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The economic and social effects of the Economic Partnership Agreements on selected African countries
The European Union (EU) has concluded or currently is in the process of concluding Economic Partnership Agreements (EPAs) with the group of African, Caribbean and Pacific (ACP) countries.
Instead of the unilateral approach prevalent until the Lomé Agreements, the EPAs are bi-regional reciprocal agreements, which commit both parties. Unsurprisingly, the negotiations on the EPAs have thus proofed challenging and highly controversial.
Given their political sensitivity, the EPAs must deliver tangible benefits to the African partners. Thus, the trade liberalization and further changes facilitated by the agreements must trigger sustainable economic development for the African partner countries, i.e. economic growth that is socially inclusive and respects ecological boundaries.
EPAs are therefore primarily to be judged against this yardstick, which is the approach adopted in this study from the Austrian Foundation for Development Research (ÖFSE). Apart from assessing the impact of the EPAs and investigating export potentials, the study also aims at providing policy recommendations for EU Development Cooperation in the latter’s efforts to support development-friendly implementation of the EPAs.
The report starts with an assessment of the main provisions of the three EPAs covered – the Southern African Development Community EPA (SADC-EPA), the Economic Community of West African States EPA (ECOWAS-EPA) and the East African Community EPA (EAC-EPA), thereby focusing on the market access offer and the provisions in the agreement which potentially limit the developmental policy space as well as offer a potential to strengthen sustainability aspects in African partner countries. Then the implications of the three specific EPAs with a focus on Mozambique, Ghana and Uganda, respectively, are scrutinized.
The respective analyses provide assessments of the economic impact of the three regional EPAs on Mozambique, Ghana and Uganda, based on simulations with the ÖFSE Global Trade Model. Based on interviews with stakeholders during field research in the three countries, implementation challenges associated with the agreements are discussed.
Further, different sectoral case studies are analyzed to investigate the potential of the EPAs on the export side, highlighting the opportunities and challenges for export promotion policies in the context of global value chains and related lead firm strategies as well as local competitiveness conditions. The five sectoral case studies include the cotton, textile and apparel sectors in selected SADC countries with a focus on Mozambique, the cocoa and mango sectors in Ghana, and the coffee and fish sectors in Uganda.
The study was facilitated by the German Federal Ministry for Economic Cooperation and Development (BMZ) as part of the research project “Preferential market access and sustainable development: the case of value chains”. The authors are Jan Grumiller, Werner Raza, Cornelia Staritz, Bernhard Tröster, and Rudi von Arnim.
Download the texts of the EPAs here.
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tralac’s Daily News Selection
Starting tomorrow, in Geneva: WTO Public Forum 2018. Under the main theme of Trade 2030, the Public Forum’s sub-themes will be sustainable trade, technology-enabled trade, and a more inclusive trading system. Our profiled sessions from the extensive programme:
On Tuesday: Industrialisation 4.0: how to achieve sustainable results for Africa?; AgTech disruptors in East African value chains: implications for regional integration and inequality; How a plurilateral ecommerce agreement can meet African economic development needs?
On Wednesday: Africa goes digital: leaving no one behind; Women and e-commerce: from data to implementation; How to harness the industrialization opportunities of the African Continental Free Trade Area in the digital age
On Thursday: Data and statistics for gender-responsive trade policy; Harnessing technology for transformation and inclusive trade for Africa and the LDCs: the role of the WTO; Creating value at origin: putting SMEs at the heart of inclusive and sustainable trade in Ghana and Ethiopia
Chiedu Osakwe: WTO fundamentals are sound, but the architecture requires reform and modernisation for the 21st century global economy (ICTSD)
What are the problems facing the WTO? The range spans conflicting economic models, architectural and structural inadequacies, and rules, functions, and procedures that require radical updates...Eight, any serious reform of the WTO, as a contributor to growth and a healthy global economy, requires a changed approach and engagement with Africa, and by Africa. That realisation is dawning on all sides. The paradigm for engagement with Africa must change, consistent with actions that flow from the realisation that good policy invites positive engagement.
A reformed approach to engagement with Africa should be in full recognition of the Agreement Establishing the African Continental Free Trade Area. The AfCFTA is not only about an integrated liberalised single market for trade in goods and services. It is both an economic and a geopolitical turn for Africa. It represents a strategic, economic, and legal order for rules-based engagement with the global economy. Therefore, the legal and policy framework for relations with Africa must and should be based on the new terms governing trade arising from the AfCFTA. In responding to Africa’s economic policy choices, WTO members should reform their approach to Africa, and stop designing “assistance” programmes or providing development aid as a substitute for rules-based trade and investment engagement. Furthermore, Africa as a market will be a centre of gravity in the global economy by 2050. The relevance of a reformed and refitted WTO, with a claim to universality, for the 21st century would depend substantially on its engagement with and acceptance of the AfCFTA. Across the board, Nigeria, in solid partnerships, will continue to provide leadership. [The author is Director General and Chief Negotiator, Nigerian Office for Trade Negotiations]
At UNGA side events: UNECA’s Vera Songwe advocates AfCFTA, digital identity, investment opportunities and strengthened partnerships
Reinvigorating trade and inclusive growth (WTO, IMF, WB)
Certain “frontier” areas of trade policy have high potential to lift global productivity and durably increase medium-term growth. The digital economy revolution is opening new opportunities for cross-border trade and investment. This is changing the nature of trade, elevating the roles of policies relating to electronic commerce (“e-commerce”), investment, and services trade. This reflects the international nature of supply chains and complementarity of foreign direct investment with trade in goods and services – the ‘trade-investment-services’ nexus. The effectiveness of this nexus, and of international supply chains, is also grounded in secure property rights, including for intellectual property. The growing overlap between trade regimes and domestic policy puts extra emphasis on effective regulatory cooperation. While the benefits are high in these areas, so too are the risks. On gender and trade (pdf):
Exporters in developing countries employ more women than non-exporters and jobs in export sectors tend to have better pay and conditions than those in the informal sector. In many developing economies women comprise up to 90% of the workforce in export processing zones, bringing jobs that provide higher income and greater job stability. The growth of global and regional supply chain trade, such as in apparel and assembled goods, has been a strong source of employment for women in developing countries. The impact of trade and trade policy on women is complex. Women can be affected by trade as consumers, as producers of traded goods and services, and as entrepreneurs with dominant ownership of exporting companies. The trade impact on female producers or exporters also depends on the role in the economy of the sector or industry where they are specializing and on whether they are employed in large or small firms. While the export sector is an important source of employment for women, the services sector is the largest employer of women. Further services trade reform, coupled with domestic regulatory reform, could thus help to drive further job creation for women in service sectors such as health, finance, and tourism, and in areas such as communications, distribution, and logistics that are becoming increasingly tradable. Table of contents (pdf) :
Introduction; Trade areas with high growth potential (Services trade, Regulatory cooperation, Electronic commerce, Investment, Market access for merchandise trade); Trade-related policies for inclusiveness (Trade and the empowerment of poor people, Rural economy, Micro, small, and medium-sized enterprises, Gender, Complementary policies to support inclusiveness); Role of the international trading system
pdf Zambia: 2019 Budget Speech (1.02 MB) (MoF)
External sector performance: Export earnings increased by 20.7% to $4.6bn during the first half of 2018 from $3.8bn over the same period in 2017. Copper export earnings were the largest contributor at $3.5bn from $2.9bn following an increase in both price and export volumes. Non-traditional exports increased by 17.7% to $911m, from $774.1m. Notwithstanding the increase in export earnings, the current account deficit widened to $756.5m in the first half of 2018 compared to $340m in the corresponding period in 2017. This was explained by higher growth in imports relative to export earnings, an increase in interest payments on public sector external debt, and dividend payments to non-resident shareholders.
South Africa-Saudi Arabia Joint Economic Commission: dti update
In addition to co-chairing the JEC, Minister Rob Davies is leading a business delegation of South Africa companies from the financial services, agro processing and pharmaceutical sectors. The visit is also a follow up on President Ramaphosa’s State Visit to Saudi Arabia in July 2018 where Saudi Arabia pledged to invest $10bn in South Africa’s energy, defence and agricultural sectors. The 8th session of the JEC will assess the progress made and implementation of the commitments of the previous session and seek ways to further deepen trade, economic and social cooperation. Minister Davies will address a Business Forum, to be hosted by the Riyadh Chamber of Commerce.
Kenya’s push to lower regional tariffs hits snag (The Standard)
Kenyan exports to the region are likely to continue attracting high tariffs as EAC member states go slow on the proposed review of the Common External Tariff. According to some countries, the review is not top on their agenda. Instead, Rwanda, Uganda, Tanzania and Burundi have turned their attention to the promise of lower tariffs proposed under the nascent AfCFTA. Tanzania Revenue Authority Commissioner for Customs and Excise, Ben Usaje, said EAC countries were struggling with their own domestic fiscal demands, and that was why they were shelving the long-awaited review of the Common External Tariff.
He said besides the other four EAC member states, Kenya, the region’s biggest economy and which has been pushing for a review of the tariff, was also grappling with its own challenges, including implementation of the recently passed VAT regulations. “Since the countries participated in the AfCFTA trade negotiations, they have not shown any enthusiasm for the community’s CET. Again, they are also struggling with their domestic tax regulation issues. Tanzania will be watching closely to see if the other EAC members will rejuvenate the CET review talks and then we will act,” said Mr Usaje. He added: “The common narrative in East Africa is that Tanzania has been the stumbling block of a review of the CET because of its constant levy disputes with Kenya, but that is not the case.”
Working with the grain of African integration (ECDPM)
This Briefing Note (pdf) gives an overview of the complexities and challenges facing efforts at regional integration in Africa. While frustration with progress is widespread and with ambitions continuing to grow, the paper proposes that engagement with regional processes be based on a more explicit understanding of the political economy of regional processes. That is, it is important to take account of within and between state political interests in order to gauge where there is genuine traction for regional initiatives and therefore where support might be effective.
As part of thinking about furthering the regional agenda, this BN also points to the importance of effective monitoring, meaning not only following outcomes, but also tracking commitments made towards regional efforts. While a more realistic understanding of where and why countries engage in regional integration, and though improved monitoring of actual engagement can help identify where to support countries in their efforts, peer pressure and learning across regions can also play a role. The Pan African Coalitions for Transformation recently launched to play this role across a range of policy areas may help to fulfil this role. [The authors: Bruce Byiers, Jaime de Melo, Ed Brown]
PwC’s Truck Study: Digitisation and autonomous driving to halve costs by 2030
The digitization and automation of processes and delivery vehicles will reduce logistics costs for standardized transport by 47% by 2030, according to a new report from PwC’s Strategy& consultancy. The Global Truck Study 2018 (with a focus on the trucking sector in the EU) has found that around 80% of these savings will be attributable to the reduction of personnel in the transport and logistics industry. In addition, there will be enormous increases in efficiency: autonomous lorries, for example, will be able to travel 78% of the time from 2030 onwards, as opposed to 29% of the time since 2030. This will be because there will be no breaks for drivers and idling time will be reduced through the use of algorithms. The first-mile delivery of products will become more efficient over the next few years, primarily as a result of the automated assignment of freight to the truck, and platform solutions will replace manual administration tasks, which will release savings potential of 45% by 2030. For last-mile deliveries, data-driven demand analysis, automated deliveries (for example through drones) and reduced administrative overhead could see costs fall by 51%.
Monday’s Quick Links: Mills Soko, Mzukisi Qobo: SA’s cancellation of bilateral investment treaties - strategic or hostile? Bank of Namibia: Quarterly Bulletin, September 2018 (pdf) European Commission Fact Sheet: Political negotiations on a new ACP-EU Partnership start in New York NAFTA: United States-Mexico-Canada Agreement Text Fletcher Tabuteau to lead NZ’s first trade delegation to South Africa Chelsea Follett: Are tariffs Trump’s most anti-woman policy? |
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WTO-IMF-World Bank report: greater trade integration will boost shared prosperity
A new report issued on 30 September argues that trade integration can play a larger role in boosting shared prosperity. The report, by economists from the World Trade Organization, the International Monetary Fund and the World Bank, concludes that global trade policy can help to unlock opportunities provided by fundamental changes in the global economy.
In the report, entitled Reinvigorating Trade and Inclusive Growth, the economists find that the opening of trade has played a key role in lifting living standards and reducing poverty since World War II, but that this work remains incomplete. Trade reform has not sufficiently kept pace with the changing landscape of services trade, digital technologies, and foreign direct investment. Much also remains to be done in areas such as market access for goods and regulatory cooperation. Greater openness in such areas, the report claims, would promote competition, lift productivity, and raise living standards.
In many other domains, such as the rural economy, gender and smaller enterprises, trade-related reforms are important to foster more inclusive growth and increase productivity. Moreover, the report notes that the current trade tensions may in part be rooted in issues that have been left unresolved on the negotiating table for too long. Cooperative action to secure greater, more durable openness could help to resolve these issues.
Introduction
Despite a recent rebound in trade, a prolonged slowdown in the pace of trade reform is leaving in place widespread trade distortions and putting at risk the strength and durability of the global economic recovery. A global economic upswing that began around mid-2016 grew into a synchronized expansion underpinned by trade-intensive investment growth. But this largely cyclical development, and a more recent period of unusually high trade tensions – which itself poses serious concerns – risk masking the need for substantial and durable trade opening on a global basis. Remaining trade distortions are a key factor behind the trade tensions, making the need to reinvigorate trade reform all the more urgent.
As new trade reform initiatives lagged and the benefits of past reforms levelled off, trade growth slowed. Global trade volumes grew at some 7 percent annually during the 1990s – double the rate of global GDP growth – but decelerated markedly as the ratio of trade growth to GDP growth fell to 1.5 during 2001-07 and to unity in the period after 2008.2 While several factors lie behind the slowdown, a substantial part represents a slower pace of trade reform following the remarkable progress made from the 1980s to the early 2000s.
It is time to reinvest in open, rules-based global trade. Since World War II a system of global trade rules has brought more openness, stability, and transparency to trade, nurturing unprecedented world economic growth. It is time to reinvest in that system to serve the modern economy. To think that the work of trade reform is essentially complete is a fallacy that neglects both the significant remaining obstacles to traditional trade and the opportunities presented by the rise in services and technology for greater trade-driven prosperity.
Extending rules-based trade openness poses new challenges and could require fresh thinking and exploring all available approaches. At the domestic level, trade policy and trade negotiations increasingly reach “behind the border” and interact with domestic regulatory agencies, sectoral ministries, and sub-national entities. Unlike a classical tariff-cutting exercise, for example, successfully opening to services trade brings additional complexities: policy coherence becomes critical in designing and implementing reform. For any particular trade policy areas it follows that some countries may be prepared to move more quickly than others. So internationally, it’s important to channel that desire in ways that are most constructive for the countries concerned, while also contributing to a healthy global system.
This paper complements earlier joint work. Along with the broad benefits of trade, the IMF-WB-WTO (2017) policy paper Making Trade an Engine of Growth for All emphasized policy tools that can be used to help workers and communities to adjust to adjustment pressures associated with trade and technological change. The current paper digs more deeply into the benefits that trade and trade reform can provide for economic growth and inclusiveness and how such reform could be achieved at the global level.
Trade areas with high growth potential
Reinvigorating trade integration should be a key component of the global policy agenda to boost economic growth. Despite the upswing that began in 2016, a longer-term trade slowdown has coincided with weaker productivity growth. This has occurred because the benefits of past major trade policy reforms have played out and new initiatives have lagged. The pace of new trade policy reforms at the global level has slowed since 2001; this has not only left an unfinished agenda in traditional areas, but has also meant that the trading system has not kept pace with modern economic developments. At the same time, new trade restrictions imposed since the global financial crisis have begun to weigh on global trade; this trend has only grown recently.
Certain “frontier” areas of trade policy have high potential to lift global productivity and durably increase medium-term growth. The digital economy revolution is opening new opportunities for cross-border trade and investment. This is changing the nature of trade, elevating the roles of policies relating to electronic commerce (“e-commerce”), investment, and services trade. This reflects the international nature of supply chains and complementarity of foreign direct investment (FDI) with trade in goods and services – the ‘trade-investment-services’ nexus. The effectiveness of this nexus, and of international supply chains, is also grounded in secure property rights, including for intellectual property. The growing overlap between trade regimes and domestic policy puts extra emphasis on effective regulatory cooperation.
While the benefits are high in these areas, so too are the risks. International rules in these areas are less developed than those in the more traditional areas of trade. Moreover, broadly speaking the existing international obligations – whether in the WTO or in other trade and investment agreements – provide limited protection against backsliding from existing policies. This is also an important consideration, particularly in an environment of rising trade tensions.
A trade policy agenda to promote global growth should also encompass market access issues and other conventional areas of trade policy. Much remains to be done to promote open and secure market access in the goods sector. The work of reducing tariffs is incomplete, while greater transparency and openness in government procurement markets can promote competition and increase expenditure quality and efficiency, particularly important when budgets are tight.
Trade-related policies for inclusiveness
Gender
Trade helps to drive female employment. Trade generates jobs for women, including through employment in the formal sector among those previously employed in the informal sector. MSMEs account for 52 percent of employment in developing economies (ILO, 2017) and employ women disproportionately (WTO, 2017). Exports now represent just 8 percent of total sales of developing country MSME manufacturers, but raising MSME participation in trade seems likely to promote female employment.
Exporters in developing countries employ more women than non-exporters and jobs in export sectors tend to have better pay and conditions than those in the informal sector. In many developing economies women comprise up to 90 percent of the workforce in export processing zones, bringing jobs that provide higher income and greater job stability. The growth of global and regional supply chain trade, such as in apparel and assembled goods, has been a strong source of employment for women in developing countries.
Many governments are now acting to support the participation of women in trade. The Buenos Aires Declaration on Trade and Women’s Economic Empowerment, signed by 121 WTO Members and Observers representing three-quarters of global trade, seeks to ensure that the WTO works to make trade more inclusive and increases the participation of women in trade.
The impact of trade and trade policy on women is complex. Women can be affected by trade as consumers, as producers of traded goods and services, and as entrepreneurs with dominant ownership of exporting companies. The trade impact on female producers or exporters also depends on the role in the economy of the sector or industry where they are specializing and on whether they are employed in large or small firms. While the export sector is an important source of employment for women, the services sector is the largest employer of women. Further services trade reform, coupled with domestic regulatory reform, could thus help to drive further job creation for women in service sectors such as health, finance, and tourism, and in areas such as communications, distribution, and logistics that are becoming increasingly tradable.
In many countries, women are constrained from fully participating in or benefiting from trade. Specific constraints include access to credit, land and other resources, asymmetric household responsibilities, gendered social norms, labor market segregation and lower skills and lack of training. Women are often heavily involved in cross-border trade – in the Great Lakes region of Africa, about three-quarters of small-scale cross-border traders are women – but are less likely than men to be aware of their rights and of legal conditions governing trade at the border. In a 2010 survey of those traders, more than 80 percent reported having to pay bribes to cross the border, while more than half had suffered physical harassment and abuse.
Farming often presents specific issues. In many poor countries, seeds, fertilizers and pesticides are predominantly imported; however, women often find it more difficult to interact with markets as they are bypassed by traditional male-dominated distribution networks, are less likely to receive technical information, and farm support programs may exclude crops grown primarily by women. Improved access to markets for women farmers would increase use of modern inputs and enable them to sell more of what they produce –helping to close the gender productivity gap in agriculture, raising agricultural output, and improving the welfare of households of female farmers.
Through its impact on job creation, trade can enhance the status of women in society and empower women within the household. Employment of women has been shown to have positive long-term development outcomes through the greater influence of women on household decisions on education, food, and health expenditures, and on the status of girls. Decisions that improve the caloric intake of children and reduce stunting improve educational attainment and adult productivity. By creating jobs for women, trade can also increase incentives for girls to attend school and training, and greater job opportunities through trade bring an increased focus and expenditure on education for all children in the household. Finally, job creation through trade can empower women in social and political spheres, making institutions more representative and changing policies that lead to increases in the provision of public goods (education, health, sanitation, water) which contribute to long-term development.
Role of the international trading system
Multilateral trade cooperation is increasingly important in today's hyper-integrated, multipolar global economy. Many key trade issues, such as e-commerce, are largely global in nature and can only be tackled globally in the WTO. Yet one of the WTO’s core strengths – its global scope and membership – also makes it more challenging to advance and 'upgrade’. The last major reform of the system, the Uruguay Round, was concluded almost a quarter century ago and addressed the agenda of the 1980s. The WTO Agreement does not tie negotiators to predetermined negotiating approaches, but allows for a variety of approaches. The urgent challenge today is to harness the unique strength of the WTO – an institutional, legal, and enforcement character that cannot be matched in bilateral and regional trade agreements – to tackle the key trade issues of today, using the most effective approaches available.
In these times of fast-moving change in the global economy there is a need now more than ever to ensure that the rules, policies, and practices governing global trade evolve and are modernized. Since its creation immediately after the Second World War, the system has evolved and adapted in response to new economic activities, new trade participants, and new 'integrating' technologies. Although this evolution has not always been smooth – often advancing in fits and starts – two long-term trends are striking.
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First, multilateral trade cooperation has grown wider and deeper with more countries, more issues, and more rules being consolidated in the increasingly global architecture.
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Second, WTO negotiations have included all members, but members have had varied ambitions and undertaken varied commitments, especially as the system has grown more diverse. Every negotiation has been multi-speed, with some members going further and faster than others. The resulting agreements have been ‘variable geometry,’ with outcomes that accommodated different obligations on issues such as tariff schedules and services commitments, anchored in common principles and general rules.
The slower pace of multilateral negotiations has encouraged countries to turn to bilateral and regional strategies. This has had positive aspects, but also presents a risk of complicating or fragmenting the trading system. These efforts have been motivated, in part, by a sense that smaller like-minded groups could address the complex challenges of deeper integration easier and more quickly than the broader WTO. The number of RTAs in force and notified to the WTO increased from about 54 in 1995 to over 250 today, yet less than half of global merchandise trade takes place between countries that share an RTA. The most ambitious RTAs go beyond liberalizing trade in goods and services to address deeper integration by devising common regulations and standards governing goods, services, investment, and public procurement markets.
Regional trade agreements can help to advance trade integration, but are not enough on their own. The more ambitious regional agreements have helped to demonstrate the potential of further integration in new areas. While the growth of more, broader and deeper RTAs clearly demonstrates countries' desire to expand and strengthen international trade cooperation, even the most far-reaching mega-regional deals cannot address all modern trade challenges. Because RTAs by definition have limited membership and coverage, their ability to address the policy coordination challenges posed by increasingly 'borderless' global issues like services, investment, or e-commerce is also limited. In addition, proliferating RTAs can create overlapping, inconsistent and fragmented trade regimes – 'spaghetti bowl' effects – raising transaction costs and complicating sourcing for businesses that operate in global markets. By design, RTAs are also preferential and exclusionary, with tariff and some other discriminatory provisions potentially trade-diverting.
These shortcomings are amplified by the fact RTAs tend to define or 'lock-in' trade partnerships by region, while key trade relationships today often transcend geography and are specific to issues or industries, rather than regions. The complex China-EU-US relationship, to take an obvious example, cannot helpfully or even feasibly be addressed by multiple RTAs, regardless of how comprehensive or well-designed. As the only global trade system, the WTO provides the only forum where all countries, including the most powerful, can cooperate on the growing number of global trade issues that impact them collectively. In today's increasingly open, integrated, and multipolar global economy, there is no obvious alternative to the global system of trade rules, policy coordination, and institutional support – especially regarding transparency and dispute settlement – that the WTO now provides.
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WTO fundamentals are sound, but the architecture requires reform and modernisation for the 21st century global economy
The World Trade Organization (WTO) is an indispensable multilateral institution. In its routine professional work, the organisation, staffed by top-class professionals, continues to deliver, technically and daily, for the operational functioning of the rules-based global economy. Much important work continues to be accomplished.
Thirty-six new members have joined since 1995. Twenty-two are queued up. Draft standards are notified. Dispute settlement cases continue to be filed for the time being and are being litigated. Reports are produced. A civil dialogue over trade issues persists.
However, looking ahead, technical functioning is now wholly inadequate to meet the major challenges to the strategic relevance of the WTO in the 21st century. In critical areas, the organisation has neither responded, nor adapted, nor delivered. Dimensions of its structures and functions are fragile, creaking, and failing in parts. The WTO is undergoing a crisis.
Although it remains an indispensable organisation, it requires urgent fixing, reform, and modernisation. It is one of the three cornerstones of global economic governance together with the International Monetary Fund and the World Bank. It remains a welfare and prosperity pump for the global economy. If it is wilfully destroyed, as a matter of policy, or diminished through lack of care or robust and courageous stewardship, the global economy will surely take direct hits and suffer damage. We cannot forget that the WTO has no power to make decisions on its own – its fate rests entirely in the hands of its members.
The consequences of an unravelling of the WTO would be considerable and legion. The risk would increase of a negative polarisation of the global economy. Cooperation would be limited and painful. Unilateralism, economic nationalism, and trade wars would be largely unconstrained. In an age increasingly marked by conflict, a weakened or atomised WTO would result in the weaponisation of trade. At a time of complex interdependence, international cooperation – a required function for managing interdependence – would be disabled.
The scales should fall from our eyes to see that if we wreck the WTO, the damage may not be easily reversible. A concert of members must now be assembled – not in partial coalitions – for the urgent reform of the WTO to serve 21st century requirements. If the reform efforts are to be successful, common sense and the rule of reason must prevail on core issues all round. Leadership will be required. Consensus will not be formed without it. An unhelpful systemic silence on glaring anomalies will have to be overcome to redeem and strengthen an indispensable global public good.
A reformed WTO will have to be constructed on the foundation of liberal multilateralism, resting on open, non-discriminatory plurilateral pillars, explicit accommodation of regional trade agreements (RTAs) (not as derogations), and safety valves for rules-based sovereign action, in accordance with national constitutions and public international law. Vows will have to be reaffirmed, accompanied by the practice of a market-based liberal order. A momentum for systemic reform is gathering pace in the WTO, but it requires direction, courage, and a postilion to guide the carriage.
What are the problems facing the WTO? The range spans conflicting economic models, architectural and structural inadequacies, and rules, functions, and procedures that require radical updates.
First, the functioning of state enterprises engaging in commercial activities is interfering with and distorting the operative assumption of the General Agreement on Tariffs and Trade (GATT)/WTO that international trade is to be conducted, principally, by private sector operators in response to conditions of supply and demand through price in a market economy. A vibrant WTO cannot accommodate conflicting economic models of market versus state. All WTO members will have to accept the operative assumption of a rules-based order steered by a market economy, the private sector, and competition. Although the GATT 1994 provided for state enterprises, it did so within the prevailing assumption of market operations. This assumption has been specified and reaffirmed in the vast majority of WTO accession commitments of Article XII members negotiating their WTO membership after 1995.
Second, industrial and agricultural subsidies that distort markets need to be addressed through a dedicated new series of intensive trade negotiations. Many WTO members bear responsibility for the use of trade-distorting domestic subsidies. Agricultural and industrial subsidies have caused blockages in the system and prompted protectionist reactions in a number of WTO members. We need to launch negotiations to address the intertwined issues of agricultural subsidies and market access, while recognising that food security concerns will not disappear.
Third, a credible trading system requires a dispute settlement system that is accepted by all. Blockage and deadlock in the Appellate Body stage of the WTO dispute settlement system triggered the present crisis. After approximately a quarter of a century of practice, it is now clear that although all members accept the rule of law and a robust dispute settlement system, they do not accept judicial activism, supranational interventions, or the judicial branch stepping into the breach of legislative hiatus. Again, unless we have serious negotiations, this problem cannot be solved. Deadlocked systems fail and disappear, historically. This cannot be allowed of the WTO. The conundrum of the AB is solvable. Already, there are practical ideas on the table.
Fourth, every system is driven by its culture and psychology. The rules-based trading system has always had a dual personality – the equivalent in clinical psychology of a dissociative identity disorder. The WTO lost the critical balance between the organisation as an institution established to support, consolidate, and bind economic reform to counter damaging protectionism, on the one hand, and the organisation as an institution for litigation-based dispute settlement, on the other hand. The balance was lost and the WTO became excessively litigious to the detriment of driving economic reform for growth. We need to launch serious negotiations to restore the balance, and we must do so in an open-ended plurilateral manner that cannot be blocked by those who do not want to move ahead. In doing so, it is to be underscored that international cooperation is necessary in a global economy defined by complex interdependence. At the same time, scope must remain for sovereign action, recognising that there is a structural tension between international cooperation and sovereignty, in a global economy with sovereign players managing domestic stakeholders.
Fifth, GATT/WTO rules in a number of areas are outdated. New rules are required to keep pace with changes in the market and technology. Rules and disciplines on topics ranging from trade-distorting industrial subsidies to digital trade require updates. The Buenos Aires WTO ministerial conference pointed to the future direction of plurilateral progress on the topics of investment facilitation, the digital economy (e-commerce), micro, small and medium-sized enterprises, domestic regulations for trade in services, and the empowerment of women in international trade. Here again, because rules and disciplines cannot always be made unanimously, members would be wise to accept the necessity for negotiations based on open, non-discriminatory plurilateralism, to the extent possible.
Sixth, decision-making by WTO members requires urgent adjustment. Current practices that allow for hostage-taking and blocking coalitions (majorities or minorities) are no longer workable in an age of complex interdependence and the need for cooperation for critical and practical problem-solving. Consensus is best when it is obtainable. However, when we fail and fall short of this ideal, because of unyielding positions, the practices in the European Union (qualified majorities) and international financial institutions provide pragmatic models for moving forward, in addition to decisions to move ahead in open and non-discriminatory plurilateral configurations.
Seventh, the rules-based multilateral trading system still has an undefined modus vivendi with RTAs, but the review and application of the rules are lacking. This is an area for vital and pressing reform: the Committee for Regional Trading Arrangements must go beyond formal analysis to making recommendations for high quality, job-creating growth. The high-quality but excessively controlled secretariat could also be empowered to conduct specific tasks as a research resource for members which would help ensure compliance with RTA rules.
Eight, any serious reform of the WTO, as a contributor to growth and a healthy global economy, requires a changed approach and engagement with Africa, and by Africa. That realisation is dawning on all sides. Recently, Jean-Claude Juncker, President of the European Commission, in his State of the Union speech, stated: “To speak of the future, one must speak of Africa... Africa is the future: By 2050, Africa’s population will number 2.5 billion. One in four people on earth will be African. We need to invest more in our relationship with the nations of this great and noble continent. And we have to stop seeing this relationship through the sole prism of development aid. Such an approach is beyond inadequate, humiliatingly so.”
Changes on the African side, based on better policy choices and command of trade and economic facts, compel changes in engagement, shifting from the excessive focus on “threats” and “risk assessments” to “seizing the opportunities”. According to the United Nations, from 2018 to 2035, the 10 fastest growing cities in the world will be African. According to the World Bank, in 2018, six of the fastest growing economies are in Africa. The paradigm for engagement with Africa must change, consistent with actions that flow from the realisation that good policy invites positive engagement.
A reformed approach to engagement with Africa should be in full recognition of the Agreement Establishing the African Continental Free Trade Area (AfCFTA). The AfCFTA is not only about an integrated liberalised single market for trade in goods and services. It is both an economic and a geopolitical turn for Africa. It represents a strategic, economic, and legal order for rules-based engagement with the global economy. Therefore, the legal and policy framework for relations with Africa must and should be based on the new terms governing trade arising from the AfCFTA.
In responding to Africa’s economic policy choices, WTO members should reform their approach to Africa, and stop designing “assistance” programmes or providing development aid as a substitute for rules-based trade and investment engagement. Furthermore, Africa as a market will be a centre of gravity in the global economy by 2050. The relevance of a reformed and refitted WTO, with a claim to universality, for the 21st century would depend substantially on its engagement with and acceptance of the AfCFTA. Across the board, Nigeria, in solid partnerships, will continue to provide leadership.
Ninth, there have been tortured debates on the development dimensions of the rules-based trading system. These do not lie in the absence of disciplines. They can be found in WTO accession rules and the associated commitments by the 36 Article XII members, case by case. WTO membership is a contract with a specific balance of rights and obligations. In Article XII members’ obligations, specific contractual commitments to principles and disciplines across the board, in goods, services, and protection of intellectual property rights, are embedded in domestic legislation. Requests for necessary policy space and associated assistance for development reasons must support eventual adherence to the rules, and should be accompanied by calendar-based action plans, where these are required. An Article XII approach to membership, coupled to a radically improved and strengthened WTO Trade Policy Review, in real time frames, would usefully add to the reform and modernisation of the 21st century WTO.
The rules-based trading system, with is roots in the GATT 1947, has been in a state of virtually permanent reform angst. The calls for WTO reforms are growing. This time they cannot be ignored. Uncertainty and doubt surrounded the rules-based system at its establishment. However, as was pointed out in 1958 by John M. Leddy, of the US State Department, the key drafter of the GATT 1947, GATT’s contracting parties consistently promoted observance of these rules by national governments. They also agreed to change the rules whenever desirable to meet changed conditions or new circumstances. There are ideas of value on the table, from the past to the present, from which the WTO can draw.
The WTO matters. Its GATT origin was conceived and designed by the United States and the United Kingdom in 1946, and developed with patience and practice over time. However, it is now a global public good – a universal patrimony that belongs to all. Members have to face the reality that the organisation requires non-cosmetic, serious root-and-branch reform: positive and additive changes for a WTO adapted to modern economic and political realities. We must act to defend it – as collective guardians of the rules-based multilateral trading system – through broad coalitions for change.
As proposals accumulate and negotiations intensify for reform, it is historically necessary to recall that trade policy has always been more than border tariffs, domestic regulations, and markets. Trade policy has always been interwoven with geostrategic relations and associated struggles. We should be clear that the WTO cannot arbitrate strategic struggles. Strategic struggles between incumbent and emerging economies should be sorted out in other appropriate configurations and venues. WTO reforms should focus, strictly, on a rules-based order for a 21st century trade agenda with equity and fairness, to spur business, welfare, and prosperity.
Of all the possible options, the rules-based liberal market order, with a development dimension, is best. The elasticity of such an order should accommodate all who want to remain part of the system. A reaffirmed commitment to the rules-based liberal order with a development dimension must be the foundational starting point. The architects for a reformed and updated trade multilateralism, built on open, non-discriminatory plurilateral pillars as an objective – anchored in the WTO – must resist the siren songs of populism and unilateral conduct and reject resurgent protectionism. The lessons of economic history stand: protectionism is a dead end and does not protect.
Ambassador Chiedu Osakwe is Nigeria’s chief trade negotiator and Director General of the Nigerian Office for Trade Negotiations (NOTN).
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tralac’s Daily News Selection
South Africa’s August 2018 merchandise trade statistics show a R8.79 billion surplus from an upwardly revised R5.29 billion deficit in July and above market expectations. “We expect the deficit to have narrowed to R3.5bn, from R4.7bn in July. Bloomberg consensus expectations foresee a trade deficit of R1.8bn,” Standard Bank had said.
WTO downgrades outlook for global trade as risks accumulate (WTO)
Trade will continue to expand but at a more moderate pace than previously forecast. The WTO anticipates growth in merchandise trade volume of 3.9% in 2018, with trade expansion slowing further to 3.7% in 2019. The new forecast for 2018 is below the WTO’s 12 April estimate of 4.4% but falls within the 3.1% to 5.5% growth range indicated at that time. Trade growth in 2018 is now most likely to fall within a range from 3.4% to 4.4%. The updated trade forecast is based on expectations of world real GDP growth at market exchange rates of 3.1% in 2018 and 2.9% in 2019. This implies a ratio of trade growth to GDP growth of 1.3 in both years.
All geographical regions recorded positive year-on-year trade growth in both exports and imports in the first half of 2018, but some regions performed better than others. North America saw the fastest export growth during this period at 4.8%, followed by Asia at 4.2% and Europe at 2.8%. Exports of Other regions (comprising Africa, the Middle East and the Commonwealth of Independent States including associate and former member States) increased by 2.7% while those of South America were up 1.1%. Asia had the fastest import growth (6.1%) followed by South America (5.5%), North America (4.8%), Europe (2.9%) and Other regions (0.5%).
WTO agriculture talks: Members evaluate negotiating submissions, eyeing 2020 Ministerial (ICTSD)
The WTO’s agriculture negotiations resumed last week after the organisation’s annual August hiatus. While the discussions were mainly limited to reviewing negotiating submissions, analysis, and data, some sources indicated that the level of engagement seemed noticeably improved from recent meetings, with more planned to help refine the direction of the talks further. Ambassador John “Deep” Ford of Guyana, the chair of the WTO’s Committee on Agriculture “special session” tasked with negotiating new farm trade rules, convened delegates for informal meetings on 21 September, at which Australia and Canada both made presentations based on recent negotiating submissions.
Canada presented analysis on domestic support by the Cairns Group of agricultural exporters, drawing on figures presented in a submission that the group tabled in July. The paper reviews domestic support from 2001 to 2014 for select WTO members that are significant exporters, importers, or producers, drawing on data that the countries themselves have reported to the global trade club. Members also discussed a separate paper from Australia, which also looked at domestic support trends. In addition, the chair reported on his consultations on cotton, where the US has also tabled an informal paper. Sources said this could be followed by submissions from other members soon.
Pew Research Center: Americans, like many in other advanced economies, not convinced of trade’s benefits
Americans and publics in advanced economies are especially skeptical of trade’s role in boosting wages – only about three-in-ten in the United States and across the other advanced economies surveyed subscribe to this view. Slightly more Americans think trade lowers prices and generates new jobs (37% and 36%, respectively). Among the other advanced economies polled, a median of 47% link trade to job creation, while 28% say prices decrease thanks to trade. People in emerging markets are even more dubious of trade’s impact on prices – a median of just 18% in these countries say it drives prices lower. But publics across the nine emerging markets surveyed are enthusiastic about trade’s other economic benefits: A median of 56% think trade leads to more jobs and 47% say it improves wages.
These are among the key findings from a Pew Research Center survey conducted among 30,133 respondents in 27 countries from 14 May to 12 August. Among the 27 nations surveyed, attitudes toward trade are closely associated with education and income levels. In 18 countries, those with higher levels of education are more likely than those with less education to think trade creates jobs. In 17 countries, those with an income higher than the national median are more likely than those with an income below that line to believe trade generates employment. [Note: Emerging and developing countries included in the survey are Brazil, India, Indonesia, Kenya, Mexico, Nigeria, Philippines, South Africa, Tunisia]
IFC’s Sub-Saharan Africa project financing portfolio (IFC)
From Nigeria
Updates from the Manufacturers Association of Nigeria AGM: Mainstreaming industrial policies to catalyse industrial renaissance
(i) President Addo Akufo-Addo: Nigeria, Ghana urged to lead industrial revolution in Africa. Speaking through his Senior Minister, Samuel Yaw Osafo-Maafo, who represented him as a guest lecturer at the annual lecture during the 46th AGM of the Manufacturers Association of Nigeria in Lagos: “We need to stop this needless drive for importation and direct our attention to protecting local businesses. We must tailor our procurement laws to favour local production. For every cheap item we buy from outside Nigeria, Ghana or the continent as a whole, we shall bear in mind that we are providing employment to other people outside our borders and denying our people the jobs to make a living and create wealth in dignity. Africa must procure prudently to protect itself and provide labour to its youth.”
The Ghanaian leader explained that Africa could create the champions of entrepreneurs and business giants who could stand shoulder to shoulder with foreign businesses. “We have many examples of our own to celebrate like the Dangotes. What we must never stop to do is to effectively ensure that both the private and public sectors continuously engage in productive dialogues and consultations to define what is good for our industrial sustainability and I believe this meeting will deepen that process.”
(ii) Nigerian, Ghanaian manufacturers sign MoU on trade relations. The Manufacturers Association of Nigeria and the Association of Ghanaian Industry, on Thursday, signed a MoU to facilitate exchanges and joint actions for a conducive atmosphere for the operation of manufacturing business in both countries. Dr Frank Jacobs, outgoing President of MAN, and Dr Yau Agyei Gyamfi, President Association of Ghanaian Industry, signed the MoU at the 46th Annual General Meeting of the manufacturers Association of Nigeria in Lagos. The MoU serves to form the nucleus of a coalition of manufacturers across West Africa.
(iii) Manufacturers’ inventory up 255% in one year. Dr Frank Jacobs, outgoing MAN president noted that the inventory of unsold products, inadequate electricity supply, frequent increase in electricity tariff and abnormally high interest rates were some of the problems bedeviling the sector. “Inventory of unsold finished goods increased to N161.53bn in the second half of 2017 from N35.42bn recorded in the corresponding period of 2016. Inventory of unsold manufactured goods amounted to N321.12bn in 2017 against the N90.43bn recorded in 2016, indicating a 255.19% increase over the period.”
Launch of New Africa Dialogue: remarks by President Paul Kagame (CSIS)
Let me say that the main lines of US policy toward Africa have hardly changed since the end of the Cold War. To be very frank, if I could remember how many times I have had discussions with distinguished leaders in the United States and across Africa, talking about how we could relate to each other. There have been so many meetings over so many years, and we always keep coming back more or less to the same thing. We keep asking what is it that we could do, and yet we end up not doing much about that. But Africa has changed tremendously, and so has America and the rest of the world. It is therefore very important to rethink how Africa and the United States relate to one another.
US refuses visa for Kenyan delegation to UN meeting (The East African)
The United States refused to issue visas to more than half of the Kenyans who were seeking to travel to New York for the United Nations General Assembly week. “A delegation of 60 people from Kenya applied for visas. Only 27 of the 60 got them,” said James Mureu, vice chairman of the Kenya National Chamber of Commerce and Industry. Mr Mureu made the disclosure on Tuesday in a talk at a New York trade show of African products.
Côte d’Ivoire: Country Strategy Paper (2018-2022) and 2018 Country Portfolio Performance Review (AfDB)
Regional Integration and Trade (extract, pdf): Regional integration, one of the five pillars of PND 2016-2020, is one of the Government’s top priorities despite some challenges. The Integration Strategic Plan for 2017-2020, which Côte d’Ivoire has adopted, seeks to achieve its dual ambition as economic hub in the region and as a major continental player. With a GDP 36% close to that of WAEMU, Côte d’Ivoire is a key actor at regional level. At the African level, the country seeks to be among the most prosperous economies, by continuing to increase its overall trade balance which remains positive with the various regional and continental blocks (see Graph 5). The main integration challenges are related to weak infrastructure in the transport and energy sectors. The other challenges are commercial, and concern the economic impacts of tariff disarmament which could stem from the implementation of the agreement on the continental free trade area as well as the unilateral conclusion of agreements with the EU under the regional Economic Partnership Agreement.
Ghana: IMF completes Seventh ECF Review visit
Growth prospects remain strong, supported by robust oil and cocoa production. Inflation has remained in single-digits. S&P upgraded Ghana’s ratings from B- to B with a stable outlook in September 2018. The government continues to step up efforts to address financial sector vulnerabilities, with the recent purchase and assumption of five banks. However, Ghana has been affected by the volatile environment for emerging and frontiers markets, which has exerted pressure on the currency resulting in cedi depreciation. Program performance has been affected by external and domestic factors. Available fiscal data through end-July point to much expenditure front-loading on goods and services and lower-than-programmed revenue, especially VAT and import duty. On this basis, achieving end-December fiscal targets hinges on strengthening both expenditure discipline and tax compliance, beyond measures adopted in the mid-year budget review. The authorities remain strongly committed to the program targets. The 2019 budget would need to address persistent revenue shortfalls and start tackling decisively the issue of exemptions.
US capital goods orders, trade data temper third-quarter growth forecasts (Reuters)
New orders for key US-made capital goods fell in August after four straight months of strong gains and the goods trade deficit widened sharply, prompting some economists to significantly lower their economic growth estimates for the third quarter. Still, growth projections for the quarter remained at lofty levels, with other data on Thursday showing increased investment in wholesale and retail inventories last month. The Federal Reserve raised interest rates on Wednesday for the third time this year, and Chairman Jerome Powell told reporters that this was “a particularly bright moment” for the economy.
US August 2018 trade data (USG)
The US Census Bureau announced the following international trade, wholesale inventories, and retail inventories advance statistics for August 2018: The international trade deficit was $75.8bn in August, up $3.8bn from $72.0bn in July. Exports of goods for August were $137.9bn, $2.3bn less than July exports. Imports of goods for August were $213.7bn, $1.5bn more than July imports.
Friday’s Quick Links: Governments urged to ‘do the hard work’ to better manage global migration Tanzania: Magufuli sacks deputy Foreign and EAC minister Australia is keen on boosting free and open trade with East Africa President Buhari urges ECOWAS to harmonise for consensus candidates at AU, UN Akufo-Addo assures Buhari of safety of Nigerians in Ghana |
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South Africa Merchandise Trade Statistics for August 2018
South African trade balance swings to surplus in August
South Africa’s trade balance shifted to a R8.79 billion surplus in August of 2018 from an upwardly revised R5.29 billion deficit in July and above market expectations of a R5 billion surplus. Considering the January to August period, the country posted a R2.66 billion surplus.
Exports increased 9.4 percent month-over-month to R116.88 billion in August 2018, driven by higher sales of vehicles and transport equipment (32 percent); mineral products (10 percent); precious metals and stones (7percent); chemicals (12 percent) and base metals (5 percent). The most important export partners were: China (9.0 percent of total exports), Germany (7.9 percent); the US (5.8 percent), the UK (5.3 percent) and India (5.0 percent).
Imports dropped 3.6 percent month-over-month to R112.15 billion, mainly due to lower purchases of mineral products (-37 percent) and vegetables (-33 percent). On the other hand, higher purchases were recorded for precious machinery and electronics (6 percent); metals and stones (28 percent) and original equipment components (8 percent). Main import partners were: China (19 percent of total imports), Germany (11.7 percent), the US (6.3 percent), India (4.7 percent) and the UK (3.7 percent).
Excluding trade with neighboring Botswana, Lesotho, Namibia and Eswatini (formerly Swaziland), the country recorded a trade surplus of R0.05 billion in August.
The South African Revenue Service (SARS) has released trade statistics for August 2018 recording a trade surplus of R8.79 billion. These statistics include trade data with Botswana, Eswatini, Lesotho and Namibia (BELN).
The year-to-date (01 January to 31 August 2018) trade surplus of R2.66 billion is a deterioration on the surplus for the comparable period in 2017 of R39.93 billion. Exports year-to-date increased by 5.0% whilst imports for the same period showed an increase of 10.4%.
Including trade data with Botswana, Eswatini, Lesotho and Namibia (BELN)
The R8.79 billion trade surplus for August 2018 is attributable to exports of R116.88 billion and imports of R108.09 billion. Exports Increased from July 2018 to August 2018 by R10.03 billion (9.4%) and imports decreased from July 2018 to August 2018 by R4.06 billion (3.6%).
On a year-on-year basis, the R8.79 billion trade surplus for August 2018 is an improvement from the surplus recorded in August 2017 of R 6.80 billion. Exports are 12.2% more than the exports recorded in August 2017 of R104.16 billion. Imports are 11.0% more than the imports recorded in August 2017 of R97.37 billion.
Exports for the year-to-date (01 January to 31 August) increased by 5.0% from R757.56 billion in 2017 to R795.10 billion in 2018. Imports for the year-to-date of R792.45 billion are 10.4% more than the imports recorded in January to August 2017 of R717.63 billion, leaving a cumulative trade surplus of R2.66 billion for 2018.
July 2018’s trade deficit was revised downwards by R0.64 billion from the previous month’s preliminary deficit of R4.65 billion to a revised deficit of R5.29 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:
|
|
Vehicles & Transport Equipment
|
+R3 986
|
+ 32%
|
Mineral Products
|
+R2 269
|
+ 10%
|
Precious Metals & Stones
|
+R1 250
|
+ 7%
|
Chemical Products
|
+R 727
|
+ 12%
|
Base Metals
|
+R 627
|
+ 5%
|
Total
|
+R8 859
|
88%
|
Total Movement
|
+R10 032
|
100%
|
The main month-on-month import movements: R’ million
|
||
Section:
|
Including BELN:
|
|
Mineral Products
|
-R8 687
|
- 37%
|
Vegetable Products
|
-R 896
|
- 33%
|
Works of Art
|
+R 27
|
+ 43%
|
Wood & Articles thereof
|
+R 36
|
+ 8%
|
Wood Pulp & Paper
|
+R 47
|
+ 2%
|
Live Animals
|
+R 129
|
+ 7%
|
Optical Photographic Products
|
+R 131
|
+ 5%
|
Misc Manufactured Articles
|
+R 149
|
+ 8%
|
Textiles
|
+R 189
|
+ 5%
|
Vehicles & Transport Equipment
|
+R 232
|
+ 2%
|
Plastics & Rubber
|
+R 287
|
+ 6%
|
Base Metals
|
+R 293
|
+ 6%
|
Footwear & Accessories
|
+R 350
|
+ 28%
|
Chemical Products
|
+R 467
|
+ 4%
|
Prepared Foodstuff
|
+R 494
|
+ 16%
|
Precious Metals & Stones
|
+R 586
|
+ 28%
|
Original Equipment Components
|
+R 762
|
+ 8%
|
Machinery & Electronics
|
+R1 370
|
+ 6%
|
Total
|
-R4 034
|
99%
|
Total Movement |
-R4 057 |
100% |
Trade highlights by world zone
The world zone results from July 2018 (revised) to August 2018 are given below.
Africa:
Trade surplus: R18 873 million – this is an improvement of R5 874 million in comparison to the R12 998 million surplus recorded in July 2018.
America:
Trade deficit: R2 204 million – this is a deterioration of R1 850 million in comparison to the R 353 million deficit recorded in July 2018.
Asia:
Trade deficit: R11 533 million – this is an improvement of R3 230 million in comparison to the R14 764 million deficit recorded in July 2018.
Europe:
Trade deficit: R4 249 million – this is an improvement of R5 621 million in comparison to the R9 869 million deficit recorded in July 2018.
Oceania:
Trade surplus: R9 million – this is an improvement of R 357 million in comparison to the R 348 million deficit recorded in July 2018.
Excluding trade data with Botswana, Eswatini, Lesotho and Namibia (BELN)
The trade data excluding BELN for August 2018 recorded a trade surplus of R0.05 billion. This was a result of exports of R104.37 billion and imports of R104.32 billion.
Exports increased from July 2018 to August 2018 by R8.25 billion (8.6%) and imports decreased from July 2018 to August 2018 by R3.95 billion (3.6%).
The cumulative deficit for 2018 is R56.45 billion compared to R20.50 billion deficit in 2017.
Trade highlights by category
The main month-on-month export movements: R’ million
|
||
Section:
|
Excluding BELN:
|
|
Vehicles & Transport Equipment
|
+R3 986
|
+35%
|
Mineral Products
|
+R1 993
|
+ 9%
|
Chemical Products
|
+R 636
|
+12%
|
Base Metals
|
+R 606
|
+ 5%
|
Wood Pulp & Paper
|
+R 564
|
+37%
|
Total
|
+R7 785
|
94%
|
Total Movement
|
+R8 252
|
100%
|
The main month-on-month import movements: R’ million
|
||
Section:
|
Excluding BELN:
|
|
Mineral Products
|
-R8 667
|
-37%
|
Vegetable Products
|
-R 910
|
-34%
|
Works of Art
|
+R 24
|
+39%
|
Wood Pulp & Paper
|
+R 36
|
+ 1%
|
Wood & Articles thereof
|
+R 38
|
+13%
|
Optical Photographic Products
|
+R 133
|
+ 5%
|
Misc Manufactured Articles
|
+R 145
|
+ 8%
|
Live Animals
|
+R 153
|
+11%
|
Textiles
|
+R 216
|
+ 6%
|
Plastics & Rubber
|
+R 279
|
+ 6%
|
Base Metals
|
+R 294
|
+ 6%
|
Footwear & Accessories
|
+R 348
|
+28%
|
Chemical Products
|
+R 377
|
+ 3%
|
Prepared Foodstuff
|
+R 407
|
+16%
|
Vehicles & Transport Equipment
|
+R 574
|
+ 6%
|
Precious Metals & Stones
|
+R 587
|
+42%
|
Original Equipment Components
|
+R 762
|
+ 8%
|
Machinery and Electronics
|
+R1 273
|
+ 6%
|
Total
|
-R3 931
|
99%
|
Total Movement |
-R3 949 |
100% |
Trade highlights by world zone
The world zone results for Africa excluding BELN from July 2018 (Revised) to August 2018 are given below.
Africa:
Trade surplus: R10 128 million – this is an improvement of R3 986 million in comparison to the R6 142 million surplus recorded in July 2018.
Botswana, Eswatini, Lesotho and Namibia (Only)
Trade statistics with the BELN for August 2018 recorded a trade surplus of R8.74 billion. This was a result of exports of R12.51 billion and imports of R3.77 billion.
Exports increased from July 2018 to August 2018 by R1.78 billion (16.6%) and imports decreased from July 2018 to August 2018 by R0.10 billion (2.8%).
The cumulative surplus for 2018 is R59.10 billion compared to R60.43 billion in 2017.
Trade Highlights by Category
The main month-on-month export movements: R’ million
|
||
Section:
|
BELN:
|
|
Precious Metals & Stones
|
+R 824
|
+1779%
|
Mineral Products
|
+R 276
|
+ 15%
|
Prepared Foodstuff
|
+R 219
|
+ 19%
|
Machinery and Electronics
|
+R 98
|
+ 6%
|
Chemical Products
|
+R 91
|
+ 9%
|
Total
|
+R1 508
|
85%
|
Total Movement
|
+R1 780
|
100%
|
The main month-on-month import movements: R’ million
|
||
Section:
|
BELN:
|
|
Vehicles & Transport Equipment
|
-R 343
|
- 92%
|
Textiles
|
-R 28
|
- 5%
|
Prepared Foodstuff
|
+R 86
|
+18%
|
Chemical Products
|
+R 89
|
+ 19%
|
Machinery and Electronics
|
+R 96
|
+ 28%
|
Total
|
-R 100
|
93%
|
Total Movement
|
-R 108
|
100%
|
Related News
President Kagame attends ‘New Africa Dialogue’ on AfCFTA Potential
President Kagame attended the ‘New Africa Dialogue’ on 27 September 2018, organized by the Centre for Strategic and International Studies (CSIS), on the potential of the African Continental Free Trade Area (AfCFTA).
The Centre is a bipartisan, nonprofit policy research organization dedicated to providing strategic insights and policy solutions to help decision makers chart a course toward a better world.
Attended by Ghanaian President Nana Akufo-Addo and former US Secretary of State Dr. Henry Kissinger, the Dialogue convened a broad range of seasoned diplomats, researchers, and policymakers.
In his address, President Kagame highlighted that the AfCFTA signed in March this year is a historic step meant to transform trade within the African continent while requiring the world to relate to Africa as a single bloc for trade purposes.
“But this agreement should be understood in a wider context. The CFTA heralds a new political reality in Africa. We also signed an agreement on the free movement of people within Africa,” President Kagame said.
The Head of State also spoke about the financing and functioning reforms underway within the African Union.
The President pointed out that the confusion served to highlight the need for improved dialogue about how Africa and the United States can better collaborate to enhance each other’s prosperity, and hailed the ‘New Africa Dialogue’ as an effective platform for such efforts.
Launch of New Africa Dialogue: Remarks by President Paul Kagame
I just want to state how happy I am to be invited to CSIS for this very useful discussion.
Let me say that the main lines of U.S. policy toward Africa have hardly changed since the end of the Cold War. To be very frank, if I could remember how many times I have had discussions with distinguished leaders in the United States and across Africa, talking about how we could relate to each other. There have been so many meetings over so many years, and we always keep coming back more or less to the same thing. We keep asking what is it that we could do, and yet we end up not doing much about that.
But Africa has changed tremendously, and so has America and the rest of the world. It is therefore very important to rethink how Africa and the United States relate to one another.
Dr Kissinger, your presence signals the weight and promise of this initiative. The conclusions of your analysis of the “Central Issues of American Foreign Policy” in 1968 are as fresh and relevant today, as 50 years ago. I wish to highlight three of them this morning.
First, in all advanced countries, political stability was a precondition for industrialisation rather than an outcome. Technical and economic factors alone cannot offer a sufficient moral foundation for good politics.
Business and trade should rightly constitute the day-to-day subject matter of enhanced relations between Africa and the United States. But it would be a mistake to avoid frank exchanges about values.
Second, the core challenge in developing countries is the consolidation of political legitimacy. Even two generations ago, the futility of a strategy based on transferring or imposing American institutions on others was clear. And I was glad the other day to hear President Trump say something about it: imposing on people is not going to be very helpful.
Too often, political structures in Africa are evaluated against abstract notions of process, almost on auto-pilot. This is done without reference either to the objective outcomes, or to the views of the citizens directly concerned and affected. When innovative forms of democratic stability are undermined, nobody’s interest is served. The tendency to elevate abstractions about democratic process into a precondition for engagement, rather than a basis for discussion, is counterproductive.
Third, America succeeds whenever it is able to generate willing cooperation, based on a sense of shared purpose. This brings me to recent developments in Africa, particularly the Continental Free Trade Area that Dr Kissinger referred to earlier, which was signed in March in Kigali. We view this is a historic step. It will transform trade within our continent, while requiring the world to relate to the fastest-growing continent as a single bloc for trade purposes. In fact, this again consolidates the efforts that have already been underway for continental integration.
But this agreement should be understood in a wider context. The AfCFTA heralds a new political reality in Africa. We also signed an agreement on the free movement of people within Africa, for example, as part of that. Africa is currently undertaking coordinated action in the United Nations Security Council to use U.N. assessed contributions to fund necessary African Union-mandated peace support operations that the United Nations cannot conduct on its own.
In addition, we have made major reforms to the financing and institutional functioning of the African Union. The United States initially responded to this obviously positive development by a discussion as to whether this new financial levy violated or contravened World Trade Organisation provisions. We had discussions back and forth, and I think most of the misunderstandings have been found to be inaccurate and therefore done away with.
But the confusion served to highlight the need for improved dialogue about how Africa and the United States can better collaborate – because this is the main objective – to enhance each other’s prosperity.
The New Africa Dialogue can be an effective platform for these efforts, and I look forward to working with you on this matter. Once again, thank you very much for inviting me and for listening.
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WTO downgrades outlook for global trade as risks accumulate
Escalating trade tensions and tighter credit market conditions in important markets will slow trade growth for the rest of this year and in 2019, WTO economists expect.
Trade will continue to expand but at a more moderate pace than previously forecast. The WTO anticipates growth in merchandise trade volume of 3.9% in 2018, with trade expansion slowing further to 3.7% in 2019. The new forecast for 2018 is below the WTO’s 12 April estimate of 4.4% but falls within the 3.1% to 5.5% growth range indicated at that time. Trade growth in 2018 is now most likely to fall within a range from 3.4% to 4.4%.
Some of the downside risks identified in the April press release have since materialized, most notably a rise in actual and proposed trade measures targeting a variety of exports from large economies. The direct economic effects of these measures have been modest to date but the uncertainty they generate may already be having an impact through reduced investment spending. Monetary policy tightening in developed economies has also contributed to volatility in exchange rates and may continue to do so in the coming months.
Main points
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World merchandise trade volume is forecast to grow 3.9% in 2018,accompanied by global GDP growth of 3.1% at market exchange rates.
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Trade volume growth should slow to 3.7% in 2019 as global GDP growth dips to 2.9%.
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Rising trade tensions pose the biggest risk to the forecast,but monetary policy tightening and associated financial volatility could also destabilize trade and output.
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Trade-related indicators show a loss of momentum, including global export orders and economic policy uncertainty.
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North America had the fastest export growth and Asia had the strongest import growth in the first half of 2018 while resource-based economies still struggled.
The updated trade forecast is based on expectations of world real GDP growth at market exchange rates of 3.1% in 2018 and 2.9% in 2019. This implies a ratio of trade growth to GDP growth of 1.3 in both years.
Trade policy measures are far from the only risk to the forecast. Developing and emerging economies could experience capital outflows and financial contagion as developed countries raise interest rates, with negative consequences for trade. Geopolitical tensions could threaten resource supplies and upset production networks in certain regions. Finally, structural factors such as the rebalancing of the Chinese economy away from investment and toward consumption are still present and could weigh on import demand due to the high import content of investment. Overall, risks to the forecast are considerable and heavily weighted to the downside.
In the first half of 2018, world merchandise trade was up 3.8% compared to the same period in the previous year. Exports of developed economies rose 3.5% during the same period while shipments from developing economies increased by 3.6%. On the import side, developed economies recorded year-on-year growth of 3.5% in the first half of 2018 while developing countries registered an increase of 4.9%. Imports of developed economies have generally been flat in 2018 while exports of developing economies plateaued similarly.
All geographical regions recorded positive year-on-year trade growth in both exports and imports in the first half of 2018, but some regions performed better than others. North America saw the fastest export growth during this period at 4.8%, followed by Asia at 4.2% and Europe at 2.8%. Exports of Other regions (comprising Africa, the Middle East and the Commonwealth of Independent States including associate and former member States) increased by 2.7% while those of South America were up 1.1%. Asia had the fastest import growth (6.1%) followed by South America (5.5%), North America (4.8%), Europe (2.9%) and Other regions (0.5%).
Prices of energy commodities including oil have risen 33% for the year-to-date through August compared to last year, boosting export revenues of commodity exporters. This has not yet translated into strong import demand in resource-rich regions, as one might expect. Meanwhile the US dollar has appreciated by 8.4% in real effective terms since January of 2018.
The downward revision to the trade forecast is consistent with the WTO’s World Trade Outlook Indicator (WTOI), which has signalled slowing trade momentum since the first quarter of 2018. The WTOI combines several leading indicators for trade into a single composite indicator. Components include container port throughput, air freight shipments, export orders, automobile sales and trade in electronic components and raw materials. The export orders component, derived from purchasing mangers' indices, has fallen from 54.1 in January to 50.3 in August, just above the baseline value of 50.0 separating expansion from contraction.
A separate indicator of economic policy uncertainty is based on the frequency of keywords related to uncertainty in press reports. The index value rose from 113 to 227 between January and July before falling back to 205 in August. Although uncertainty has eased slightly recently, it remains higher than during the global financial crisis of 2008. To the extent that economic uncertainty deters investment it can have a negative impact on trade since capital goods tend to have high import content.
The trade figures above refer to merchandise trade in volume terms, but trade in current US dollar terms is also relevant. Note that nominal trade statistics should be interpreted with caution as they may be strongly influenced by prices and exchange rates.
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WTO agriculture talks: Members evaluate negotiating submissions, eyeing 2020 Ministerial
The WTO’s agriculture negotiations resumed last week after the organisation’s annual August hiatus. While the discussions were mainly limited to reviewing negotiating submissions, analysis, and data, some sources indicated that the level of engagement seemed noticeably improved from recent meetings, with more planned to help refine the direction of the talks further.
Ambassador John “Deep” Ford of Guyana, the chair of the WTO’s Committee on Agriculture “special session” tasked with negotiating new farm trade rules, convened delegates for informal meetings on Friday 21 September, at which Australia and Canada both made presentations based on recent negotiating submissions.
The talks covered agricultural domestic support and the separate, though related, topic of public stockholding for food security purposes. Various low- and middle-income countries have argued that the WTO’s current domestic support rules do not provide enough flexibility for them to buy food at subsidised prices as part of their public stockholding programmes.
Canada presented analysis on domestic support by the Cairns Group of agricultural exporters, drawing on figures presented in a submission that the group tabled in July. The paper reviews domestic support from 2001 to 2014 for select WTO members that are significant exporters, importers, or producers, drawing on data that the countries themselves have reported to the global trade club.
Members also discussed a separate paper from Australia, which also looked at domestic support trends. In addition, the chair reported on his consultations on cotton, where the US has also tabled an informal paper. Sources said this could be followed by submissions from other members soon.
One Geneva-based trade official said that the talks were characterised by “frank discussion of details,” and a greater willingness of negotiators to engage more openly with one another, with another noting that the level of engagement seemed significantly improved from last year.
The reports of relatively improved optimism come just months after WTO members sparred over how to approach a possible work programme for the negotiations, in the wake of last December’s ministerial conference in Buenos Aires, Argentina, that led to no substantive outcomes on agriculture.
What remains unclear at this stage, however, is what issues farm trade negotiators may prioritise in the months to come, as they work to determine what may serve as possible deliverables for the next WTO ministerial conference, which is planned for June 2020 in Astana, Kazakhstan.
Though many WTO members have repeatedly stated that reforming the organisation’s rules on the subsidies that governments can grant their farmers is a priority, political differences as well as disagreements over how to approach the issue on a more substantive level remain. The question of whether and how to tackle other topics, such as liberalising agricultural market access, has seen less engagement. Members have also shown diverging views on whether to negotiate more stringent disciplines on agricultural export restrictions.
At a negotiating meeting in May, Ford identified seven outstanding areas which members had told him they saw as priorities for the negotiations. In addition to domestic support, market access, export restrictions, and public stockholding, these included a “special safeguard mechanism” for developing countries to use in the event of sudden import surges or price depressions; export competition, covering measures seen as similar to export subsidies; and cotton.
Ford is expected to convene further talks on other outstanding issues in the negotiations in the weeks and months ahead. Meetings are already scheduled on market access and a special safeguard mechanism, with the chair convening delegates for informal talks on 22 and 23 October.
However, Ford also emphasised the need for greater urgency in the negotiations if these are to deliver an outcome ahead of the next ministerial conference in June 2020.
Global trade climate looms over WTO negotiations
According to a Geneva trade official, tensions among major economic powers over trade were referred to repeatedly in the negotiating meeting last week. Drawing particular scrutiny was a planned domestic support package that the US Department of Agriculture announced in late July, which is due to take effect this month and could amount to US$12 billion.
This support is meant to help offset the costs that some US farmers are facing due to higher tariffs that other countries have imposed on their products, which are in response to tariffs that Washington itself has placed on various trading partners. The farm aid would be provided by the Commodity Credit Corporation (CCC) Charter Act, a law from 1948 that changed the CCC into a federal corporation. The original CCC dates back to 1933.
“The CCC Charter Act, as amended, aids producers through loans, purchases, payments, and other operations, and makes available materials and facilities required in the production and marketing of agricultural commodities,” according to a USDA description of some of the law’s capabilities.
The US farm support package prompted numerous questions from trading partners at meetings of the WTO’s regular committee on agriculture this week, having already led to some questions at last Friday’s negotiating session.
Australia, Canada, the EU, India, Japan, and New Zealand were among those asking for more details of the planned support package.
Trading partners asked how the US would ensure that the support provided would not distort markets; whether measures were in place to prevent support from exceeding limits that Washington has agreed at the WTO; how the payments would be made; and when details of the support would be formally notified to the global trade body.
At the meeting, Australia also asked how the US could prevent payments being made in excess of the value of the actual tariffs imposed, according to a copy of the questions submitted prior to the meeting and seen by Bridges.
New Zealand also said it was concerned that the new support “risks taking the United States close to its AMS limit of US$19.1 billion” – a reference to current WTO limits on the aggregate measure of support (AMS). These are dubbed “amber box” subsidies by negotiators, within the Agreement on Agriculture’s overall taxonomy for different farm support types. Amber box subsidies are considered highly trade-distorting under the organisation’s rules.
Aside from questioning the US over the planned aid package, countries also questioned India over its policies on sugar, pulses, and skimmed milk; Canada over its dairy and wine programmes; and Indonesia over its soybean and dairy policies. India also reiterated a question about how trade preferences for developing countries would be affected by the UK’s withdrawal from the European Union, which is due to take effect from the end of March next year.
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tralac’s Daily News Selection
Management of Africa’s global position must change: pdf Rwandan President Paul Kagame’s UNGA address (328 KB)
Let me start with a paradox. In no other region is the sense of trans-national solidarity and unity so deeply felt as in Africa. The idea that our respective national identities stand in contradiction to Pan-Africanism is unheard of in our context. And yet, despite this unique civic endowment, Africa has too often stood out for division and dysfunction in practice. This left Africa unable to articulate and advance our common interests. We ceded responsibility for our future to others, not by force but by default. But times are changing rapidly, and so the management of Africa’s global position must also change.
The trend on our continent is toward closer and more productive cooperation, both through the African Union and our Regional Economic Communities. The evident decline of old certainties and authorities is not bringing turbulence to Africa, as would have been the case, as of a previous era. On the contrary, the effect has been to focus Africa’s attention on the urgent need to get our house in order and fundamentally change how we do business. That is why the African Union initiated a major financial and institutional reform, more than three years ago. We are already seeing practical results: [President Al-Sisi’s visit to US and UN General Assembly speech: Egypt adjusting the compass] [Note: Speeches by other African leaders at the ongoing UNGA debate can be accessed here]
UNGA side events
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Invest in South Africa private roundtable: remarks by President Cyril Ramaphosa. “We are taking immediate steps to finalise reforms in key sectors like mining, oil and gas, tourism and telecommunications – all of which are sectors that have great potential for growth, but which have been constrained by policy uncertainty. We are reprioritising our budget – within the existing fiscal framework – to invest more in those activities that are most likely to boost growth, including agriculture, township and rural businesses, and infrastructure.”
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Third Industrial Development Decade for Africa: enhanced and innovative global partnerships key to a successful AfCFTA
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High-Level Panel on Migration and Structural Transformation in Africa: Africa must look to internal migration to boost development
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A call to invest: investing in jobs for young people in Africa. Extract from speech by UK PM, Theresa May: Next year the UK will host an Africa investment summit in the UK – bringing African leaders together with private and institutional businesses and investors.
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African Leaders Roundtable on Identification for Development: The World Bank Group estimates it will take $6bn to meet Africa’s digital identification and civil registration needs. Through the ID4D initiative, the World Bank Group is providing a comprehensive package of financial and technical support at national- and regional-levels in Africa. Nearly $1bn is being mobilized for digital identification and civil registration projects across 30 countries – 23 of which are in Africa. For example, recently-approved and pipeline projects in West Africa will build foundational identification platforms that are interoperable across borders for more than 200 million people.
Africa-to-Africa Investment Report: pdf A first look (1.80 MB) (AfDB)
To start to plug the data gap on intra-African investments, the report takes a look at the dynamics behind African investment from the point of view of leading African companies. It shares key lessons and experiences to offer practical solutions for the region’s investors. The report features case stories from eight publicly listed or privately owned African companies operating in a range of sectors. Each has a significant African footprint – registered and operational in at least one country outside of the company’s home base. The companies represent consumer services, finance, industry, media and diversified portfolios and investment from across North Africa (Morocco), West Africa (Nigeria, Togo), East and Central Africa (Ethiopia, Kenya) and Southern Africa (Mauritius, South Africa). The companies in the report were selected from a potential pool of 300 African companies.
IMF updates:
IMF completes 2018 Article IV Mission to Ethiopia: “Growth is expected to step up in 2018/9 to 8.5%, supported by stronger confidence as the uncertainty of the previous year recedes, and the availability of domestic and foreign direct investment improves. The authorities’ strategy to shift the engine of economic activity to private sector development while the public sector consolidates is appropriate to maintain strong growth. The mission supports the ambitious reform agenda announced by the Prime Minister aimed at opening up important parts of economy to competition and encouraging private sector investment. At the same time, measures to reduce public sector borrowing and bring inflation back to target need to be intensified, as external imbalances and indebtedness remain a source of macroeconomic risk.”
IMF on Madagascar’s economic programme: “Economic conditions have continued to improve. Growth is expected to exceed 5% this year, the highest level in 10 years. This outcome is driven by a rebound in agricultural production, especially for rice, as well as growing public investment. Despite rising international oil prices, external developments have remained favorable, with a strong export performance underpinned by high prices and production for vanilla and mining.”
Ethiopia to Mauritius: How will Africa match jobs to its population boom? (The Guardian)
There’s a speech that the Nobel-prize winning economist Joseph Stiglitz has been taking around African countries these past few years. It is a problem that has been troubling many, including the billionaire philanthropist Bill Gates. And Stiglitz’s message is not entirely reassuring. “What I have argued is that the reason exports were so important [to Asia beginning in the 1960s] is threefold: it created jobs, created goods for exchange and was the basis of modernisation. There won’t be a single sector or activity that will do all three for Africa, so its approach will need to be more subtle. It follows that you need to have a multi-pronged strategy. Some African countries have natural resources, which means they can get foreign exchange – but that won’t create jobs. But there are a variety of sectors that can embed modernisation, including advanced tourism and telecoms.” [The authors: Peter Beaumont, Tom Gardner]
Strengthening National and Regional Trade Policy Dialogue Platforms: Trade policy should not be left to governments alone, says UNECA’s David Luke
“Trade policy and its effects are too complicated and far-reaching to be left to governments alone and must include dialogue with the private sector through which trade occurs, and the civil society which can play a key role in monitoring outcomes and advocacy. Effective trade strategies are a product of a trade policy-making process that includes all the key stakeholders. We expect, therefore, to see consultation and dialogue become an inherent feature of trade policy governance at all levels.” Commenting on some ECA initiatives, David Luke said: “Currently we are working on the next edition of Assessing Regional Integration in Africa, volume 9, which will focus on a detailed analysis of AfCFTA Phase II issues, including e-commerce. We are also developing a monitoring and evaluation tool to be known as the AFCFTA Country Business Index that will provide concrete data and information on the impact of the AFCFTA.”
Lifting the lid on the black box of informal trade in Africa (The Conversation)
Reducing tariffs should help formalise some of this informal trade. But it is difficult to predict by how much. It’s possible that incentives to go informal remain high for many traders, even under the continent’s proposed free trade agreement, especially if preferential treatment is costly or difficult to obtain. [The authors: Joachim Jarreau, Cristina Mitaritonna, Sami Bensassi]
Liberia: ECOWAS Parliamentarians to assess bottlenecks at borders (Daily Observer)
A 35-person delegation from the 4th Legislature of ECOWAS Parliament of 15 West African countries is expected in the country today, 27 September 27, for a three-day border surveillance exercise on the Liberia-Sierra Leone border at Bo-Waterside in Grand Cape Mount County and the Liberia-Guinea (Ganta) border in Nimba County.
Kenya escalates Tanzania trade war with new tariffs (Business Daily)
Nairobi has hit back at Dar es Salaam by imposing new tariffs on Tanzania products like flour after the neighbouring country ignored a deal that granted Kenyan-made chocolate, ice cream, biscuits and sweets unrestricted entry into its market. This came after Tanzania and Kenya failed to resolve the trade war sparked by use of imported materials in goods made in the countries, setting the stage for a fresh round of the trade war. Tanzania will continue to levy 25% duty on Kenya’s edible oils as well as the Tembo cement brand produced by Bamburi Cement Factory which it says are made from imported palm and clinker respectively. Kenya, on the other hand, is imposing 25% duty on Tanzania’s products like flour which it says are produced from imported wheat.
Nigeria: pdf Commodity price indices and terms of trade (Q2 2018) (2.29 MB) (NBS)
Between January and June 2018: The all commodity group import price index rose by 2% driven by miscellaneous manufactured articles; The all commodity group export price index rose by 11% driven by mineral products, wood products, live animals and vegetable products; The all products terms of trade index rose by 9% driven by mineral products; The all region group export index rose by 9% as a result of trade with the Americas region; The all region group import index fell by 2% as a result of trade with Oceania region; The all region terms of trade rose by 11% as a result of trade with the Americas. In Q2 2018, Nigeria’s top five trading partner countries were Belgium, China, Spain, the Netherlands and India.
What can African countries learn from China about transport and logistics? (World Bank)
New UNCTAD reports:
(i) Fostering gender mainstreaming in National Trade Facilitation Committees. Results show that, at present, National Trade Facilitation Committees are not gender balanced. On average, only 36% of members of NTFCs are female. This percentage goes down to 24% in the case of the developed countries that participated in the survey (see Figure 1, pdf). Not only are Committees not gender balanced, but it also transpires from the survey that most NTFCs (62%) are usually chaired or co-chaired by men. As shown in Figure 2, in Least Developed Countries only 17% of National Trade Facilitation Committees are chaired or co-chaired by a woman.
Besides having a gender imbalance in both the composition and leadership of Committees, NTFCs also lack concrete actions and decisions towards gender mainstreaming in trade facilitation. From the 39 countries that answered the survey, only one country affirmed that the Committee has ever taken a decision or action to mainstream gender in trade facilitation. When asked why this is the case, almost half of NTFCs affirm that this is due to a lack of awareness on gender mainstreaming (44%). Almost a third of Committees (31%) considered that gender mainstreaming is not relevant at this stage.
(ii) Trade and Development Report 2018: power, platforms and the free trade delusion. Global trade continues to be dominated by big firms through their organization and control of global value chains with, on average, the top 1% of each country’s exporting firms accounting for more than half its exports. The spread of these chains contributed to a rapid growth of trade from the mid-1990s up to the financial crisis, with developing countries posting the fastest growth, including by trading more with each other. But the report shows that countries have had to trade more intensely to generate the same growth of output as in the past and that too much of this trade has been unequal, with gains skewed in favour of lead firms through a mixture of increased market concentration and control of intangible assets. The report documents a general decline – with China an exception – in the share of value added from manufacturing activities in these chains and a rise in the share of pre- and post-production activities. The rents captured at these ends of the chain have had a pronounced effect on the distribution of income in all countries.
Thursday’s Quick Links: Kenya: Oil export deadlock deepens as key investors lock horns, head to court EAC and IGAD launch Nutrition Knowledge Hubs UN retreat discusses Mauritius Strategic Partnership Framework 2019-2023 Africa’s environment ministers urge action on environmental challenges through innovative solutions Africa Conference on Social Entrepreneurship: speech by Ms Susie Kitchens, UK Deputy High Commissioner to Kenya Methodology for a World Bank Human Capital Index |
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Trade policy should not be left to governments alone, says ECA’s David Luke
David Luke, Coordinator of the African Trade Policy Centre at the United Nations Economic Commission for Africa (ECA), has called for greater private sector involvement in trade policy processes across the continent.
“Trade policy and its effects are too complicated and far-reaching to be left to governments alone and must include dialogue with the private sector through which trade occurs, and the civil society which can play a key role in monitoring outcomes and advocacy,” said Mr Luke.
“Effective trade strategies are a product of a trade policy-making process that includes all the key stakeholders. We expect, therefore, to see consultation and dialogue become an inherent feature of trade policy governance at all levels,” he added.
He was speaking in Lusaka on 25 September at the opening of a four-day African Union (AU) meeting on ‘Strengthening National and Regional Trade Policy Dialogue Platforms’.
Mr. Luke stated that as negotiations and actual work of establishing the AfCFTA continue, the importance of consultations and dialogue among governments, private sector, civil society, parliamentarians and other relevant stakeholders cannot be overemphasized.
“We, at the ECA, believe that it is only through consultation and dialogue among key stakeholders that Africa will be able to strategically respond to emerging opportunities and challenges as well as defend its strategic interests,” said Mr. Luke, who also pointed out that it was imperative for governments to establish effective national mechanisms to facilitate dialogue.
The ECA official praised African countries for negotiating and signing the Agreement establishing the AfCFTA in Kigali on 21 March 2018, “At a time when the general trend is to be protectionist.” He added that “ECA, in collaboration with AUC, is working with the seven countries that have not yet agreed to begin the liberalization process at 90 per cent of tariff lines,” in a bid to get them on board.
49 AU Member States have signed the Agreement, and seven have deposited instruments of ratification with the African Union Commission (AUC). it is expected that the 22 ratifications required for the entry into force of the Agreement will be reached by its first anniversary next year.
The AfCFTA Agreement covers trade in goods, trade in services, investment, intellectual property rights and competition policy. The second phase of the negotiations, which is expected to start this year, will focus on intellectual property rights, competition policy and investment.
Mr. Luke said ECA will continue to support the second phase of the negotiations. He expressed hope that “e-commerce will soon be included formally.”
Commenting on some ECA initiatives, he said, “Currently we are working on the next edition of Assessing Regional Integration in Africa volume 9, which will focus on a detailed analysis of AfCFTA Phase II issues, including e-commerce. We are also developing a monitoring and evaluation tool to be known as the AFCFTA Country Business Index that will provide concrete data and information on the impact of the AFCFTA.”
He noted that ECA is also giving priority to AfCFTA implementation by assisting countries on a request basis to prepare AfCFTA National Strategies, stating: “These strategies complement the country’s trade policies and identify the key trade opportunities, current constraints and steps required for it to take full advantage of national, regional and global markets.”
tralac is being represented by Talkmore Chidede at the Workshop in Lusaka.
African Development Bank launches its first Africa-to-Africa Investment Report
Opportunities for investment in Africa often outweigh the obstacles, according to leading African companies included in the African Development Bank’s first Africa-to-Africa (A2A) Investment Report.
The report unearths the realities African companies face when investing in the continent, the emerging trends in A2A investment and the steps African policymakers can take to accelerate intra-African investment.
Africa-to-Africa Investment Report: A first look, finds that more African companies are investing in Africa. These companies have confidence in the continent’s long-term growth potential; they are at the cutting edge of their industries, and are capitalizing on their knowledge of local markets to generate higher returns and impact.
In line with the Bank’s High 5s for transforming Africa and the African Union’s Agenda 2063, the A2A Report aims to take the conversation on investing in the continent a step further. It shows what African multinationals are doing to drive investments in Africa, d how they are expanding their African footprint, and gives insights into how to scale-up investments more widely.
“As global foreign direct investment to Africa falls, intra-African investments are picking up pace,” said Akinwumi A. Adesina, President of the African Development Bank Group. “Africa’s big companies are increasingly on the move and expanding their African footprint. It is through more investments that the continent can build inclusive, sustainable growth and development. We have made this our collective commitment in the High 5s”.
The A2A Report features eight publicly-listed and privately-owned African companies operating in consumer services, finance, industry, media and diversified portfolios and investment, with home bases in North Africa (Morocco), West Africa (Nigeria, Togo), East and Central Africa (Ethiopia, Kenya) and Southern Africa (Mauritius, South Africa).
Highlights from the Report’s intra-African investment stories include the importance of having a clear long-term vision, getting up-to-date investment facts, building local partnerships to deliver on the ground and tapping into talent in the local labour force.
The business case for A2A investment is strongly connected to the continent’s integration, growth and prosperity. Although challenges remain, the A2A Report is the start of a broader discussion to fast-track investments, move beyond the wish list and make deals happen. The continent’s policymakers can inspire a greater level of confidence and promote A2A investments by highlighting their role as dependable business partners for African investors.
The Report is part of the Bank Group’s continued championing of investment across Africa, along with the first Africa Investment Forum (AIF), scheduled to take place in Johannesburg, South Africa from 7-9 November 2018.
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SA provides fertile ground for investment
President Cyril Ramaphosa has assured potential investors that South Africa is working hard to provide a conducive environment for investors.
“Government is working with urgency to guide the economy towards a more sustainable growth trajectory and to restore South Africa to investment grade status at all credit rating agencies,” said the President.
He was speaking at a Business Seminar on Opportunities in South Africa, on the margins of the United Nations General Assembly taking place in New York.
The President also engaged in the Invest in South Africa Private Roundtable discussion hosted by American businessman, Michael Bloomberg, on investment opportunities in South Africa.
Addressing investors, the President told delegates that South Africa, in a bid to revive its economy, made new investments into the economy a central priority for government. To achieve this, President Ramaphosa outlined government’s ambitious investment drive to raise $100 billion in new investment over five years.
As part of improving South Africa’s investment service to investors, the President highlighted that government established Invest SA to focus on investment promotion and facilitation.
Invest SA brings together key government departments in a single location to provide specialist advisory services, fast track investment projects and reduce regulatory burdens for investors.
President Ramaphosa also reiterated measures announced as part of government’s stimulus package to reignite the economy.
On mining, President Ramaphosa told investors that government has finalised a new Mining Charter in consultation with the mining industry, labour, affected communities and other stakeholders.
A significant part of South Africa’s economic development agenda is to promote greater economic cooperation among African countries, Ramaphosa added.
“It is through increasing intra-African trade and investment that we will grow, develop and diversify African economies, and make them more attractive to investment,” he said.
Invest in South Africa Private Roundtable
Opening Remarks by President Cyril Ramaphosa, New York, 26 September 2018
I wish to express my sincere gratitude to Michael Bloomberg for hosting this discussion with such an important group of people, and to appreciate his great interest in South Africa’s development as a valued investment destination.
As the country emerges from nearly a decade of low growth, declining investment and faltering employment, we are determined to forge a new growth path.
Earlier this year, I announced an ambitious investment drive that aims to generate at least $100 billion in new investment over the next five years.
As part of this drive, we will be hosting an Investment Conference in Johannesburg on 26 October, which will bring together investors from within South Africa and internationally.
We have appointed four Presidential Investment Envoys, who have been travelling to major financial centres around the world, to promote investment in South Africa ahead of the conference.
We are also working to improve the investment environment by, among other things, ensuring policy certainty and consistency, improving the performance of state owned enterprises and consolidating fiscal debt.
As we put in place the pillars of sustained growth into the future, we are also working to address immediate concerns, specifically the effects of two quarters of negative growth.
In response to recent news that South Africa is in a technical recession, government last week announced an economic stimulus and recovery plan that aims to restore growth, save existing jobs and create new ones.
The stimulus and recovery plan has five broad parts:
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Firstly, implementation of growth enhancing economic reforms.
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Secondly, reprioritisation of public spending to support job creation.
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Thirdly, the establishment of an Infrastructure Fund.
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Fourthly, addressing urgent and pressing matters in education and health.
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Fifthly, investing in municipal social infrastructure improvement.
We are taking immediate steps to finalise reforms in key sectors like mining, oil and gas, tourism and telecommunications – all of which are sectors that have great potential for growth, but which have been constrained by policy uncertainty.
We are reprioritising our budget – within the existing fiscal framework – to invest more in those activities that are most likely to boost growth, including agriculture, township and rural businesses, and infrastructure.
We see infrastructure investment as a critical enabler of growth and job creation, and are therefore consolidating government infrastructure resources into a single Infrastructure Fund.
We intend to use that Fund to leverage investments from development finance institutions, multilateral development banks, asset managers and commercial banks.
A dedicated team located in the Presidency will oversee the implementation of an extensive infrastructure programme covering areas like water, transport, energy, telecommunications and social infrastructure.
Resources are being made available to provide basic needs and hire essential personnel in the public health and education systems.
Despite the challenges of the present, the South African economy has several fundamental strengths that makes it a suitable destination for investment.
South Africa has established a diversified manufacturing base that has shown its resilience and potential to compete in the global economy.
Companies like Ford, Microsoft, GE and IBM, among others, have established operations in South Africa.
Multinationals with a presence in South Africa cite numerous advantages, from excellent financial systems to world-class infrastructure.
South Africa is a regional manufacturing and services hub on the African continent, and, for many companies, serves as a base to export products globally.
Recent investments by companies such as Ab Inbev, Caterpillar and Marriot Hotels are testament to the diversity of opportunities.
We have done much work in recent years to improve investment incentives, establishing, for example, several special economic zones across the country, each having unique offerings for investors.
These include ready infrastructure for business development, reduced costs for key inputs such as land, water and electricity, and reduced corporate tax rates.
We are determined that our economic policy must facilitate inclusive growth.
Given our country’s history of dispossession, and the continued economic exclusion of millions of our people, we have a responsibility to bring all our people into the economic mainstream.
We are therefore building a robust and effective education and skills development system that equips our youth for the workplace of the present and the workplace of tomorrow.
We have implemented policies to promote black economic empowerment, to provide black people, women and people with disability with the assets and opportunities they need to participate more meaningfully in economic activity.
One of the key instruments for black economic empowerment are Codes of Good Practice, which assess companies in terms of levels of black ownership and the promotion of previously disadvantaged groups through enterprise, supplier and skills development.
This is sometimes seen as a barrier by multinationals that have global practices preventing them from complying with the black ownership element of the codes.
In such instances, the codes provide for an Equity Equivalent Investment Programme, which enables international companies to contribute to transformation through enterprise and supplier development, critical skills development and research and development.
Currently some of the approved multinational companies that successfully participate in this programme are Caterpillar, IBM, Dell, Microsoft and Hewlett Packard.
Another area that is critical to economic transformation is land reform, which is currently a focus of intense debate across South African society.
There is general agreement among most South Africans that we need to accelerate land reform not only to redress a historical injustice, but also to effectively unlock the economic potential of the country’s land.
We are committed, as government to pursue a comprehensive approach to land and agrarian reform that ensures transformation, development and stability, while providing certainty to those who own land, to those who need land and to those who are considering investing in the economy.
South Africa’s strategic position at the tip of Africa, makes it a key investment location, both for opportunities that lie within its borders and as a gateway to the rest of the region.
Earlier this year, African heads of state agreed to the establishment of an African Continental Free Trade Area that will provide access to a market of more than 1.2 billion people and a combined GDP of more than US$3.4 trillion.
This will fundamentally transform the economies of many African countries and will further enhance the attractiveness of South Africa – with its diverse manufacturing base, advanced infrastructure and sophisticated financial sector – as a compelling investment destination.
It is for all these reasons that we invite you to invest in South Africa – or invest more in South Africa – and we look forward to hosting you at our Investment Conference in Johannesburg on 26 October.
Business Seminar on Opportunities in South Africa
Opening Remarks by President Cyril Ramaphosa, New York, 26 September 2018
Thank you very much for this opportunity to have a discussion on the South African investment experience.
It is through such engagements that we, as the South African government, are able to understand what motivates, energises and worries investors.
And it is through such engagements that investors can gain greater insight into government’s plans and prospects.
In the State of the Nation Address that I delivered in February this year, I announced that a central priority for my government is to encourage significant new investment in our economy.
This is a necessary condition for the growth of our economy and the creation of jobs on a scale that will significantly reduce current levels of unemployment.
Foreign direct investment is critical to this effort, because it strengthens productive capacity through transfer of technology and knowledge, the creation of job opportunities, improvements in human capital and enhanced production processes.
Greater capital inflows generate greater trade flows, and with it the opportunity for a country like South Africa to derive greater value from its mineral, agricultural and other resources.
It is for this reason that, earlier this year, we launched an ambitious investment drive to raise $100 billion in new investment over five years.
An important milestone in this initiative is an Investment Conference to be held in Johannesburg on 26 October.
The Investment Conference, which will involve domestic and international investors, provides a platform for would-be investors to seek out opportunities in the South African market.
In preparation for the Investment Conference, I appointed four Special Envoys on Investment, who have spent the last few months engaging both domestic and foreign investors on the opportunities that exist in South Africa.
They have travelled to major financial centres in Africa, Asia, Middle East, Europe and the Americas to meet with potential investors.
Through this work, we are establishing new investment relationships and strengthening existing ones.
Many US companies have a long and successful history of involvement in South Africa.
South Africa is the second largest destination of US investments in Sub-Saharan Africa after Mauritius.
Total bilateral investment, comprising FDI, portfolio and other investments, stood at approximately R2.2 trillion in 2016.
Investments by US companies into South Africa accounted for about 22% of total inward investments from the world.
There are over 800 US companies doing business in South Africa, accounting for 10% of GDP and employing over 220,000 people.
It is our intention, through this investment drive, to substantially expand the presence of US companies in South Africa.
Among other things, this requires that we improve the investment environment in the country and that we take decisive measures to address the key structural challenges in our economy.
We are therefore investing significantly in our education and skills development programmes, using our competition policies to create opportunities for new market entrants, reducing the cost of business and developing our economic infrastructure.
Government is working with urgency to guide the economy towards a more sustainable growth trajectory and to restore South Africa to investment grade status at all credit rating agencies.
Government, private sector, labour and civil society are working together on a social compact to create jobs, particularly for young South Africans.
As part of improving our investment service to investors, we have established Invest SA to focus on investment promotion and facilitation.
Invest SA has established ‘one stop shops’, which bring together key government departments in a single location to provide specialist advisory services, fast track investment projects and reduce regulatory burdens for investors.
We also have a good track-record in generating private investment to meet key infrastructure needs.
Our independent power producers programme has unlocked significant investment in renewable energy generation, while contributing to a more diverse energy mix and advancing our efforts to mitigate climate change.
We are also working closely with our neighbours in Southern Africa on regional opportunities to exploit natural gas, coal bed methane and shale gas.
We are giving renewed attention to mining, an industry that has been in decline over many years, but which still holds huge potential for job creation, growth, beneficiation, transformation and empowerment.
We have finalised a new Mining Charter in consultation with the mining industry, labour, affected communities and other stakeholders.
This provides clarity on how we will balance the imperatives of growth, sustainability and transformation.
Our aim is to unlock the economic potential of our country, which has been constrained for decades by policies of racial exclusion.
For generations, black South Africans were denied opportunities to own assets, establish businesses, acquire skills and enter professions.
Nowhere was this more apparent than in the patterns of ownership and usage of land.
The extreme concentration of ownership of land is one of the great impediments to the full realisation of our country’s potential.
We have taken a decision to accelerate land reform, including land redistribution and ensuring security of tenure for the rural poor.
We are determined that this should be achieved in a manner that is consistent with our Constitution, enhances agricultural production and food security and promotes economic development.
A significant part of our economic development agenda is to promote greater economic cooperation among African countries. [...]
It is through increasing intra-African trade and investment that we will grow, develop and diversify African economies, and make them more attractive to investment.
South Africa has embarked a new path of renewal and growth.
We are hard at work to remove the constraints that have held us back and to create new opportunities for growth.
We are determined to change the economic fortunes of our people through partnership and cooperation with investors here in the United States and across the world.
We invite you to be part of the regeneration of our country and of our continent.
I thank you.
On day two of UN General Assembly’s annual debate, it’s multilateralism all the way
Climate change, economic inequality, systemic bias among issues underlined by world leaders as General Assembly continues debate
From trade to climate change to development and fighting diseases, world leaders mounted the podium of the United Nations General Assembly on Wednesday to deliver a ringing endorsement of multilateralism, singling out a strengthened UN as the prime tool for improving humanity’s lot.
Across the political spectrum, from economies large and small, representing all continents, Heads of State and Government crossed the lines of political and ideological division to join in their advocacy of a multilateral world order.
“In a global context that is increasingly fragmented, multipolar, and in constant evolution, we are convinced, in fact, that the international community needs more effective multilateralism and a United Nations that is strengthened in its role as a pillar of an international system based on peace, justice and equity,” said Italian Prime Minister Giuseppe Conte on the second day of the Assembly’ annual general debate.
In many respects the leaders’ speeches were like ‘state of the nation’ reports in which they laid out a balance sheet of challenges faced and achievement attained by their individual countries, but many soon returned to the theme of the essential need for multilateralism.
“The world has slowly drifted ever more worryingly towards unilateral action,” Namibian President Hage Geingob said, stressing that this goes against the fundamental tenets of democracy upon which the UN is built and which are necessary for sustained inclusive development. “It is for this reason that multilateralism must be embraced with greater urgency.”
Selected African statements
pdf HAGE G. GEINGOB, President of Namibia (664 KB) , said that, since the end of the cold war, “the world has slowly drifted ever more worryingly towards unilateral action”. This development goes against one of the fundamental tenets of democracy upon which the United Nations is built. Democracy might have its flaws, he noted, but it is by far the best system, enabling the key values of the United Nations necessary for sustained inclusive development. It is for this reason that multilateralism must be embraced with greater urgency.
Namibia is founded upon the principles of democracy, the rule of law and justice, he continued. The fundamental rights and freedoms enshrined in its Constitution include virtually all the rights and freedoms recognized in international human rights instruments. However, these instruments in themselves are not sufficient to bring about sustainable development. There are emerging threats and challenges that continue to frustrate individual and collective efforts to achieve greater socio-economic progress.
As a dry and arid country, Namibia has stepped up its efforts to implement the Sustainable Development Goals in critical areas, such as energy, water and terrestrial ecosystems, he said. In July 2018, it presented its Voluntary National Review on the implementation of the Goals, its first opportunity on the world stage, to show progress made in implementing the 2030 Agenda for Sustainable Development and complementing Agenda 2063 of the African Union, in pursuance of the “Africa We Want”.
However, communicable diseases threaten to jeopardize the attainment of the 2030 Agenda, he underscored. For this reason, he endorsed the call to end the tuberculosis endemic and reaffirmed his country’s commitment to unite with the world in achieving this goal. His Government has demonstrated its commitment to address tuberculosis by including related targets in its fifth National Development Plan, as well as by ensuring that 70 per cent of available funding for tuberculosis comes from domestic resources. However, inadequate human and financial resources, high levels of poverty, and lack of public health services in rural areas remain a concern.
He emphasized that excluding women from certain spheres of life is to waste skills and expertise that can contribute to sustainable development. He applauded the United Nations Secretary-General for exercising leadership and reaching gender parity among senior management and resident coordinators. Namibia is also fully committed to implementing gender equality, as evident in the important role that women play in the country’s politics where they are equally represented in the Executive and Legislature. He also noted that during the darkest days of his country’s fight for independence, the Government and people of Cuba came to its aid. It is in the spirit of profound kinship Namibia shares with that country that he renewed the call for the lifting of the decades old, outdated, ineffective and counterproductive economic and financial embargo of Cuba.
pdf NANA ADDO DANKWA AKUFO-ADDO, President of Ghana (551 KB) , said that Kofi Annan’s passionate and profound belief in the United Nations and his certainty that a better organized and stronger Organization would make the world a better place is an ideal that should not be allowed to die. The international community continues to be faced with the stark reality that resolutions, norms and any number of votes in the Security Council and General Assembly mean nothing without the political will to enforce them.
When nations gathered in San Francisco 73 years ago and signed the landmark document that created the United Nations, it was a very different world than that which exists today, he continued. Ten years ago, as the General Assembly was starting its proceedings, the world was plunged into a financial crisis. The consequences were felt around the world, including in small countries like Ghana. Those events provide proof that the world is an interdependent world.
He noted that 55 per cent of the work of the Security Council in 2017 had to do with Africa. Unfortunately this invariably meant peacekeeping and poverty‑related issues. Africa no longer wants to be the place that requires peacekeepers and poverty-fighting non-governmental organizations, no matter how noble their motives. Regional bodies like the Economic Community of West African States (ECOWAS) and the African Union are making systematic efforts to bring peace and stability to the entire continent. Ghana, like many countries in Africa, is forging relations with China to address part of the infrastructure deficit.
This is not a uniquely Ghanaian or African phenomenon, he pointed out. Developed, rich and well-established countries have been paying regular visits to China, seeking to open new economic ties and improve upon existing ones. A lot of anxiety is being expressed about the possibility of a recolonization of the African continent by a new power. However, at the turn of the twentieth century, China’s first railroads were built by western companies and financed by western loans to a nearly bankrupt Qing Dynasty. It was under those circumstances that the port of Hong Kong was leased for 99 years. The rest is history. That former victim of western railway imperialism is lending billions to countries throughout Asia, Africa and Europe to construct railroads, highways, ports, power plants and other infrastructure.
Ghana must build roads, bridges, railways, ports, schools and hospitals and must create jobs to keep young people engaged, he said. It is obvious that the development trajectory Africa is on is not working. A different one is being tried and he called upon the international community to help stem the huge flows of illicit funds from the continent. It is in everyone’s interest that Africa make a rapid transformation from poverty to prosperity.
pdf JOÃO MANUEL GONÇALVES LOURENÇO, President of Angola (342 KB) , said that the role of the United Nations was decisive for the achievement of a long‑lasting peace in Angola through the United Nations Angola Verification Mission (UNAVEM III) and United Nations Observer Mission in Angola (MONUA) peace missions, and also commended the work undertaken by United Nations Children’s Fund (UNICEF) and the World Food Programme (WFP). Angola’s experience in peacebuilding and reconciliation between the warring forces has been a positive example for the United Nations, in the sense that it has allowed for the drawing of useful conclusions on how to approach peace processes in other regions of the world.
It is at the United Nations where the best solutions can be found to the current, serious problems and conflicts that may hinder the survival of humanity itself, and are discussed and resolved, he continued. Those include hunger and misery that affect millions of citizens around the world, as well as global warming and its consequences, mass migrations, trafficking in narcotics, human trafficking, religious intolerance and extremism, and the uncontrolled proliferation of nuclear weapons, among other issues. The United Nations is still far from achieving the goals enshrined in its Charter.
He underscored that, while it is true that, after the establishment of the United Nations, the bipolarization of the planet into two antagonistic political and economic systems did not contribute to the easy enforcement of principles that work in favour of international peace and security. However, it would be unfair to deny that the United Nations has played an important role in bringing colonialism to an end, promoting human rights, boosting international development and cooperation, and the management and control of the hotspots of instability worldwide.
With the end of the so‑called cold war, there was a momentary emergence of a new political paradigm oriented towards multilateralism, he said. Today, in a time of ever‑increasing globalization, there is no justification for the continued proliferation of conflicts apparently without a solution, with entire populations suffering from their tragic consequences. There have been many voices demanding profound reforms inside the United Nations, including the enlargement and reform of the Security Council. Such changes would ensure better representation of the different geopolitical regions of the planet.
pdf GEORGE MANNEH WEAH, President of Liberia (466 KB) , hailed Ms. Espinosa’s successful election, noting that she is one of four women to hold the Presidency of the General Assembly. Paying tribute to the late Kofi Annan, he said Africa lost one of its most illustrious sons and the world one of its most outstanding diplomats. On his country’s newly democratically elected Government, he stressed that Liberians voted for “a Change for Hope” and a paradigm shift towards youthful leadership, change and transformation as a first in 73 years.
Adopting the Pro-Poor Agenda for Development and Prosperity, he pointed out that this will benefit not just the poor, but all Liberians. It is a policy framework for alleviating poverty and reducing the marginalization of the most vulnerable while being conducive for the middle and upper-income Liberians to grow and prosper. Intending to build a harmonious society, he called on friends, partners and private investors to support the efforts of the Pro-Poor Agenda in giving power to the people, promoting economic diversification, protecting sustainable peace and encouraging good governance.
He deplored the vulnerability of the youth in his country who lack access to high quality education and employment opportunities, adding that he plans to make them productive citizens by providing adequate educational facilities at high school and college levels. He also recalled the Technical Vocational Education and Training programmes for the youth left behind due to the disastrous civil crisis. To connect cities and towns and to power Liberia’s economy, he highlighted much needed investments in roads, energy and ports and called therefore for funding and technical expertise.
Because agriculture is another key priority in alleviating poverty, focus is now on improving self-sufficiency in food production and self-employment, he continued. Liberia also intends to attract labour-intensive light manufacturing by implementing a new Special Economic Zone law. He noted that due to the results of the 2014 Ebola Epidemic costing thousands of Liberians’ and health workers’ lives, he plans to better organize the healthcare delivery system to improve the wellbeing of his people.
pdf MSWATI III, Head of State of Eswatini (565 KB) , expressed support for Assembly resolutions aimed at repositioning the United Nations development system to better support countries in their efforts to achieve the Sustainable Development Goals under stronger national leadership and international cooperation. Citing the existence of pockets of tensions across the globe “which require that all Member States speak in one voice when providing peaceful solutions”, he warned that a fragmented approach will render peaceful solutions elusive. Appealing to countries embroiled in conflict to come up with “home‑grown solutions” to address their differences, he urged them to avoid the use of force and employ dialogue. “Where there is no loss of blood, unity prevails, whereas violence begets instability,” he said.
Outlining another major concern, he said the imbalance between rich and poor people continues to widen despite attempts to implement the Sustainable Development Goals. Such imbalances contribute to terrorism and social strife, he warned, voicing support for Agenda 2063 and its goal of improving lives and realizing a well‑developed Africa by that date. Expressing support for such programmes, he said the slow progress of development adds to many countries’ burdens and prevents them from meeting the needs of their people. “We need to find ways and solutions to speed up the process of developing sustainable economies […] by removing the stumbling blocks to development,” he said.
Emphasizing that “no country deserves to go for a whole year without investment”, he warned against leaving developing countries behind. The African continent, in particular, still faces challenges including such diseases as Ebola, HIV/AIDS, malaria and tuberculosis, and will continue to do so without funding. All citizens must have access to basic services such as clean water, health care and free primary education. Commending countries that have succeeded in providing those, he spotlighted the need to reduce unemployment and care for older persons as additional important global challenges.
Calling for international cooperation as well as alternative means of funding, he noted that Africa continues to absorb more peacekeeping missions than any other United Nations regional grouping. “This qualifies Africa [for] proper representation in areas of peace and security,” he stressed, emphasizing that the continent’s voice must be heard and featured prominently and permanently at the United Nations. As talks on Security Council reform progress, he stressed the need to consider the common African position – namely, calls for the allocation of no fewer than two permanent Council seats with all the prerogatives and privileges of permanent membership, including the veto power, and five non‑permanent seats.
He went on to outline national progress made in mainstreaming the targets of the Sustainable Development Goals and Agenda 2063 into Eswatini’s development framework. Among other things, the country has made strides in localizing and integrating the Goals into its planning processes; finalized the review of its National Development Strategy (1997‑2022); and will soon launch a revised National Strategy, he said, adding that the latter’s theme will be “sustainable development and inclusive growth”. Among other things, he also spotlighted achievements in innovation and research as well as the country’s successful holding of free, fair elections earlier in September.
pdf UHURU KENYATTA, President of Kenya (559 KB) , expressed strong support for the General Assembly’s intention to better enable the United Nations Human Settlement Programme (UN-Habitat) and the United Nations Environment Programme (UNEP) to fulfil their global mandates. However, he said there was a need for broader reforms. In almost every part of the world, there is a growing trust gap between citizens and their governing institutions, due to growing awareness of the scourge of corruption and wastage of public resources.
Pointing beyond individual corruption, he said major corporations are misrepresenting earnings to deny Governments revenues needed for investment in public goods. The corrupt dealings of cartels and oligopolies pillaging Africa’s resources “have over several decades been clothed in the garments of legality”, leading to “popular theorizing of Africa’s resource curse”, he said.
Continuing, he said that citizens all over the world are more aware that a globalized financial and legal system enables the illegal conduct of corrupt individuals, with Africa probably enduring the most suffering. Saying evidence increasingly marked Africa as a net exporter of capital through illicit outflows, he cited conservative estimates that the outflow ranged between $1.2 and $1.4 trillion between 1980 and 2009, roughly equal to the continent’s current gross domestic product (GDP) and “surpassing by far the money it received from outside over the same period”. Illicit capital powers a global corrupt network used by drug cartels and even terrorist organizations, driving a loss of trust in national, regional and global governing institutions, and thus enabling populists and extremists who thrive in chronic instability.
Globally, he said multilateralism is under severe strain, threatening the system of trade and security established after the Second World War under the aegis of the United Nations. Calling for bold solutions, he said the global community must fight impunity and corruption, fraud and abuse of public trust. Kenya has reached out to partners in Switzerland and the United Kingdom to counter transfers of illegal proceeds to their banking and financial systems, but bilateral agreements must come with determined reforms. Saying that one such reform must occur in the Security Council, he called for two permanent seats for Africa to counter the “historical injustice” of its under-representation in the non-permanent Member category. “Global decision-making needs more of Africa, if the world is to respond wisely to the demographic and economic shifts under way,” he said.
pdf EMMERSON DAMBUDZO MNANGAGWA, President of Zimbabwe (934 KB) , said that his country has made substantial progress in the implementation of some of the Sustainable Development Goals. In a bid to improve nutrition and broaden income opportunities, Zimbabwe has extended support to the livestock, fisheries and wildlife sectors. “We are confident that these multi-pronged programmes will accelerate Zimbabwe’s re-entry into the global economy,” he added. Recalling the many developmental and economic challenges caused by the continued illegal sanctions imposed on Zimbabwe, he called for their immediate removal.
Peace, security, stability, democracy and good governance are essential ingredients for sustainable development, he said, noting Zimbabwe’s recent general elections. Election campaigning, voting and counting processes were conducted freely, peacefully and transparently. International observers and global media were also invited to observe the elections. “The exceptionally peaceful pre- and post-electoral environment represented the maturing and entrenchment of democracy in Zimbabwe,” he said. Expressing gratitude to the United Nations and other Member States for sending election observer missions and for providing technical assistance, he said the recommendations received will be considered.
The isolated incident of the post-election violence which occurred on 1 August is regrettable and unacceptable, he said. The Commission of Inquiry, comprising of eminent persons of national, regional and international repute, has now begun its work. Their report will help bring closure to the matter and will assist in the improvement of Zimbabwe’s institutional governance. Now that elections are over, Zimbabwe is focusing on economic development. “The Land Reform Programme is behind us and is irreversible,” he added.
It is time to look forward to Agenda 2063 and focus on increasing investments, decent jobs and empowerment and realizing a society free from poverty and corruption, he said. “Zimbabwe is open for business,” he emphasized, outlining steps taken to modernize the country’s roads, airports and other infrastructure. He also urged the need to address the root causes of conflict, which include poverty, inequality and disputes over land and resources.
The United Nations, like all global organizations, must be democratic, he said, calling for the review and reform of the Bretton Woods institutions and other international financial organizations. Trade remains an engine for growth if it is conducted fairly. He further called for negotiations under the World Trade Organization (WTO) which foster inclusive and shared economic growth. He also urged the international community not to turn a blind eye to the suffering of the Palestinian people. It is disheartening that the people of the Western Sahara have yet to exercise their inalienable rights to self-determination. The Security Council in cooperation with the African Union must find a just solution to the issue of Western Sahara.
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Third Industrial Development Decade for Africa: Enhanced and innovative global partnerships key to a successful AfCFTA
High-level event on Enhancing global partnerships for IDDA III held on the margins of the 73rd UN General Assembly in New York
Heads of States, high-level representatives of governments, development financing institutions and UN agencies together with representatives of the private sector, non-governmental organizations and academia met today at the United Nations Headquarters to discuss how inclusive and sustainable industrial development can support the implementation of the African Continental Free Trade Area (AfCFTA) agreement.
The event was organized by the United Nations Industrial Development Organization (UNIDO), the African Union Commission (AUC), the African Development Bank (AfDB), the United Nations Economic Commission for Africa (UNECA), and the Food and Agriculture Organization of the United Nations (FAO).
In the next decades, Africa is set to become the youngest and most populous continent in the world, with a working age population expected to grow by around 70 per cent to number 450 million people by 2035. Job creation in Africa is not keeping pace with the growing workforce and large parts of the rural population, the urban poor, women and youth have not benefited from recent economic growth. Unemployment and inequality still remain unacceptably high.
Policymakers now acknowledge that the continent’s economies need to undertake a systematic structural transformation from resource-based economies to more diversified economies, specifically by increasing the shares of manufacturing and agro-related industry in national investment, output, and trade.
The AfCFTA, launched by the AUC in March 2018 in Kigali, Rwanda, has enormous potential for catalyzing this structural transformation, as it will spur industrialization, economic diversification and employment in Africa. It will create a continental market of 1.2 billion consumers and an African GDP of US$2.5 trillion, and is expected to provide great business opportunities for trading enterprises, businesses and consumers.
Welcoming the audience, Amina J. Mohammed, Deputy Secretary-General of the United Nations, highlighted that “real output growth is estimated to have increased by 3.6 percent in 2017, up from 2.2 percent in 2016, and is poised to accelerate to 4.1 percent in 2018 and 2019,” and added that, “despite this positive economic growth, challenges remain for the achievement of meaningful inclusive and sustainable industrial development for Africa.”
Addressing the New York meeting, LI Yong, the Director General of UNIDO, which is leading the implementation of the Third Industrial Development Decade for Africa (IDDAIII), said that, if the full benefits of the AfCFTA are to be fully realized, industrialization should be the central focus. He predicted that “the successful implementation of the AfCFTA will lead to an increase in demand for goods manufactured by small and medium-sized enterprises.”
Also, the African Union Commissioner for Trade and Industry, Ambassador Albert M. Muchanga, emphasized that “the African Continental Free Trade Area and IDDAIII are complementary, and the alignment will offer win-win outcomes to Africa and the international community.”
All speakers agreed that for the implementation of the AfCTFA to be sustainably successful it will necessarily require further enhanced and concerted efforts by all international and national stakeholders – especially through innovative global partnerships on a multilateral level.
Pierre Guislain, Vice President of the African Development Bank, said that “the private sector has a critical role to play in driving Africa’s industrialization and integration”.
He added that “boosting intra-African investment was as important as boosting intra-African trade” and called on governments “to accelerate adoption and implementation of the AfCFTA and create truly integrated regional markets that have the scale needed for large private investments”. He indicated that industrializing Africa is one of the African Development Bank's top five lending priorities.
Vera Songwe, Executive Secretary of the UNECA, stressed, “if the AfCFTA is to catalyze Africa’s industrialization through integrated markets then bridging infrastructure gaps and digitalizing economies across the continent is critical!”
Noting that the AfCFTA and industrialization strategies will need to exploit the full agribusiness potential of the continent, José Graziano da Silva, Director-General of the FAO, said, “agro-industrial development that connects family farmers, herders and fisher folks to rewarding markets can create opportunities for young people, stimulate greener practices throughout the food system, and deliver healthier and safer food to consumers.”
During the event, it was announced that the following heads of state had agreed to become IDDA III Champions to actively promote the role of inclusive and sustainable industrial development within the IDDA III framework and to increase awareness of this important initiative at the national, regional and global level:
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His Excellency Alassane Ouattara, President of the Republic of Côte d’Ivoire;
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His Excellency Uhuru Kenyatta, President of the Republic of Kenya;
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Her Excellency Marie-Louise Coleiro Preca, President of the Republic of Malta;
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His Excellency Mahamadou Issoufou, President of the Republic of Niger;
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His Excellency Macky Sall, President of the Republic of Senegal;
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His Excellency Matamela Cyril Ramaphosa, President of the Republic of South Africa; and
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His Excellency Edgar Chagwa Lungu, President of the Republic of Zambia.
Deputy Secretary-General says positive economic growth sign of Africa’s strong potential
Following are UN Deputy Secretary-General Amina Mohammed’s remarks at the high-level event on the Third Industrial Development Decade for Africa, in New York today:
I am pleased to join you today as we focus attention on Africa’s industrial and socio-economic development. I am encouraged by the presence of so many high‑level representatives from both the public and private sectors.
This year’s event comes when Africa’s economic growth is beginning to recover after the decline witnessed in 2016. Real output growth is estimated to have increased by 3.6 per cent in 2017, up from 2.2 per cent in 2016, and is poised to accelerate to 4.1 per cent in 2018 and 2019. This is indeed welcome news and a reflection of the continent’s strong potential.
However, despite this positive economic growth, challenges remain for the achievement of meaningful, inclusive and sustainable industrial development for Africa. The diversification of African economies through value addition is essential for sustainable growth, market resilience and withstanding economic shocks.
To that end, we welcome the launch this year of the African Continental Free Trade Area. This will constitute the world’s largest free trade area in terms of membership and will also create a single market of 1.2 billion people with a combined gross domestic product (GDP) of over 2.5 trillion dollars, which is expected to double by 2050.
Sustainable industrialization is key to the success of the Free Trade Area, with an emphasis on inclusive development that harnesses the energy, drive, creativity and skills of women and youth.
Within the framework of the Third Industrial Development Decade for Africa, commendable efforts are being undertaken by different stakeholders, including within the United Nations. We have a roadmap for its implementation that will form the basis for joint programmes between United Nations agencies and key stakeholders.
This and other achievements are captured in the progress report on the Decade that will be presented to the General Assembly.
Going forward, I would like to highlight five areas for special attention.
First, congruency between alignment and cohesive regional and industrial policies. Trade and industry policies that talk to each other are much more likely to yield positive results than those implemented in isolation.
Second, enhanced focus to investments on infrastructure development. This includes special economic zones and industrial parks, roads, ports, harbours, energy infrastructure, information and communication technologies and digital infrastructure.
Third, enhanced value addition local contacts, with a focus on agriculture and other natural resources. As the mainstay of most African countries, these hold the key for accelerated sustainable growth, diversification and job creation.
Fourth is trade capacity building to facilitate fuller participation in regional and global value chains. Being at the table needs muscle capacity to engage and negotiate the best deals for your country.
And fifth is human capital development and technology with a focus on women and youth to ensure inclusive development.
It is also clear that the agendas set out in the Industrial Development Decade and the African Continental Free Trade Area cannot be achieved by any single entity or country. There is a need to build and strengthen partnerships among all relevant stakeholders.
Finally, creating a space for these partnerships to focus on five areas mentioned and addition, encouraging technology transfer, building productive capacity, creating jobs, promoting international trade, supporting economic diversification, and building green industries.
Creative and innovative approaches must continue to be deployed to mobilize both financial and non-financial resources.
Maximizing financing for development means a number of things. We must mobilize domestic resources alongside international financial resources. We need to harness the role of the private sector in financing development. And we must maximize the use of innovative financing sources and mechanisms including pension funds, insurance and other large pools of private capital.
To do this, it is vital that we share experiences and lessons among countries. We also need to leverage and deepen strategic North-South; South-South and Triangular cooperation.
On behalf of the United Nations, I reaffirm our continued strong commitment and action to sustainable development on the continent and ensuring an inclusive, resilient, and secure future, for all Africans.
I wish you a productive meeting.
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Trade wars are symptoms of deeper malaise, UNCTAD warns
The flagship Trade and Development Report 2018 says the international economy remains rigged against the interests of the global poor.
The world economy remains on shaky ground a decade after the 2008 financial crisis, with trade wars a symptom of a deeper malaise, according to UNCTAD’s Trade and Development Report 2018: Power, Platforms and the Free Trade Delusion.
While the economy has picked up since early 2017, growth remains spasmodic, and many countries are operating below potential, states the report. This year is unlikely to see a change of gear.
“The world economy is again under stress,” UNCTAD Secretary-General Mukhisa Kituyi said. “The immediate pressures are building around escalating tariffs and volatile financial flows but behind these threats to global stability is a wider failure – since 2008 – to address the inequities and imbalances of our hyperglobalized world.”
The annual Trade and Development Report analyses current economic trends and major international policy issues and makes suggestions for addressing them.
The 2018 edition examines how economic power is being concentrated in a smaller number of big international firms and the impact this is having on the ability of developing countries to benefit from their participation in the international trading system and to gain from new digital technologies.
The report states that many advanced countries have since 2008 abandoned domestic sources of growth for external ones, most noticeably with the turnaround of the eurozone from a deficit to a surplus region.
Downside risks
But this can only work by tapping into other countries’ domestic demand – and among countries that do depend on domestic demand, too many are relying on a combination of higher debt and asset bubbles rather than boosting wages. In either case, growth is hindered by the ever-present threat of financial instability.
The bigger emerging economies are doing better this year, the report says, and commodity exporters can expect an improvement while prices remain firm. Except for the Russian Federation, growth in the other four BRICS countries – Brazil, India, China and South Africa – relies heavily on domestic demand.
However, that is not the case for many other emerging economies. With downside risks increasing and financial fault lines widening in several countries, the report sees economic storm clouds gathering.
Today’s $250 trillion debt stock – 50% higher than at the time of the crisis – is three times the size of the global economy. Private debt, particularly corporate debt, has been behind this surge in borrowing but without stimulating business investment – a disconnect that spells trouble ahead.
Even as advanced economies have not done enough to rebalance the global economy, there are concerns that their “normalizing” monetary policies could send new shock waves through capital and currency markets, with a vicious economic spiral in more vulnerable economies already looking possible.
“The growing indebtedness observed globally is closely linked to rising inequality,” said Richard Kozul-Wright, lead author of the report and head of UNCTAD’s globalization and development strategies division. “The two have been connected by the growing weight and influence of financial markets – a defining feature of hyperglobalization.”
Superstar firms
Global trade continues to be dominated by big firms through their organization and control of global value chains with, on average, the top 1% of each country’s exporting firms accounting for more than half its exports.
The spread of these chains contributed to a rapid growth of trade from the mid-1990s up to the financial crisis, with developing countries posting the fastest growth, including by trading more with each other.
But the report shows that countries have had to trade more intensely to generate the same growth of output as in the past and that too much of this trade has been unequal, with gains skewed in favour of lead firms through a mixture of increased market concentration and control of intangible assets.
The report documents a general decline – with China an exception – in the share of value added from manufacturing activities in these chains and a rise in the share of pre- and post-production activities. The rents captured at these ends of the chain have had a pronounced effect on the distribution of income in all countries.
“Superstar firms are a global phenomenon, and their rent-seeking strategies straddle borders,” Mr. Kozul-Wright said.
Damaging consequences
Recent rounds of tariff hikes, whether they amount to a trade war, will disrupt a trading system drawn increasingly around value chains, although trade growth in 2018 will likely be similar to that of 2017.
However, the knock-on effects of any serious escalation could, through heightened uncertainty and reduced investment, bring more damaging consequences in the medium term, the report says. These could be particularly serious for countries already facing financial distress.
Moreover, because tariffs work by altering the profitability of firms in the tradeable sectors, they carry distributional consequences and affect demand in ways that require careful assessment.
The report includes projections that highlight the possible risks and concludes that “after decades of experiencing the limits of ‘free trade’, it would be tragic to embrace the opposite excess – a trade-tariff war – rather than to consider what Governments could do, through global policy coordination, to avert the continuing deterioration of income distribution and employment that are at the root of most recent economic crises”.
Ideological fig leaf
The report says that hyperglobalization has not resulted in a win-win world. But neither a retreat to nostalgic nationalism nor doubling down on support for free trade provides the right response.
In addition, free trade has shown itself to be an ideological fig leaf that has curtailed policy space for developing countries and cut away protections for working people and small businesses, even as it protects the rent-seeking proclivities of big firms.
In the real world, trade wars are a symptom of a degraded economic system and multilateral architecture, the report says, while the disease is a vicious circle of corporate political capture and rising inequality where money is used to gain political power and political power is used to make money.
“Old and new pressures are weighing down on multilateralism,” Dr. Kituyi added. “In our interdependent world, inward-looking solutions do not offer a way forward. The challenge is to find ways to make multilateralism work.”
Back to the future
To avoid repeating the mistakes of the 1930s, UNCTAD suggests returning to the Havana Charter, which was the initial attempt to establish a managed multilateral trading system. Doing so means taking on many new challenges – unfamiliar to the signatories of the Charter in 1948 – that require effective international cooperation.
At a minimum, it would prioritize three actions: tie trade discussions to a commitment to full employment and rising wages, regulate predatory corporate behaviour and guarantee sufficient policy space to ensure that countries can manage their integration in line with the Sustainable Development Goals, adopted by the international community in 2015.
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UN Chief joins world leaders in calling for greater investment in Africa’s young people
United Nations Secretary-General Antonio Guterres on Tuesday joined world leaders in calling for greater investment in jobs for young people in Africa, calling them the continent’s “greatest asset”.
“Investment is crucial to harness Africa’s youth dividend,” Mr. Guterres said at an event organized by the United Kingdom, Canada, Ghana and Rwanda on the margins of the annual high-level General Assembly in New York.
He cited the need for investments in health and education, as well as in science, technology and industrialization.
Today, one-third of African youth are unemployed; another third are vulnerably employed or in low-value jobs in the informal sector. The Secretary-General said this reinforces poverty and inequality.
Young African women are even worse off, he pointed out, noting that it is estimated that gender gaps in the labour force cost Africa $105 billion in 2014 alone.
At a time when the rest of the world will be ageing, Africa’s youth – with their energy, innovation, ideas and solutions – are an asset for the global labour force, Mr. Guterres emphasized.
British Prime Minister Theresa May said that Africa “stands on the cusp of playing a transformative role in the global economy,” but the continent’s potential will only be realized with greater investment in the next generation.
She noted that to keep pace with its growing population, Africa will need to create 18 million new jobs every year between now and 2035. And creating those jobs is not just important for Africa’s future.
“In our interconnected world, where new jobs in Africa drive new markets, new trade and investment opportunities and greater global stability, these new jobs are important for everyone’s future.”
“Africa’s youth bulge does not need to be a problem for our continent nor for our neighbours. On the contrary, our young people are an asset and a driver of growth and innovation,” stated Rwandan President Paul Kagame.
“If we plan strategically and work together, we can instil a sense of hope in Africa’s youth about the vast opportunities to be found right at home.”
Around 60 per cent of Ghana’s population of 30 million people is under the age of 25, noted its President, Nana Akufo-Addo, adding that for most of the last decade, the growth of the country’s economy has barely kept pace with population growth.
“Basically, we have an economy that is not generating jobs and not expanding,” said the President. “Youth unemployment is the greatest threat to the stability of our country and to our democracy. So finding solutions as to how to grow the Ghanaian economy so that it can produce jobs – that is the biggest single issue confronting our country.”
Canada’s Prime Minister, Justin Trudeau, added that educating young people and giving them opportunities in Africa is something that matters not just to the future of Africa but to the future of the world.
‘A Call to Invest’: Investing in Jobs for Young People in Africa
Speech delivered by Prime Minister Theresa May
I am delighted to be here, alongside President Kagame, President Akufo-Addo and Prime Minister Trudeau, to open this meeting.
Today we make a call to invest in Africa.
Africa stands on the cusp of playing a transformative role in the global economy. A more prosperous, growing and trading Africa is in all of our interests. But its incredible potential will only be realised through a concerted partnership between governments, global institutions and business.
That’s why we are bringing together today, political leaders, business leaders and the African leaders of tomorrow. For together we can work in partnership to unleash the transformative power of trade and investment to work across the continent of Africa.
Last month, I made my first official visit to Africa – I met leaders, entrepreneurs and young people who are building an exciting future for their countries and their continent.
I saw a continent full of potential. One with a young population that is eager to embrace the opportunities of the 21st century – and ready to play its part in tackling the challenges we all face.
I was delighted when I was there to meet a young fashion designer in Nigeria, and a young jewellery designer in Kenya - examples of the next generation.
I am delighted that we are also joined by representatives of that next generation today.
But Africa’s potential will only be realised if we invest in the next generation.
Just to keep pace with its growing population, Africa will need to create 18 million new jobs every year between now and 2035.
And creating those jobs is not just important for Africa’s future. In our interconnected world, where new jobs in Africa drive new markets, new trade and investment opportunities, and greater global stability, these new jobs are important for everyone’s future.
That is why high-quality investment and job creation forms the centrepiece of the UK’s new partnership with Africa.
It is why I want the UK to be the G7’s number 1 investor in Africa by 2022, with our companies investing billions into African economies.
It is why the UK is ensuring that the 0.7% of gross national income we spend on development will do more to support investment and job creation in Africa and in developing economies across the world.
While in South Africa, I announced plans for £4 billion of new UK government investment in African economies that will pave the way for at least another £4 billion of private sector financing.
And next year the UK will host an Africa investment summit in the UK – bringing African leaders together with private and institutional businesses and investors.
This partnership working is vital to delivering the high-quality investment we want to see.
Today, I am delighted to welcome the Sustainable Development Capital Initiative which, in partnership with UK Government, will develop the City of London’s role in raising the capital needed to meet the sustainable development goals.
I am also pleased that the UK played a role in the International Finance Corporation doubling the investment it supports in Sub-Saharan Africa, to $10-12 billion a year by 2030.
These and wider shifts in the multilateral system are encouraging foreign investment in African countries by improving business environments, and addressing market barriers, such as regulation and risk mitigation.
But like everyone here today, I want us to go further still.
So together today, we are issuing a ‘Call to Invest’ in Africa. A challenge to governments, businesses, investors and organisations the world over, to redouble our efforts to address the youth jobs challenge, and to bring fresh ideas and practical commitments to the table.
When Africa succeeds, the world succeeds.
Remarks by the UN Secretary-General
Let me thank the United Kingdom, Canada, Ghana and Rwanda for bringing us together and for highlighting the vast opportunities for investing in jobs for young people in Africa.
Youth unemployment is first and foremost a tragedy for young people’s hope for the future.
But it can also undermine development and generate frustration and alienation that, in turn, can be a catalyst for social unrest, crime and unsafe migration – and a threat to global peace and security.
It would be wrong to draw a straight line between youth unemployment and a propensity for violence. Yet it is unfortunately all too easy for frustration and anger to be exploited by extremists of all kinds.
Africa has the fastest growing youth population in the world.
They are the continent’s greatest asset – a vast source of energy, innovation, ideas and solutions.
Indeed, at a time when the rest of the world will be ageing, Africa’s youth are also an asset for the global labour force.
But today, one third of African youth are unemployed and discouraged; another third are vulnerably employed or in low-value jobs in the informal sector. This reinforces poverty and inequality.
Young African women are even worse off. It is estimated that gender gaps in the labour force cost Africa US$105 billion in 2014 alone.
Investment is crucial to harness Africa’s youth dividend.
Investments in health and education, and in science, technology and industrialization.
And not just basic education – but in skills that match the needs of present but above all of future labour markets in a world that is changing so quickly.
The African Continental Free Trade Area is an important step in the right direction in creating job opportunities.
Earlier this week, the United Nations launched the Youth2030 strategy and the Generation Unlimited initiative – two new efforts to empower people, including through learning and employment, especially for girls.
We want to make sure that all young people, in and beyond Africa, have decent work and can fulfil their potential.
Thank you very much.
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Climate change and multilateralism figure high on first day of UN General Assembly debate
Secretary-General calls for renewed commitment to rules-based order, reformed, reinvigorated, strengthened multilateral system
If there was one issue that was a recurrent theme on Tuesday on the first day of the United Nations General Assembly’s annual general debate, it was the potentially catastrophic impact of climate change from Secretary-General António Guterres’s opening address warning global Heads of State and Government that “its speed has provoked a sonic boom SOS across the world”, to individual leaders highlighting their individual vulnerabilities.
Guterres said the world is suffering from a bad case of “trust deficit disorder”, with people losing faith in political establishments amid rising polarization and populism. Cooperation among States is more difficult, divisions within the Security Council stark, and trust in global governance fragile as twenty-first century challenges outpace twentieth century institutions and mindsets. While living standards for millions have improved, and a third world war avoided, that cannot be taken for granted.
“Multilateralism is under fire precisely when we need it most,” he said. While a multipolar world will not in itself guarantee peace or solve global problems, shifts in the balance of power may increase the risk of confrontation, he cautioned. Leaders have the duty to advance the well-being of their people, but as guardians of the common good, they also have a duty to promote and support a reformed, reinvigorated and strengthened multilateral system.
Leaders must renew their commitment to a rules-based order, with the United Nations at its centre and with the different institutions and treaties that bring the United Nations Charter to life, he stated. They must also demonstrate the added value of international cooperation by delivering peace, defending human rights and driving economic and social progress for women and men everywhere. “In the face of massive existential threats to people and planet – but, equally, at a time of compelling opportunities for shared prosperity – there is no way forward but collective, common-sense action for the common good,” he underscored. “This is how we rebuild trust.”
Focusing on climate change, which represents a direct existential threat, he stressed: “We have reached a pivotal moment. If we do not change course in the next two years, we risk runaway climate change.” World leaders must listen to scientists, see what is happening before their very eyes and guarantee implementation of the Paris Agreement.
“Our future is at stake. Climate change affects everything,” he said, announcing that he will convene a summit on climate change in September 2019 to mobilize action and financing one year before States are to revive their Paris pledges. Only a higher level of ambition will do, he said, adding: “The world needs you to be climate champions.”
While new technologies hold great promise, they also pose risks and serious dangers, including criminal activity and disruption to labour markets, he continued. Malicious acts in cyberspace, such as disinformation campaigns, are polarizing communities and diminishing trust among States.
Social media and the digital revolution are reinforcing tribalism and reinforcing a male-dominated culture. The technology sector must become more diverse, not least for its own benefit. With technology outpacing institutions, cooperation between States and stakeholders is crucial, he said, stressing the urgency to find and implement mutually beneficial solutions to digital challenges. Further, the dangers of new technologies on warfare also need to be urgently addressed, particularly now that the prospect of weapons which can select and attack targets on their own could trigger a new arms race.
“Let’s call it as it is: the prospect of machines with the discretion and power to take human life is morally repugnant,” he said, warning that any new war could include a massive cyberattack against civilian infrastructure as well as military capacities. He urged the international community to use the United Nations as a platform to nurture a digital future that is safe and beneficial for all.
Despite chaos and confusion in the world, there are winds of hope, he said, citing peace initiatives between Eritrea and neighbouring States, the signing of a peace agreement between the rival leaders of South Sudan, and summit meetings between the leaders of the Democratic People’s Republic of Korea and the United States and Republic of Korea. Approval of compacts on refugees and migrations is another sign of hope, while the drive for gender equality is gaining ground. “Our future rests on solidarity,” he said. “We must repair broken trust. We must reinvigorate our multilateral project and we must uphold dignity for one and all.”
Seychelles President Danny Faure warned that peace and prosperity cannot be disassociated from the effects of climate change and its existential threat to the world as a whole. “Neglecting the effects of climate change will pass on to the next generation a world beyond repair,” he said.
Many leaders recounted the problems and achievements of their own countries. But they also highlighted the UN Sustainable Development Goals (SDGs), which seek to eliminate a host of social ills in an environmentally friendly way by 2030, and underscored the UN’s prime role in attaining the global partnership needed to combat climate change and resolve a slew of other problems, including the current worldwide migration crisis.
A discordant note came from United States President Donald Trump, who rejected the ideology of globalism, opposed the new Global Compact on Migration, scheduled to be adopted in Morocco in December, and complained that the US’s trading partners had taken advantage of it, explaining his policy of unilaterally imposing billions of dollars in import tariffs.
Delivering a sound argument against this position was Swiss President Alain Berset, who bemoaned the “tendency at the moment” to seek answers to such problems as globalization, inequality, conflict, extremism, migration and climate change “in nationalist isolation and in a growing mistrust with regard to cooperation between States.”
“We are witnessing a real crisis in multilateralism – paradoxically at the very moment when we are trying to forge the main pillars of the global governance of the future,” he said. “The United Nations is indispensable and ideally placed to tackle contemporary challenges, especially the fight against inequality.”
He also decried “policies relying on trade protectionism and selfish interests” that undermine trade and prosperity, and reiterated his countries support for the [International Criminal Court] as “this unique international cooperative effort in favour of the victims of the most serious crimes.”
South African President Cyril Ramaphosa also robustly defended multilateralism. “We must resist any and all efforts to undermine the multilateral approach to international trade, which is essential to the promotion of stability and predictability in the global economy,” he declared.
Many speakers declared their support for the Global Compact on Migration. “We look forward to its adoption in Marrakech later this year,” Nigeria’s President Muhammadu Buhari said, noting that irregular migration is not a consequence of conflicts alone, but of the effects of climate change and lack of opportunities at home, calling climate change “one of the greatest challenges of our time.”
While stressing the importance of multilateralism, Rwandan President Paul Kagame highlighted the need for “real multilateralism, where it has too often been lacking.
“The current two-track system of global governance is unsustainable,” he said. “A few get to be the ones to define the norms by which others shall be judged. But standards that do not apply to everyone equally are not universal. Addressing this imbalance in the very foundation of our system is what will give shape to a revival of multilateral cooperation, and renew the legitimacy of the international institutions, that are so crucial to our planet's future.”
But it was Malawi’s President Arthur Peter Mutharika who perhaps best captured the true essence of the UN. “Every nation is important and we all have something to offer,” he declared. “There are no minorities here. There are no small nations here. There are only nations in the United Nations.”
Selected African statements
pdf PAUL KAGAME, President of Rwanda (328 KB) , spotlighted the paradox represented by both Africa’s deep sense of transnational solidarity and its frequent division and dysfunction. “This left Africa unable to articulate and advance our common interests,” he said, adding: “We ceded responsibility for our futures to others, not by force, but by default.” However, he emphasized that times are now changing rapidly, and Africa’s global position must also change.
He went on to say that the continent’s current trends are towards closer and more productive cooperation, both through the African Union and regional economic communities. Recalling that the former recently initiated major financial and institutional reforms, he said that practical results are already being seen. The African Union’s budget is 12 per cent lower than in 2017 and the share of funding supplied by its member States has increased substantially.
Early in 2018, the historic African Continental Free Trade Area was signed, representing the culmination of decades of effort, he continued. Once in force, Africa’s place in the global economic and trade architecture will be redefined. Economies of scale and higher levels of intra-African trade will help the continent attain the 17 Sustainable Development Goals by 2030. Underlining the importance of crucial developments in the Horn of Africa – where leaders have set aside decades of mistrust to work towards comprehensive settlements – he said the Security Council must work closely with the African Union to accompany that normalization process.
Turning to other situations on the continent, such as those in the Central African Republic, Libya, the Sahel region and South Sudan, he said Africa and the world should come together to harmonize overlapping initiatives and ensure that agreements are respected. African countries stand ready to embark on a new chapter of cooperation between the continent and the United Nations, based on the stable funding of African Union-mandated peace support operations. In that regard, he noted that a resolution slated to be introduced by Africa’s three present Security Council members enjoys the full backing of the African Union and will align with the Secretary-General’s new Action for Peacekeeping initiative.
“The dividend of a more focused and functional Africa benefits everyone,” he continued, emphasizing that against the backdrop of stronger partnerships the African Union’s representation at the United Nations must be accorded the same status and weight enjoyed by other major regional bodies. Making the United Nations relevant to all people requires a commitment to achieving real multilateralism where it has too often been lacking. Indeed, the current two-track system of global governance – in which a few define the norms by which others will be judged – is unsustainable. “Standards that do not apply to everyone, equally, are not universal,” he warned, adding: “Addressing this imbalance in the very foundation of our system is what will give shape to a revival of multilateral cooperation.”
pdf MUHAMMADU BUHARI, President of Nigeria (662 KB) , said Africans took pride in the way former United Nations Secretary-General Kofi Annan served humanity in an exemplary manner. The international community is witnessing positive results from bilateral and multilateral efforts to address conflicts and threats to world peace, he said, pointing to recent commitments by the United States and Democratic People’s Republic of Korea. However, other crises have deteriorated.
The international community must strengthen its resolve to combat ethnic and religious cleansing everywhere, including Myanmar, he said, where Rohingya refugees must be able to return to their homes with guarantees of security and citizenship. Carnage in Syria and Yemen continues unabated and he called for negotiated political solutions to those crises. The situation in the Middle East is worsening and the humanitarian crisis in Gaza is the result of unrestrained use of power. He reaffirmed support for a just two-State solution to the Israeli‑Palestinian crisis. Terrorist insurgencies continue to affect the Sahel and Lake Chad regions, increasingly fuelled by the international Jihadi movement.
He said irregular migration entails avoidable loss of lives and strains all countries affected by migration flows. He welcomed the successful conclusion of negotiations on the first-ever Global Compact for Safe, Orderly and Regular Migration and looked forward to its adoption later this year. Climate change is contributing to irregular migration and negatively impacting the livelihood of those around the Lake Chad region, leading to instability in the subregion.
Turning to corruption, he noted that illicit flows of funds across borders negatively impact the stability, peace and economic prospects of millions of people in developing countries. Corruption deprives Governments of resources to provide meaningful livelihoods to their populations. It is in the collective interest of all States to cooperate in tracking illicit financial flows, and investigate and prosecute corrupt individuals.
Stressing that current challenges can only be addressed through multilateral cooperation and concerted action, he reiterated the call for strengthening the United Nations and speeding reforms of the Security Council, with expanded membership in line with prevailing international consensus. Nigeria is mobilizing the human and material resources to achieve United Nations goals, including those outlined in the 2030 Agenda.
pdf MATAMELA CYRIL RAMAPHOSA, President of South Africa (426 KB) , said nearly a quarter of a century has elapsed since Nelson Mandela stood at the Assembly’s podium, declaring that millions of his people looked to the United Nations “to bring them a life worth living”. Asking if those hopes have been met, he said the Organization is still called upon to ask what it must do to achieve peace, reconciliation and stability around the globe. Welcoming the 24 September adoption of a political declaration marking 2019-2028 as the Nelson Mandela Decade of Peace, he said the Organization is obliged to truly become what the people of the world want it to be: A voice for all, including the poor and marginalized, around the globe.
“During the dark days of colonialism and apartheid, we drew strength, inspiration and encouragement from the United Nations,” he said. Today, he said, South Africa is making strides in dealing with apartheid’s ugly legacy, including undertaking reforms to ensure that land “belongs to all who work it” and attracting millions of dollars in foreign investment. As world leaders assemble today, they must commit to forging a more fair, equal United Nations that is better equipped to end the struggles against poverty and discrimination. Those challenges are most pronounced in Africa, which is “living in the age of youth” and bears a special responsibility to place young people and women at the centre of its affairs. “It is young people who are fighting the wars that we started” and women who bear the brunt of conflicts, he stressed, underlining the urgency of measures needed to end wars, death, destruction and human suffering.
Emphasizing that commitments to address terrorism and end protracted disputes must be coupled with resources and action, he spotlighted the long‑standing plights of the Palestinian people and Western Sahara, both of whom possess inalienable human rights. He also called for efforts to address youth unemployment and educational opportunities that are appropriate to the changing world of work. The potential of the digital revolution must be effectively harnessed to promote social justice as well as human progress, he stressed, also calling for stronger and more global institutions. Indeed, he said, the United Nations, the World Bank, the World Trade Organization (WTO) and others need to be revamped to better meet the needs of all peoples around the world. “We must resist any and all efforts to undermine the multilateral approach to trade” which is central to the global economy’s stability and predictability, he stressed, adding that history has demonstrated that no country can prosper alone.
Spotlighting the potential of the 2030 Agenda to tackle those challenges and “turn implementation into impact”, he said African nations are working more closely together to rid the continent of underdevelopment and conflict while promoting the rule of law and human rights. For example, he said, the recently agreed African Continental Free Trade Area will give rise to a new industrial age in the region. “Africa has the potential to be the next great frontier for global growth and development” with major investments in education, good governance, health care and large-scale industrial capacity aimed at lifting millions of people out of poverty. “The youth of Africa are poised to transform their continent,” he said, reiterating South Africa’s determination to always be a force for good, peace, development and progress around the globe.
pdf ARTHUR PETER MUTHARIKA, President of Malawi (188 KB) , urged the General Assembly to raise the flag of peace in honour of former Secretary-General Kofi Annan, asserting that peace must be guarded by all. The Assembly cannot stand proud while people around the world are forced to abandon their countries and while innocent children, women and men are being killed. Every human needs a home, every life is precious, he asserted, adding that there is a shared responsibility to seek and defend peace.
He said the relevance of the United Nations rests on its ability to satisfy the needs of people across the world, including Africans. Every nation is important and every nation has something to offer. However, those with more resources and power must step up and offer more. Global leadership must be defined in terms of global responsibility and Malawi is prepared to fulfil its responsibilities and obligations, he said.
He acknowledged the sacrifices being made by United Nations peacekeepers and expressed pride in Malawi’s active membership in peacekeeping operations, including ongoing efforts in the Democratic Republic of the Congo. He said Malawi supports United Nations efforts to galvanize international cooperation in promoting socioeconomic development and remains committed to the 2030 Agenda. The priorities of the United Nations are also Malawi’s priorities.
The plight of refugees and migrants is a concern to the people of Malawi, he said, expressing his belief in the collective responsibility to ensure the protection of refugees. Malawi is actively part of a United Nations initiative to develop a comprehensive refugee response framework to be rolled out within its national development strategy. Turning to climate change, he said its consequences are real, devastating and often tragic and urged all relevant actors to fight for the bending of the curve of carbon dioxide emissions by 2020.
He said Malawi is endeavouring to eliminate hunger and malnutrition by 2030 and that inclusive economic growth is essential to reducing poverty. Malawi’s economy has stabilized with inflation having been reduced from 24 per cent to the single digits and with its GDP expected to grow by 6 per cent in 2019. He said Malawi supports United Nations reform efforts, including the call for two permanent, veto-holding seats for African States in the Security Council. The United Nations cannot preach democracy while it itself is unrepresentative, he said, calling for the Organization to be relevant to all people.
pdf EDGAR CHAGWA LUNGU, President of Zambia (676 KB) , said little has changed in the African continent’s situation over the last seven decades. Today, however, the effective implementation of the 2030 Agenda and Agenda 2063 present huge opportunities for Africa to revitalize its growth and further accelerate its transformation, as both frameworks seek to achieve inclusive growth, sustainable development, peace and security. Noting that Zambia’s development path is guided by its “Vision 2030” plan – aimed at making it a prosperous middle-income country by that date – he said its successful implementation still faces many hurdles. Zambia’s economy, like those of many other developing countries, depends on commodities for economic growth and has not been spared by the negative impacts of their declining prices on the international market.
Reiterating Zambia’s determination to overcome those challenges by creating a more diversified and resilient economy driven – among other things – by agriculture, tourism and energy, he said robust infrastructure development, regional partnerships and conducive policy frameworks will also play critical roles. The country has mainstreamed the 2030 Agenda, Paris Agreement, Addis Ababa Action Agenda and Agenda 2063 into its national development plans and is focusing on such initiatives as road construction and rehabilitation; the expansion and construction of hydropower stations; the diversification of energy towards renewable sources including solar power; rehabilitating railways; and construction and modernization of airports.
Outlining some of the country’s important policy and structural reforms, he spotlighted the Economic Stabilization and Growth Programme, which improves domestic resource mobilization and modernizes revenue collection processes. Meanwhile, Zambia – mindful of the challenges in financing development as well as the declining resources and ODA being allocated to least developed nations and other countries in special situations – continues to call on all its partners to help it implement the Sustainable Development Goals. Expressing support for Council resolution 2378 (2017) on peacekeeping reform, he welcomed a stronger focus on mediation, ceasefire agreements and the monitoring and implementation of peace accords, and voiced support for the Secretary-General’s proposed Action for Peacekeeping initiative.
Zambia has increased the number of its troops in United Nations peacekeeping operations, including deployed women, he continued. In addition, his country recently took up the chairmanship of the Southern African Development Community (SADC) Organ on Politics, Defence and Security, a position it will hold until August 2019. Turning to gender equality and women’s empowerment, he underlined Zambia’s commitment to eliminating all forms of violence and discrimination against women and girls, noting that it implemented a “50‑50” school enrolment policy and in 2017 began distributing free sanitary towels to girls in rural and peri-urban areas to help them remain in school. Meanwhile, traditional leaders across the country have been helping to combat child marriage and forced marriage.
Noting that the world is witnessing a movement of migrants too vast for any one country to handle alone, he underlined the importance of collaborative efforts and stressed that – if well managed – migration has the potential to contribute to the socio-development of both origin and destination countries. Voicing support, in that respect, for the Global Compact for Migration, he also underscored the centrality of the principle of responsibility sharing for hosting and supporting the world’s refugees, while considering the differing capacities and resources of Member States. Expressing concern over the little progress made in reforming the Security Council, he reiterated the call for two permanent members representing Africa, declaring: “Not only is this a matter of common decency and correction of a historical injustice, but [also of] restoring the dignity of Africa.”
pdf ADAMA BARROW, President of the Gambia (563 KB) , said no country can thrive in isolation amid complex global multilateral challenges, with our salvation as human beings resting in strengthening multilateral institutions and greater international cooperation. “The UN uniquely provides the opportunity to achieve this goal,” he added. Noting the irony of underfunding the United Nations in that context, he called upon Member States to step up support.
Turning to his own country, he noted that after a difficult political impasse in 2016, the Gambia had restored democracy and the rule of law, completing its national electoral process and further pursuing institutional and electoral reforms. With Gambians yearning to oversee their destiny, the Government is implementing a national development plan (2018-2021) to transform the country through infrastructural development, agricultural transformation, macroeconomic stability, job creation and employment. Aiming to deliver “a fully transformed Gambia that has a future”, they have begun to harness information and communications technology (ICT) to catalyse modernization and youth empowerment. The plan is consistent with the 2030 Agenda and Agenda 2063 of the African Union.
Saying he recognized the “importance of a meaningful engagement with the Gambian diaspora – fondly referred to as ‘the eighth region of the Gambia’”, the strategy seeks to utilize the talents and resources of Gambians everywhere. In that regard, there has been a decrease in young people making dangerous journeys across the Mediterranean to Europe. Strongly urging incentivized intervention to curb youth migration, he looked forward to the high-level conference in Morocco to adopt a new Global Compact for Safe, Orderly and Regular Migration.
As a member of the Sahel, the Gambia fully supports implementation of the new United Nations Support Plan for the region, anchored in the United Nations integrated strategy for the Sahel. As the new strategy views the Sahel as a land of opportunity, not hopelessness, he sees it yielding important dividends for Africa, especially in peace, security and the elimination of terrorism. Aiming to “fulfil our aspiration of silencing the gun on the African continent by 2020”, he worried that United Nations peacekeeping missions will suffer from drastic budget cuts and lack of critical resources and called for appropriate reforms.
“As Africans, we must assume leadership for maintaining peace and security on our continent,” he said, commending Ethiopia and Eritrea for “extraordinary efforts” to bring peace to the Horn of Africa, and South Sudan for agreeing to restore peace and work for development. He called on Libya and the Central African Republic to intensify their efforts. Internationally, he affirmed support for the two-State solution for peace between the Palestinians and their neighbours, offered unconditional recognition of the One-China policy and recognized the support of Bangladesh in addressing the plight of Rohingya Muslims. As Chair of the next Organization of Islamic Cooperation (OIC) Summit, he said the Gambia will champion an accountability mechanism to “ensure that perpetrators of terrible crimes against the Rohingya Muslims are brought to book”.
FILIPE JACINTO NYUSI, President of Mozambique, acknowledged the role of the United Nations in promoting dialogue and solving conflict, as a forum for multilateral dialogue in globally assumed agendas. Saying “an unequal and fractured world requires multilateralism to address its gaps”, he cited the implementation of the Paris Agreement and efforts to eliminate nuclear weapons and to regulate migration. With the promotion of human rights, good governance and financing for development as key points, he called for support of the Secretary-General’s reform of the United Nations system so the Organization can be adequate to its purpose. Commending the Secretary-General’s inclusive approach, he said Member States must resolve differences for more effective cooperation.
Expressing deep concern for flashpoints and conflicts in Africa and the Middle East, he said Mozambique also follows tensions on the Korean Peninsula. Fighting recruitment and financing of terrorist groups will aid development. His country supports self-determination for Western Sahara and the two-State solution to resolve the Palestinian issue. Appealing for the normalization of relations between Cuba and the United States, he said that he is personally committed to the search for peace. In his own country, he started dialogue that led to consensus and approval of an amendment to the Constitution introducing an innovative approach to resolving conflicts, a milestone in the history of his nation, meaning the next elections will be held without armed parties. Those elections will prove Mozambique’s commitment to democracy, but the country still needs more assistance in disarmament and demobilization. While committed to peace, he resolves to continue the fight against organized crime which threatens development, aiming to neutralize criminals in the northern regions, as we cannot think about human rights when the very right to life is jeopardized.
Aligning his country’s national agenda with the 2030 Agenda, he said this will lead to a just, equitable society and broaden social justice in his nation, particularly for women and youth “and not leaving anyone behind”. Social justice requires gender equality, and his country has made significant strides in that domain, also prioritizing access to food, water, nutritional security and sanitation. Increasing productivity and livestock will also help achieve the Sustainable Development Goals. While stating that corruption remains a scourge, his Government has worked for good governance, strengthening institutions and respecting the separation of powers.
As one of the countries most exposed to the effects of climate change, he said Mozambique continues to take measures in accordance with the Paris Agreement, devoting 25 per cent of its territory to the conservation of biodiversity, developing renewable energies in rural areas and working to ensure the protection of ecosystems and sharing of benefits. Appealing for international cooperation in sharing technological means, and reiterating the unconditional commitment of his country to the critical role of the United Nations in solving humanity’s problems, he called for continuing to be “faithful” to those ideals.
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Africa must look to internal migration to boost development
Ahead of the Global Compact on Migration to be signed by leaders in December, UNCTAD hosted a high-level panel on migration and economic transformation in Africa during the United Nations General Assembly.
The economic benefits of managed migration in Africa were debated by ministers and diplomats at a special event co-organized by UNCTAD during the United Nations General Assembly in New York on 25 September.
Also organized by the Governments of Morocco and Rwanda, the High-Level Panel on Migration and Structural Transformation in Africa provided a platform to raise awareness and discuss maximizing the economic and development impact of migration on the world’s second most populous continent.
The debate took place as world leaders prepared to gather in Marrakesh, Morocco, in December to sign the landmark Global Compact for Safe, Orderly and Regular Migration.
Hosting the event, UNCTAD Secretary-General Mukhisa Kituyi said that for a long time the narrative on African migrants has been driven by fear, but UNCTAD concentrated on evidence-based discussion on the patterns of migration with analysis in the 2018 edition of its Economic Development in Africa Report.
“Contrary to media projections, the largest movement of African migrants is within Africa,” Dr. Kituyi said. “Migrants also make a very clear contribution to the economy of the country they move into.”
This contribution included labour productivity, economic growth and taxes, he said. They also contribute to their home countries through remittances and other trade connections.
Call for dialogue
“But it’s not good enough to celebrate what they are doing. What can we learn from this for policy? For example, we see that women migrants go through the most difficult, trying times, and they pay an inordinately high cost for remitting to their home countries.”
He called for a dialogue on how to lower such costs as an example of how to construct policies that can lower barriers for positive migration in Africa.
Joining the debate, the president of the 73rd session of the United Nations General Assembly, Fernanda María Espinosa Garcés, commended UNCTAD for its analysis and for inviting her to the meeting.
In looking at the positive narrative around intra-African migration, Ms. Espinosa Garcés highlighted the value of remittances “which dwarfs official development assistance to developing countries”.
“In Africa alone, remittance inflows grew by 11% in 2017 to $38 billion,” she said. However, the high costs of money transfer “inhibited” the benefits of remittances, she said, echoing Dr. Kituyi’s earlier point.
She also called for better data collection and capacity building to “harness the power of diasporas”, as well as expressing support for the “road to Marrakesh” leading to the global compact.
“Migration is about development. Migration is about economic growth. Migration is about human rights,” Ms. Espinosa Garcés concluded.
Partnership of equals
Federica Mogherini, High Representative of the European Union for Foreign Affairs and Security Policy and Vice-President of the European Commission, said she was grateful for the opportunity to “for helping us focus on the positive sides of migration”.
“We Europeans often forget our recent history. We forget that we used to be migrants not so long ago. European migration to the Americas, for example, made and still makes, our continents stronger,” she said.
“The same is true of migration today, and of migration inside Africa,” she said.
Ms. Mogherini called for a “political partnership of equals” between Africa and Europe in which each side listened to the other’s needs. “A stronger Africa makes a stronger Europe.”
The good, the bad and the starting point
Nasser Bourita, Minister for Foreign Affairs and Cooperation, Kingdom of Morocco, said that a better understanding of the facts of migration in Africa was needed to better devise policy solutions.
He said that, for example, only two African migrants in 10 moved in an irregular way. He also bust the myth that most African migrants left the continent when they moved.
“When Africa migrates, it stays in Africa,” he said.
Finally, he called for policies to make migration “a choice, not a necessity,” he said, reminding the meeting that “youth is the future of Africa”.
Retaining this young talent was the “starting point of structural transformation”, he said.
Rwanda’s Minister of Foreign Affairs, Cooperation and East African Community, Louise Mushikiwabo, thanked UNCTAD for “bringing the science” to the topic of intra-African migration.
“The good of migration must be highlighted and the bad of migration must be tackled urgently,” she said. “Get ready for a meaningful conversation about the good and the bad in Marrakesh later this year.”
Speakers from Canada, Spain, Malta, the United Kingdom, Norway, Senegal, Egypt, Angola and Gabon contributed to the discussion from the floor.
Representatives of the International Federation of Red Cross and Red Crescent Societies, the Office of the Special Adviser on Africa to the United Nations Secretary General, the Universal Postal Union, the International Organization for Migration, the Organisation for Economic Co-operation and Development, and the African Union also added their voices to the debate. Several non-governmental organizations also spoke.
Underlying causes
Pioneering work on the issue was at the heart of UNCTAD’s Economic Development Report in Africa 2018: Migration and Structural Transformation, speakers said.
On the one hand, well-managed migration can yield significant benefits for countries of origin and for destination states.
For example, 85% of the benefits of intra-African migration go to the host country, with the rest going back to origin countries in trade and remittances. In addition, most migration in Africa is not driven by distress, but by entrepreneurship.
On the other hand, mismanaged or unmanaged migration can have detrimental consequences for the welfare of states and migrants and generate security threats.
With Africa projected to be the region with the largest population growth by 2050, job creation has become a top political priority, the Economic Development in Africa Report says.
However, in the context of Africa’s regional and continental integration, vulnerability to low commodity prices and rising national unemployment threaten acceleration of the continent’s agenda for facilitating the mobility of persons.
Furthermore, drivers such as the depletion of environmental resources or disasters exacerbated by climate change, as well as conflicts and political crises, have gained prominence in the analysis of the underlying causes of migration patterns, the report says.
Migration milestones
The landmark Global Compact for Safe, Orderly and Regular Migration will represent an important milestone in the efforts to advance the implementation of the 2030 Agenda for Sustainable Development and meet the goals of the African Union’s Agenda 2063.
Earlier this year, African nations agreed to advance the African Continental Free Trade Agreement with 31 nations signing its Protocol on Free Movement of Persons, Right of Residence and Right of Establishment.
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tralac’s Daily News Selection
Profiled African trade and regional integration events now underway:
In Windhoek: preparatory meetings for the joint meeting of SADC Ministers responsible for ICT, Information, Transport and Meteorology
In Mauritius: 9th African Accreditation Cooperation General Assembly and Meetings
In Nairobi: Validation workshop for the draft EAC Regional Policy for Intellectual Property
In Lusaka: AU Trade and Industry workshop Strengthening regional trade policy dialogue platforms – exchanges of REC experiences. The keynote address was delivered by ATPC’s David Luke.
SACU and the AU both hosted two important discussions last week:
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The 36th SACU Council of Ministers took place on Friday in Windhoek, Namibia. The meeting was chaired by Dr Moeketsi Majoro, Minister of Finance of the Kingdom of Lesotho. It was preceded by the SACU Ministerial Task Team on Finance.
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The 10th AU Sub-Committee of Directors General of Customs meeting took place last week in Moroni, Comoros. The meeting ended with the pdf Moroni Declaration on Combating Corruption in Customs (104 KB) and the adoption of the AU Draft Trade Facilitation Strategy.
Profiled commentary, by Olusegun Obasanjo: West Africa’s failed war on drugs. “Earlier this month, the West Africa Commission on Drugs, which I chair, published the pdf Model Drug Law for West Africa (1.56 MB) , an online tool designed to help regional policymakers rewrite their drug-enforcement playbooks and deliver policies to protect the health and welfare of every citizen.”
African Union: pdf Post-harvest loss management strategy, August 2018 (1.67 MB)
Through a regional workshop held in Nairobi, in July 2018, experiences and knowledge were shared in the sphere of post-harvest loss activities by Kenya, Tanzania, Zambia and Zimbabwe. It is intended that the experiences of the country studies be scaled up, and that as more countries are studied, that additional knowledge and information will further bolster this strategy. Extract:
The document is structured into six parts. Part 1 has provided the background to the development of this strategy, and the concept of post-harvest loss management. Part 2 discusses the rationale for developing a continental level post-harvest strategy and its importance to the continent. Part 3 summarises the key strategic issues in post-harvest loss management at the national level in the five countries studied, namely, Ethiopia, Kenya, Tanzania, Zambia and Zimbabwe. Each of these country reports are presented in Annex 5 for detailed reading. Part 4 is the suggested post-harvest loss management strategic framework outlining the vision, goal and objectives of post-harvest loss management. Part 5 outlines indicative strategic interventions that the strategy proposes to implement. Part 6 outlines the strategy implementation framework. Part 7 outlines the monitoring and evaluation framework for the post-harvest loss management strategy.
Third AU-EU-UN Trilateral Meeting: joint communiqué
Extract: They agreed that it is imperative to put youth at the heart of their joint action, in order to respond to the challenges of tomorrow and to address the needs and hopes of the younger generations. The AU, EU, and UN, in collaboration with Member States, intend to enhance their cooperation to foster the employability of young people by investing in quality education and training and in matching skills with labour market needs; promoting the creation of sustainable and decent jobs through strategically targeted investments by the public and the private sectors with a focus on those with the highest potential for job creation; strengthening equal access to economic opportunities; and the inclusion of young people into political and economic decision-making and democratic institutions. [Related: Africa’s youth: access the presentations to the parallel session at the recent WIDER Development Conference; Akufo-Addo to EU: Let’s talk trade, not migration]
Bitcoin breakthrough? Japanese giant opens corridor to Africa (Forbes)
The Japanese money transfer giant SBI Remit is now letting nearly half a million customers send money to Africa using the bitcoin blockchain. Designed to be a faster, more reliable way to send money to Africa’s often overlooked markets, the new treasury management services are being provided by venture-backed firm BitPesa, which has raised $10m from Greycroft Partners and others to turn the bitcoin blockchain into an enterprise payment rail. Specifically, the partnership follows a path laid out by BitPesa in targeting cosmetics companies, electronics companies, and the lucrative used-car market between Japan and Africa. Further, the partnership enables direct currency pairs between Japanese yen and the fiat currencies of Ghana, Kenya, Morocco, Nigeria, Senegal, Tanzania, Uganda and the Democratic Republic of Congo.
COMESA: Trade experts propose sanctions on member states introducing new NTBs
The next summit of the COMESA Heads of State and Governments is likely to take a firmer stand on countries that introduce non-tariff barriers without notice. But this will depend on whether the leaders will adopt a raft of recommendations made by COMESA trade experts. In a recent meeting of the COMESA Trade and Customs Committee, the experts noted that elimination of NTBs has been a moving target. Yet Member States, upon signing the COMESA Treaty, committed themselves to the elimination of the NTBs. In their final report, the TCM stated: “COMESA needs to adopt a preventive approach in dealing with NTBs by imposing sanctions as may be appropriate against a Member State that do not provide notifications before introduction of NTBs.” The recommendation of the TCM will be presented for adoption to the Council of Ministers meeting scheduled to take place in the next two months. If adopted, Member States will be required to adhere to the NTB resolution time frames set out in the COMESA Regulations on Elimination of NTBs. This will ensure timely resolution of NTBs and enhance intra-regional trade. [Note: TCM report available here].
Nigerian traders protest closure of Nigerians’ businesses in Ghana (ThisDay)
The National Association of Nigerian Traders yesterday petitioned President Muhammadu Buhari, and ECOWAS, over the alleged closure of over 400 businesses owned by Nigerians in Ghana. It further gave a one-week ultimatum to the Commission to intervene in the matter, warning that the association would occupy the ECOWAS premises if the situation in Ghana was not addressed. President of NANT, Mr. Ken Ukaoha, said the development had reached a point where the Ghanaian parliament had passed legislation to make the business environment hostile to foreign investors. He argued that Ghana is currently a signatory to the ECOWAS protocol on free movement of goods and services, and needed to be called to order. He said ECOWAS President Jean-Claude Brou had also been petitioned over the development.
Ghana-Morocco Poultry Summit: Morocco to explore investment opportunities in Ghana’s poultry sector (GhanaWeb)
Ghana’s collapsing poultry industry is to see a revamp as the country welcomed some poultry operators and investors from Morocco. This assurance comes from the Agriculture Minister, Dr Owusu Afriyie Akoto, who witnessed the maiden Ghana-Morocco Poultry Summit in Accra. Currently, Ghana imports about 135 million tonnes of poultry on an annual basis. This trend could change as the Moroccan investors have been engaging with poultry operators in Ghana on best ways of injecting capital in the sector. The Ghana National Association of Poultry Farmers says local poultry farmers still incur losses as consumers choose cheap frozen chicken dumped on the market over the broilers produced in Ghana. The Association has estimated that over 135,000 metric tonnes of frozen chicken were imported from the European Zone to Ghana in 2017, a figure that represented 76% increase over 2016 imports. The government will not disclose by how much the frozen chicken importation, which was announced in March has been reduced. However, Minister of State at the Presidency in charge of Food and Agriculture, Dr Nurah Gyeile, recently disclosed on Accra-based 3FM that the importation has been reduced “to the barest minimum.”
Tanzania-Zambia currency agreement: BoT explains cross-border currency use reciprocity (IPPMedia)
The Bank of Tanzania and the Bank of Zambia have signed a contract to allow the use of their currencies in both countries specifically for towns around the border (Tunduma and Nakonde) to address challenges facing traders at the border points. BoT Governor Professor Florens Luoga said the agreement aims to remove currency challenges facing business people at the area. The procedure is not new to Tanzanians because it is also used in Namanga and in other border points, he pointed out, noting that the agreement was likely to help both countries obtain accurate financial data of economic significance. Songwe Regional Commissioner, Brig.Gen. Nicodemus Mwangela (rtd) said the two governments’ decision on reciprocal use of currencies will help to stimulate economic activities in the border zone.
Mozambique-China trade grew 45.13%, from January to July (Club of Mozambique)
Trade between China and Mozambique stood at $1.492bn (+45.13%) from January to July, with China selling goods worth $1.092bn (+51.93%) and buying goods worth $400m (+29.32%). Sino-Angolan trade amounted to $15.825bn (+18.28%), with Angola buying 0.6% less, or $1.241bn, and selling products worth $14.582bn (+20.23%).
Towards a leasing platform for African airlines: AfDB posts an EOI for preparation of a feasibility study
In 2018, the Bank adopted a framework and guidelines document for its support to the aviation sector in Africa. The African Development Bank is therefore seeking the services of a specialized firm with qualified professionals for the preparation of a feasibility study on the creation of a leasing platform for African airlines. The study will explore means and options for creating an efficient company that would strengthen and sustain the development of a viable airline industry in Africa. It should be detailed enough to address the feasibility and viability of such an initiative, the resulting benefits of an African aircraft leasing company for African carriers, the adequate legal and financial arrangements for such a company as well as the type of intervention/instrument that could be provided by the Bank in setting up this leasing company.
Tuesday’s Quick Links: UNCTAD’s flagship Trade and Development Report 2018: power, platforms and the free trade delusion, will be launched tomorrow Tanzania eyes 10% growth in tourist arrivals from India South Africa to relax visa rules to boost investment, tourism Namibia needs improved investment climate Nigeria: WCO workshop enhances AEO validation techniques Revisiting the Turkey, COMESA pact Zambia to host a regional office for the Sustainable Development Goals Centre for Africa High-Level Meeting on Financing the 2030 Agenda for Sustainable Development: Christine Lagarde’s keynote address; António Guterres: ‘Surge in financing’ needed to transform the world |