the past three days participants had managed to enhance their partnerships as “we fight for a peaceful, united and prosperous humanity”.
For his part, the African Union’s Infrastructure Director, Mr. Cheik Bedda emphasized the importance of good governance to promote infrastructural development that will positively impact the continent’s economies.
Representatives of the European Union and the GIZ, a major partner to Nepad and its partners in the PIDA programme, also spoke in support of Africa’s quest for an integrated infrastructure network.
“Big change is on the way for Africa through PIDA and we have to stay the course. Huge investments are required for it to become a reality. We as GIZ are with you. There are also huge opportunities in terms of human capital as well for the continent at all levels,” said GIZ African Union Office Director, Ms. Inge Baumgarten.
2018 PIDA Progress Report: Summary Update
Foreword
Five years ago, Africa launched Agenda 2063 calling for “world class, integrated infrastructure that criss-crosses the continent.” This mirrored the spirit of the Programme for Infrastructure Development in Africa (PIDA); which was adopted a year earlier in 2012.
The First Priority Action Plan of PIDA (PIDA PAP) aims to implement key transboundary infrastructure projects with the potential to interconnect, integrate and contribute to structural transformation of Africa’s geographic and economic regions by 2020.
During this year, together with the African Union Commission and our partners we have been able to record some successes towards the implementation of PIDA PAP and the first ten year implementation plan of Agenda 2063.
Currently 44 out of the 55 AU member states have signed the consolidated text of the African Continental Free Trade Area (AfCFTA) and the ratification process is underway. These 44 countries together could create a huge market with a combined population of more than one billion people and a combined gross domestic product of more than US$3.4 trillion. The role of PIDA in contributing to the success of the AfCTA cannot be over-stated and necessitates an integrated approach to infrastructure development.
As regional integration arrangements deepen and intra-African trade increases, we need to focus on improved trans-continental highways in terms of road and rail networks; furthermore, deepening of financial markets and increased cross-border financial flows including money transfer will require us to make additional investments in ICT and digitalisation while growing industrialization and agro-industries will require more reliable and affordable power supply across the energy mix. The NEPAD Agency will thus pursue its integrated corridor development approach and aim to take advantage of synergies between the large trans-boundary projects in PIDA.
In January 2018, the AU Assembly also launched the Single African Air Transport Market (SAATM) and designated H.E. Faure Essozimna Gnassingbé, President of Togo as its champion. As acknowledged by the International Air-Transport Association (IATA), the SAATM has the potential for remarkable transformation that will build prosperity while connecting the African continent.
The NEPAD Agency is leading the Sub-Core Team on SAATM Infrastructure and we are committed to working with the AUC, AfDB, ICAO and other partners to reduce fares and costs of travel by 50% to achieve air traffic double-digit growth rates in Africa by 2023.
Every year around 15 million people of working age enter the labour market in Africa and it is therefore important that we consider how large-scale infrastructure and PIDA in particular, can contribute to absorbing some of this latent labour force. With the support of the German Government through GIZ, the NEPAD Agency has over the last 2 years been working on the PIDA Job Creation Toolkit which includes a methodology to quantify the job creation impacts of infrastructure projects and guidelines on how to mainstream labour market effects into PIDA project planning and implementation.
The Toolkit allows users to explore ways in which to maximize job creation from infrastructure projects and thus capitalize on Africa’s demographic dividend and opportunities for wider regional economic development. This innovative tool will be launched on the margins of the African Union Summit in February 2019.
With current projections that Africa’s population will reach 1.6 billion by 2030, there is enormous pressure to increase food production and increased pressure on water resources, including a projected tenfold increase in water needs for energy production. This, coupled with rapid urbanisation and industrialisation, will increase the demand for water and hence necessitate PIDA from 2019-2024.
With a portfolio of nine (9) transboundary water and 10 hydropower projects, the goal of PIDA Water is to accelerate the preparation and financing of transboundary water projects and foster a water-food-energy nexus approach in the development of hydropower projects.
In 2016 we established the Continental Business Network (CBN) as a platform for high-level engagement with the private sector to facilitate investment in transboundary infrastructure projects. The work of the CBN is to continuously deliberate on how Africa can finance its infrastructure and how Africa’s infrastructure can be de-risked to attract investments from the private sector as well as to explore innovative measures and instruments to close the US$108 billion infrastructure gap on the continent.
Following the launch of the 5% Agenda in 2017, this year the Continental Business Network (CBN) once again gathered international investors, pension funds, stock exchange CEO’s, multi-lateral development banks and G7 representatives at the New York Stock Exchange, to follow up on the Agenda and consider how to structure an Africa Infrastructure Guarantee Mechanism (AIGM) that would attract participation from institutional and long-term investors.
Apart from a well-structured and resourced AIGM, enticing institutional investors to invest significantly in Africa’s infrastructure requires that we have well-prepared and packaged projects. To this end we have continued to strengthen and promote the PIDA Service Delivery Mechanism (SDM) which aims to assist regional project owners with advisory services for early-stage project preparation. Building on the lessons learned in applying this instrument to the Abidjan-Lagos Corridor, we are currently starting to apply it to the Lamu Port-South Sudan Ethiopia Transport Corridor Project (LAPSSET).
In October we were pleased to receive Hon. Railia Odinga the High Representative for Infrastructure Development in Africa, appointed by the the Chairperson of the African Union Commission, H.E Moussa Faki Mahamat. Hon. Odinga will support us in PIDA implementation by championing the upgrading and modernisation of the missing links of the Trans-African Highways Network and the Continental High-Speed Freight Railways Network (C-HSfRN) – two important Infrastructure projects of Agenda 2063 – and its pdf First Ten-Year Implementation Plan (2.04 MB) .
Partnership remains an integral element of PIDA implementation and we continue to work with partners such as GIZ, DBSA, the EU, AfDB, UNECA and others. In 2019, our cooperation with GIZ will enter a new phase as will the PIDA Capacity Building Support from the AfDB. We also look forward to working with the EU through their new phase of the Infrastructure Support Mechanism.
As we celebrate the successes of the past year, I look forward with much anticipation to future successes in 2019 and beyond.
CEO, NEPAD Agency
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Uganda deposits its instrument of ratification of the Agreement on the AfCFTA
The Instrument of Uganda’s ratification of the African Continental Free Trade Area (AfCFTA) Agreement was officially handed over to the African Union Commission on Wednesday, 28 November 2018. Uganda is the 9th country to ratify this initiative, which will bolster trade opportunities for Ugandans.
Below are extracts from the press statement delivered by Hon. Amelia Kyambadde, Minister of Trade, Industry and Cooperatives, on 28 March 2018 following the signing of the AfCFTA Agreement in Kigali, Rwanda:
Introduction
Uganda is a signatory to the pdf Treaty establishing the African Economic Community (the Abuja Treaty) (145 KB) , adopted and signed in 1991. One of the major objectives of the Treaty is to promote economic, social and cultural development and the integration of African economies in order to increase economic self reliance.
During the 18th Ordinary Session of Assembly of the African Union (Addis Ababa, Ethiopia, 23-30 January 2012), the summit adopted a “Decision on boosting intra-African trade and fast tracking the Continental Free Trade Area”.
Negotiations were subsequently launched by the Assembly in June 2015 and effective negotiations started in July 2016 after a preparatory phase. The President of Niger H.E. Issofou Mohammadou was selected to champion and spearhead the negotiations on behalf of the Assembly.
Africa has signed an pdf Agreement Establishing the African Continental Free Trade Area (4.67 MB) . The signing took place on 21st March 2018 during the 10th Extraordinary Session of the Assembly of AfCFTA in Kigali, Rwanda.
The AfCFTA Agreement and its Protocols was signed by 44 countries, including Uganda, which is 80% of the membership of the African Union. In the history of African integration, never before has a legal instrument been signed by that number of countries at a single sitting. This is a testimony to the desire of the African leaders to economically integrate their countries together for the development of the African people for mutual benefit.
We agreed to the principle of variable geometry, which allows those that are ready to proceed while the others will join whenever they are ready. Thus there are 11 countries (including Nigeria, South Africa, Botswana, Lesotho, Burundi, Sierra Leone, Eritrea, Tanzania, Zambia, Namibia and Guinea-Bissau) that did not sign the Agreement [at the time]. These countries will sign the Agreements at a convenient time whenever their domestic processes are completed.[1]
The AfCFTA has three protocols:
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Trade in Goods – this is the instrument that prescribes the modus operandi for the trade in goods;
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Trade in Services – this will define the regime for trade in services within the African Continental Free Trade Area; and
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Rules and Procedures on the Settlement of Disputes – this Protocol sets out the procedures for the settlement of disputes that may arise out of the implementation of the Agreement establishing the AfCFTA. This is to ensure that disputes are settled transparently and with fairness so that parties may exercise their rights and meet their obligations.
Agreement Establishing the African Continental Free Trade Area
This is the Framework instrument that sets up the African Continental Free Trade Area. As such it sets out a broad agenda for trade in goods, trade in services and rules and procedures for the settlement of disputes and, for the negotiation in the second phase, of Intellectual Property, Investment and Competition Policy.
What does the Agreement mean for Africa and for Uganda?
The AfCFTA involves the 55 Member States of Africa, and the world’s largest free-trade area, by number of countries. It establishes a single market of 1.2 billion people, with a combined Gross Domestic Product $3.4 trillion.
In the case of Uganda and, indeed, most African countries, large markets support more trade in goods, services and assets produced by job-creating enterprises, generate income and create jobs. The AfCFTA will contribute to meeting public policy objectives and national aspirations in NDPII and Vision 2040. Large open markets support the exploitation of economic gains along the value chain, lead to specialisation and efficiency.
The AfCFTA is one of the vehicles to catalyse the development of African countries. Few countries in history, if any, have achieved significant economic development without trade. In order to develop, African countries will need to trade more, both with one another and with the rest of the world. By breaking down trade barriers between African countries, the AfCFTA would significantly boost trade on the continent.
Africa is the continent with the largest arable land, 874 million hectares of which only 274 million hectares is under cultivation, while 600 million is idle or underutilised. In addition, there are large reserve of strategic minerals, abundant aquatic resources, and the youngest population, 60-70% of the population. However, Africa, is the continent with the lowest level of development (35 of the world’s poorest countries are in Africa); Africa is the least industrialised, and has the highest rates of unemployment between 50-80% youth unemployment.
African nations need this to boost trade as an engine for economic growth and development. Currently, trade among African Nations accounts for just over 14 percent of their total trade, a considerably lower figure than trade within many of the world’s more developed regions, including Europe and North America – both of which have intraregional trade rates at over 60 percent. The intra-Asian trade is about 50%, while Intra-Latin American trade is about 45%.
The success of the implementation of the AfCFTA will require accompanying measures such as the Plan for Infrastructure Development of Africa (PIDA). This will enable the increase in the stock of infrastructure in terms of land, air and maritime transport, energy and ICT, which will improve interconnectivity and reduce the cost of doing business.
pdf Protocol on Movement of Persons, Right of Residence and Right of Establishment (3.80 MB) : This will enable nationals of the African continent to freely cross borders and conduct trade in goods and services.
What Uganda stands to gain from the Agreement
For Uganda, our objectives in African economic integration is driven by the need for expanded markets for our growing economic operations; attracting cross-border investment; creating employment opportunities for our young populations domestically through expansion in production of goods and services that will be demanded by the expanded markets; improving the interstate infrastructure interconnectivity to enable us harness our productive capacities; enhancing peace and security in the continent through engaging people in gainful economic activities.
What we have achieved in trade in the EAC and in COMESA following our regional economic integration policy, is a testimony to the success of our regional integration policy. As a result of this policy, our exports to the region have grown significantly from less than $100 million in 1993 to a high of $1.49 billion in 2012 before reducing to $1.23 billion in 2016. The reduction is attributed to a number of factors including the instability in South Sudan and the Eastern DRC and climate change that occasionally affects agricultural production.
Uganda’s imports from the EAC and COMESA increased from $97 million in 1993 to a high of $760.2 million in 2012. This reduced to $609.8 million in 2016.
It is in the EAC and COMESA regions where we have recorded a positive trade balance since 2007. Our trade balance was $383.9 million in 2007, rising to $806.8 million in 2008. It reduced to $792.8 million in 2012 and to $615.7 million in 2016.
Cabinet Committee: Government has put in place a Cabinet sub-committee to fast track Uganda’s penetration into the broader market and to ensure our competitiveness in the market.
Conclusion
With the integration of the African continent, Uganda stands to benefit from expanded trade, to increase production capacity and creation of employment. We are immediately targeting livestock products notably dairy and beef, coffee, tea, iron and steel, among others. Services will include education, tourism, business services and infrastructure services. The key focus markets are West Africa in particular Nigeria, Ghana and Cameroon. In North Africa we are targeting Morocco, Algeria and Tunisia. The others in the COMESA we will continue to nurture using the regional instruments.
[1] Five additional countries signed the AfCFTA Agreement during the 31st Ordinary Session of the African Union in Mauritania on 1 July 2018 – South Africa, Sierra Leone, Lesotho, Burundi, and Namibia – bringing the total number of signatories to 49.
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tralac’s Daily News Selection
Tomorrow, in Addis Ababa: 6th African Union Commission-United States High Level Dialogue. Amb. Kwesi Quartey (AUC Deputy Chairperson) and Tibor Peter Nagy (US Assistant Secretary of State for African Affairs) will lead their respective delegations.
Update on next month’s Intra-African Trade Fair (11-17 December, Cairo): exhibitor registrations pass the 1000 mark
Africa Visa Openness Index Report 2018 (AU, AfDB)
In this 3rd edition of the Africa Visa Openness Index Report 2018, published today by the AfDB and the AUC, the findings shows that on average, African countries are becoming more open to each other. The top 20 most visa-open countries continue to improve their average score, reflecting the countries’ more liberal visa policies. In addition, 43 countries improved or maintained their score. Benin made the most progress in opening up its borders to African travellers, moving from 27th place in the 2017 edition to 1st place in the 2018 report. Zimbabwe also broke into the top 20 with the introduction of a visa-on-arrival policy for SADC members. Overall, when compared to 2017, Africans do not need a visa to travel to 25% of other African countries (up from 22%); can get visas on arrival in 24% of other African countries (same as last year); and need visas to travel to 51% of other African countries (down from 54%).
Regional overview: Free movement of people continues to vary region by region, in part reflecting regional policies. In 2018, the top 20 countries include the same number of countries in East Africa, West Africa, Southern Africa and North Africa as in 2017, and no countries in Central Africa. 8 countries in the top 20 most visa-open countries are in East Africa (Comoros, Djibouti, Kenya, Rwanda, Seychelles, Somalia, Uganda and Tanzania). 7 countries in the top 20 most visa-open countries are in West Africa (Benin, Cabo Verde, Gambia, Ghana, Guinea Bissau, Senegal and Togo). 4 countries in the top 20 most visa-open countries are in Southern Africa (Madagascar, Mauritius, Mozambique and Zimbabwe). Only one country in the top 20 most visa-open countries is in North Africa (Mauritania). Of the top 20 most visa-open countries, none are in Central Africa. Open reciprocity (measuring ‘no visa’ policies) Africa-wide was 19% (up from 17% in 2017). Closed reciprocity Africa-wide was 33% (down from 36% in 2017). Top performing RECs on open reciprocity include: ECOWAS (100%), EAC (90%), UMA (60%) and SADC (56%).
REC updates:
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ECOWAS early-warning gender integration and training manual validation workshop. The workshop (26-27 November, Abuja) reviewed the draft document to ensure that it serves as a practical guide on integrating gender into the different phases of the regional community’s early warning system. The experts discussed whether the methodology employs a gender-sensitive lens in data collection and analysis, as well as in the formulation and implementation of responses to situations. The director, Early Warning at the ECOWAS Commission, Dr Abdou Lat Gueye, commended the ECOWAS partners including West Africa Network for Peace building, UNOWAS, gender experts and other supportive or collaborative organisations for their commitment to the process. Noting that early warning deals with data collection, management and analysis in relating to human security, he disclosed that the Directorate has been expanding its thematic areas and field activities in order to effectively cover the five sectors in the manual.
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ECOWAS Commission urges strengthening of cross-border trade through e-commerce. Commissioner Zouli Bonkoungou told participants attending a regional workshop in Abuja on the quality of postal services that in order for the postal sector to play a role in e-commerce and help stimulate cross-border trade in the sub-region, “postal operators must have the necessary means to achieve and maintain a high level of quality”. He maintained that the current trend of an increased wave of migration to the use of ICT, to facilitate socio-economic transactions, also influences the expectations of users who now demand higher quality services. The Postmaster General of the Nigerian Federation, Bisi Adegbuyi, admitted that the region needs to provide appropriate tools that will ensure an efficient and quality based exchange of postal items at all levels in terms of physical, digital, electronic or financial postal network. Bold steps, he maintained have been taken by the Nigerian Postal Services to restructure its services to meet the challenges of the contemporary times, and bring it at par with global best practices. The West and Central Africa Regional Coordinator for the Universal Postal Union, Mr Salam Sanfo, hoped for better times after the workshop, as most African postal companies “have a poor quality services, resulting in poor performance in terms of their results with difficulties and all that, hinders the financing of investments for the modernization of postal infrastructures”
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French Development Agency commits to support EAC regional projects. The Head of the French delegation, Amb Frédéric Clavier, said France is committed to support EAC integration, as they do for other RECs, like ECOWAS. He said France was keen on supporting initiatives that will promote peace, political stability and political integration. He proposed that the cooperation between France and EAC cooperation should focus on resolving challenges such as job creation through support to the private sector. Other areas of interest include the environment, sustainable agriculture, sustainable cities, transport, and water management. Mr Benoit Gauthier, head of Regional Economic Department for East Africa and the Indian Ocean, noted that France and Germany are the main investors in the EAC region because of the EAC integrated market. He emphasized the need to remove non-tariff barriers and re-affirmed France’s commitment to supporting the resolution of NTBs.
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ITC to launch SheTrades in two more COMESA countries – Uganda, Egypt. The International Trade Centre will, next year, launch the SheTrades programme in Uganda and Egypt, bringing the number of COMESA countries implementing the programme to five. SheTrades Chapters have been launched in Kenya, Rwanda and Zambia as part of efforts to connect three million women to markets by 2021.
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Youth unemployment, trade, and migration in West Africa: lessons and opportunities. In West Africa, an observatory was established to monitor abnormal practices relating to free movement, which documents irregular practices by national authorities, border agencies, and other stakeholders. The missing link is a mechanism that connects the reports from the observatory to the policymaking process at the national and regional level. To address this gap, the observatory should collaborate with the ECOWAS task force on the free movement of goods and people. The ECOWAS Heads of States and Government has taken the task force reports seriously and implemented their recommendations, especially as they relates to the free movement of goods.
South Africa becomes first country in the world to allow an illegal cigarette brand to become the top seller (pdf, TISA)
The trade in illegal cigarettes has increased dramatically, despite promises of a crackdown from the South African Revenue Service, according to the latest Tobacco Market Study from research house Ipsos. Cigarettes selling for less than the tax of R17.85 per pack owed to SARS have grown market share by over 25%, from 33% to 42% in the informal market, in just three months. According to a 2015 judgment, cigarettes that sell for below the minimum tax can be deemed as illicit. In a remarkable show of defiance, manufacturers of cigarettes selling below the minimum tax have expanded their distribution at the very same time as SARS has been promising to crack down. Gold Leaf Tobacco’s RG brand is now the top selling brand in South Africa overall, overtaking all legal brands. It sells for an average price of just R10 and is, therefore, clearly evading the R17.85 owed to SARS on each pack. Gold Leaf Tobacco Corporation now represents 73% of the market for illegal cigarettes. It is on track to become the biggest tobacco company by sales volume in the country, especially if there is another tax increase on legal cigarettes in February 2019. [Various downloads are available] [Gold Leaf calls illicit tobacco survey smoke and mirrors (Fin24)]
The rise of counterfeit pharmaceuticals in Africa (Enact)
We are still in the foothills of combating falsified medical products in Africa. In the past 10 years, Western regulatory, technology and measurement systems have successfully adapted to the threat of counterfeit medicines. SDG 3 needs to emphasise the need to ‘ensure healthy lives’60 through ‘quality, affordable medicines’. Yet fake pharmaceuticals in Africa continue to account for up to 30% of the market. The EU’s FMD and similar legislation in the US have helped to shore up a leaky supply chain. Moreover, evidence of successful enforcement of countermeasures and investigations show a strong bias towards more economically developed countries. In Africa, the WHO’s GSMS is the first large-scale monitoring mechanism. African national medicines regulatory authorities, in co-operation with each other, must complement international efforts with local enforcement, monitoring and reporting. Extract (pdf): Our recommendations call for a substantial overhaul of the regulatory, legal, enforcement and education systems around African medical supply chains. The legal and regulatory frameworks for combating medicine fraud will need to be enacted and established nationally. A consistent and regular assessment of counterfeits should be undertaken, and awareness-raising and training campaigns improved. Options to introduce mass-serialisation forms of track-and-trace should be investigated and evaluated, and supply chains will need to be carefully assessed to identify risk areas. Capacity building in enforcement should follow the successful Nigerian example. [The authors: Robin Cartwright, Ana Baric]
Global Wage Report 2018/19: what lies behind gender pay gaps (ILO)
For the first time, the ILO report also focuses on the global gender pay gap, using data from 70 countries and some 80% of employees worldwide. Its findings indicate that despite some significant regional differences, men continue to be paid around 20 per cent more than women; “perhaps the biggest single injustice in the world of work”, Mr Ryder said. In high-income countries the gender pay gap is at its biggest in top-salaried positions. In low and middle-income countries, however, the gap is widest among lower-paid workers, the ILO report found. Its data also suggests that traditional explanations for this - such as differences in the levels of education between men and women who work - play only a “limited” role in explaining gender pay gaps. Executive summary: extract (pdf): In Africa, where wage data have been collected for the first time for a significant number of countries, real wages appear to have declined overall in 2017 by 3.0%. This is mainly attributable to negative wage trends in Egypt and Nigeria, two large countries which exert a strong influence on our weighted regional average. If these two countries are taken out of the sample, real wages in Africa are estimated to have increased by a moderate 1.3% in 2017.
G20 Investor Forum input: The landscape for institutional investing in 2018 – perspectives of institutional investors
As part of preparing for the Forum, the World Bank Group conducted semi-structured interviews with senior executives – mostly chief executive officers and chief investment officers – in 34 global institutional investors, soliciting their views on the current operational and investment environment; strategic priorities going forward; and actions required to scale up investments in sustainable, long-term projects, particularly investments in infrastructure. A key finding from the interviews was the significant degree of consensus among global investors on what were the principal concerns, opportunities, and actions needed.
Section 6.3: Infrastructure investments in emerging markets: Many of the respondents viewed infrastructure investments in emerging markets as a key source of future opportunities. At the same time, infrastructure investing in emerging markets was regarded as especially problematic, with regulatory and political uncertainty and a lack of institutional capacity (which can vary even within a single institution) resulting in significant difficulties in sourcing projects and negotiating their funding with sponsors. Respondents felt that transparency and predictability in the legal and institutional framework were key to estimating risks and returns on investment, while they saw political and business risks – including corruption, regime change, breach of contract, and the inability to enforce policy changes – and foreign exchange/currency risk as the most significant risks for infrastructure investment in emerging markets. [Download: pdf The Landscape for Institutional Investing in 2018: Perspectives of institutional investors, An Input into the Investor Forum (953 KB) ] [Project Syndicate commentary, by Jeffrey Sachs: Financing international cooperation]
IMF podcast: Managing the remarkable jump in capital flows in Sub-Saharan Africa
Today’s Quick Links: World Bank: Economy profile of Tanzania, Sudan UNECA: Mauritania iGuide now available to download Somaliland holds investment forum in Nairobi (30 November) ECA presents new Harmonized Regional Framework for the Implementation of the New Urban Agenda in Africa to local authorities |
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African countries are becoming more open to each other, 2018 Africa Visa Openness Report shows
African countries on average are becoming more open to each other, with indications that travel within the continent is getting easier.
The year 2018 is a landmark chapter in Africa’s regional integration efforts. The launch of the African Continental Free Trade Area and the Single African Air Transport Market are major milestones in the creation of a regulatory environment that promotes air connectivity and makes it faster, easier and less expensive for Africans to travel within Africa.
Findings in the 3rd edition of the Africa Visa Openness Index Report 2018, published by the African Development Bank and the Africa Union Commission, show that on average African countries are becoming more open to each other. The top 10 and the top 20 most visa-open countries continue to improve their average score, reflecting countries’ more liberal visa policies. In addition, 43 countries improved or maintained their score.
Benin made the most progress in opening up its borders to African travellers, moving from 27th place in the 2017 edition of the report to 1st place in the 2018 report. Zimbabwe also broke into the top 20 with the introduction of a visa-on-arrival policy for SADC members.
Overall, when compared to 2017, Africans do not need a visa to travel to 25% of other African countries (up from 22%); can get visas on arrival in 24% of other African countries (same as last year); and need visas to travel to 51% of other African countries (down from 54%).
“Regional integration and trade based upon the free movement of persons, goods, services and capital is at the core of the business of the African Development Bank,” says Akinwumi A. Adesina, President of the African Development Bank Group.
However, the fact that Africans still require visas to travel to just over half of other African countries shows that more progress is needed to realise free movement of people continent-wide. As infrastructure expands across Africa, and tangible trade and investment opportunities are put on the table, Africans will need to travel with greater ease. Solutions such as the African passport, visa-free regional blocs, multi-year visas, or visa-on-arrival schemes should continue to be promoted.
“Looking at the recent development this year, such as the announcement by Ethiopia, Africa’s diplomatic capital, on the establishment of a visa-on-arrival regime for all African passport holders, Africa is indeed on an upward trajectory towards seamless borders and the free movement of its people. Commendable work has also gone into the actual roll-out of the African passport to the citizenry,” says Amb. Kwesi Quartey, Deputy Chairperson of the African Union Commission.
The Visa Openness Index assesses the progress African countries have made in relaxing their visa regimes. The Index analyses visa requirements set by each member state of the African Union for other member states seeking to enter their borders.
The report aims to show at a glance which countries are facilitating travel for citizens of other African countries and how; whether they allow people to travel to their country without a visa; if travellers can get a visa on arrival in the country; or if visitors need to get a visa before travel.
2018 Findings: Visa Openness
Progress made on visa openness between 2016-2018
Compared to 2017 and 2016, progress has been made in 2018 against visa openness indicators. Africans currently do not need a visa to travel to more countries than in previous years, and they need visas to travel to fewer countries.
However, the fact that Africans still require visas to travel in just over half of other African countries shows more progress is needed to realise free movement of people continent-wide.
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Africans do not need a visa to travel to 25% of other African countries (up from 22% in 2017, and 20% in 2016).
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Africans can get visas on arrival in 24% of other African countries (also 24% in 2017, and 25% in 2016).
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Africans need visas to travel to 51% of other African countries (down from 54% in 2017, and 55% in 2016).
There is an upward trend for African countries to be more open to each other when it comes to their visa policies. Over three-quarters of countries Africa- wide scored the same or higher than before on the Index in 2018. And a quarter of countries moved up in rank from 2017.
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43 countries improved or maintained their score (47 countries in 2017)
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15 countries moved upwards in rank on the Index (12 in 2017)
Access overview
Facilitating visa access improved in 2018, with slightly more countries offering liberal access to all Africans, while the number of countries offering visas on arrival to all Africans stayed the same. More countries offered eVisas in 2018, an increase of seven countries from 2016.
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11 African countries offer liberal access(visa-free or visa on arrival) to all Africans (up from 10 in 2017, and 13 in 2016)
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4 African countries offer visa on arrival to all Africans (also 4 in 2017, and 3 in 2016)
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16 African countries offer eVisas (up from 13 in 2017, and 9 in 2016)
Regional overview
Free movement of people continues to vary region by region, in part reflecting regional policies. In 2018, the top 20 countries include the same number of countries in East Africa, West Africa, Southern Africa and North Africa as in 2017, and no countries in Central Africa.
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8 countries in the top 20 most visa-open countries are in East Africa (Comoros, Djibouti, Kenya, Rwanda, Seychelles, Somalia, Uganda and Tanzania).
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7 countries in the top 20 most visa-open countries are in West Africa (Benin, Cabo Verde, Gambia, Ghana, Guinea Bissau, Senegal and Togo).
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4 countries in the top 20 most visa-open countries are in Southern Africa (Madagascar, Mauritius, Mozambique and Zimbabwe).
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Only one country in the top 20 most visa-open countries is in North Africa (Mauritania).
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Of the top 20 most-visa open countries, none are in Central Africa.
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Top performing RECs on open reciprocity: ECOWAS (100%), EAC (90%), UMA (60%) and SADC (56%).
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Africa’s small, landlocked and island states are more open, promoting trade links with their neighbours.
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Committees are cornerstone of pan-African trade dream, NTFC Forum hears
National trade facilitation committees can make the dream of seamless African trade a reality, experts tell Addis Ababa forum on easing the flow of goods on the continent.
The dream of a single African market where goods flow easily from the port of Cape Town to the markets of Marrakesh came within grasp in March 2018 when the region’s leaders signed an agreement to begin establishing a continent-wide free trade area.
But achieving the dream of the African Continental Free Trade Area (AfCFTA) requires more than goodwill.
Boosting intra-African trade requires fixing incompatible customs clearance systems, poor roads and inefficient ports that cause bottlenecks at borders, experts said on 27 November at a trade facilitation forum in Addis Ababa.
“If the Continental Free Trade Area is implemented with trade facilitation measures, we could see a doubling of intra-African trade by 2022,” said Robert Lisinge, in charge the UN Economic Commission for Africa’s operational quality section.
It takes a committee
Because the range of issues covered by trade facilitation provisions in the agreement are so broad, implementation can’t be the remit of one entity, said Willie Shumba, a chief customs expert and adviser for the African Union Commission.
“The need for a multi-stakeholder committee on trade facilitation at national level cannot be overemphasized,” Mr. Shumba told government agencies and trade operators gathered in the Ethiopian capital for the First African Forum for National Trade Facilitation Committees, scheduled to meet until 29 November.
Issues to tackle include reducing quotas and other harmful non-tariff barriers to trade, setting up single-windows systems, ensuring freedom of transit and improving security and risk management.
“The issues are not purely customs issues,” he said, adding that a host of stakeholders must participate, including trade and transport ministries, port and road authorities, the police, freight forwarders, chambers of commerce.
The AfCFTA therefore requires member countries to set up a committee to coordinate the necessary work.
The committees, Mr. Lisinge said, will also help resolve conflicts of interest, like when transporters become frustrated with delays caused by government quotas for trucks on new roads or police check points on transit routes.
“If you bring all these people together you can have the kinds of compromise that are needed,” he said.
But avoid committee clutter
But before creating a new committee for the AfCFTA, governments should first check to see if one already exists for trade facilitation provisions that fall under another agreement that they have signed up to, such as the World Trade Organization’s Trade Facilitation Agreement (TFA), which came into force in February 2017.
Currently, 31 African countries have ratified the TFA. And most have already created a national trade facilitation committee to work on the require reforms, as shown in UNCTAD’s online database.
Poul Hansen, who oversees UNCTAD’s work on trade facilitation, said that because there is strong coherence between the AfCFTA and the TFA, the same committee could feasibly work on the provisions under both.
“I think it is worthwhile for countries to have a review of what is existing in their national landscape in order to not have what I would call committee clutter,” Mr. Hansen said.
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The landscape for institutional investing in 2018: Perspectives of institutional investors
The 2018 Argentina G20 Presidency requested the World Bank to organize a high-level G20 Investor Forum focused on institutional investors (pension funds, insurance companies, sovereign wealth funds, asset managers). The Forum will take place on November 29, 2018, in Buenos Aires.
The Forum will bring together leaders from the public sector and the global investment community to explore how their combined power could contribute to sustained global economic growth and increase the flow of long-term sustainable investments to where they are needed most. It is hoped that the Forum will build strong momentum to support collaboration to address areas of shared interest, concern, and opportunity.
As part of preparing for the Forum, the World Bank Group (WBG) conducted semi-structured interviews with senior executives – mostly chief executive officers and chief investment officers – in 34 global institutional investors, soliciting their views on the current operational and investment environment; strategic priorities going forward; and actions required to scale up investments in sustainable, long-term projects, particularly investments in infrastructure.
The major topics covered were (i) current perceptions regarding today’s economic and investment environments; (ii) mega-trends shaping existing and future investment strategies; (iii) sustainable investing along a number of dimensions; (iv) infrastructure investing; (v) investing in emerging markets; (vi) the potential role of the WBG and, by extension,other international financial institutions (IFIs); and (vii) their guidance on how to make the Forum a success.
Given the geographic diversity, number, and level of seniority of the interviewed executives, we believe that these inputs can be considered a good reflection of views widely held by the global investment community. A key finding from the interviews was the significant degree of consensus among global investors on what were the principal concerns, opportunities, and actions needed.
There was a strong consensus in the interviews regarding the current investment landscape. Nearly all the executives agreed that the extraordinary international macroeconomic policies – in particular, monetary policies – and regulations instituted in response to the 2008 global financial crisis are still in place, and are a major factor shaping today’s investment environment.
While these measures were largely effective in containing the crisis, they also continue to have unintended consequences affecting markets and the global business environment. Financial regulations (such as Solvency II and Basel II/III), in particular, were cited as potentially disincentivizing long-term investments, especially in infrastructure, due to their capital adequacy requirements and liquidity risk standards.
Investors shared a concern that once central banks return to ‘traditional’, non-crisis and less accommodative policies this could exacerbate economic instability, triggering a potential increase in market volatility and greater fragility of global economy. They also noted that unconventional monetary policy cannot be the solution for the next financial crisis, and appropriate fiscal and economic measure need to be put in place to ensure continued economic growth.
Four categories of mega-trends were seen as creating both risks and opportunities:
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environmental (climate change and resource scarcity disrupt supply chains and markets, but also create new investment opportunities, such as in renewable energy technologies);
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social (demographic trends shift the distribution of human capital, affect labour markets and the sustainability of existing pension schemes, but also open new markets, while growing inequality presents increasingly serious systemic risk);
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technological (disruptive technologies in the short to medium term threaten to eliminate traditional jobs and sources of income, but in the longer term contribute to productivity improvements and create new opportunities); and
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geopolitical (political polarization and disruption of the multilateral world order). Executives noted that public policy and market solutions designed to address the challenges raised by any of these trends must simultaneously consider their consequences for other ones, to optimize the overall positive impact on the “state of the world.”
Interviewees identified the advancement of sustainable, long-term investing, and investing in infrastructure, as important areas of shared interest and opportunity. Such opportunities can be enabled, they added, by the collective and coordinated action of the global investment community, multilateral institutions, and governments, through channels such as the G20.
There is growing support for sustainable investing, which was seen as having the potential to lower financial and reputational risks, improve returns, and provide long-term revenue streams. The adoption of sustainable investing is expected to increase, and it has the potential to become an investment market component in the short to medium term, and a potential standard for a significant share of investments in the medium to long term, reflecting shifts in the standards and values of asset owners, investors, and consumers. Coupled to this support was a growing interest in long-termism, a natural corollary to sustainable investing, since its benefits play out over years, not days or months.
The investors noted that shifts toward sustainable investment practices – including the adoption of environmental, social, and governance (ESG) principles in investing – are driven in part by consumers and employees who are increasingly reluctant to work for, or buy from, companies with poor ESG practices. Another important driver is companies’ growing recognition of the system-level implications of their investment decisions. Increased media attention and global advocacy through international political platforms such as the Sustainable Development Goals support this trend, making it increasingly difficult for investors to turn a blind eye to the systemic and sustainability impacts of their investment decisions.
This report, which was based on a summary of conducted interviews, was prepared by Eric Bouyé, World Bank; Robert Eccles, Saïd Business School, Oxford University; Svetlana Klimenko, World Bank; and Daria Taglioni, IFC.
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ECOWAS Commission urges strengthening of cross-border trade through e-commerce
The Commission of the Economic Community of West African States (ECOWAS) is committed to boosting cross-border trade through e-commerce.
Commissioner for Telecommunications and Information Technology Dr. Zouli Bonkoungou stated this on the 27th of November 2018 in Abuja, Nigeria while opening a 2-day regional Workshop on quality of postal services.
Commissioner Bonkoungou told participants that in order for the postal sector to play a role in e-commerce and help stimulate cross-border trade in the sub-region, “postal operators must have the necessary means to achieve and maintain a high level of quality”.
He maintained that the current trend of an increased wave of migration to the use of ICT, to facilitate socio-economic transactions, also influences the expectations of users who now demand higher quality services.
The Commissioner pointed out that it was in recognition of the foregoing that the Commission established a fruitful partnership with the West African Postal Conference (WECAFC) and is collaborating with it, in the implementation of the Master Plan for Postal Services.
Stressing that the importance of the postal sector in West African economies cannot be overemphasized, he said “the Post has an undeniable heritage in terms of communication between citizens and it contributes to the development of our Member States and remains a major element in achieving the vision 2020 of ECOWAS and Sustainable Development Goals (SDGs)”.
Commissioner Bonkoungou noted that in the era of technology, the landscape of the postal sector has also changed while traditional postal services are increasingly being replaced by new and innovative services offered by both postal operators and new entrants to the market through liberalization.
The new reality, he said prompted the development of a Master Plan for Postal Services by the ECOWAS Commission with the aim of repositioning the postal sector in the current economic environment. The Master plan guides the programs, projects and activities of the postal sector undertaken by the ECOWAS Commission.
One of the objectives of the Master Plan for Postal Services, is to strengthen the capacity of national postal operators (NPOs) of ECOWAS Member States to deliver efficient and high quality services in accordance with international standards.
Cognizant of the fact that there can be no development without quality service, the Commissioner pointed out that the ECOWAS Commission expects all postal operators to improve the quality, reliability and efficiency of their services while the workshop offers the opportunity to identify the problems that affect the quality of postal services in the region and to formulate concrete and appropriate proposals as well as recommendations to meet these challenges.
The chair of session Mr. Wakili Saidu informed that the postal sector is one of the fastest growing, with the potential of significantly increasing revenue and improving the economy of ECOWAS member countries.
He said the Postal Service Master Plan (PSMP) was adopted by the regional ministers in charge for a revitalized Postal sector and to ensure that it is able to provide efficient basic postal services to the citizens.
In his remarks, the Post Master General of the Nigerian federation Bisi Adegbuyi admitted that the region needs to provide appropriate tools that will ensure an efficient and quality based exchange of postal items at all levels in terms of physical, digital, electronic or financial postal network.
Bold steps, he maintained, have been taken by the Nigerian Postal Services to restructure its services to meet the challenges of the contemporary times, and bring it at par with global best practices.
The West and Central Africa Regional Coordinator for the Universal Postal Union (UPU) Mr. Salam Sanfo held that the workshop’s theme is fully in line with the objectives of the priority projects in the Regional Development Plan for Africa (RDP).
He hoped for better times after the workshop most African postal companies “have a poor quality services, resulting in poor performance in terms of their results with difficulties and all that, hinders the financing of investments for the modernization of postal infrastructures.”
He informed the gathering that one of the ways by which the UPU had intervened is through the introduction of the Postal Technology Center (CTP), which is already revolutionizing the processing of mailings, among others.
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tralac’s Daily News Selection
Diarise: Role of capital markets in mobilizing domestic resources in Africa – a capacity building workshop (5-7 December, Gaborone). Download the concept note (pdf)
Featured commentary, by Vera Songwe: African countries should demand loans are made in local currencies
Featured blog, by Pinelopi Goldberg: First day on the job...and WDR 2020
My vision for the next WDR, which we have already started work on, is that it reflects the zeitgeist as it sets out to analyze the implications of the changing face of globalization for development. Our starting point is this wholly new level of country interdependence. The world has always been interconnected – but international trade today is fundamentally different, both qualitatively and quantitatively from the last World Development Report on Industrialization and Foreign Trade written thirty years ago. Tariff reduction and significant advances in production, communication and transportation technologies led to the emergence and expansion of global value chains. From the early 1990s until the mid-2000s global trade grew at twice the rate of income growth. Which brings us to the present, where production is fragmented and distributed across multiple locations, and the parts produced in each place are shipped across the globe – often crossing borders multiple times.
WDR 2020’s goal is to understand why global value chains have formed in some sectors and regions, while others have been left out. It will examine how they affect growth, inequality and poverty. The report will consider the role of new technologies and trade policies in creating incentives to produce closer to home. It will explore how national policies can promote sustainable development and if international cooperation on trade, as well as other policies, can support inclusive growth. [The author is the World Bank’s new Chief Economist]
Commonwealth Regional Consultation on Multilateral, Regional and Emerging Trade Issues for Africa: outcomes, documentation
The regional consultation was held on 15-16 November in Mahé, Seychelles. The meeting, following the Second African Trade Negotiators Meeting, brought together over 40 participants, including trade policymakers from various African capitals, Geneva-based trade negotiators, eminent policy experts from the WTO, UNCTAD, AUC and prominent regional bodies such as COMESA. Acting Head of International Trade Policy at the Commonwealth Teddy Y. Soobramanien: “These consultations are timely, give the tremendous evolution of global trade landscape in the last decade. With the rise in non-tariff barriers to trade, slow progress in WTO trade talks, and the threat of trade wars, it is important for African countries to strategise on how to respond to these trends.”
Sessions covered: Presentation of the 2018 Commonwealth Trade Review: key issues and findings for Africa; WTO issues of interest to the Commonwealth African countries; Harnessing digital trade opportunities for Africa; E-commerce discussions and the development dimension for African countries; Improving African micro-small medium enterprises access to markets; Implications of investment facilitation and services facilitation for Africa; Strengthening regional integration in Africa
Andrew Mold: The consequences of Brexit for Africa – the case of the East African Community (Journal of African Trade)
This paper looks at the available empirical evidence and carries out a Computable General Equilibrium simulation, focusing particularly on the prospects for the EAC. The paper makes three main points. First, while the direct impacts through investment, trade and remittances are likely to be relatively small, African countries may benefit from the creation of new export opportunities. However, these are mainly in resource-intensive sectors that are not considered a priority for the development agendas of most African countries. Second, indirect consequences, through Brexit’s impact on the global economy, its influence on the EPAs with the EU, or a potential reduction in UK development cooperation, are likely to be equally important over the longer run. Finally, one overlooked consequence of Brexit for Africa is that it could undermine confidence in ‘deep’ regional integration processes like the EAC. [Journal of African trade: articles in press]
The Djibouti City – Addis Ababa transit and transport corridor: turning diagnostics into action (UNCTAD)
Landlocked Ethiopia needs a liberal trade policy and an efficient and reliable transport and logistics network if it is to meet the targets of the country’s Second Growth and Transformation Plan. The targets include expansion of the manufacturing sector, value-addition in all productive sectors, and a three-fold increase in the values of exports. Currently, opportunities created by Ethiopia’s low cost inputs (labour and energy) are cancelled out by factors relating to trade logistics. For example, the labour costs of making a T-shirt in Ethiopia are one third those of China, but the logistics expenses of exporting the T-shirt mean that the Ethiopian-made shirt sells for the same price as a Chinese shirt on international markets.
2018 PIDA Week: updates
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AU High Representative for Infrastructure Development, pdf Mr Raila Amollo Odinga (193 KB) , said Africa needs to move away from the conference and feasibility study syndrome and move to implement agreed projects if it is to successfully integrate and achieve sustainable development and change the lives of its citizens for the better. “Transformational decisions have to be taken if we are to move ahead. Africa must deal with political bottlenecks that hamper its development or we shall never compete. We must also overcome the habitual of feasibility study after feasibility study syndrome without implementing. We must change.” [African leaders must change, says Raila Odinga]
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CEO of the NEPAD Agency, pdf Mr Ibrahim Assane Mayaki (266 KB) , said Africa needs to accelerate the development of trans-boundary infrastructure projects if it is to fully integrate. He said a lot of progress has been made since African leaders adopted PIDA in 2012. “We recognise that optimal solutions for continental problems lie in regional integration. We are getting there progressively, but we need to accelerate implementation if we want regional integration. It’s not a question of lack of financial resources, it is a question of lack of bankable projects and sound rules. So we need to do our homework.”
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The ECA’s Chief of Industrialisation and Infrastructure, Mr Soteri Gatera: “The Luxembourg Protocol will support African economic integration and high speed rail networks through the provision of common rules covering cross border operation of rolling stock,” said Mr. Soteri, adding for public and private operators, the protocol opens up new capital sources and new ways of doing business – operating leasing leading to a larger, more dynamic, efficient, transparent and competitive industry. “As such it will be a game changer and will help Africa achieve its economic potential. We need your help to make this tremendous tool a reality. Governments need to sign and then ratify the Luxembourg Rail Protocol and lead the way.”
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pdf Presentation by the NEPAD Planning and Coordinating Agency to the Continental Business Network (405 KB) : immediate next steps for the African Infrastructure Guarantee Mechanism (i) Receive feedback on preliminary AIGM Discussion Paper; (ii) Conduct in-depth discussions with public and private sector providers of risk mitigation, reinsurance, and brokerage functions: define ways to expand coverage and scale to meet pension funds investment criteria; define ways to streamline access to risk mitigation; define optional implementation mechanisms; (iii) Test approach with Pension Funds in March 2019 conference (Mauritius); (iv) Present AIGM Plan at World Bank Spring Meetings; (v) Implement initial mechanism for Pilot Projects; (vi) Refine based on lessons earned and scale.
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NEPAD Agency, Global Water Partnership sign MoU to accelerate the implementation of priority continental water infrastructure projects; Accelerating project preparation and financing water projects in Africa. Presentation: pdf Africa Water Investment Programme support to PIDA Water (1.53 MB)
African Union strengthens its sanction regime for non-payment of dues (AU)
The new sanctions regime stipulates the short and long term measures member states will face for defaulting to pay partly or in full, their assessed contributions, within a period of six months to two years. The categories of the sanctions are; cautionary, intermediate and comprehensive. The Deputy Chairperson of the AUC, Amb. Kwesi Quartey: ”As we speak now in the month of November, member states have only paid 50% of the assessed contributions for the year 2018. We therefore find ourselves in a precarious position where our planning, implementation and execution of programmes and activities is greatly hampered. The sanctions regime will therefore go a long way in addressing the weaknesses in the compliance arrangements.”
International economic cooperation in troubled times: A call for strong action by the G20 (ICTSD)
The leaders of the G20 will meet on 30 November and 1 December in Buenos Aires for their annual summit. They need to acknowledge that the last two years have been characterised by strong headwinds for the world economy. This time, however, it is not a mixture of poor macroeconomic policies and bad business decisions – as in 2008 when they met in Washington for their first summit – that endangers the well-being of billions of citizens around the globe. This time the threat stems from deliberate political decisions, in particular on trade. The danger emerges from an unholy trinity of insufficiencies in the trade book to address persistent trade distorting practices in major players, primarily with respect to a revival of mercantilist ideas, populist governments championing economic nationalism and uncompetitive advantages of state-owned enterprises. The G20 summit in Buenos Aires presents an eleventh hour opportunity to stop or at least mitigate these destructive forces, by taking strong action in favour of an open and rules-based system of multilateral cooperation on trade, investment and tax matters. [The authors: Axel Berger, Uri Dadush, Andreas Freytag, Simon J Evenett, Christian von Haldenwang, Ricardo Meléndez-Ortiz, Raul Ochoa, Agustin Redonda, Karl P. Sauvant]
A way forward on the functioning of the Appellate Body
The European Union with other members of the WTO – Australia, Canada, China, Iceland, India, Korea, Mexico, New Zealand, Norway, Singapore and Switzerland – unveiled a proposal for concrete changes to overcome the current deadlock in the WTO Appellate Body. The proposal will be presented at the meeting of the WTO General Council on 12 December. Commissioner Malmström: “The appellate body function of the WTO dispute settlement system is moving towards a cliff’s edge. Without this core function of the WTO, the world would lose a system that has ensured stability in global trade for decades. Now, together with a broad coalition of WTO members, we are presenting our most concrete proposals yet for WTO reform. I hope that this will contribute to breaking the current deadlock, and that all WTO members will take responsibility equally, engaging in good faith in the reform process.” [tralacBlog by Alan Wolff: Assuring Continuation of Effective WTO Dispute Settlement]
Solidarity and The South: new directions in long-term development finance (UNCTAD)
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Let us make Africa’s infrastructure competitive, Zimbabwean Minister urges continent at PIDA Week
Africa needs to unite and work hard to reverse colonial infrastructure systems which promoted the extraction of profitable agricultural and mineral wealth for export at the expense of local communities and the continent, Zimbabwe’s Transport and Infrastructural Development Minister, Joel Biggie Matiza said Monday.
Speaking during the opening session of the 2018 PIDA Week in Victoria Falls, Mr. Matiza said for Africa to fully develop and integrate, there was need for the continent to focus on infrastructure development, in particular transboundary projects, to ensure it was competitive enough to make a difference.
“Historically African countries inherited under-developed infrastructure geared towards exports-imports transportation rather than focusing on transforming and improving local production capacity as well as promoting intra-Africa trade. This is reason for us to reverse this legacy and as a continent we have crafted a new trajectory through PIDA, a turning point we should follow to ensure we transform the current state of affairs,” he said.
Mr. Matiza hailed PIDA for its efforts in trying to bridge Africa’s infrastructure deficit. He said PIDA Week offered a valuable opportunity for policymakers, project developers, private sector, civil society, and academia to exchange views and proffer solutions towards the implementation of regional infrastructure projects on the continent.
“PIDA is such a vital initiative, not only to catalyse intra-African trade but perhaps more important to provide a wider platform to encourage investment,” he said.
For his part, Chief Executive Officer of the NEPAD Agency, Mr. Ibrahim Assane Mayaki, said Africa needs to accelerate the development of transboundary infrastructure projects if it is to fully integrate. He said a lot of progress has been made since African leaders adopted PIDA in 2012.
“We recognise that optimal solutions for continental problems lie in regional integration. We are getting there progressively, but we need to accelerate implementation if we want regional integration. It’s not a question of lack of financial resources, it is a question of lack of bankable projects and sound rules. So we need to do our homework,” said Mr. Mayaki, adding that local, national and regional governance was key to the success Africa seeks in closing its infrastructure deficit.
Challenges
The African Union Commissioner for Infrastructure and Energy, Dr. Amani Abou-Zeid said the current low levels of infrastructure on the continent posed one of the biggest challenges to Africa’s industrialization and development agenda, which is having a negative impact on Africa’s competitiveness and participation in the global markets.
According to the World Bank, the poor state of infrastructure in Sub-Saharan Africa in respect of its electricity, water, roads and ICT, reduces national economic growth by 2 percent annually and reduces productivity by as much as 40 percent.
“Meeting Africa’s infrastructure needs and developing cost-effective infrastructure services requires significant investments,” the Commissioner said, adding the continent should turn its challenges in infrastructure development into an opportunity.
The financing gap in Africa for infrastructure development is estimated at between US$130-170 billion per year.
“Despite encouraging investments on infrastructure, both at the domestic and international levels, which averages about US$75 billion per year, there is a need for significant increase in infrastructure investments on the continent,” Dr. Abou-Zeid added.
She added: “There have been remarkable achievements within a short period of time considering the many barriers that exist within the continent. However, the scale of the challenge in infrastructure development on the continent calls for more accelerated implementation and innovative approaches to meet-up with the increasing demand for infrastructure services.”
For his part, the African Union’s High Representative for Infrastructure Development, Mr. Raila Amollo Odinga, said that Africa needs to move away from the conference and feasibility study syndrome and move to implement agreed projects if it is to successfully integrate and achieve sustainable development and change the lives of its citizens for the better.
“Transformational decisions have to be taken if we are to move ahead. Africa must deal with political bottlenecks that hamper its development or we shall never compete,” said Mr. Odinga. “We must also overcome the habitual of feasibility study after feasibility study syndrome without implementing. We must change.”
Ms. Carla Montesi, European Commission’s Director for Planet and Prosperity and a representative of COMESA Secretary General, Ms. Chileshe Kapwepwe, also spoke in the opening session in support of Africa’s desire to invest in infrastructural development that will support Africa’s growth.
Ms. Montesi said the EU will continue to support Africa in its quest for an integrated infrastructure that generates jobs for the youth; helps reduce poverty; and supports regional integration.
Mr. Xiao Weiming, Director-General of the Belt and Road Unit, National Development and Reform Commission, the People’s Republic of China, said his country will continue to work with African nations to help build their infrastructure capacity.
He said China will continue to enhance cooperation with Africa through infrastructure development, adding PIDA was a transformative initiative that will change the face of Africa if fully and successfully implemented.
The 4th PIDA Week is being held under the theme Realizing Africa’s Integration through Smart Infrastructure and Good Governance, and it intends to build on the relative achievements and the momentum created in the previous three events to continue to engage stakeholders on the effective delivery of infrastructure on the continent.
The event welcomed more than 400 participants brought together an impressive line-up of top-level government representatives, influential industry leaders, private sector, leading thinkers from international institutions, government, academia, business and finance.
It aims to provide a platform for stakeholders to engage in accelerating and synergizing their efforts to accelerate projects preparation and implementation; mobilize adequate financial and technical resources for projects; increase private sector participation in PIDA implementation; and mobilize Member States to integrate the PIDA projects into their national development plans.
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Smooth African trade to tackle rising challenges: UNCTAD head
Competitive transport, logistics and foreign investment are essential to ease intra-African commerce and reap rewards of new deal, meeting hears.
Smoothing the way for African trade is critical if the continent is to tackle the challenges posed by fast-shifting patterns of global commerce, UNCTAD Secretary-General Mukhisa Kituyi said on 27 November in Addis Ababa.
Dr. Kituyi was in the Ethiopian capital for the First African Forum for National Trade Facilitation Committees, which are spotlighting how to reduce trade hurdles on the continent.
The forum, taking place at the UN Economic Commission for Africa (UNECA), is part of efforts to implement the World Trade Organization’s (WTO) Trade Facilitation Agreement, which entered into force in February 2017 and could help drive down the cost of commerce. It also comes amid new momentum provided by the African Continental Free Trade Agreement (AfCFTA), a landmark for regional integration that was signed in March 2018.
“Africa faces a moment when the market access gains that have been negotiated over the past two decades can be severely eroded unless we address the challenges of trade facilitation,” said Dr. Kituyi.
He emphasized that Africa’s competitive labour advantage must be accompanied by quality transport hubs, efficiencies in the cross-border movement of goods and services, better procedures at ports, and a predictable regime of logistics management.
The most secure frontier for African growth driven by trade is Africa itself, he underscored.
“If Africa is going to trade with itself, we have to make sense of what main roads and railways are to be built to connect African producers and consumers.”
Together with well-functioning trade committees, infrastructure and investment are the main tools to facilitate trade, he argued.
Lowering trade costs
Trade facilitation matters in Africa since businesses and people on the continent shoulder an unfair share of trade costs.
Overall, the WTO calculates current trade costs for developing countries are equivalent to applying a staggering 219% tariff on their international trade, and that full implementation of the pdf Trade Facilitation Agreement (150 KB) could cut trade costs for Africa.
WTO Director General Roberto Azevêdo said the forecast impact of the agreement is “striking”.
“It could add 2.7 percentage points per year to world trade growth and more than half a percentage point to world GDP. The biggest benefits would accrue to developing countries.”
“In Africa estimates show that full implementation of the agreement could reduce trade costs by an average of 16.5% – by doing that, it has the potential to deliver a huge economic boost for the continent,” he said.
This level of trade would open new opportunities for smaller businesses, especially for women-led businesses and younger entrepreneurs while enhancing transparency and reducing corruption.
African solutions
The solutions, like the market, should be African, said Thomas Kwesi Quartey, deputy chairperson of the African Union Commission (AUC).
For a decent shot at the dream of the African common market, Africa needs to have vision, he said.
“The AfCTA is a continental blueprint for strengthening trade capacities in Africa,” Mr. Quartey said. “But to trade, you must first produce, and to be able produce and leverage science and technology in this production, you need education training and planning.”
“Intra-African trade, currently at a lowly 15 to 18%, is now beginning to be the focus of all our endeavors.
“Statisticians tell us where there is an increase of 2% in intra-African trade, GDP rises by a factor of 10. The AfCFTA would reduce in half Africa’s trade deficits, while strengthening GDP growth. It would create jobs for our people, especially our dynamic youth.”
“But the gains are nowhere near automatic – we need to work hard, we need to vision and together strengthen our endeavours and create institutional environments.”
Delivering a statement from UNECA’s executive secretary Vera Songwe, the head of her office Ingrid Cyimana said Africans were doing just this by taking bold steps to integrate their economies using the AfCFTA and by establishing trade facilitation committees.
“Our projections show the value of intra-African trade to be between 15% to 25% higher in 2040 compared to a situation with no AfCFTA. We also find that gains are significantly higher when the AfCFTA is implemented alongside trade facilitation measures,” she said.
She stressed the role of people on the ground influencing the debate, a sentiment shared by delegates at the forum. “An integrated Africa will not be possible without advocacy, consultation and consensus building.”
“While government needs to set a conducive environment, it is Africa’s traders and businesses that can best identify what actions are needed to overcome existing trade facilitation challenges.”
Meeting of minds
The forum is the first of events globally to support implementation of the WTO’s agreement, which besides measures to boost trade also addresses improved revenue collection, safety and security compliance controls, including for food, and streamlining government agencies.
The reforms aim to help small cross-border traders, often women, enter the formal sector, make economic activities more transparent and accountable, promote good governance, generate better quality employment, strengthen information technology capabilities and generally modernize societies by bringing about benefits related to administrative efficiency.
These reforms are a prerequisite for developing countries to join global value chains and start trading out of poverty.
Also speaking at the forum’s opening:
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Fetlework Gebregziabher, minister of trade and industry, Ethiopia
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Brenda Mundia, capacity building directorate deputy director, World Customs Organization
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Philippe Isler, director, Global Alliance for Trade Facilitation
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Manuel Henriques, senior private sector development specialist, World Bank Group
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Olga Algayerova, executive secretary, United Nations Economic Commission for Europe
Presentations from Day 1
Session 1: Trade Facilitation efforts and prospective in Africa
Africa is expected to see the biggest benefits from the full implementation of the WTO TFA with a 35% increase in exports and a 16% reduction in trade costs (WTO World Trade Report, 2015). Indeed, African countries predicted the potential benefits trade facilitation reforms could bring to the continent long before the end of the WTO TFA negotiations. Since then, they have embarked in national and regional initiatives to eliminate red tape.
This session looked at the key factors for the successful reforms, highlighting the unique African approach, and how to overcome the challenges. Experts also discussed how trade facilitation reforms can leverage to spur economic growth and development. Finally, the session discussed the African Trade Facilitation Agenda for the next 10 years in the new era of the digital economy.
Session 2: The WTO Trade Facilitation Agreement – Status of ratification, categorisation and notifications in Africa
This session provided an update on the current ratifications of the Agreement and the necessary A, B and C categorisations of provisions as well as other relevant notifications on transparency concerning Africa and donor partners. This information was drawn from the TFA Database.
Session 3: The role of the African regional organisations in implementing Trade Facilitation reforms
Regional approaches to trade facilitation can deliver greater benefits to individual countries and the regional community than unconnected national reforms. Coordinated cross-border reforms would help create a more consistent and predictable regional trading environment without diverging administrative procedures and requirements in each member state.
Harmonized formalities across regions would reduce business transaction costs, create the necessary condition for the development of regional value chains and further attract investment. African regional organisations can play a key role in coordinating trade facilitation reforms as they work towards deeper integration.
This session discussed regional approaches to trade facilitation reforms; benefits of regional trade facilitation reforms; paths chosen by African regional organisations in implementing reforms; and designing a regional trade facilitation roadmap
Session 4: The role of NTFCs in the implementation of trade facilitation provisions in the AfCFTA
The African Continental Free Trade Area (AfCFTA) aspires to create a single market for intra-regional trade in goods and services, representing more than 1.26 billion people, and a GDP of $2.14 trillion. The Agreement contains trade facilitation measures, tailor-made to the African context and aimed to make import, export and transit procedures more efficient.
The AfCFTA implementation will require a great deal of coordination among different public and private stakeholders at the national and regional level, ensuring the coherence with other relevant instruments.
This session provided an opportunity to debate the singularity of the Trade Facilitation Provisions in the AfCFTA. Panellists exchanged views on the role of the NTFCs in the AfCFTA’s implementation and how to establish regional networks.
The session also offered proposals on how the NTFCs could ensure a coherent approach in the implementation of the trade facilitation reforms in the framework of the AfCFTA, WTO TFA and other regional agreements.
ECA chief pledges continued support for Africa’s blue economy
In her remarks during the Leaders’ Commitment Segment of the Sustainable Blue Economy Conference on 26 November in Nairobi, Vera Songwe, Executive Secretary of the Economic Commission for Africa (ECA), pledged ECA’s continued readiness to “help Member States in developing their national Blue Economy strategies.”
She stated that the Commission will work together with the African Union to set up a Regional Blue Economy Framework, adding that the blue economy has significant potential to bolster the socio-economic transformation of the global economy.
“The wealth that can be generated from the ocean is conservatively valued at US$4 trillion, which is equivalent to the GDP of countries in East Asia and the Pacific in 2017. Goods and services account for an estimated $2.5 trillion of this amount annually,” Ms Songwe noted.
The three-day conference was organized under the theme “The blue economy and the 2030 Agenda for Sustainable Developments”, with the leaders’ segment as its key feature.
Download statements from the Leaders’ Commitment Segment below.
The segment was attended by many leaders from across the globe, including heads of state and government, chair of the African Union Commission, heads of UN agencies and other international entities, who all pledged to mobilize the necessary will and resources to sustainably boost the blue economy.
Kenya’s president and host of the event, Uhuru Kenyatta, pledged to “lead from the front” by adopting “appropriate policies, strategies and mechanisms to harness the blue economy to re-energize our national economies and to create greater opportunities and jobs for our people.”
He urged world leaders to work together in managing global aquatic resources for sustainable global development.
President Kenyatta added, “We shall also aggressively combat illegal and unregulated as well as unreported fishing, and we have taken measures to ensure the security and safety of our collective waters.”
ECA’s Executive Secretary praised Mr. Kenyatta for the recent launch of the Kenya Coast Guard Service, which she said will “reinforce security in the region, assist in marine pollution prevention, and prevent Illegal, Unreported and Unregulated (IUU) fishing,” especially as Kenya reportedly loses an estimated 118 million USD annually due to IUU fishing in its waters.
Ms. Songwe pointed out that harnessing the potential of the blue economy for economic diversification and doing so in an inclusive manner is crucial in achieving the SDGs.
She also posited that the AfCFTA can go a long way to foster the development of Africa’s blue economy, given its role in facilitating the movement of goods and persons and in reducing the cost of trade between African countries.
ECA has been assisting Member States in developing different components of the Blue Economy. It has produced a guidebook titled pdf Africa’s Blue Economy: A policy handbook (826 KB) . The handbook serves as a tool to assist Member States in developing their national strategies on Blue Economy.