Search News Results
AU Sub-Committee of Directors General of Customs expresses commitment to combat corruption to effectively implement the AfCFTA
The Department of Trade and Industry of the African Union Commission, in partnership with Comoros Customs, organised the 10th AU Sub-Committee of Directors General of Customs Meeting from 17-21 September 2018 in Moroni under the theme, “Combatting Corruption in Customs to effectively implement the African Continental Free Trade Area (AfCFTA)”.
The objective of the Meeting was to take stock of the work carried out by the various Customs Technical Working Groups (TWGs) since the 9th Ordinary Session of the AU Directors General of Customs was held in Yaoundé, Cameroon in November 2017. The Directors General were also expected to consider the recommendations of the Experts and reflect further on the theme of the Meeting.
The Meeting was attended by Directors General of Customs from AU Member States, Customs Experts from the Regional Economic Communities (RECs), Experts from the United Nations of Trade and Development (UNCTAD, the Secretary General of the World Customs Organization (WCO) and the WCO Regional Offices for Capacity Building for Eastern and Southern Africa and for West and Central Africa. The Closing Ceremony of the Meeting was graced by the presence of H.E. Mr. Azali Assoumani, President of the Republic of Comoros, who took off some time from his busy schedule to meet with the participants.
While welcoming participants, Mr. Bianrifi Tharmidhi, Minister of Economy and Investments of the Government of the Union of Comoros, indicated that his country was privileged to host the 10th Edition of the African Union Sub-Committee of Directors General of Customs Meeting.
Mr. Tharmidhi expressed his gratitude to the African Union Commission for the choice of Comoros to host such an important high-level Meeting. He recalled the theme of the Meeting and commended Experts for their great work aiming to stamp out corruption in Customs administrations within the Continent.
The Honourable Minister indicated that his country fully supports the African Continental Free Trade Area (AfCFTA) and expressed the commitment of Comoros to ratify the Agreement by October this year. He urged Directors General of customs to find pathways to solutions that adequately will help combat Corruption in Customs and meet the needs of Integration of the people of Africa.
Addressing the Meeting, the Secretary General of the World Customs Organization (WCO), Dr. Kunio Mikuriya expressed his gratitude to the Comoros Authorities for their hospitality, the warm welcome and the political will symbolized by the presence of the President and two honourable Ministers at the Meeting, namely the Minister of Economy and Investments and the Minister of Finance and Budget.
He indicated that the WCO is fully supportive of the African Continental Free Trade Area (AfCFTA) which he said, will boost the Intra-African Trade and promote trade through Trade Facilitation and the improvement of customs procedures. “We are working with African Union Member States in order to develop a harmonized digital system that will create cooperation between Customs Administrations across the Continent,” he underscored.
Dr. Mikuriya also pointed out that tackling illicit trade through risk management is key in Boosting Intra-African Trade and mainstream African economies into the global system. In this respect, he mentioned that the use of digitization to analyse data would support African Union Member States and the Regional Economic Communities to fight illicit trade. Before he concluded, the Secretary General of the WCO insisted on the fact that Trade Facilitation is critical to combat financial flows, terrorism and fraud.
In his opening remarks, the Commissioner for Trade and Industry of the African Union Commission, H.E. Amb. Albert M. Muchanga appreciated the warmth and the hospitality of the Government and the People of Comoros. He congratulated the incoming bureau of the AU Sub-Committee of the Directors General of Customs under the Leadership of Mr. Kamalidini Souef, Director General of Comoros Customs and expressed his gratitude to the out-going bureau for the work they did during their tenure of office.
Recalling the theme of the Meeting, Commissioner Muchanga indicated that it is both timely and relevant. “It is timely because we have made significant strides in bringing into legal existence and operation, the African Continental Free Trade Area whose Agreement was signed on 21st March this year in Kigali, Rwanda. The theme is relevant because it resonates well with the African Union’s theme for 2018,” he explained.
The Commissioner for Trade and Industry pointed out that the adoption of the theme by the AU Assembly shows the strong commitment of the political leaders to bring to an end this scourge that undermines sovereignty, democracy, governance, progress and dignity.
“In my view, it will be difficult for the AfCFTA to achieve its intended objectives if we do not change the way we are doing business in combatting corruption in our institutions, including African Customs administrations,” he underlined.
According to the Commissioner, corruption violates human rights, undermines sustainable development and fuels social exclusion. In some countries, he said, there is also the danger of corrupt elements capturing State institutions and creating shadow and shadowy governments that serve their interests at the expense of the public good.
Ambassador Muchanga indicated that digitalization of payments systems of African Customs administrations would greatly help in this connection. He urged participants to be in the frontline of developing electronic payments systems in their respective Customs administrations.
“Through the AfCFTA, we are creating a new and promising future for Africa. To succeed in this historic task, integrity; among other values and capabilities, matters,” he concluded.
In his remarks, the President of the Republic of Comoros, H. E. Mr. Azali Assoumani, expressed his gratitude to the African Union Commission and its Chairperson, H.E. Mr. Moussa Faki Mahamat for choosing Comoros to host the Meeting. He articulated his concern about Corruption which he said, is the scourge that strikes the world.
“Corruption is a genuine gangrene for development, a brake to self-fulfilment, a real poison for the emancipation and well-being of our populations, especially when it is trivialized and unfortunately integrated into our way of life. Corruption scares away investment, tarnishes the confidence of development partners and has a lasting impact on the country’s image,” he indicated.
The Head of State and Government added that he remains convinced that the task is immense and that the road will be long to eradicate this scourge that undermines Africa. He urged African leaders to take responsibility for its eradication.
“Our continent is unfortunately indexed as one of the most corrupt regions in the world. It is then our responsibility, we as government authorities, to be vigilant and ruthless, rigorous and inflexible in the hunt for any form of corruption,” he stressed. According to President Azali, African people would not appreciate if those who abuse their powers for personal gain, those who seek ease and comfort in corruption are left with impunity.
“The meagre resources of our countries and our limited finances cannot benefit some and leave the sovereign people behind,” he emphasized. The President also pointed out that customs are often singled out because they are the cornerstone of the stability of any country. “I know that effective measures are being taken, including digitalization, the strengthening of moral and professional ethics to mitigate the impact of this scourge in customs,” he concluded.
The 10th AU Sub-Committee of Directors General of Customs ended with a Moroni Declaration on Combating Corruption in Customs and the adoption of the AU Draft Trade Facilitation Strategy. Directors General of Customs undertook, among others, to support all initiatives aimed at eradicating corruption on the Continent. They also agreed to reinforce their internal mechanisms for combating corruption based on “Zero Tolerance”.
Related News
African Union, European Union, United Nations leaders meet in New York
Joint Communiqué: Third African Union-European Union-United Nations Trilateral Meeting
-
The Chairperson of the African Union Commission Moussa Faki Mahamat, the President of the European Commission Jean-Claude Juncker and the Secretary-General of the United Nations António Guterres, met on 23 September 2018 at United Nations Headquarters in New York in the margins of the United Nations General Assembly. They were accompanied by senior officials from the three organisations, including Vice President/High Representative Federica Mogherini, Commissioner for Peace and Security Smail Chergui, Commissioner for Political Affairs Minata Samate Cessouma and Deputy Secretary-General Amina J. Mohammed. They discussed the ongoing cooperation between the three organisations and ways to better coordinate efforts in addressing global challenges. They concurred that peace, security and stability are paramount not only to ensure decent living conditions for all citizens, but also to attract investments necessary for sustainable and inclusive growth.
-
The leaders reaffirmed their joint commitment to promote an effective multilateral system and expressed their readiness to take further action towards reinforcing synergies and coordination in tackling global challenges through international cooperation. They underscored the positive developments noted in several areas, including the increasing economic integration in Africa and the solid steps taken by the African Union towards self-reliance. Building on this positive momentum of the innovative trilateral cooperation, the AU, EU and UN intend to increase their coordination and cooperation at political, economic and operational levels on a range of issues notably in the area of peace and security, including conflict prevention and mediation; implementing the 2030 Agenda for Sustainable Development and the African Union’s Agenda 2063; inclusive and sustainable growth, human rights and climate change, as well as support to the implementation of AU and UN reforms.
-
They welcomed the cooperation and the results achieved by the AU-EU-UN Taskforce to address the Migrant Situation in Libya, launched in Abidjan in November 2017. They particularly noted the progress made in the protection of migrants and refugees, the voluntary return of close to 30,000 migrants since then, and the reintegration process. They encouraged further efforts to dismantle trafficking and criminal networks.
-
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. These efforts are in line with the aspirations of the three organisations, including as noted by the 5th AU-EU summit theme “Investing in Youth for Accelerated Inclusive Growth and Sustainable Development”. Efforts made by the three organisations to reinforce the link between Peace and Education – as a key tool to prevent violent extremism, teach and nurture compassion, empathy for others, and learning to live together – were also highlighted.
-
They also stressed the importance of initiatives aiming at supporting women’s meaningful participation and leadership in political and peace processes, as well as peacebuilding activities. They particularly noted the progress made by the ”FemWise-Africa” Network of African Women in Conflict Prevention and Mediation as well as the Africa Women Leaders Network in this regard.
-
The three organisations will continue to work closely together in support of the Sahel countries, in line with their respective strategies. Similarly, they intend to engage partners and mobilise resources in support of the long-term stabilization of the Sahel region. In this regard, they will pursue their joint efforts alongside the G5 Sahel, ECOWAS and other sub-regional entities. In addition, they will continue to work in accordance with relevant African Union Peace and Security Council decisions, European Union Council conclusions and United Nations Security Council resolutions towards the full operationalization of the G5 Sahel Joint Force.
-
Addressing specific country situations and building on their respective contributions and comparative advantages the three organisations intend to continue to actively engage in support of the stabilization of Mali, including through the full implementation of the Algiers agreement on peace and reconciliation. Furthermore, the three organisations will also strive to act in a concerted manner to help address complex political situations and support democratic processes. Given the importance of the stability of the Democratic Republic of Congo (DRC) for the entire region the three organisations remain committed to supporting credible, peaceful, inclusive and transparent elections by the end of 2018. Already present side by side in various situations on the continent, they intend to enhance joint efforts to support the overall political process and implementation of the Transition Plan in Somalia, and build up frameworks for joint engagement in the Central African Republic. On Libya, they extensively discussed the worrying prevailing situation on the ground. They agreed to work in close cooperation with the Libyan actors on the principle of the organization of a peace and reconciliation conference as a prelude to the conduct of peaceful and transparent legislative and presidential elections.
-
The leaders acknowledged the important role played by peace operations mandated or authorised by the African Union and confirmed their resolve to enhance collaboration, coordination and planning between their respective missions and operations, while recognising the need for a clear delineation of roles and enhanced complementarity between their efforts. They underscored the importance of ensuring all peace missions and operations are compliant with the relevant international human rights standards and principles, and, where applicable, with international humanitarian law. They intend to join efforts to establish the relevant compliance frameworks.
-
They intend to pursue together the reflection on how to ensure the predictability, sustainability and flexibility of financing for African Union-led peace support operations authorized by the Security Council and under the Security Council’s authority consistent with Chapter VIII of the UN Charter.
-
Meetings between the leaders are envisaged at least once a year, to take stock of progress and provide guidance on further areas for cooperation.
Joint Statement: African Union-United Nations in the margins of the seventy-third session of the United Nations General Assembly
-
The Chairperson of the African Union Commission, Moussa Faki Mahamat, and the Secretary-General of the United Nations, António Guterres, met today [23 September] in New York in the margins of the seventy-third session of the United Nations General Assembly.
-
They discussed issues central to the strategic partnership between the African Union and the United Nations, in line with the two joint frameworks they signed in 2017 and 2018 on peace, security and development.
-
They renewed their commitment to work closely together to support an effective multilateral global system and to advance peace, sustainable development and human rights in Africa.
-
They exchanged views on the ongoing reforms in the African Union and United Nations, aimed at making the Organizations more effective and efficient.
-
The Secretary-General commended the African Union and its Member States for the highest level of contributions reached by the AU Peace Fund since its creation in 1993. In this regard, both leaders advocated for the urgent need to secure predictable and sustainable financing for African Union-led Peace Support Operations authorized by the Security Council.
-
The Secretary-General thanked the African Union and its Member States for the wide support to the Action for Peacekeeping Agenda, which calls for collective and strategic-level commitments to address the political and operational challenges facing peacekeeping today.
-
The two leaders stressed the priority of both Organisations to prevent violent extremism and terrorism and discussed the efforts of both Organisations to further strengthen capabilities to support more effective engagement in the prevention, management and resolution of conflicts, including through specialized mediation support.
-
They praised the leaders of the Horn of Africa countries for their leadership and commitment to advancing peace and reconciliation in the region, and renewed their offer to support their efforts as needed. They also welcomed the signing of the Revitalized Agreement on the Resolution of the Conflict in South Sudan and called upon all parties to work in good faith and demonstrate their commitment to fully and expeditiously implement it.
-
They discussed other situations, including in the Central African Republic, the Democratic Republic of the Congo, Libya, Mali and the Sahel. On the situation in the Central African Republic, they welcomed the progress made in the peace process and underlined the need to strengthen it within the framework of the African Initiative for Peace and Reconciliation.
-
On the Democratic Republic of the Congo, they took note of progress made by the Congolese Government in preparations for the holding of presidential and legislative elections on 23 December 2018. Given the importance of the stability of the Region as a whole, the two Organisations reaffirmed their commitment to support free and fair and inclusive, peaceful and credible elections towards the end of 2018.
-
On Libya, they extensively discussed the worrying prevailing situation on the ground. They agreed to work in close cooperation with the Libyan actors on the principle of the organization of a peace and reconciliation conference as a prelude to the conduct of peaceful and transparent legislative and presidential elections.
-
On Mali and the Sahel, they discussed the growing insecurity in the region and agreed on the need to ensure complementarity of efforts by the two Organizations. They welcomed the efforts of the UN System in better addressing the humanitarian-development-peace nexus through the recalibration of the UN Integrated Strategy for the Sahel, the international framework guiding the international response, as well as the UN Support Plan aimed at boosting its implementation and fostering greater impact. They encouraged further cooperation and alignment between the AU and the UN strategies in the Sahel.
-
The two leaders highlighted the importance of implementing the two pivotal intergovernmental agreements, the 2030 Agenda for Sustainable Development and Agenda 2063: The Africa We Want. In this context, they stressed the importance of empowering women and youth as agents of change and custodians of peace in Africa, and encouraged more integrated approaches, encompassing security, humanitarian assistance, climate action, human rights, and sustainable development to address the root causes of conflict. They noted that the joint AU-UN visit to Chad, Niger and South Sudan had enabled the advancement of the Women, Peace and Security agenda. They also exchanged views on the preparations for the Climate Summit to be held in New York in 2019.
Related News
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 the 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.
Article 49 of the Treaty stipulates: ‘except as may be provided for or permitted by the Treaty, each of the Member States undertakes to remove immediately upon the entry into force of this Treaty, all the then existing non-tariff barriers to the import into that Member State of goods originating in the other Member States and thereafter refrain from imposing any further restrictions or prohibitions.’
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 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.
In the tripartite region that brings together COMESA, the East African Community and the Southern Africa Development Community, a total of 612 NTBs have been reported since 2008 out of which 532 has been resolved. Of the 80 NTBs still outstanding on 30 are among SADC Member States, 43 among EAC Partner States and seven among COMESA Member States.
Countries that are affected by unresolved NTBs include Egypt, Eswatini, DR Congo, Kenya, Mauritius, Sudan, Zambia and Zimbabwe. However, most of the these NTBs are being addressed bilaterally with technical assistance from the COMESA Secretariat.
On another note, the committee urged COMESA Member States to accept Certificates of Conformity issued by local authorities regarding quality standards for export products.
Click here to download COMESA documents and trade-related resources.
Related News
tralac’s Daily News Selection
The ATPC’s David Luke: The ECA has received requests from a dozen countries and/or RECs for support in developing an AfCFTA country strategy
Potential of manufacturing and industrialization in Africa: trends, opportunities, and strategies (Brookings)
By 2030, business-to-business spending in manufacturing in Africa is projected to reach $666.3bn, $201.28bn more than in 2015. This report discussed the evolution and prospects of manufacturing and industrialization in Africa. It ultimately offers business leaders an overview of Africa’s biggest opportunities in the manufacturing sector, discussing trends, drivers, perspectives, and strategies for effective investment by 2030. It provides policymakers with some options likely to attract private investors, accelerate manufacturing and industrial development, and contribute to growth and poverty alleviation, facilitating the fulfillment of the Sustainable Development Goals and the African Union’s Agenda 2063. While policy solutions are likely to differ across countries, manufacturing and industrial development will be central to Africa’s ability to meet its development goals. Extract (pdf):
In order to compare and highlight some specific manufacturing investment opportunities, we first provide an overview of the 10 largest manufacturing markets in Africa — in terms of the current value of manufacturing output — across key indicators of market competitiveness. Figure 8 compares countries’ scores for the pay versus productivity of the labor force, quality of electricity supply, and quality of transport infrastructure, which is an average of the individual scores for the quality of roads, railroads, ports, and air transport infrastructure. Not surprisingly, those countries that score best across all three variables are also those with the largest and most well developed manufacturing sectors to date, namelySouth Africa, Egypt, Tunisia, Morocco, and Kenya. At the same time, though, several frontier markets exhibit strong foundations for manufacturing investment, especially in terms of the value of the workforce. Using these data, we classify country cases in terms of the relative size of the manufacturing market and its competitiveness. The threshold for the size of the manufacturing market is drawn at about $10bn in annual output, while countries are considered to have highly competitive markets for investment if the average score across the three indicators summarized in Figure 8 is greater than or equal to three. The two-by-two categorization of these 10 countries is provided in Table 2. In the subsequent discussion, we select one country from each box - specifically, Morocco, Kenya, Zambia, and Nigeria - in order to discuss specific opportunities for investment in light of the unique structural and policy-related dynamics of each case. [The authors: Landry Signé, Chelsea Johnson]
IAPH’s Abuja conference sets pan-African ports agenda: download the 20 presentations. Extracts from the IAPH communique:
Connectivity for economic growth, expansion and integration should be viewed from the perspective of domestic, sub-regional, continental and international trade domain; To overcome the cumbersome and difficult experiences on intra-Africa trade route, occasioned by heavy infrastructural deficit and unfriendly border post procedures, there is need for Ministerial/ inter-Government collaborations across sub and regional levels; African countries need to leverage on the support platforms provided by international bodies such as the IMO, WTO, UNCTAD, ACMA and others to build technical, financial and operational competence and capacity to raise standards and efficiency levels.
There is the need for sustained promotion of the ideals/ objectives of Corridor Management Institutions as promoted by ACMA; Need to consider measures aimed at sustainable environmental protection as the ports and transportation network develop in response to increasing demands of logistics, connectivity and regional integration; Countries need to look into the possibilities of partnering to develop regional deep-sea ports; The need for cooperation and synergy between littoral ports and dry ports in the African region to improve hinterland connectivity;
African medicines regulatory harmonization: Implementation Completion Report Review (World Bank)
Country updates:
Lesotho: AfDB posts an EOI for a feasibility study for a Special Economic Zone
The consulting firm will be expected to conduct a detailed literature review of previous studies on SEZs. They will also assess the status of industrial infrastructure development in Lesotho and the current infrastructure supply gap as well as conducting a review of the other eight industrial estates/parks in Lesotho, and the legal, regulatory and policy gaps for the development of SEZ in Lesotho based on lessons learned with SEZ-like programs within Lesotho and experience from Africa and Asia. Based on the assessment, the team will recommend a suitable park or SEZ to support diversification into agro industry and non-apparel manufacturing. [FinMark Trust: Mapping financial access points in Lesotho]
Kenya Revenue Authority: Imported plastic rice is raising concern (The Star)
Plastic rice from China is slowly finding its way into the country, an agency set up to fight counterfeits told a Senate committee yesterday. The senate committee for trade is set to place a ban on importation of food items following a report of re-emergence of plastic rice in Nairobi’s hotels. Senate Trade and Industrialisation committee chairman Charles Kibiru said the committee will recommend for restriction on all imported food items including fish, rice and sugar. “The ban will block all food entering the country and only have importation when there is an emergency on food security or a deficit. This will also have to go through the Parliament,” Kibiru said. [Ghana: Revenue Authority warns against importation of rice through inland borders]
Nigeria: FG to establish export trading company, says NEPC (The Guardian)
The Federal Government has unveiled plans to create an export trading company to replace the defunct commodity boards, to aggregate main agricultural produce such as palm oil, cocoa, cashew, groundnut, as well as semi-finished and finished products. Executive director of the Nigerian Export Promotion Council, Segun Awolowo, disclosed this while delivering a lecture on ‘Nigeria export trade: focusing on the chains and regulations’ organised by the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture in Lagos, yesterday. The council said the proposed corporation, to be co-funded with private operators, would serve as a clearing house for commodity off-taking, quality control, price stabilisation and supply network for international and local industries. The Structural Adjustment Programme of the IMF, introduced by the Ibrahim Babangida-led military regime in 1986, suspended all commodity boards, leading to unorganised commodity aggregation and fluctuating prices and supplies. [Standards Organisation of Nigeria reviews standards to revive ailing paper industry]
Nigeria: State of States 2018 (pdf, BudgIT)
Lagos dropped from 2nd to 4th place on the Fiscal Sustainability Index notwithstanding the state’s fiscal advantage. Lagos’ Internally Generated Revenue (IGR), when compared with other states, is relatively high. Her IGR as at the end of 2016 was N287bn; higher than its 2015 level of N268.2bn. In 2017, the state planned a recurrent expenditure spending of N305bn or N25bn monthly. With its IGR not expected to grow significantly above N300bn, and its share of FAAC revenue in the first six months of 2017 at N6.6bn, Lagos is expected to meet its recurrent expenditure obligations. However, Lagos’ unusually high overhead costs and debts continue to weigh its revenue down. While the fiscal structure of states has improved on the back of increasing oil revenue, state governments need to tremendously embrace a high level of transparency and accountability, develop workable economic plans, take haircuts—especially on overheads—expand their IGR base and cut down on debt accumulation. [Nigeria: IMF harps on structural reforms, non-oil revenue mobilization]
Nigeria’s gas pipeline: NNPC negotiating with Chinese lenders (Punch)
The Nigerian National Petroleum Corporation says it is concluding negotiations on terms of funding and payback structure for the Ajaokuta-Kaduna-Kano gas pipeline project with Chinese lenders. The 40-inch x 614km AKK gas pipeline is expected to cost about $2.8bn. While 85% of the money is expected to be provided by the financiers, including Industrial and Commercial Bank of China, Bank of China and Infrastructure Bank of China with Sinosure, the remaining 15% will be provided by the contractors, which include Oilserve/Oando consortium and Brentex/China Petroleum Pipeline Bureau consortium. The AKK pipeline is designed to enable gas connectivity between the East, West and North, which is currently inadequate.
Rwanda: Agricultural exports grow by 44% to over Rwf447b (New Times)
Measuring India’s economy using PPPs shows it surpassed France 25 years ago (World Bank)
Earlier this summer, new data published by the World Bank showed that the GDP of India had recently surpassed that of France, and that it was on track to overtake the UK economy too. Many news outlets jumped upon this new ranking of India’s economy, now sixth from top. But most media articles did not mention that the World Bank’s other measure, which compares GDP across countries using purchasing power parities , has placed India ahead of both France and the UK for the last 25 years. [WBG Board endorses new India Country Partnership Framework]
Globally, youth are the largest poverty-stricken group, says new UN report
The new figures in the 2018 global Multidimensional Poverty Index show that in 104 primarily low- and middle-income countries, 662 million children are considered poor according to multiple different indicators. In 35 of these countries. Children account for at least 50% of the total. The 2018 MPI, produced by UNDP and the University of Oxford’s Poverty and Human Development Initiative, provides the most comprehensive view of the many ways in which 1.3 billion people worldwide experience poverty in their daily lives.
Friday’s Quick Links: ICAEW Economic Insight: Africa (with a focus on Ghana, Uganda) Bright Simons: The danger of the innovation narrative becoming a distraction in Africa Blockchain in Africa: a Q & A with John Kamara South Africa: Statement by President Cyril Ramaphosa on economic stimulus and recovery plan South Africa: PIC makes $100m equity investment in Afreximbank (pdf) Zambia assumes Chairpersonship of SADC Organ on Politics, Defence and Security Cooperation ECOWAS calls for increased coordination to address security and developmental challenges in Sahel region Does premature deindustrialization matter? The role of manufacturing versus services in development |
Related News
AfCFTA will spur Africa’s industrialization and economic development, says ECA’s David Luke
The African Continental Free Trade Area (AfCFTA) is a tool that countries can use to create opportunities for African businesses and through them drive the continent’s industriali-zation, economic diversification and development, says David Luke, Coordinator of the Africa Trade Policy Centre (ATPC) at the Economic Commission for Africa (ECA).
In a presentation at the on-going 24th Session of the Inter-Governmental Committee of Experts (ICE) of Southern Africa in Mauritius, Mr. Luke said the AfCFTA, which has been signed by 49 of the 54 African countries and ratified by seven so far, will reduce trade costs and facilitate business expansion and in the process provide great opportunities for African businesses to gain from, and contribute to Africa’s rapid market growth.
“The AfCFTA helps promote the type of trade that produces sustainable growth, creates jobs for Africa’s youth, and establishes opportunities for nurturing Africa’s businesses and entrepreneurs,” he said.
“It will have only a small impact on tariff revenues while helping to restructure African economies to deliver a more sustainable fiscal base. This is because the AfCFTA helps to pivot Africa’s trade away from extractive exports towards more sustainable and inclusive trade that is less dependent on the fluctuations of commodity prices.”
Mr. Luke said in an era of increasingly unreliable aid receipts, and the growing importance of domestic resource mobilization, the AfCFTA provided a route towards more sustainable government revenues.
Africa faces a changing world trading landscape with many evolving external challenges, he said, adding the AfCFTA, against this, could serve as a platform for African trade policy coherence providing Africa with the strengthened voice of 1.2 billion people in future negotiations, fostering a common position on evolving trade policy issues, and ensuring that individual bilateral arrangements do not unravel the objectives of continental integration.
The ATPC Chief said to fully utilize the opportunities of the AfCFTA, each country is recommended to develop an AfCFTA strategy which is complementary to their broader trade policies and identifies key trade opportunities, current constraints and steps required to take full advantage of the continental African market. Such strategies could speak to the African Union’s Boosting Intra-African Trade Action Plan, he added.
The ECA has already received a dozen country and REC requests for support for developing such strategies.
“The AfCFTA presents an opportunity to leverage trade for structural transformation, economic growth and job creation in Africa. This is because intra-African trade, which is promoted by the AfCFTA has a stronger impact on development than other types of trade,” Mr. Luke said.
The ECA estimates that all African countries will experience welfare gains once the AfCFTA becomes operational; more industrialized countries will be well placed for manufactured goods; there will be opportunities for satisfying Africa’s growing food security requirements; land-locked gain from trade facilitation, transit and customs cooperation, among other gains.
“African businesses have had their interests piqued, political leadership at the highest level is committed, and the world is watching,” said Mr. Luke, adding policymakers must see through momentum with prompt ratification of the AfCFTA.
The AfCFTA will officially come into force once at least 22 countries have ratified the agreement, potentially making the continent the largest trading bloc in the world.
Related News
IAPH regional conference sets pan-African ports agenda
From 17-19 September 2018, International Association for Ports and Harbours (IAPH) Vice-President in Africa, Mrs. Hadiza Bala Usman, hosted the first regional conference under the new IAPH constitution.
Held in Abuja, Nigeria, in the presence of the President of the Federal Republic of Nigeria and representatives of IMO, UNCTAD and the World Bank, the successful three-day conference focused on hinterland connectivity of African ports.
The event concluded with a highly attended Regional Meeting, during which VP Bala Usman and IAPH Managing Director Patrick Verhoeven interacted with present and potential African members. The meeting proposed to develop a strategic pan-African ports agenda under the World Ports Sustainability Program, outlining priority actions on infrastructure, operations and governance.
Presentations are available for downloading from the conference website.
Improved port infrastructure – pivotal to African economic growth
The President of the Federal Republic of Nigeria, President Muhammadu Buhari, advocated for the effective deployment of improved port infrastructure across all countries within the continent in order to maximize maritime potentials within the territory.
Addressing participants at the Conference, Buhari submitted that the linkage of port operation to the hinterland by multi modal transport techniques would result in the commendable economic growth and improved standard of living of the people. He therefore charged participants to synergize and collaborate with one another.
According to the President, this inter-connectivity would infer in great enabling environment and frontier for competitive edges if well managed. He added that the availability of standard rail lines and effective road networks amongst others would result in plausible African prosperity across board: “The same level of serious attention is being given the improved road infrastructure”.
“At the moment, 25 major highways and 44 roads are under construction across six geopolitical zones of the country just as we have insisted on the stimulation of activities on the inland waterways.”
The President said that as part of the economic recovery growth plan of the government, the ease of doing business would help drive trade facilitation both in the nation, across Africa and by implication the world at large.
In his address, the Honourable Minister of Transportation, Rotimi Chibuike Amaechi urged participants at the Conference to optimize their comparative advantages in order to improve the welfare of the people.
He stated that Government is committed to the deployment of multi transportation modes of operation in the sector, by way of improved rail services and other supply chains to the Hinterland.
“With the development of the inland dry port in Kano and Kaduna, with the direct rail connection also, cargoes and containers are easily transported to Northern Nigeria... We are partnering with the government of Niger Republic in the construction of Maradi from Kano to promote regional motivation of trade and inter connectivity”.
Speaking at the Conference, the African Regional Vice President (IAPH), Hadiza Bala Usman who also is the Managing Director of the Nigerian Ports Authority (NPA) said that Africa definitely has a place of pride amidst the fact that 39 out of the 54 countries in the continent are endowed with littoral assets calling for optimal exploitation of these vast maritime dividends.
The NPA MD enjoined operators within the continent to imbibe best practices in the areas of speed of operation in service delivery as well as adopting of new techniques amongst others reiterated that IAPH from inception had helped promote port development across the world through Synergy and Collaboration for efficient and effective port operations and shipping activities.
Similarly, she stressed that members of the Association leverage on one another’s technical expertise in line with best practices pointing out that the use of barges, inland water ways, the efficient utilization of dry ports and the deployment of pipelines for the evacuation of cargoes across African ports and indeed the world over is the route to go should we want to compare within the comity of Nations.
Hadiza said: “Organizations like the World Trade Organization (WTO), The International Maritime Organization (IMO) and United Nations Conference on Trade and Development UNCTAD are here to avail us the opportunity to latest global practice and environment that exists for the development of Ports in Africa.”
The Conference is a gathering of Technocrats, stakeholders and Operators in the world under one roof in attempt at proffering solutions to the many questions facing port operations globally but with specific consideration on matters concerning “Hinterland Connectivity”.
The Conference’s areas of discussion include: Prioritization of effective policies, funding, Infrastructural Upgrade, Administrative Excellence, Blue Economy and Regional Integration. Others areas of coverage include: Operational Efficiency, Digital Infusion and ICT utilization, Trade Facilitation, Capacity Building, Revenue Generation and other areas of Best practices as may echo during the conference.
Communiqué of the African Regional Conference of the International Association of Ports and Harbours (IAPH) in Abuja
Theme: African Ports & Hinterland Connectivity
Fundamental issues that arose from the Conference are:
-
Ports are strategic national assets;
-
For economies to grow in the right direction, there is need for investments in port and evacuation infrastructure to facilitate hinterland connectivity;
-
Connectivity for economic growth, expansion and integration should be viewed from the perspective of domestic, sub-regional, continental and international trade domain;
-
There is need to develop sustainable multi-modal transport linkages with emphasis on rail, inland waterways and pipeline infrastructure;
-
To overcome the cumbersome and difficult experiences on intra-Africa trade route occasioned by heavy infrastructural deficit and unfriendly border post procedures, there is need for Ministerial/ inter-Government collaborations across sub and regional levels;
-
African countries need to leverage on the support platforms provided by international bodies such as the IMO, WTO, UNCTAD, ACMA and others to build technical, financial and operational competence and capacity to raise standards and efficiency levels;
-
To encourage funding, port service providers are encouraged to form viable consortiums to provide the required size for credit guarantees;
-
Promotion of the use of ICDs and off-dock facilities as a measure of promoting hinterland connectivity;
-
African ports are encouraged to develop the right capacity to take investment opportunities in landlocked countries;
-
Need for African ports to adopt best practices in terms of human capacity and expertise;
-
Development of capacity building in ICT and port community systems to improve efficiency and reduce corruption;
-
Take advantage of opportunities afforded by infrastructural financial institutions such as AfDB, ADF and NTF to access funds required to address the menace of infrastructural deficits;
-
Need to operate within the prescription of the FAL convention to mitigate border post problems and associated delays and connectivity restrictions;
-
There is the need for sustained promotion of the ideals/ objectives of Corridor Management Institutions (CMIs) as promoted by ACMA;
-
Need to consider measures aimed at sustainable environmental protection as the ports and transportation network develop in response to increasing demands of logistics, connectivity and regional integration;
-
Need to build models that will domesticate environmental compliance processes with regard to the peculiarity of the African situation;
-
Need for African ports to develop capacities for standards that are comparable to global best practice;
-
Introduction and strengthening of private sector participation (PPP) to improve dilapidated port infrastructure and efficiency in port operations;
-
Creating awareness and taking measures to mitigate the negative effects of marine pollution and environmental degradation that could harm the population;
-
Motivating the ports to pursue agenda that will facilitate ISO compliance in line with current trend on standardization and best practices;
-
Countries need to look into the possibilities of partnering to develop regional deep-sea ports;
-
The need for cooperation and synergy between littoral ports and dry ports in the African region to improve hinterland connectivity;
-
The need to encourage women integration and capacity building in the maritime sector;
-
Giving incentives and prioritizing services rendered to dry ports to create volume traffic as seen in the case between Dakar Port Authority and Bamako Port in Mali;
-
Strengthening corporate social responsibilities between the ports and ports community through incentive packages that will make the communities ambassadors of ports
-
The president of Nigeria encouraged participants to see their participation as privileged and the need to serve their countries with optimum loyalty in ensuring they contribute their quota to trade facilitation and total integration of African economies.
Related News
Rwanda’s agricultural exports grow by 44% to over Rwf447b
Rwanda’s agricultural exports generated over $515.9 million (over Rwf447 billion) in a period of one year from July 2017 to June 2018, representing an increase of 44.73 per cent compared to $356.5 million (over Rwf316.8 billion) generated in the same period in 2016-2017.
According to statistics by the National Agriculture Exports Development Board (NAEB), non-traditional exports generated over $354.7 million (about Rwf307.5 billion) from July 2017 to June 2018, representing 59.97 per cent increase compared to $221.7 million (Rwf192.2 billion) that was generated from July 2016 to June 2017.
Non-traditional export commodities refer to commodities that were previously produced solely for domestic consumption and have recently debuted the export market.
These include fruits, vegetables, roots and tubers, legumes and cereals, meat, eggs and dairy products as well as live animals.
Total traditional exports – commodities that Rwanda is known to have been exporting over years – which are tea, coffee and pyrethrum provided $161.2 million in the 2017-2018 period compared to $134.7 million in the 2016-2017 period, an increase of 20 percent.
Garden Fresh’s Chief Commercial Officer, Marie Chantal Isugi, told The New Times that the efforts in export evolution is picking up pace.
For instance, the firm said that they have moved from exporting six tonnes of commodities per month in 2016 to up to 18 tonnes a week currently.
The firm said that to make the improvement, they have been involved in training farmers in horticulture farming and are working with about 500 smallholder farmers in the last farming season.
“Having farmers increasingly embrace horticulture crops is among the indicators that smallholder farmers understand the importance of growing vegetables as cash crops. They go beyond subsistence only,” she said.
She said, previously, people had commonly held belief that only coffee and tea qualify as cash crops and viable for export.
“Now, horticulture crops such as vegetables can be compared to coffee or tea in earning foreign revenues,” she said.
NAEB Communications Officer, Pie Ntwari, said that among the strategies to keep the momentum and further increase agricultural export revenues include expansion of production land and productivity per hectare; using quality inputs and value addition.
“NAEB will also continue to engage more investors in the sector, help farmers to be focus more in business oriented agriculture rather than traditional farming,” Ntwari said.
“We are going to add efforts in diversified products such as macadamia and avocados. This is in terms of expansion of production,” he said.
Vegetable oils amounting to 38.7 million kilogrammes in volume were exported generating over $38.3 million from 16.8 million kilogrammes exported in the 2016-2017 period.
Dairy exports also increased significantly as 17.5 million kilogrammes were exported generating some $20.6 million from 12 million kilogrammes that were exported and generated $13 million in 2016-2017.
The statistics show that production of tea from July 2017 to June 2018 period was over 30.5 million kilogrammes of which more than 27.8 million kilogrammes were exported, generating over $88 million in revenue.
Related News
tralac’s Daily News Selection
Women and African trade:
A set of postings, complementing tralac’s recent newsletter on the same theme
i) Why do gender issues matter in trade relations? How do trade policies affect women differently? How do we create trade policy that improves women’s lives? Find out more in tralac’s pdf Women in Trade FAQ (389 KB)
ii) UNCTAD online course on trade and gender devoted to SADC: registration details. This course (15 October - 9 December) targets academics (from universities and research centres), policymakers and representatives of civil society involved in research, teaching, policy formulation and implementation, advocacy or field work in the area of trade and gender. Qualified women candidates are particularly encouraged to apply. Applicants must hold a Master’s degree in Economics, Statistics, Agriculture Economics, Law, Political Science or related area, as well as working knowledge of English. The deadline for applications is 30 September 2018.
iii) Women in trade in East Africa: TradeMark East Africa posts an RFP. The RFP is for a needs assessment study to determine the information needs of women in trade across East Africa and how these challenges can be addressed using different options, including ICT.
iv) The launch of the West African Cross-Border Women Traders Association. The Nigeria chapter of the New Faces New Voices, an initiative of the Graca Machel Trust, in partnership with the United Parcel Service, the US-headquartered global logistics company, has commenced the implementation of the second of NFNV Nigeria’s “Raising Voices for Cross Border Traders in West Africa” project. The implementation began with a two-day regional roundtable with stakeholders on women cross-border trade in Dakar last week. Aishatu Debola Aminu said the project would develop a high level advocacy tool for presentation to the ECOWAS Heads of States and Governments on the need to formally mainstream women cross border traders into the economies of the sub-region.
Korkor Cudjoe: “During the first year of the project, we will identify viable products and markets to produce and market; we will then pilot a train-the-trainer model for 30 women who will subsequently train and mentor women cross border traders over a period of 9 months. We will then replicate the model in two other countries of the region during the second year and then conduct a Pan African expo to strengthen trade linkages and access new markets.”
Binta Ibrahim: “There is very minimal investment in the collection of informal cross-border trade in the ECOWAS region except for Ghana and Liberia. ICBT data is collected through various methods: border observation or monitoring, tracking and stock taking techniques. Therefore, we need to find a way to gather data to monitor relevant information towards achieving our objective.”
v) World Bank Africa Region: pdf Gender Action Plan FY18-22 (328 KB) This RGAP replaces the previous RGAP for FY13-17 and is especially timely given the launch of a new WBG gender strategy in FY16, the recent shift in how the WBG identifies country level priorities with the introduction of Systematic Country Diagnostics, and the change in the system that the Bank uses for monitoring gender integration in Bank operations. The new RGAP is also timely given the recent release of the Global GBV Task Force Report and associated Action Plan for Implementation, outlining recommendations to strengthen institutional tools, systems, and processes to prevent and mitigate the risks of sexual exploitation and abuse and other forms of gender-based violence in Bank-supported projects.
This RGAP starts from a discussion of five-well established priority thematic areas (section 2). While these areas provide a clear operational focus, there are emerging issues in the region for which there is a need to further strengthen the knowledge base. Section 3 discusses these frontier issues and how developing evidence can help lead to effective and scalable interventions. Section 4 provides the channels for implementing the plan and section 5 provides key indicators to monitor progress. The five thematic areas that have been identified as encompassing the most pressing gender issues in sub-Saharan Africa are: reproductive health and demographics; gender gaps in schooling and issues around adolescence; gender gaps in agricultural productivity; gender gaps in entrepreneurship and access to jobs; and gender constraints related to fragility, conflict, and violence. Frontier issues, where efforts will be focused on developing emerging evidence to fill knowledge gaps, include:
vi) EAC launches Gender Policy. The EAC Gender Policy, which was launched at the EAC Headquarters this week, has been developed to provide guidance on institutionalizing gender strategies in the EAC integration process, in addition to ensuring that the rights of women and men, boys and girls are promoted, protected and realised on an equal basis. The policy further aims at strengthening the mainstreaming of gender concerns in the planning and budgetary processes of all sectors in the EAC Organs, Institutions and Partner States. The Director of Social Sectors at the EAC Secretariat, Ms Mary Makoffu, said there was still misleading data and contradictions between targeted programme interventions and those incorporating gender perspectives across different sectors.
vii) African Women: Economic Futures. The African Women’s Development Fund convened a workshop (13-15 September, Accra) of a select group of activists, scholars, researchers and policy shapers to help build and think through a thoughtful, progressive and transformative vision for the future of women in African economies. The workshop forms part of a larger movement-building process and ongoing conversation and activism around African women’s economic transformation. Some of the questions that will anchor the conversations and creative construction are: [Download: pdf Futures Africa: trends for women by 2030 (768 KB) ]
viii) The raising voices for women cross-border traders in West Africa project: an interview with Korkor Cudjoe, women’s rights programme manager at the Graça Machel Trust
South African cities see improvements in ease of doing business: but pace of reforms is slow (World Bank)
pdf Doing Business in South Africa 2018 (11.90 MB) , the second in the subnational series on South Africa, analyzes business regulations for domestic small and medium enterprises in nine cities – Buffalo City, Cape Town, Ekurhuleni, eThekwini, Johannesburg, Mangaung, Msunduzi, Nelson Mandela Bay and Tshwane. They are assessed on five Doing Business areas: Dealing with Construction Permits, Getting Electricity, Registering Property, Enforcing Contracts and Trading Across Borders. In the area of Trading Across Borders, the report measures four of South Africa’s maritime ports – Cape Town, Durban, Ngqura, and Port Elizabeth. The report finds that in the three years since the last study, Cape Town, eThekwini, Johannesburg, Mangaung and Nelson Mandela Bay implemented reforms. Four of the reforms improved the conditions for businesses to obtain electricity, and one made it easier to transfer property. Although reforms have been few, where they were implemented, the results have been striking. Mangaung, for example, automated municipal processes that have halved the time needed to transfer property, from just over seven weeks to three weeks. As a result, Mangaung has moved from lowest performer in this area in 2015 to best performer now. [Download: pdf Launch presentation (1.58 MB) ]
WTO members review two regional trade agreements: Africa, the Caribbean and the EU
WTO members reviewed Seychelles’ accession to the SADC trade protocol and the economic partnership agreement between the European Union and Cariforum states at the 18 September meeting of the Committee on Regional Trade Agreements. Members welcomed progress being made in the economic integration of the African region. For Seychelles’ accession to the SADC trade protocol in 2015, the parties involved remarked that it will enhance trade in the region and lead to economic growth. Seychelles eliminated tariffs on 91.7% of its tariff lines for imports from other SADC members. By 2026, 97.5% of Seychelles’ tariffs will be liberalized. The other SADC parties will liberalize between 93.8% and 100% of their tariffs for imports from the Seychelles. A number of changes on rules of origin, sanitary and phytosanitary standards and provisions on technical barriers to trade have also been made to the SADC protocol which was considered in 2007 by the Committee. [Download: pdf Factual presentation – Accession of Seychelles to the SADC Trade Protocol (1.49 MB) ]
Mauritius set to become a sophisticated and attractive financial centre (GoM)
Prime Minister Jugnauth emphasised that in view of fulfilling the commitment to international organisations, Government has also brought changes to the legislative framework so as to combat money laundering and financing of terrorism. In this respect, Mauritius is currently conducting a national risk assessment of money laundering and terrorism financing. He said Mauritius, as a fully collaborative international financial centre of substance, has supported the implementation of best practices set up globally by recognised institutions. To this end, Mauritius has signed numerous agreements such as the OECD multilateral convention on mutual administrative assistance in tax matters and the intergovernmental agreement with the US for the implementation of Foreign Accounts Tax Compliance Act. He outlined that another key enabler for developing the financial services sector of Mauritius to its next level is innovation and in this respect, Government is providing new opportunities for private investment and job creation by accelerating the country’s move to an age of digitisation through Artificial Intelligence, blockchain technologies and FinTech.
Bangladesh: Enabling export diversification (World Bank)
Bangladesh’s export growth has been remarkable. Bangladesh aims to generate $54.1bn in export earnings by FY2020, a significant increase over the $35bn earned in FY2015-16. The leading sector, textiles and apparels, usually referred to as ready-made garments (RMG), has created 4 million jobs overall and accounts for 82% of Bangladesh’s exports. RMG exports have shown signs of deceleration in the recent past but the momentum has picked up in FY2018. At the same time, several other less dominant but promising sectors are showing a positive export growth trend and could possibly drive export diversification and job creation in the future. However, the composition of the export basket has not changed much over the past two decades. Bangladesh’s HHI (Herfindahl-Hirschmann Index), that measures the level of sectoral concentration in exports is about five times that of other export-driven economies such as Thailand, China and Vietnam. During the last two decades, Vietnam expanded its export basket from agriculture to include machinery, footwear and electronics through national-level strategies and policy reforms to support specific sectors. However, Bangladesh continues to be primarily an RMG exporter. [Related Bangladesh Policy Notes: Enhancing FDI through investment policy reform; Back in business to create jobs; Export diversification through bonded warehouse reforms; Improving regulatory service delivery]
Annual meeting of the New Champions: Trade, taxes and other takeaways from Li Keqiang’s speech (WEF)
The basic principles of free trade should be maintained and unilateral trade actions will not solve any problems, Chinese Premier Li Keqiang said in a speech at the WEF’s annual meeting of the New Champions in Tianjin. Hot on the heels of news that China had been plunged deeper into a trade war with the US, Premier Li also said that, though flawed, the trend of globalization is unstoppable and China’s process of opening up will only quicken in the years to come. The premier also said that maintaining a rate of steady growth in the world’s second-largest economy is getting more difficult, that intellectual property breaches and other business malpractice would be swiftly punished, and that the country would not engage in competitive currency devaluation to weaken the yuan to boost exports.
Related News
South African cities see improvements in ease of doing business, but pace of reforms is slow, World Bank report finds
South African cities are making efforts to improve the ease of doing business, although the pace of reforms has been slow in the last three years, finds a new World Bank Group report.
Doing Business in South Africa 2018, the second in the subnational series on South Africa, analyzes business regulations for domestic small and medium enterprises in nine cities – Buffalo City, Cape Town, Ekurhuleni, eThekwini, Johannesburg, Mangaung, Msunduzi, Nelson Mandela Bay and Tshwane.
They are assessed on five Doing Business areas: Dealing with Construction Permits, Getting Electricity, Registering Property, Enforcing Contracts and Trading Across Borders. In the area of Trading Across Borders, the report measures four of South Africa’s maritime ports – Cape Town, Durban, Ngqura, and Port Elizabeth.
The report finds that in the three years since the last study, Cape Town, eThekwini, Johannesburg, Mangaung and Nelson Mandela Bay implemented reforms. Four of the reforms improved the conditions for businesses to obtain electricity, and one made it easier to transfer property.
Although reforms have been few, where they were implemented, the results have been striking. Mangaung, for example, automated municipal processes that have halved the time needed to transfer property, from just over seven weeks to three weeks. As a result, Mangaung has moved from lowest performer in this area in 2015 to best performer now.
“Efforts by South African locations to reduce the time, cost and complexity of bureaucratic processes that can hinder private enterprise are a welcome step in the right direction,” said Pilar Salgado Otónel, Program Manager of the Subnational Doing Business Unit at the World Bank.
“Better collaboration between national and local authorities will go a long way in expanding the scope of future local reforms and putting in place a regulatory environment that allows businesses and entrepreneurship to flourish, creating much-needed jobs. We hope this report will serve as a roadmap for reform at the subnational level.”
The report finds that no location does equally well across all areas measured, and there is room for peer learning. Cape Town, eThekwini, Johannesburg, Mangaung, Msunduzi and Tshwane, for example, are good performers in two areas measured. However, they have room for improvement in other areas.
Johannesburg performs well in the areas of Registering Property and Getting Electricity, which was an area of improvement in this report. Johannesburg, along with Cape Town and eThekwini, started monitoring reliability of electricity supply, in line with international best practices. In the area of registering property, Johannesburg has few procedures for transferring property, making it one of the fastest locations in the country. However, Johannesburg lags in construction permitting and contract enforcement.
Mangaung excels in property registration, with only seven procedures for effecting a property transfer. It also maintains its lead in enforcing contracts, with the lowest cost for commercial litigation in the country. And, along with Msunduzi, Mangaung is the fastest in contract enforcement. But Mangaung lags in construction permitting.
Similarly, Cape Town continues to lead in construction permitting, because it has efficient procedures and is the fastest place to obtain construction approvals, much faster than most high-income economies. It is also at the top of the Getting Electricity indicator because it monitors the reliability of electricity supply and has few procedures for obtaining an electricity connection. However, Cape Town lags in the areas of property registration and contract enforcement.
South African cities’ performance is most widely varied in Getting Electricity. Although Nelson Mandela Bay halved the time needed to obtain an electricity connection to just over six months, there is still room for improvement as it takes just over two months in Buffalo City. This reveals a need for continued replication of good practices.
Overall South African locations are relatively competitive in the time needed to complete regulatory processes in three areas. They perform on par with or close to most high-income economies in time to obtain construction approvals, transfer property and enforce contracts.
However, challenges remain, especially in reducing costs and streamlining processes. For example, changes making it more difficult to do business, such as local and national fee increases, countered efforts to improve business conditions. All municipalities have raised construction approval fees. In Cape Town and Buffalo City, building plan approval fees went up by nearly two-thirds over the past three years, exceeding the rate of inflation for the same period.
In registering property, national-level fee increases, including a sizeable increase of the transfer duty, made property transfers costlier. In addition, the introduction of additional procedures has made it more cumbersome to obtain construction approvals in Cape Town. Time has also slowed – for getting an electricity connection in Mangaung and registering property in eThekwini and Msunduzi.
The report also finds that South Africa’s ports show room for improvement in facilitating cross-border trade. For example, across the four ports, the time and cost to comply with border requirements for exports is high compared to other economies exporting by sea. Durban, the country’s largest port in terms of volume handled, is the slowest in handling of goods.
The National Treasury is supporting Invest SA’s lead in working with the relevant national and provincial departments and government agencies to simplify and speed up the processes involved in starting a business, registering property, dealing with construction permits, and trading across borders.
In particular, there are a number of processes that would be made significantly more efficient through the introduction of electronic automation, online accessibility as well as electronic information exchange. These reforms are often complex to initiate and implement but have significant benefit in improving intergovernmental regulatory performance that impacts on doing business.
“This report helps South Africa take its pulse amid efforts to improve conditions for entrepreneurs over the last three years. It specifically identifies which initiatives have been successful and where constraints remain. Moreover, the undertaking represents the country’s commitment to strengthening its business climate. Given the new presidential investment agenda, the time is ripe to use these results to promote smart regulation in favor of business,” said Paul Noumba Um, World Bank Country Director for South Africa.
Doing Business in South Africa 2018 is the second edition of the subnational Doing Business series in South Africa. The first edition was published in 2015. The reports are produced by the World Bank Group at the request of National Treasury of South Africa, as part of the Cities Support Programme, and funded by the State Secretariat for Economic Affairs of Switzerland, SECO.
“For Switzerland, this exchange adds value in our endeavour to work with the metropolitan municipalities in the area of creating more productive cities, while creating an enabling environment for private sector investment and business development,”Ambassador Raymund Furrer, Head of Economic Co-operation and Development for SECO.
“We are confident that the results of this report will open up opportunities for increased dialogue between business and government and the realisation of the potential that lies in the economy of South Africa”.
The study was implemented in collaboration with the Cities Support Programme, the Department of Trade and Industry and the South African Cities Network. The Subnational Doing Business work is based on the same methodology as the global Doing Business report published annually by the World Bank Group.
Speech by Deputy Minister of Finance Mr Mondli Gungubele launch of Subnational Doing Business Report, 19 September 2018
The National Treasury welcomes you to this launch of the “Doing Business in South Africa 2018” report.
This is the second such report we have launched. In June 2015, we launched ‘Doing Business in South Africa 2015’. That report provided a baseline from which to measure the progress of South African municipalities, especially metros, in facilitating an investment-friendly environment. This second report will provide some indication of our progress.
We all know that this is very important, as above all our economy must generate more jobs and more inclusive growth. Municipalities have a very important role to play in achieving these objectives.
I wish to make four points in this regard:
1. As National Treasury we have long been emphasising that our cities are the engines of the South African economy:
-
They account for around 2.4% of the land area of our country, but approximately 40% of the total population, and as much as half of all employment.
-
They also account for approximately 56% of all those who pay personal income tax, and 57% of gross value added.
-
How well our city economies perform is therefore of critical national importance.
2. The national economy and city economies are overwhelmingly driven by the private economic decisions made by firms and households.
-
Over two-thirds of the national GDP is privately generated and funded, and the ratio is even higher for the city economies.
-
The dynamism and growth of city economies, especially, depend upon the investment decisions made by private firms and households.
-
Government strategies and actions to promote economic development and growth therefore necessarily operate indirectly.
3. The purpose of city activities to promote economic development should be to provide effective platforms for local economic activity.
-
In general this should mean providing the essential infrastructure & services that facilitate economic activity and investment. Sophisticated marketing or industrial development schemes will be irrelevant if water and electricity cannot be reliably supplied.
-
Furthermore, if we are to break with our inefficient and inequitable spatial history of urban sprawl, essential infrastructure & services should be provided in such a way that they encourage the agglomeration and ‘connectedness’ that promotes inclusive economic development.
4. City governments need to properly understand how to use the levers they actually have to promote local economic activity.
- These levers are effective local service delivery, fast and effective spatial planning, land use management and building controls, and responsiveness to the needs of local business. This brings us to the purpose of today’s event.
The report to be presented will show the results of the second survey in a series which reminds us that our service delivery performance as local government has a direct effect on economic development.
-
A business which cannot be connected to a reliable electricity supply in a reasonable time and at a reasonable cost will not create many jobs.
-
A business which cannot get quality building plan approvals within a reasonable time and at a reasonable cost will not create many jobs.
-
A business which cannot transfer a property within a reasonable time and at a reasonable cost will not create many jobs.
Local governments are directly involved in these processes, and their performance therefore directly affects economic growth and development in the cities.
The Subnational Doing Business Survey highlights the importance of good administrative performance in government at all levels, local, provincial and national, to promote inclusive economic development.
-
By conducting this survey, we are reinforcing our messages of three years ago, that city governments should seek to continuously improve their regulatory and administrative processes, become more competitive, and facilitate inclusive economic growth;
-
Each city government has something to learn, through international benchmarking and through domestic peer-learning processes. National Treasury has facilitated a great deal of peer-learning over the past three years, and will do so again in future. We urge you all to participate with enthusiasm;
-
Subnational Doing Business Surveys will be conducted on a regular basis, and we expect that the next set of results, to be released in 2021, will show significant improvement over these results.
I thank you.
Related News
The World Bank’s Africa Region Gender Action Plan FY18-22
This Regional Gender Action Plan (RGAP) presents the broad approach that the Africa Region of the WBG will take to address gender inequality FY18-22.
The RGAP is not intended to be an additional administrative burden for Bank staff, but rather to serve as a focal point, so that all teams across the Africa region of the World Bank Group (WBG) are all pulling in the same direction with our approach to addressing gender issues. The ultimate objective is to advance development for both men and women through operations grounded in robust evidence and informed country dialogue.
This RGAP replaces the previous RGAP for FY13-17 and is especially timely given the launch of a new WBG gender strategy in FY16, the recent shift in how the WBG identifies country level priorities with the introduction of Systematic Country Diagnostics (SCDs), and the change in the system that the Bank uses for monitoring gender integration in Bank operations. The new RGAP is also timely given the recent release of the Global GBV Task Force Report and associated Action Plan for Implementation, outlining recommendations to strengthen institutional tools, systems, and processes to prevent and mitigate the risks of sexual exploitation and abuse and other forms of gender-based violence in Bank-supported projects.
This RGAP starts from a discussion of five-well established priority thematic areas (section 2). While these areas provide a clear operational focus, there are emerging issues in the region for which there is a need to further strengthen the knowledge base. Section 3 discusses these frontier issues and how developing evidence can help lead to effective and scalable interventions. Section 4 provides the channels for implementing the plan and section 5 provides key indicators to monitor progress.
The five thematic areas that have been identified as encompassing the most pressing gender issues in sub-Saharan Africa are:
-
Reproductive health and demographics;
-
Gender gaps in schooling and issues around adolescence;
-
Gender gaps in agricultural productivity;
-
Gender gaps in entrepreneurship and access to jobs; and
-
Gender constraints related to fragility, conflict, and violence.
Frontier issues, where efforts will be focused on developing emerging evidence to fill knowledge gaps, include: social norms around ‘manhood’ and the importance of engaging men in projects to gain their support and to influence key norms and behaviors; occupational segregation by sex and the factors that may allow women to cross-over into more highly remunerated and profitable sectors that have traditionally been dominated by men; the importance of non-cognitive skills for women’s ability to overcome the greater constraints they face as entrepreneurs and farmers; women’s unequal roles in unpaid/domestic work and the impacts on productivity, timeuse, and other outcomes of providing family care; and the effectiveness of interventions to address psychosocial health issues, such as the negative side effects of experiencing rape and other forms of gender-based violence.
The channels of actions through which the RGAP will be implemented include: integrating gender in country level strategic documents (SCDs, CPFs) and policy dialogue; integrating gender into WBG operations; and research/research-uptake to fill critical gender-related knowledge gaps and to ensure that new research influences policies and interventions. A guiding principle of this RGAP is that there should be a coherent and strategic approach to gender that starts with the analysis presented in the SCD, which then feeds into the overall country strategy outlined in the Country Partnership Framework (CPF), which in turn identifies the key areas where gender-informed interventions are called for in individual Bank-funded operations. At each of these stages, the Bank’s work will be continuously refined based on emerging evidence generated by impact evaluations, lessons learnt during operations, and other research from inside and outside the WBG.
Theme 3: Gender Gaps in Agricultural Productivity
Improving agricultural productivity is critical for the achievement of the WBG’s twin goals in sub-Saharan Africa: the agriculture sector employs the majority of the region’s workers, including the poorest, accounts for 30-40 percent of GDP, and makes a vital contribution to household food security. However, research shows that women farmers face a series of constraints that make them much less productive than their male counterparts.
The World Bank’s Leveling the Field report (World Bank and ONE, 2014) finds that gender gaps in agricultural productivity range from 24 percent in Ethiopia to 66 percent in Niger. These gender gaps are underpinned not only by women’s lower access to productive inputs (land, labor, fertilizer, improved seeds, and agricultural information), but also by their lower returns to these inputs. This has important implications for how we address the gender gap: for example, giving women in Southern Nigeria equal access to productive inputs would allow them to be just as productive as men, while this would not be sufficient in Northern Nigeria, where women receive lower returns to these inputs. Women’s lower returns are likely driven by social norms, market failures, and institutional constraints. For example, in many countries agricultural extension services are aimed at men, so their design may not sufficiently consider the needs of women farmers. Women also usually tend to bear a greater burden for domestic tasks, which may impede their ability to supervise farm labor, leading to lower returns from that labor. Indeed, evidence shows that, compared to men, women in Malawi, Niger, southern Nigeria, and Uganda, suffer a larger reduction in their productivity with each additional child in the household.
Female-headed households face a specific set of constraints. These households tend to be smaller, so they have less labor to draw upon for farm work. They may also have less access to certain productive assets, especially land, as women often access such assets through male household members. Access to land is critical. Research indicates that weaker land tenure security is associated with lower levels of productive investments in land (Goldstein and Udry, 2008), and that interventions to strengthen land tenure security have stronger impacts on women’s than men’s productive investments (Ali et al, 2014).
Women farmers also have less access to export markets. This is significant as these crops are more profitable. For example, in Malawi growing tobacco, an export crop, is associated with a 71 percent increase in annual net income from crop activities per hectare of land. Yet tobacco is grown on only 3 percent of women-managed plots, compared to 10 percent of men-managed plots. Kilic et al (2015) find that women’s lower involvement in cash crop farming (tobacco and cotton) drives the gender gap in agricultural productivity in Malawi.
Within the World Bank’s regional portfolio, efforts to close gender gaps in agricultural productivity will address women’s access and returns to productive inputs. In some cases, specific component or sub-components will be designed for and targeted at women, while in other cases non-gender specific projects will be designed with women’s and men’s different needs in mind, to ensure that all participants are able to benefit to the greatest extent possible. For example, attention will be paid to women’s different time use patterns. Beyond productivity, there will also be a focus on the role of agriculture (and women’s specific role within agriculture) in ensuring improved household nutrition.
Theme 4: Gender Gaps in Entrepreneurship and Jobs
Compared to other regions, women in sub-Saharan Africa are very active in the labor force, especially as entrepreneurs: sub-Saharan Africa is the only region where women make up the majority of those who are selfemployed (World Bank, 2013) and the only region where the percentage of women who are self-employed is higher than the percentage of women in wage work.
However, women often move into entrepreneurship simply because there are too few opportunities for them in wage employment. As entrepreneurs, women face multiple constraints, resulting in lower sales, profits, value added, and number of employees, compared to businesses owned by men. For example, in sub-Saharan Africa, almost half of informal firms with no paid employees are owned by women, compared to only 20 percent of those with six or more employees (World Bank Enterprise Surveys, informal module); Bardasi et al (2011) find that the average sales of women-owned firms are 13 percent lower than those of male-owned firms, even after accounting for the sector of operation; and Hallward-Driemeier (2013) finds that African firms owned by women achieve 6 percent lower value-added compared to those owned by men.
The constraints to women’s entrepreneurship include: contextual factors (legal discrimination, social norms); endowments (education/skills, confidence, capital/assets, networks/information); and individual, household, and community preferences (allocation of household resources, risk preferences, time use). These constraints influence women’s strategic choices, such as which sectors to enter and whether to formalize their businesses, and these choices in turn contribute to their poorer business outcomes. For example, women are less likely to operate businesses in more profitable sectors such as transport, manufacturing, and construction, and are more likely to be in less profitable sectors, such as commerce and hospitality. Women tend to divert a higher proportion of their capital to household expenses and invest less in their businesses (Fafchamps et al., 2014). While these expenses, such as school fees, are also important investments to break the intergenerational cycle of poverty, they also impede the growth potential of women’s businesses. Women are less likely to formalize their businesses, reducing their options for accessing finance. Finally, women are also less likely to adopt advanced business practices.
Wage employment is limited for both men and women in sub-Saharan Africa, but even more so for women. For example, across the region, around 13 percent of men are non-agricultural wage workers, compared to around 5 percent of women. Additionally, women tend to work in lower paying and less secure jobs and are more likely than men to be unpaid workers and to work in the informal sector. For example, almost 20 percent of women in Sub-Saharan Africa are unpaid workers, compared to around 15 percent of men, while the World Development Indicators suggest that Sub-Saharan African countries have an average of 63 percent of women in vulnerable employment, compared to 54 percent of men. The constraints to women’s access to better jobs include their lower level of education and skills, occupational sex segregation, and women’s greater share of various domestic responsibilities, such as child care and caring responsibilities for elderly, sick, and disabled family members, and fetching water or fuel. Underpinning many of these constraints are social norms.
Within the WBG’s regional portfolio, efforts to improve business outcomes and access to jobs for women include support to help women overcome constraints related to their access to capital, skills, markets, and social norms. Activities to address capital constraints include cash grants and alternatives to traditional collateral for business loans. Activities to address skills constraints include vocational skills training, business incubators for women and alternatives to traditional management training, such as non-cognitive skills training. Activities to address women’s access to markets include support to help women move up the value chain in agribusiness. Activities to address social norms include support to women to enter more profitable sectors that are traditionally dominated by men and the provision of child care, elder care, or other domestic caring services and improvements in water and transport infrastructure to counter women’s greater burden for domestic tasks.
Related News
A push for the formalization of women cross-border trade in West Africa
The Nigeria chapter of the New Faces New Voices (NFNV), an initiative of the Graca Machel Trust, in partnership with the United Parcel Service, the US-headquartered global logistics company, has commenced the implementation of the second of NFNV Nigeria’s “Raising Voices for Cross Border Traders in West Africa” project.
The implementation began with a two-day regional roundtable with stakeholders on women cross-border trade in Dakar, Senegal last week. The stakeholders’ forum brought together key players in women cross border trade from across West Africa and ended with the formation of the West African Cross-border Women Traders Association, aimed at formalizing and institutionalizing cross-border trade in the sub region.
“What this project wants to achieve with the growing numbers of players in cross border trade after the successful completion of the first phase is to: first establish a WCBT association with policy and legal framework to guide its activities and have a strong body and voice,” says Aishatu Debola Aminu, while welcoming delegates at the roundtable.
“Two, develop a high level advocacy tool for presentation to the ECOWAS Heads of States and Governments on the need to formally mainstream women cross border traders (WBCT) into the economies of the sub-region. We want to continue to advocate for seats at the ECOWAS ministerial meetings and other meetings where discussions and are taken that affect us.”
New Faces New Voices Nigeria had in 2014 successfully implemented the first phase of the Raising Voices for Women Cross Border Traders in West Africa Project with the support of UK Department for International Development’s Supporting West Africa’s Regional Integration Program (SWARIP) implemented across five ECOWAS member states of Nigeria, Ghana and Liberia.
Aminu said whereas the first phase of the project focused mainly on Anglophone West Africa the second phase will be focusing largely on francophone West Africa adding that although women played a particularly significant role in cross border trade (CBT) in West Africa, they were facing a lot of challenges to do with access to finance and security because they were yet to be formally integrated into the process.
While proving a strategy and policy framework for the proposed women cross border trade association in West Africa, John Odubele, a leadership consultant said the world had become a global village hence the increased levels of competition in the business world, and thus the need for women cross border traders in West Africa to become organized into an association, to be able to effectively deal with the competition.
“Alibaba and Amazon are threatening your business; you have to rise to the challenge of technology. As a network of formal and informal women cross border traders, your association should be able to mobilise members at the grassroots; be self-sustaining with the ability capacitate membership and self-fund programs,” said Odubele.
Moreover, DS Paradang, retired comptroller-general of Nigeria Immigration Service (NIS), in his paper on the legal framework for WBCT association said: “The conception of border has been changing due to the impact of globalization; globalisation and particularly information technology has been massively affecting all spheres of human endeavors, particularly trade. However, countries still retain laws to ensure sovereignty defence and build their economies for the welfare of their citizens.”
While giving an overview of the NFNV-WCBT project, Korkor Cudjue, women rights programme manager at the Graca Machel Trust said: “Building networks requires a foundation of self-sustainability. Mama Machel’s vision is ‘One is too small a number to achieve greatness.’ To achieve this we need to build a movement – we need advocates who will be messengers to women who are not here.”
Cudjoe, therefore said under the NFNV-WBCT project, NFNV would be helping clusters of women cross border traders who work across different products to add value to their products adding that each cluster of women working on a specific product will be mentored by an individual woman with expertise on the particular product.
“During the first year of the project, we will identify viable products and markets to produce and market; we will then pilot a train-the-trainer model for 30 women who will subsequently train and mentor women cross border traders over a period of 9 months. We will then replicate the model in two other countries of the region during the second year and then conduct a Pan African expo to strengthen trade linkages and access new markets.”
Speaking on the role of women in CBT in attaining economic growth, Appiah Adomako of CUTS International, a global nonprofit focused on consumer protection, trade and development said: “Women informal cross border traders make an important contribution to economic growth and government revenues. But by ignoring women’s informal trading activities, African countries are neglecting a significant proportion of their trade.”
Adomako thus called for immediate priority to be giving for improving conditions at borders and the treatment of cross-borders traders at border posts which he said will have a significant impact on the livelihoods of a substantial number of women cross border traders and the households who depend on the income from generated by WCBT in the course of their trade.
“There is need to provide and implement policy frameworks by which traders can become increasingly organized and backed up by support services that improve access to information, facilitate access to credit, and ensure better representation of traders’ interests. There is need to bridge information gaps for the benefits to formalization of trade especially for women cross border traders and not only to be seen as revenue loss sector by the governments,” he added.
Binta Ibrahim, the coordinator of NFNV in north central Nigeria while providing an evaluation for WBCT in West Africa said agencies monitoring informal cross-border trade (ICBT) in the region were focused mainly on goods passing through unofficial trade routes adding that there was a “very minimal investment” in data collection for ICBT in the ECOWAS region.
“There is very minimal investment in the collection of ICBT in the ECOWAS region except for Ghana and Liberia. ICBT data is collected through various methods: border observation or monitoring, tracking and stock taking techniques. Therefore, we need to find a way to gather data to monitor relevant information towards achieving our objective,” she said.
Ibrahim as such urged for the need to ensure information was collected on informal cross border trade “with all people-level variables disaggregated by gender in order to capture women and men ICBTs’ contribution to economic development and to inform policymakers about the activities and challenges of this subsector.”
Khadi Cisse, a successful Senegalese cross border trader said members of her network were initially trading in Europe and America before they realised it was more profitable trading across Africa. She however decried the challenges to do with insecurity associated with travels across Africa including lack of access to finance, lack of marketing skills, sexual harassment and intimidation by security officials at border posts.
While also sharing her story on CBT, Mamyna Gueye, a member of FDS, a network of young female entrepreneurs in Senegal said they were facing serious challenges to do with transporting their goods across land borders, including poor road network which means unnecessary delay as well as sexual harassment by customs and police officials at border posts across the sub-region.
The highpoint of the 2-day roundtable was the composition of a caretaker committee for the newly founded West African Cross-border Women Traders Association whose French acronym is AFOACT. The regional CBT association is to be led by the Nigeria country director of NFNV, Aishatu Debola Aminu, as caretaker president.
This article was produced by African Newspage – a digital newspaper for development reporting. View the original article on their website.
Related News
African women: The architects of our economic futures
On September 13-15, 2018 in Accra, Ghana, AWDF convened a select group of activists, scholars, researchers and policy shapers to help build and think through a thoughtful, progressive and transformative vision for the future of women in African economies.
The African Women’s Development Fund knows the potential of the power that women wield in our shared economic future and seeks to harness to shape this future. The “African Women: Economic Futures” convening examined what needs to be done to see that potential grow into tangible results.
Participants also investigated feminist interventions within the economy and how we can further support progressive changes that help ensure that the possibilities of our economic future becomes a reality.
The convening is part of a larger movement-building process and ongoing conversation and activism around African women’s economic transformation. Some of the questions that anchored the conversations and creative construction included:
-
What is already being done to build just and secure economic presents and futures?
-
How are African women actively, politically and intentionally creating subversive work/labour practices, and what can we learn from these?
-
What economic models exist that can be engaged in thinking about where to go?
Futures Africa: Trends for Women by 2030
The African Women’s Development Fund (AWDF) is a grant making foundation that supports local, national, and regional women’s organisations, working towards the empowerment of African women and the promotion and realisation of their rights. Since 2001, the AWDF has been working for, by, and with African women to promote, support, and amplify African women’s organising through funding, capacity building, knowledge production, and advocacy; to change the narrative around African women.
As part of its commitment to investing in African women’s rights, AWDF felt it important to consider what lies ahead for African women – to look to the future – and begin to shape an organisational Strategic Framework as well as thematic strategies that work towards shaping a future with full rights, equality, and justice. As a first step, it is crucial to understand how various trends around gender dynamics have been evolving in the past and the present, and what those patterns portend for the future. AWDF would also like to know what new trends are emerging and how they will impact women and their rights in the future. This work therefore seeks to explore the future for Africa over the next 10-15 years and to question what that exploration implies for women and for women’s rights.
There are focuses on variables around the following: social parameters such as demographics, health, education; economic parameters such as labour trends and earnings, economic opportunities, poverty and inequality; political parameters such as political representation, access to justice and violence against women; and technological issues such as mobile technology use and social media impact.
Futures Africa: Trends for Women by 2030 is a baseline document collating these trends to establish the issues that will pose the greatest challenge to women’s rights in Africa in the future, and to determine what other emerging areas will impact women’s rights and impede their empowerment. Through this work, AWDF will also have a basis for extrapolating future prospects that are helpful in framing the future possible outcomes and options for women’s rights concerns.
This document offers a trends analysis around what the data says about Africa’s future and the place of women and girls in the arenas identified as key drivers affecting our futures: the economy, governance, demographics, health, education, and technology. It draws on existing data produced by governmental agencies and research institutions.
What is evident in reading it is that the focus and language of the data itself reveals assumptions, priorities, and sometimes even biases around what is important to track for policy and planning. In the field of health, for example, data assesses family planning access but does not necessarily provide the same quality or consistency of information around informed consent or degree of women’s access to user-controlled contraception, which are critical reproductive rights concerns. With economic data, there is a common assumption that GDP growth in itself will lead to better development and rights outcomes at population level.
From our vantage point as an African women’s fund, we see across the continent that the lever of change for the majority is not just growth in the overall economy but how that growth is distributed and what mechanisms exist for its redistribution to support the most marginalised. Indeed, a number of recent reports have pointed to economic growth in some countries as a factor that fuels inequality and economic disparity. We are also aware that most national economic data does not make visible the tremendous contribution that African women make to national economies, given that this labour is often in the informal sector and/or in the private sphere.
Data based on only a partial acceptance and analysis of the true nature of contributions to an economy not only distorts understandings of how economic growth happens, it distorts perceptions of the roles and value of women in the economic and social spheres.
There is an underlying heteronormativity around the makeup of families in particular, as well as the assumption that there are only two genders – which, as both historical reflection on the diversity of gender in Africa as well as contemporary transgender activism have shown, is not in fact the case. Lastly, the data also tends to separate sub-Saharan Africa from North Africa (with North Africa more commonly grouped with the Middle East), making statistical analyses of the continent as a whole more difficult.
All of these issues point to the political nature of how data is collected and framed, and also to the need for African women’s rights analysts and activists to be more involved in the process of defining and generating the data that we need for our work and planning.
The data that does exist, however, should force us to rethink. By 2030, people on the African continent will represent a fifth of humanity. Almost half of these people will reside in urban areas, with the slum population doubling. The continent is both growing older as people live longer, but also increasingly youthful as our demographics change. By 2030, just over a third of all Africans will be under the age of 15.
African economies are expected to increase with overall growth, yet persistent questions about equity remain. The reach of mobile technology will continue to expand, increasing possibilities for access to information and to financial and other mobile services. We know that all of these trends are gendered – even if the existing data does not always reflect this.
Related News
WTO members review Seychelles’ accession to the SADC Trade Protocol
World Trade Organisation members reviewed Seychelles’ accession to the Southern African Development Community (SADC) trade protocol at the 18 September 2018 meeting of the Committee on Regional Trade Agreements. Members welcomed progress being made in the economic integration of the African region.
For Seychelles’ accession to the SADC trade protocol in 2015, the parties involved remarked that it will enhance trade in the region and lead to economic growth. Seychelles eliminated tariffs on 91.7% of its tariff lines for imports from other SADC members. By 2026, 97.5% of Seychelles’ tariffs will be liberalized. The other SADC parties will liberalize between 93.8% and 100% of their tariffs for imports from the Seychelles.
A number of changes on rules of origin, sanitary and phytosanitary standards and provisions on technical barriers to trade have also been made to the SADC protocol which was considered in 2007 by the Committee.
Seychelles said its accession creates opportunities for further trade with Southern African neighbours and serves as a stepping stone for boosting intra-African trade. It further noted that the trade protocol is fully compatible with WTO rules and provides predictability for commerce, thus establishing better trading conditions.
Namibia on behalf of SADC said the Seychelles, though a small economy, was a strategic trading partner. The accession of Seychelles will lead to further regional integration, Namibia said. Other members who took the floor at the meeting commended the parties for the review process and remarked positively on the growing integration among African economies.
Improving transparency
The chair of the Committee, Ambassador Julian Braithwaite (United Kingdom), told members that 80 RTAs currently in force have not been notified to the WTO as of 11 September, acknowledging however that the Turkey-Singapore free trade agreement had been notified after the list was circulated.
The chair further noted that factual presentations for 29 RTAs involving only WTO members and those for a further 36 RTAs involving non-members remain pending, counting goods and services agreements separately. The WTO Secretariat reiterated its call to members to submit data and comments in a timely fashion. The chair said he was continuing consultations with relevant members to resolve the matter. It was however also noted that members needed to take a closer look at the reasons for the lack of notifications and ways in which to improve notifications of RTAs.
Factual presentation:
Accession of Seychelles to the SADC Trade Protocol (Goods)
Seychelles became a member of Southern African Development Community (SADC) in September 1997, but withdrew in 2004. In 2008 the Seychelles was readmitted to SADC and became party to the SADC Trade Protocol in May 2015. Of the fifteen countries that are members of SADC, two (Angola and the Democratic Republic of Congo) have not yet implemented the SADC Protocol on Trade and thus are not members of the SADC free trade area. Madagascar is a signatory to the SADC Trade Protocol but its accession to SADC has not been notified to the WTO.
The Seychelles is a party to three RTAs notified to the WTO including its accession to the Southern African Development Community (SADC). The Seychelles is smaller than its SADC partners in terms of GDP (2016) but has a much higher trade to GDP ratio for the period 2014-2016. South Africa is by far the largest of the SADC countries in terms of its GDP (2016) which is more than double the combined total of other SADC countries. In 2016 the Seychelles ran a global merchandise trade deficit, as did all of its SADC partners except Botswana and Eswatini.
In terms of exports (2016), South Africa was the Seychelles’ third largest export destination (after EU28 and the United Arab Emirates). Mauritius and Madagascar ranked 5th and 10th respectively. In terms of imports (2016), South Africa was the Seychelles’ fourth largest source of imports (after the Cayman Islands, EU 28 and the United Arab Emirates). Mauritius and Madagascar ranked 8th and 25th respectively.
In terms of developments in recent years in global and intra-trade between the Seychelles and its SADC partners, the Seychelles has run a constant and expanding trade deficit on a global basis and with its SADC partners over the period surveyed (2000-2016). South Africa is the Seychelles’ largest source of imports from its SADC partners followed by Mauritius. With the exception of 2011, the Seychelles’ exports to SADC countries are dwarfed by its imports. The bulk of the Seychelles’ exports to SADC countries are destined for South Africa and Mauritius.
Bilateral trade patterns between SADC countries and the Seychelles over the period 2000-2016 show that South Africa, Namibia and Eswatini have run a consistent trade surplus with the Seychelles over the period surveyed, while with Mauritius the trade balance is mixed. Gaps in trade data between the Seychelles and other SADC partners make it difficult to identify trends.
Review of the commodity structure of trade of the Seychelles’ imports from its SADC partners, as well as of the Seychelles’ imports and exports to the world (2010-2014) on the basis of HS section product categories, reveals that more than half of the Seychelles’ imports from most of its SADC partners is composed of one or two commodities (e.g. prepared foods from Malawi and Zimbabwe, vehicles from Madagascar, chemicals from Eswatini and animal products from Lesotho), whereas imports from Mauritius and South Africa which account for the bulk of imports from SADC partners are more diverse.
The Seychelles’ imports of prepared foodstuffs, machinery, wood pulp and chemicals accounted on average for 48.9% of its imports from Mauritius in 2012-2014, while imports of machinery, foodstuffs, vehicles and chemicals accounted on average for 53.6% of its imports from South Africa over the same period.
Review of the commodity structure of trade of the SADC partners’ imports from the Seychelles, as well as their imports and exports to the world (2012-2014) on the basis of HS section product categories reveals that Mauritius is the largest importer of products from the Seychelles with imports averaging US$34 million in 2012-2014 and composed almost entirely of animal products. Likewise, Madagascar’s imports from the Seychelles, averaging US$7 million over the same period are composed almost entirely of animal products.
For the other SADC partners’ imports from the Seychelles the average trade volume over the period 2012-2014 averaged less than US$1 million. Textiles, machinery and vehicles are among the most common products traded.
Related News
tralac’s Daily News Selection
Profiled African trade and investment events to diarise:
The NEPAD Agency is organizing three events next week in New York, on the margins of the UN General Assembly debate
First Ordinary Session of the AU Ministerial Sub-Committee on Tourism (1st-3rd October, Nairobi)
The 2nd Africa-Turkey Economic and Business Forum (10-11 October, Istanbul)
The African Union has posted two important resource publications:
(i) African Trade Statistics Yearbook 2017 (AU, Eurostat)
Scope of publication: The 2017 African Union Trade Statistics Yearbook provides time series for the years 2010-2016 in a single volume in two parts. Part I presents a set of summary tables providing AU aggregates, followed by a set of country tables (Part II). The [bilingual English, French] publication presents data about international trade in goods only. Figures on international trade in services are not included. Data sources and data availability: The publication is based on trade data provided by the vast majority of AU Member States. However, in order to compile AU aggregates for the period 2010-2016, missing data for certain years or countries have been estimated.
Short overview of African Union trade development: The whole of the African Union (AU-55) accounts for approximately 3% of the world’s trade in goods valued in USD. During the period 2010-2016, AU annual exports and imports were fairly stable (at around $500bn), its imports slightly exceedng exports in the most recent years. The trade balance up to 2012 was positive. The ratio of goods exports/goods imports has however changed over the period: in 2010, the AU was a net exporter (the ratio of exports over imports reached 103%), whereas in 2016 it became a net importer (the ratio of exports over imports reached 74%). Among countries the main net exporters in 2016 were Angola (ratio 265%), Gabon (ratio 162 %), Côte d’Ivoire (ratio 127 %), and Botswana (ratio 121 %). In 2016, the three major African importers (Egypt, South Africa and Algeria) and three major exporters (South Africa, Nigeria and Angola) accounted together for 39 % of total AU imports and exports.
Intra African trade is very important for the economic development and integration of the continent. However, the share of Intra African trade in Africa’s total imports and exports remains rather low: on average 13% for intra-imports and 17% for intra exports over the period of the last seven years. While the value of total exports decreased, the share of intra-exports trade increased by 30% in 2016 in comparison with 2010. Extra African trade makes up more than 80% of the total trade. The volume of extra exports and extra imports are similar: on average $450bn for exports and $490bn for imports. The main player in intra-African trade is South Africa, with a share in intra exports which varies from 27 to 30% over the period of 7 years. It is followed by Nigeria (8%) and Gabon (7%). South Africa is also a leader for intra imports (13%), followed by Botswana (8%) and Namibia (8%). [ECA’s David Luke: AfCFTA will spur Africa’s industrialization and economic development]
(ii) pdf Pan-African Financial Institutions (1.50 MB)
European Union: pdf Discussion paper on investment in South Africa (105 KB)
In anticipation of South Africa’s Investment Conference, planned for the 25-27 of October 2018, as well as the EU-SA Presidential Summit in November 2018, this discussion paper outlines key challenges that are of particular concern to European investors. The paper also presents proposals to be discussed with South Africa on how these challenges could be improved and/or even overcome. Extensive consultations with the EU member states as well as European business (EU Chamber, Bilateral Chambers, specific companies across different sectors) have identified three main constraints to potential FDI (and trade) that would benefit from the government’s urgent attention: Black ownership requirements under the B-BBEE Codes of Good of Practice; Localisation requirements in public procurement; Delays in obtaining letters of authority from the National Regulator for Compulsory Specifications. Extract from the conclusion: The establishment of a regular EU-SA forum where investment related matters could be addressed, including participation by private sector representatives, would be welcome. Specific to the EU, the resolution of pending differences in the implementation of the SADC EU EPA should be swiftly resolved, hopefully by the time the announced EU-SA Presidential Summit takes place. Without an effectively functioning EPA, the value of the EU-SA Strategic Partnership would otherwise be seriously undermined as a platform for inviting further trade and investment.
Aviation drives economic prosperity for Mauritius (IATA)
The International Air Transport Association called on the government of Mauritius to continue to focus on aviation as a strategic enabler of the country’s economic and social development. “The leaders of Mauritius have always understood that air connectivity is vital. As we celebrate the first half-century of the country’s success, let’s keep in mind the critical role that aviation plays as a pillar of the economy. And let’s look to the next fifty years with a comprehensive strategic focus on maximizing the benefits of aviation for this island nation,” said Alexandre de Juniac, IATA’s Director General and CEO in a keynote address to Aviation Day Mauritius which is marking the 50th year of Mauritian independence. “The key elements of any aviation strategy are safety, global standards, competitiveness and cooperation. But Mauritius and other small island states have a critical competitive advantage in implementing an aviation strategy—and that is size. The country is small enough to rally the aviation universe—the airlines, the airport, the tourism infrastructure—to agree a strategy and to get it implemented quickly and nimbly,” said de Juniac. [Mauritius set to become an Education Hub in the region, reiterates Prime Minister]
RETOSA faces closure due to non-committal member states (Southern Times)
The Southern African Development Community is on the verge of losing its own marketing tourism body as the majority of member states are failing to honour their obligations of paying membership fees. This matter was discussed by the SADC Council of Ministers in August 2018, during the 38th SADC Summit in Windhoek. During its 5th Extra Ordinary Meeting on 8 May 2018 in Durban, South Africa, the board of RETOSA recognised that it was unable to discuss the rescue plan for the organisation without a commitment from member states and recommended that a due process is followed to close RETOSA.
Securing the 21st Century: Mapping India-Africa engagement (ORF)
This year marks 10 years of the India-Africa Forum Summit, and provides an important moment to take an in-depth look at the India-Africa relationship. This publication (pdf) takes into account the longstanding and multifaceted nature of India-Africa ties, and the endeavour to pursue a development partnership that seeks to urgently respond to critical challenges that require organic solutions. Given both the boundless opportunities and the scale of challenges these regions face, it is inevitable that solutions and pathways will also be incubated here. As such, this publication is a knowledge bridge between Indian and African institutions, particularly as we have attempted to bring together views and policy suggestion from both Indian and African contributors. [Note: The trade and investment chapters are written by Pranav Kumar (Confederation of Indian Industry) and Miriam W. Oiro Omolo (Institute of Economic Affairs, Kenya)]
Cecilia Malmström: European Commission presents its vision for the modernisation of the WTO
The pdf EU’s concept paper (708 KB) published today, and already consulted with EU member states, sets out the direction of this modernisation effort. Without prejudice to the EU’s final position on these matters, these ideas relate to three key areas: (i) updating the rule book on international trade to capture today’s global economy; (ii) strengthening the monitoring role of the WTO; (iii) overcoming the imminent deadlock on the WTO dispute settlement system. The EU already started to engage with other WTO partners: with the US and Japan, in the framework of the trilateral discussions; with China, in the dedicated working group set up during the latest EU-China Summit; with other partners, most recently at the G20 Trade Ministerial. The EU will continue discussing these first ideas with various WTO partners in the coming weeks with a view to preparing concrete proposals to the WTO. [Related: ICC welcomes G20 Trade Ministers’ call to support WTO reform; China’s Foreign Minister, Wang Yi: reform of the international trade system]
CDI 2018 and trade: Advanced economies and poverty-weighted trade tariffs (CGD)
As the global trade powerhouses lurch towards protectionism, CGD’s Commitment to Development Index, released today, reveals which advanced economies have trade policies that support—or fail to support—lower-income countries. The Netherlands comes out on top, with overall trade policies that do the most for development, while Australia and New Zealand have the lowest tariffs against low-income countries, with the EU close behind. But some countries can do much more to remove tariffs against their poorest trade partners, and almost all countries have room for improvement. Here we look at the results, and at how countries can encourage development in the face of a global trade slowdown:
South Asia can triple regional trade by removing trade barriers (World Bank)
By reducing man-made trade barriers, trade within South Asia can grow three times, from $23bn to $67bn, says a new World Bank report. Bangladesh has the potential to more than double its trade with South Asian countries. Increased regional trade can accelerate Bangladesh’s growth and create more jobs for men and women. The report, A glass half full: the promise of regional trade in South Asia, documents the gap between current and potential trade in South Asia and provides a roadmap for deepening regional trade. It identifies four critical barriers to regional trade: tariffs and para tariffs, real and perceived nontariff barriers, connectivity costs, and a broader trust deficit. Intraregional trade in South Asia remains one of the lowest in the world and accounts for about 5% of region’s total trade, compared with 50% in East Asia and the Pacific. [World Bank: Trade facilitation challenges and reform priorities for maximizing the impact of the Belt and Road Initiative]
Wednesday’s Quick Links: African Cotton, Textiles & Apparel Monitor: #27 Africa sharpens expertise in agricultural statistics Strengthening the capacity of regional financial institutions in the CEMAC region: the project is expected to become effective on 24 October 2018 (pdf) Botswana’s 2018 budget deficit to widen to 2.3% of GDP Julian Hattem: Morocco in the middle Gates Foundation: Goalkeepers Report Levels and trends in child mortality: Report 2018 Statement by President Trump on additional tariffs on $200bn of imports from China China vows to retaliate after Trump’s $200bn tariff hit A twist in the US tariff battle: “It’s helping China be more competitive” |
Related News
European Union discussion paper on investment in South Africa
The EU, as South Africa’s biggest investment partner, welcomes President Ramaphosa’s strong commitment to building a new social compact around investment. This discussion paper outlines key challenges that are of particular concern to European investors whilst outlining possible ways forward to be discussed with South Africa.
South Africa is the European Union’s only Strategic Partner in Africa. The economic dimension of such relationship is fundamental as the EU is South Africa’s first trading and investment partner, accounting for 25% of South Africa’s trade and 75% of its foreign direct investments (FDI). Direct jobs dependent on this economic relationship are well in excess of 500 000 jobs.
The strength and strategic nature of the EU-SA economic relationship is that it encompasses virtually all economic sectors of the South African economy, thus contributing to economic diversification, export-orientation and inclusive growth. Car manufacturing, citrus and wine industries are just a few notable examples in this respect.
The recently ratified SADC-EU Economic Partnership Agreement (EPA) creates a free trade area with SACU and Mozambique, multiplying opportunities for strengthening trade and investment relations with South Africa and the region. A committed and forward-looking EPA implementation is thus a promising way to ensure that EU investors maintain confidence in South Africa and the region’s investment potential.
Data shows that FDI from the EU in South Africa has proven resilient despite the deteriorating investment climate of the past years, but remains insufficient to contribute to higher GDP growth. European investors stand ready to invest in strategic and labour-intensive sectors both through greenfield and brownfield investments, in support of South Africa’s growth and transformation agenda, however, a more certain and attractive investment and business climate is needed.
The EU welcomes President Cyril Ramaphosa’s strong commitment to building a new social compact around investment, accepting that without investment – foreign and domestic – the country cannot grow above 2%, as National Treasury has systematically warned. The target to attract a minimum of $100 billion in new investment over the next five years is an encouraging statement and the EU appreciates that investment-friendly language of the new leadership has been coupled with the concrete actions. The following specific actions are acknowledged in particular:
-
Appointment of experienced and well-trusted officials to key Ministerial positions;
-
Appointment of President’s Economic Advisor and four Special Investment Envoys, who are trusted and respected by the local and international markets
-
Appointment of credible boards at the key State-Owned Enterprises
-
Signature of the 27 outstanding power purchase agreements under the Renewable Energy Power Producers Programme
-
New Integrated Resource Plan
-
Establishment of Invest SA One-Stop-Shops
While all these are very positive signs, European investors continue to exercise caution as these steps are insufficient to compensate for the deterioration of FDI protection and business environment that has occurred over recent years. At the moment, foreign investors continue to monitor macroeconomic stability and overall policy certainty in the country. There is hope for a clearer language on investment-led growth, which would complement redistribution-led growth, including through public investment in infrastructure, education and skills development, as well as by improving the financial health of the State Owned Enterprises.
In anticipation of South Africa’s Investment Conference planned for the 25-27 of October 2018 as well as the EU-SA Presidential Summit in November 2018, this discussion paper outlines key challenges that are of particular concern to European investors. The paper also presents proposals to be discussed with South Africa on how these challenges could be improved and/or even overcome.
Extensive consultations with the EU Member States as well as European business (EU Chamber, Bilateral Chambers, specific companies across different sectors) have identified three main constraints to potential FDI (and trade) that would benefit from the government’s urgent attention:
-
Black ownership requirements under the B-BBEE Codes of Good of Practice.
-
Localisation requirements in Public Procurement.
-
Delays in obtaining letters of authority from the National Regulator for Compulsory Specifications.
There are other issues that mark the investment environment, especially as Bilateral Investment Treaties (BITs) with EU countries have been unilaterally terminated causing a worrisome dive in the level of protection enjoyed by investors. In the absence of BITs, uncertainty around property rights is of particular concern, which has been amplified by the Parliament-led consultations on constitutional changes to land ownership rights.
Policy certainty is also pending in relation to other policy initiatives, such as the Expropriation Bill (recently withdrawn from Parliament), Regulation of Land Holdings Bill, Copyright Bill, Competition Amendment Bill, Private Security Industry Regulation Bill and Mineral and Petroleum Resources Development Amendment Bill. The new Protection of Investment Act which has just entered into force deprives investors of important guarantees contained under pre-existing BITs. While South Africa’s institutions remain robust and the policy debate is conducted within sound principles, the effects of pending proposals on prospective investors cannot be discounted.
Other pertinent issues that are having a negative impact on the investment environment include stringent visa restrictions on foreign management staff and their family members of overseas subsidiaries, requirements for short-stay visas for the citizens of eight EU Member States, corruption, serious and organised crime, rising electricity prices, port and rails costs, and challenges with the registration on the Central Supplier Database. Government’s steps towards resolving these issues would further contribute to paving the way to a more investor-friendly business climate sought by President Cyril Ramaphosa.
Conclusion
The EU, notably through its representation in South Africa, its Member States and associated entities (such as the Chambers of Commerce and Industry) remains eager to engage on all the issues highlighted above, which we believe are equally beneficial to all investors.
The establishment of a regular EU-SA forum where investment related matters could be addressed, including participation by private sector representatives, would be welcome.
Specific to the EU, the resolution of pending differences in the implementation of the SADC EU EPA should be swiftly resolved, hopefully by the time the announced EU-SA Presidential Summit takes place. Without an effectively functioning EPA, the value of the EU-SA Strategic Partnership would otherwise be seriously undermined as a platform for inviting further trade and investment.
Related News
African Trade Statistics Yearbook 2017
Trade in Africa has become one of the driving forces of integration on the continent. In 2012, the Heads of State and Government of the African Union adopted a decision to establish a Continental Free Trade Area (AfCFTA) and endorsed the Action Plan on Boosting lntra-Africa Trade.
Consequently, the need for reliable and exhaustive statistics on external trade of the African Union Member States, preferably derived from data provided by the countries themselves, has also grown rapidly.
The main objectives of the AfCFTA are to create a single continental market for goods and services, with free movement of business persons and investments, and thus pave the way for accelerating the establishment of the Customs Union. While this political process is ongoing, the transition situation on the continent is diverse as there are several stakeholders such as Regional Economic Communities (RECs), Customs Unions and Monetary Unions. Producing trade data that serve all purposes is difficult.
In this context, harmonised and high quality data of trade statistics play an important role for trade negotiations and constitute an essential source of information for balance of payments statistics, national accounts and economic studies. Beyond that, the compilation of trade aggregates for the whole of the AU is a first step towards harmonisng of practices and methodologies for trade statistics across Member States.
In June 2016, the Assembly of the African Union furthermore decided in Kigali to finance AU activities from the contributions of Member States based on an extra imports levy (0.2%). To implement this decision, the availability of intra and extra trade data has become an imperative both for the AUC and for the African countries. These data on trade statistics will also be needed to evaluate the effectiveness of the measures taken by African leaders to boost Intra African trade, which has a strong impact on the economic development of the entire continent.
Therefore, the African Union Commission (AUC), in collaboration with Eurostat, has for the first time published a Time Series of Annual Trade Data for the period from 2010 to 2016. The Statistics Division at the AUC (AUSTAT) compiled data provided by the NSOs of Member States or other institutions responsible for the production and dissemination of trade statistics in Africa and estimated the data when it was not possible to collect data directly from Member States. The joint endeavour was supported by experts contributing through the Pan African Statistics (PAS) programme, funded by the European Union.
These data were almost fully stem from AU Member States themselves and thus are authentic but the reader should be aware that, due to the urgent need for such data, international organizations proceed for the estimation of their own data. The most common source of data is UN COMTRADE which is a repository of official international trade statistics and relevant analytical tables provided by United Nations. The AUC plans to continue with this new publication and will then enrich its metadata, intensify its validation efforts and improve its reconcilliation with other data sources.
The publication presents data about international trade in goods only. Intra and extra-AU trade in goods data are collected by the customs authorities and are based on the records of trade transactions in customs declarations. Goods for and after processing are included, whereas goods in transit are excluded from both trade systems. Exports include re-exports and imports include re-imports.
Short overview of African Union trade development
The whole of the African Union (AU-55) accounts for approximately 3% of the world’s trade in goods valued in USD. During the period 2010-2016, AU annual exports and imports were fairly stable (at around 500 billion of USD), its imports slightly exceedng exports in the most recent years. The trade balance up to 2012 was positive. The ratio of goods exports/goods imports has however changed over the period: in 2010, the AU was a net exporter (the ratio of exports over imports reached 103%), whereas in 2016 it became a net importer (the ratio of exports over imports reached 74%). Among countries the main net exporters in 2016 were Angola (ratio 265%), Gabon (ratio 162%), Côte d’Ivoire (ratio 127%), and Botswana (ratio 121%).
In 2016, the three major African importers (Egypt, South Africa and Algeria) and three major exporters (South Africa, Nigeria and Angola) accounted together for 39% of total AU imports and exports.
Intra African trade is very important for the economic development and integration of the continent. However, the share of Intra African trade in Africa’s total imports and exports remains rather low: on average 13% for intra-imports and 17% for intra exports over the period of the last seven years. While the value of total exports decreased, the share of intra-exports trade increased by 30 % in 2016 in comparison with 2010.
Extra African trade makes up more than 80% of the total trade. The volume of extra exports and extra imports are similar: on average 450 billion USD for exports and 490 billion USD for imports.
The main player in Intra African trade is South Africa, with a share in intra exports which varies from 27 to 30% over the period of 7 years. It is followed by Nigeria (8%) and Gabon (7%). South Africa is also a leader for intra imports (13%), followed by Botswana (8%) and Namibia (8%).
The main product group in total African imports and exports are mineral fuels and mineral oils (HS 27). However, these products are more significant in exports: the share of mineral oils reached 57% of total exports in 2012 and decreased to 34% in 2016. Decreasing oil market prices and trade in mineral products had a crucial impact on the decline of exports between 2012 and 2016.
Although the majority of African exports is sent to non-African countries, the global product structure for extra and intra exports are similar: the two dominant product groups are mineral fuels and oils (HS27) and natural and cultured pearls (HS71), accounting together for 21 % for extra exports and 30% for intra exports. However, extra exports are more diversified with agricultural products: edible fruits and nuts (2.6%), cocoa and cocoa preparation (2.4%), products of animal origin (1.3%), coffee, tea, spices (1.2%), fish and crustaceans (1.1%).
As for imports, mineral fuels and oils (HS27) accounted for 12% of total imports in 2016 with the majority being imported from non-AU Member States. Mineral fuels are followed by machinery and mechanical appliances (HS 84), electrical machinery and equipment’s, sound recorders and reproducers (HS85) and vehicles (HS87). These three product groups made up 29% of extra-AU imports and 14% of intra imports. Within extra-AU imports the second most important product group was cereals (HS10) (5%), while within intra trade it was sugars and sugar confectionery (HS17) (6%).
For the period 2010-2016, China remained by far the most important AU trading partner accounting in 2016 for 13% of extra-AU exports and 17% of extra-AU imports. The value of goods imported from France, Germany and United States made up approximately 6% for each.
The largest destination markets for AU goods, after China, are India and the United States, accounting for 7% of extra African exports each, followed by France, Spain and Italy (6% each).
The African Union Trade Statistics Yearbook is the result of a close collaboration between the African Union Commission (AUC), the Regional Economic Communities (REC) and the National Statistical Offices (NSOs).
Related News
Aviation drives economic prosperity for Mauritius
The International Air Transport Association (IATA) called on the government of Mauritius to continue to focus on aviation as a strategic enabler of the country’s economic and social development.
“The leaders of Mauritius have always understood that air connectivity is vital. As we celebrate the first half-century of the country’s success, let’s keep in mind the critical role that aviation plays as a pillar of the economy. And let’s look to the next fifty years with a comprehensive strategic focus on maximizing the benefits of aviation for this island nation,” said Alexandre de Juniac, IATA’s Director General and CEO in a keynote address to Aviation Day Mauritius which is marking the 50th year of Mauritian independence.
“The key elements of any aviation strategy are safety, global standards, competitiveness and cooperation. But Mauritius and other small island states have a critical competitive advantage in implementing an aviation strategy – and that is size. The country is small enough to rally the aviation universe – the airlines, the airport, the tourism infrastructure – to agree a strategy and to get it implemented quickly and nimbly,” said de Juniac.
“The goal of a comprehensive aviation strategy is to enable aviation to drive economic and social development. That will mean a successful future for Air Mauritius – the home-town carrier that serves the market as a lifeline. And it will create opportunities for other carriers to augment the prosperity that aviation brings with robust competition,” said de Juniac.
Key elements of a comprehensive aviation strategy would include:
Safety
IATA encouraged Mauritius to take a leadership role in fulfilling its Abuja Declaration commitment to recognize the IATA Operational Safety Audit (IOSA) in its safety oversight regulatory framework. IOSA is mandatory for all IATA member airlines and the 34 African carriers on the IOSA registry are delivering world-class safety levels – three times better than African carriers not on the IOSA registry. “We are already working with Zimbabwe and Rwanda on IOSA recognition. I encourage Mauritius to join them in taking a leadership role,” said de Juniac.
Alignment with global standards
Global standards are the foundation of international civil aviation. This includes the industry’s responsible approach to managing its climate change impact. The Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) will stabilize emissions from 2020. “As an island nation, the potential consequences of climate change – including rising sea levels and severe weather – are very real. So I encourage Mauritius to show solidarity and join the 70-plus states participating in CORSIA from the voluntary period,” said de Juniac.
Focus on competitiveness
Mauritius ranks high in many categories of the World Economic Forum’s Travel and Tourism Competitiveness Report. This includes a fourth-place ranking (behind Malta, Singapore, and Iceland) for prioritization of travel and tourism in government policy. But it ranks 116th on price competitiveness largely driven by ticket taxes, airport charges and fuel costs. “These are big pain points for airlines. Policies to improve competitiveness in these areas would boost aviation’s ability to deliver its economic benefits,” said de Juniac.
IATA urged dialogue with the airlines as Mauritius embarks on a project to more than double the capacity of Sir Seewoosugur Ramgoolam Airport to 9 million passengers annually. “The airport is probably the most valuable few kilometres of concrete ever poured on this island. The return on the investment for the economy is immense. There must be an open dialogue with the airlines to ensure that development provides sufficient capacity, technical excellence aligned to airline needs and affordable costs,” said de Juniac. IATA urged the establishment of an independent regulator to ensure that infrastructure costs are kept competitive.
Cooperation
“Mauritius has impressive connectivity. But there are many markets that have still to discover Mauritian hospitality. And no single airline can provide the connectivity that is needed. Partnerships with other airlines are enhancing the nation’s connectivity,” said de Juniac.
De Juniac also noted the strategic location of Mauritius between Asia and Southern Africa. ”Mauritius is well-placed to grow its footprint in Africa. It is accessible – only requiring visas from six African countries. Cooperation with South African Airways and Kenya Airways opened two gateways into the African continent. And the Single Africa Air Transport Market creates the potential for even broader connectivity.
“For sure Africa’s development will demand increased air connectivity with Asia’s important markets. Could Mauritius evolve as a one-stop hub, efficiently connecting Southern African markets to points in Asia-Pacific?” said de Juniac.
Business of Freedom
“We know that aviation brings in the tourists, that it connects us to family and friends, and that it is a catalyst for economic, social and educational ties. The post-independence success story that is Mauritius today would be very different without connectivity that can only be facilitated by air. Aviation is the business of freedom – and that includes the freedom to develop,” said de Juniac.
Related News
tralac’s Daily News Selection
Featured tweet, @SabineBohlke: Seychelles notified the WTO Committee on Regional Agreements on their accession to the SADC Protocol on Trade. Seychelles is a strategic trading partner to SADC members. No doubt that the accession will enhance trade between Seychelles and SADC member states.
Inter-Governmental Committee of Experts of Southern Africa: updates, documentation
-
The 24th Session of the Inter-Governmental Committee of Experts of Southern Africa opened in Mauritius, Tuesday, with an impassioned plea from Foreign Affairs, Regional Integration and International Trade Minister of Mauritius, Mr Seetanah Lutchmeenaraido, for Africa to unite and work together as one if it is to bring inclusive development to its people. Mr Lutchmeenaraido said Africa must first believe in itself with political leaders giving the right message: “We can do it. We can stand on our own feet; that South- South cooperation is a reality; that we can work together in a win-win situation with mutual respect for each other”.
-
Implementation of regional and international agendas and other special initiatives in the sub-region: pdf Progress and status of the AfCFTA (1.32 MB)
-
pdf Recent economic and social conditions in Southern Africa in 2017, and prospects for 2018 (1.31 MB) : A growing ‘battery minerals’ sector: Rising prices present opportunities for investment into greenfields exploration, a vital process for the sustainability of the minerals sector. For example, the projected rise in ‘battery minerals’ prices – lithium, nickel, cobalt, graphite, cobalt and copper presents opportunities for deepening the value chain in SADC given the resource base for these minerals. Lithium is an essential element in the fourth industrial revolution as a key element for rechargeable batteries and its potential in the region needs to be exploited. The increase in the price of lithium from an average of $6,500/t in 2015 to $16,000/t at the beginning of 2018 and of the price of cobalt from an average of $30,000/t in 2015 to $80,000/t in January 2018 has resulted in a steady increase in exploration for these minerals together with the other battery minerals. With the high regional prospectivity of, for example, lithium, mainly in Botswana, Mozambique, Namibia, South Africa and Zimbabwe, the world’s fifth largest lithium producer, the battery value chain should be investigated as a regional project.
The market for remittance services in Southern Africa (World Bank)
Since 2011, the World Bank has undertaken remittance market assessments, based on the CPMI-World Bank General Principles for International Remittance Services, in nine SADC countries: Lesotho, Madagascar, Malawi, Mozambique, Namibia, South Africa, Tanzania, Zambia, and Zimbabwe. Remittance flows to households in SADC countries amounted to $2.5bn in 2016, out of a total $575bn received worldwide. Considering unrecorded remittance flows—through both regulated and unregulated channels—the true volume of remittance flows to SADC countries is likely to be considerably higher than indicated by official estimates. Among SADC countries, Lesotho, Zimbabwe and Madagascar have the highest dependence on remittances. Figure 3 displays the distribution of remittance dependencies of SADC countries in 2015. Extract: Box 3 (pdf): Innovative money transfer operators entering the remittance landscape in the SADC region. In the last few years, a number of new and innovative remittance services have emerged in the SADC region. These include remittances services that can be initiated online or via mobile phone, and that allow transfers directly into bank accounts or e-wallets, including mobile money accounts. For example, Mukuru has recently partnered with several mobile money operators in several SADC countries to allow for the receipt of remittances directly into mobile wallets. For instance: [Reuters: South African fintech JUMO to expand in Asia with Goldman Sachs backing]
Rwanda Agriculture Finance Diagnostic (World Bank)
Agriculture is critical to Rwanda’s economy and a key sector in Rwanda’s Economic Development and Poverty Reduction Strategy. Agriculture finance is a national priority to achieve transformation of the agriculture sector and greater financial inclusion. Prioritizing agriculture finance has yielded substantial achievements, but farmers’ use of formal financial services remains sub-optimal. The report is organized as follows: Chapter 1 presents an overview of the agriculture and financial sectors. Chapter 2 presents an analysis of farmers’ financial access and use of financial services. Chapter 3 discusses key trends in agriculture credit and agriculture insurance markets. Chapter 4 discusses the key institutions and instruments of public sector support for agriculture finance. Chapter 5 identifies key challenges that are constraining the growth of agriculture finance, and lastly, chapter 6 identifies major opportunity areas and makes key recommendations to capitalize on the identified opportunities.
Rwanda: Experts call for ‘clear, bold’ industrialisation blueprint (New Times)
Rwanda needs to pursue a clear and bold strategy on industrialisation if it is to achieve its ambitious midterm target of attaining upper middle-income status by 2035, according to business experts. The call comes in the wake of a review of the country’s industrial policy and experts say that a clearly defined agenda would guide the country towards its industrialisation ambition in the next decade. They were speaking at a two-day conference on industrial policy co-organised by Rwanda’s Trade and Industry Ministry, International Growth Centre, and the World Bank.
According to Richard Newfarmer, IGC’s Country Director in Rwanda, the new framework for industrialisation should be linked to promoting exports via value chains and taking into account best practices from elsewhere. “To promote industry you have to promote exports. Rwanda can grow its exports and it will attain the income levels that it aspires to by 2035,” he said, adding that going forward the country needs to design the strategy that will see the exports double in the next decade. For John Page, achieving industrialisation in the next ten years will depend on how Rwanda is able to bring the special economic zones up to world class. “It will also require strengthening the links between the firms that operate under the special economic zones and domestic suppliers. The new industrial policy should consider all these aspects.” Victor Steenbergen, the Head of Investment Climate Unit at the World Bank, said that the new policy must address the issues related to tax incentives. “Currently, we are seeing that there is misallocation of tax incentives in Rwanda, like customs duty exemptions, and most tax incentives tend to favour companies that are already profitable.”
Chinese entrepreneur tries to bring Shenzhen miracle to Africa (Bloomberg)
Helen Hai, 40, co-founded factories making children’s clothes in Rwanda, Senegal and Ethiopia, and she became the UN Industrial Development Organization’s goodwill ambassador in Africa. In July, she began exploring how blockchain technology might help create jobs for the nations there and now heads the $100m Binance Blockchain Charity Foundation. “There’s a golden opportunity for Africa,” Hai said. “What it needs now is success stories. They have a snowballing effect.” Still, Helen Hai estimated there’s a five- to 10-year window for Africa to capitalize. So she’s forging ahead with plans to expand C&H, committing $10m over five years to create 30,000 jobs in Rwanda. The goal is to catalyze $1bn in investment, Hai said. In Ethiopia, C&H now has 1,500 workers. In Senegal, where operations just started, there are 300 workers with plans for 2,000 by the end of next year, she said. “She foresaw that the garment-and-footwear industry can -- and will -- move to Africa, eventually,” said Henok Assefa, founder and managing partner at Precise Consult International in Addis Ababa. “Given her exposure to the demands of Western markets and her Chinese background, she brought an interesting perspective to support African policy makers.”
First International Association for Ports and Harbours, Africa Regional Conference: African ports and hinterland connectivity
-
Buhari orders construction of rail infrastructure in major seaports. The president stated that the current administration’s projection was that by the end of 2021, the country would have standard gauge railway across the main North-South trading routes. “We understand that this interconnectivity will improve the country’s economic competitiveness as targeted under the Economic Recovery and Growth plan. So, for starters, I have directed that every port must have the complement of rail infrastructure and our projections is that by the end of 2021, we will have standard gauge railway across the main North-South trading route. The same level of serious attention is being given to the improvement of road infrastructure. At the moment, 25 major highways and 44 roads are under construction across the six geo political zones of the country. Just as we have insisted on the stimulation activities on our inland waterways, major inland river channels are being dredged with adequate channel markings for ease of navigation all the way through the Eastern and Northern parts of the country. That is the only way to go if we plan to remain competitive in the maritime industry.”
-
Nigeria partners Niger Republic on establishment of Kano-Maradi rail line. Nigeria’s Minister of Transportation, Rotimi Amaechi, said the rail line would start from Kano and pass through Dutse, Kazaure, Daura, Kastina, Jibia and terminate at Maradi in Niger. “The decision of the rail line getting to Niger was to try to get other neighbouring countries to transport their vessels through Nigeria, looking at the economic viability of that service. Having the train in Maradi will open up trade from other neighbouring countries to ship their goods through Nigeria, from Kano to Lagos without police checkpoints or traffic. We also do not have a seaport; we are trying to get the market. We have the capacity to do that, all those big vessels that are supposed to pass through Nigeria go to Benin Republic. Benin Republic has a Deep Water Port and we don’t have a sea port in Nigeria, what we have is a River port. So, that is the reason we want to build the 16 metres Lekki Deep Water Port and 17 metres Deep Water Port at Bonny to attract the market,” he said. [Next week, in Abuja: Port Concession in West and Central Africa - impact on economies of member states of the sub-region]
Tibor Nagy: US is Africa’s ‘ideal partner’ for promoting democratic institutions and economic growth (allAfrica)
T20 Communiqué
There are a number of topics the recommendations focus on such as the future of work, education and politics, and how to combat the effects of climate change. The proposals also suggest policies to promote gender economic equity and tackle the original challenges of the G20: international financial stability, commerce and tax cooperation and more. “The pdf T20 Communiqué (590 KB) is the result of a great process of collective thinking. The work of 150 think tanks from 60 countries, who produced over 80 documents, is intended to propose recommendations to G20 leaders on the Global Agenda,” explained Pablo Ava, co-chair of the T20’s Policy and Research.
Policy Briefs
T20 Africa, G20 and Africa: pdf Assessing Our Impact and Influence (205 KB)
The T20 comprises think tanks that aim at developing research and evidence-based briefs and positions to guide governments in policy development. The T20 Africa Standing Group was established in 2017 to bring together think thanks from the G20 and African countries to work together on G20 policy matters. But as of now there is little information about T20 Africa’s influence and impact on G20-Africa related policies. Our recommendations are: a) for T20 Africa to define success criteria for their group; b) establish a communication structure within T20 Africa; c) monitor and share status of every policy recommendation; d) collaborate with B20 and think tanks from the other engagement groups; e) conduct impact assessments during every G20 Presidency with the finance track; and f) develop a post-G20 Summit strategy to monitor and coordinate Africa-related policies and initiatives.
Mobilizing private investment and the Compact with Africa:
pdf
A preliminary assessment and steps ahead
(253 KB)
Our own analyses of the CwA suggest that the success of the initiative will hinge on whether it manages to provide practical instruments for (potential) investors. These instruments will have to be known and accessible to the potential investors, and they should be adapted to the particular challenges of the various African investment environments in a context of technological transformation. In the survey, some German companies emphasized the importance of support mechanisms to target not only investment, but also trade; thus stressing the strong interdependence of trade and investment. They indicated that their investments in Africa are typically preceded by entering a market through exports. Only in a second stage were trading entities set-up; and in some cases then followed by a wider range of activities including service provision (for machines or equipment) and, albeit not too often, production. Our interpretation of this trend is that smaller firms, including many firms of the German “Mittelstand,” find it too risky to invest in unfamiliar markets. From the German interviews, it was also noteworthy that reference was mainly made to bilateral instruments, in particular export credit guarantees.
Africa-G20 cooperation:
pdf
Reducing complexity, increasing opportunities
(259 KB)
The EU’s bank in Africa steps up the action (EURACTIV)
But while most talk in Brussels tends to focus on the amount of cash available, it is not only a question of having more money to lend but having the means to lend it, Catherine Collin, the EIB’s East Africa bureau chief in Nairobi, tells EURACTIV. “In the region of East Africa, we signed just over €400m of projects in 2017 compared to €100m in the previous year. €400m may not look huge but it’s not a bad amount for us outside the EU,” says Collin, pointing out that the vast majority of the bank’s activities are within the bloc. Collin suggests that domestic political constraints are the main block on financing. “A problem we have in the region and in Sub-Saharan Africa in general, is of very low absorptive capacity of the state.”
Related News
Intra-African trade key to continent’s economic growth, says Mauritian Minister
The 24th Session of the Inter-Governmental Committee of Experts (ICE) of Southern Africa opened in Mauritius today with an impassioned plea from Foreign Affairs, Regional Integration and International Trade Minister of Mauritius, Mr. Seetanah Lutchmeenaraido, for Africa to unite and work together as one if it is to bring inclusive development to its people.
Mr. Lutchmeenaraido said Africa must first believe in itself with political leaders giving the right message that; “We can do it. We can stand on our own feet; that South-South cooperation is a reality; that we can work together in a win-win situation with mutual respect for each other”.
Most importantly, he said, African nations need to trade more with each other if the continent is to emerge as a powerful continent in the next century.
“We have been ignored and colonized for so long that we have come to the conclusion that probably Africa is not for tomorrow and that the continent will have to wait for the millennium to emerge. This is not true,” the minister said, adding that Africa will not move ahead if its people continue to ‘stay in this mentality of being victims of colonization; victims of economic rape’.
“If we want to emerge as a powerful continent then we have to stop behaving like victims but as builders of tomorrow. If we develop this attitude that we can do it; that we have the resources to do it and that the learning process will not be that longest time, then we can emerge. We have to trade more with each other than what is currently obtaining.”
He shared with the more than 80 participants, including senior Southern African government officials, how Mauritius as a country moved from being a poor country when it gained its independence in 1968 from Great Britain to being a successful country that provides universal education and health to all her citizens.
“We have learned to move from an island which was condemned to be a failed state to what we are now today. We survived because there was no-one on whom to rely on. We had to learn the hard way of discipline and hard work. We moved from being a one-crop economy (sugarcane) into tourism, export processing zones for industrial production, then became a financial center. We diversified in a big way and in 2014 we reinvented the whole economy,” said Mr. Lutchmeenaraido.
Mauritius is the new chair of the ICE of Southern Africa. Zimbabwe was the immediate former Chair that handed over to Mauritius.
For his part, Zimbabwe’s representative at the meeting, Mr. Zvinechimwe Ruvinga Churu, a Principal Director in the Finance and Economic Development Ministry, said industrialization and strengthening regional integration remain rallying points in Southern Africa as the region endeavors to extricate itself from poverty and under-development.
He said the adoption of the African Continental Free Trade Area (AfCFTA) in February in Kigali this year buttresses and accelerates the integration agenda through boosting industrialization and trade by complementing efforts under the Tripartite Free Trade Area.
“Front loading industrialization as a platform for value addition and beneficiation, the development of domestic linkages and the creation of jobs is imperative and the blue economy can anchor such endeavors through its various development levers many of which we will interrogate during this ICA,” said Mr. Churu.
Implementation of Regional and International Agendas and Other Special Initiatives in the Sub-region:
Progress and Status of the Continental Free Trade Area (AfCFTA)
The AfCFTA presents an opportunity to leverage trade for structural transformation, economic growth and job creation in Africa. This is because intra-African trade, which is promoted by the AfCFTA, has a stronger impact on development than other types of trade. Intra-African trade comprises a far larger share of industrial, value-added and processed agricultural products than does Africa’s exports to outside the continent, around 75 per cent of which are extractives like petroleum oils and minerals. It is more labour intensive, helping to generate jobs for Africa’s bulging youth population, and relies less on the fluctuations of global commodity prices, enabling it to better fuel sustainable economic growth.
On the face of it, the AfCFTA may imply adjustments to lower import tariffs on intra-African trade, but it in fact offers a pathway to medium to longer-term fiscal sustainability. This is because, as a stimulant of economic growth, the AfCFTA helps to generate economic activities in other revenue generating areas. Moreover, the quality of economic growth that is generated by the AfCFTA marks a diversification away from fiscal reliance on volatile commodity prices. As diversification engenders structural transformation, the importance of trade taxes among sources of revenue generation declines. However, even in the short term, the revenues currently collected from tariffs on intraAfrican trade account for only a small share of total trade taxes in Africa, and can be partially offset by other taxes, such as VAT, which tends to be more efficiently levied on imports.
The AfCFTA as a Platform for African Trade Policy Coherence
The AfCFTA is being negotiated in a changing world trade environment. The multilateral trading system is in crisis after the failure of the Doha Round and populist anti-globalization sentiments in several large trading nations have sparked concern of “trade wars”. The rapid rise of emerging market economies has caused a fundamental shift in the trade patterns of many African countries. Controversies surrounding the Economic Partnership Agreements (EPAs) and Brexit require new thinking on restructuring trade relations with Europe. Africa’s trading relationship with the United States, having developed under the African Growth and Opportunity Act (AGOA), is likely to transform into reciprocal arrangements by 2025 in a post-AGOA agenda. The so-called “mega-regional” trade agreements that once threatened Africa’s preferential trade with established partners, now have evolved into a different threat of protectionism. Finally, new modes of trade such as ecommerce are putting pressure on demands for new trade rules.
What’s at stake is that future external negotiations risk unravelling regional integration in Africa. This has already posed a challenge to African regional economic communities that are nascent customs unions, such as ECOWAS and CEMAC. These comprise free trade areas and a common external tariff, and are working towards single market status with the free circulation of goods. Individual FTAs unravel this progress by 'breaking' the common external tariff; those countries with external FTAs would have a different tariffs with such external countries than others within such customs unions. Without a functioning common external tariff it is impossible for these regions to move forwards towards free circulation of goods.
Amongst these changes there has never been a greater urgency for Africa to consolidate its trade policy. Doing so provides Africa with the strengthened voice of 1.2 billion people in future negotiations, provides for a common position on evolving trade policy issues, and ensures that individual bilateral arrangements do not unravel the objectives and benefits of continental integration. The AfCFTA provides a strengthened platform for exactly such trade policy coherence in Africa.
What must countries do next for the effective implementation of the AfCFTA?
Ensure prompt ratification and conclusion of the implementation roadmap
Riding on the momentum of an historic 10th Extraordinary African Union Summit and AfCFTA signing ceremony, in Kigali, on 21st March 2018, 49 African Union member states have now signed the AfCFTA with 6 having further ratified the agreement. African businesses have had their interests piqued, political leadership at the highest level is committed, and the world is watching.
In addition to the 6 countries that have already ratified, it is understood that the ratification process is at an advanced stage in 7 more countries including South Africa. The African Union Commission is confident that the 22 ratifications required for the agreement to enter into force will be achieved by the first anniversary of the signing of the AfCFTA in March 2019.
A further three African Union member states signed instead the Kigali Declaration, declaring their intention to sign the Agreement after concluding domestic legal processes. Three member states are yet to signal commitment to the AfCFTA.
This impetus must be seized. There is a real risk that, without firm ministerial guidance, the process could derail and delays set in, as is what happened with the Tripartite Free Trade Area negotiations which have yet to be concluded despite their “launch” in June, 2015.
To bring the AfCFTA into effect, countries must first ratify the agreement through their respective domestic legislative processes. The agreement will then enter into force once 22 African Union member states have deposited their instrument of ratification with the African Union Commission.
To operationalize the AfCFTA, State Parties to the agreement must also conclude the implementation roadmap. This involves developing and submitting schedules of concessions for trade in goods. These detail, for each State Party or – as the case may be – customs union – the particular 90 per cent of products that are to be liberalized for each State Party, as well as the sensitive products that are to be liberalized over a longer time period and the excluded products that are to be temporarily exempted from liberalization.
A related complement to the schedules of concessions for trade in goods is the list of product-specific rules of origin which, alongside the general rules of origin, will enable the application of preferences under the AfCFTA.
For trade in services, negotiators have agreed that five sectors are to be prioritized: communications, financial services, transport, business services, and tourism. Negotiators are now working to similarly develop and submit schedules of concessions for these sectors, identifying how barriers to entry, such as local presence regulations, can be eased to allow the local operation of service suppliers from other African countries.
Related News
Blue economy can be engine of Africa’s economic growth if well utilized, says ECA’s Adejumobi
The Economic Commission for Africa is fully committed to supporting the African Union, Regional Economic Communities (RECs) and member States to ensure that the untapped potentials of the continent’s blue economy are fully realized, says ECA’s Southern Africa Director, Mr. Said Adejumobi.
In welcoming remarks to delegates attending the 24th Intergovernmental Committee of Experts (ICE) of Southern Africa on the theme “Blue Economy, Inclusive Industrialization and Economic Development in Southern Africa”, Mr. Adejumobi said the ECA recognizes the immense potentials of the blue economy for fostering industrial growth and economic development.
He said the ECA will therefore continue to support the continent through research and analytical work, technical assistance, capacity building, advocacy and awareness raising activities so that it can collectively and sustainably benefit from its blue economy resources.
“This forum is meant to serve that purpose of further debate and discussion, and policy articulation by member States in the region on the issue,” said Mr. Adejumobi, adding that the blue economy, which some refer to as the ocean economy is “Africa's hidden treasure”.
“The blue economy can be the engine of economic growth, the basis of socio-economic development and industrialization for many African countries, if well utilized. The maritime industry, for example, is estimated at over $1 trillion, and there are other related and emerging sectors of tourism, offshore renewable energy, aquaculture, seabed extractive industries, marine biotechnology and bio prospecting,” he said.
Mr. Adejumobi said Africa’s coastal sector remains largely underdeveloped, under-utilized, and poorly governed, which has enabled other forces from outside the continent to benefit more from it, than its citizens.
In China, for example, citing a report of the Economist Intelligence Unit, Mr. Adejumobi noted that “the ocean economy contributed $962 billion or 10% of its GDP and employed over 9 million people in 2014. In the United States of America, the ocean economy was valued at about $258 billion or 1.8% of its GDP in 2010, and in Indonesia, the ocean economy contributed about 20% of its GDP which is similar to the ratio of other middle income oceanic countries”.
“While other countries and regions are harvesting the gains and returns from the blue economy, West Africa for example, is estimated to be losing about $2 billion annually from illegal fishing,” the ECA Southern Africa Chief said.
He said some Southern African countries have adopted strategic plans and development blueprints to transform their blue economy sector.
For example, South Africa hopes to grow its blue economy sector from 54 billion Rands and 316,000 jobs in 2010 to 177 billion Rands and about 1 million jobs by 2033, a feat Mr. Ademujobi said was remarkable.
Seychelles has developed a National Blue Economy Roadmap through which it seeks to accelerate economic growth and diversification, while Mauritius has Vision 2030, which provides an overall development framework, including on the blue economy sector.
“However, the blue economy sector is very complex and dynamic, with various challenges and risks which require more of collective action, cooperation, partnerships and regional frameworks in order to address them,” said Mr. Adejumobi.
Some of the associated challenges and risks of the blue economy include issues of governance and security of the ocean, piracy and terrorism, climate change, ocean environmental sustainability, poor infrastructure and technology, effective production connectivity with land-linked and land-locked countries, financing, and poor technical skills and capacity, he said, adding that more needs to be done at the regional level in the transformation of the blue economy sector through an integrated and holistic approach.
New frontier of African renaissance
The African Union hails the blue economy as the new frontier of African renaissance and its representative at the meeting, Mr. Auguste Ngomo, said the blue economy opens doors for Africa’s industrialization and economic development.
“Like the role played by charcoal and steam engines for the first industrial revolution or oil and electricity for the second, the exploitation of the ocean potentialities can lead us to our economic revolution. The potential of oceans, lakes, and rivers is unlimited,” he said.
“We can be inspired by other nations and regions, learn and acquire experience from them but Africa must focus on its own path, on its own strengths and realities. Our evolution towards blue economy is an ambitious but achievable adventure.”
He continued: “It moves us from an economy of harvests from limited resources to an economy of harvesting unlimited resources if we organize ourselves well. With the exploitation of unlimited resources come also sustainable financial means. But to approach this revolution we must completely change our perceptive.”
Senior policy makers from the region, leading practitioners and experts, private sector operators, civil society, regional and international development agencies, including development financial institutions are attending the meeting. The meeting is hosted by the Government of Mauritius.