Search News Results
The T20 presents its public policy recommendations to the G20
The Think 20 came together in Buenos Aires on 17 and 18 September 2018 to convey its public policy recommendations to the Argentine G20 presidency. President Macri received the Communiqué on Monday morning.
In an event where there were almost a thousand participants, and with the presence of T20 Task Force co-chairs, the Advisory Board and the Steering Committee, the T20 Argentina presented the Communiqué, a document containing its public policy recommendations and vision, to the president of Argentina Mauricio Macri.
Adalberto Rodríguez Giavarini, the president of CARI, and Jorge Mandelbaum, the president of CIPPEC, lead the two institutions presiding the Think 20 (T20) and were the officials who presented the document to the president. The Communiqué contains the engagement group’s public policy recommendations which the group believes should be priorities at the G20 Leaders meeting at the end of the year.
“Today I came to receive the packet of policies that was created after many months of work. I know you have addressed nearly all of the topics on this year’s G20 agenda. I am sure that this document will be useful for the constructive work for this year,” said Mauricio Macri.
In his speech, he added: “On the G20’s path, the role of engagement groups is fundamental. It is you who bring us a new perspective to this dialogue process that we are taking to civil society. Global solutions need a compromise and action from all sectors of society. It means a collective construction, which is why it is so important that their contributions are concrete recommendations orientated towards action. This is the only way to have a positive impact on reality. The main aim of this exercise is to construct a better future for our people.”
“This process highlights to the Argentine people the need for multilateral governance that is only possible if our pillars are democracy, transparency and sustainable trade. History shows us that dialogue and consensus of countries is the only way for us to build a better world. This recommendations are a perfect example of this,” said Adalberto Rodríguez Giavarini, president of CARI.
In her speech, Julia Pomares said: “Think tanks need to step up to the challenge and show that technical knowledge is at the service of building consensus on global urgent issues. But we need to abandon the comfort zone of the technocratic analysis and involve in the global conversation. Here in this building there are more than 1,000 thinkers from 68 countries. The T20 provided a critical and independent vision on those issues that are shaping global governance.”
The handover of the document took place on September 17 during the T20 Summit in which nearly 200 international experts took part, along with almost a thousand participants including specialists from the main think tanks of the world, Argentine government officials and representatives from international organizations and the business community.
T20 Summit
Experts from the main think tanks of the world, Argentine government officials, representatives from international organizations and the business community participated in panels and presentations at the CCK in Buenos Aires.
At the event, T20 officials presented to president Mauricio Macri the Communiqué, a document with the engagement group’s vision on global governance and recommendations on policies. The objective is to collaborate with the G20 leaders meeting at the end of the year.
The Summit is also an opportunity to strengthen the conversations on relevant Think 20 topics and map the view to the future of the open and independent network of think tanks.
The debate involves six world renowned speakers:
-
Jeffrey Sachs, director of the Center for Sustainable Development at Columbia University;
-
Nicholas Burbules, expert in Philosophy of Education and professor at the University of Illinois;
-
Nora Lustig, economist and professor at Tulane University;
-
José Antonio Ocampo, Co-Chair, Central Bank of Colombia;
-
Vera Songwe, Executive Secretary of the Economic Commission for Africa (ECA); and
-
Thomas Straubhaar, professor of economics with a research focus on international economic relations and former director of the Hamburg Institute of International Economics (HWWI).
Experts will also discuss the priorities of the G20 Argentine presidency and other key topics in six plenary sessions, which will be on Climate Action and Infrastructure for Development, Food Security & Sustainable Agriculture, Social Cohesion, Global Governance & The Future of Politics, Future of Work & Education for the Digital Age, Gender Economic Equity and International Economics & Finance.
During the two days, Task Force members will meet to address the topics they worked on throughout the year during the three daily parallel sessions. There will also be parallel events organized by the institutions that lead the T20 and others they are actively involved in.
At the close of the event, the final words will be given by the Think 20 troika which will revolve around the future of the engagement group when Japan will take on the presidency in 2019.
The 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 (LINK). 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 T20 Communiqué 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.
Martín Rapetti, another T20 Policy and Research co-chair, said: “The T20 Communiqué condenses the vision and core messages of the institutions that lead this years T20, CARI and CIPPEC. The main recommendations have been put forward by experts and researchers from the think tanks that participated in the T20 process, with the aim of creating a global governance for a more prosperous, fair and sustainable world.”
The proposals of the T20 Argentina for the G20
Proposal 1: Ensure that the menu of policy options for the Future of Work is flexible enough to address the heterogeneity of challenges that G20 countries face
Proposal 2: Develop a framework for data collection and artificial intelligence in the workplace to enable a socially acceptable introduction of big data and artificial intelligence
Proposal 3: Endorse the creation of a T20 platform for accelerating the jobs of the future
Proposal 4: Promote competency-based curriculum reforms and non-formal learning initiatives to ensure equal opportunities for quality education
Proposal 5: Scale up resources of development financial institutions and align the mandates of international financial institutions with international commitments to invest in sustainable infrastructure
Proposal 6: Empower cities as leading actors to mitigate climate change,develop new metropolitan governance mechanisms, and promote a new ecologically based urban agenda (NUA)
Proposal 7: Implement comprehensive green fiscal reforms to stimulate the development and use of cleaner energies
Proposal 8: Mobilize global resources, improve measurements of agriculture productivity and climate-related parameters and stimulate the transfer of technologies to promote a sustainable food future
Proposal 9: Establish principles that respond to consumer needs, measure reductions in food loss and waste and align finance to compliance with safeguards to encourage a global food system that is sustainable and promotes healthy diets
Proposal 10: Address food security concerns through special arrangements between systemically relevant countries
Proposal 11: Adopt policies that recognize, reduce and redistribute unpaid care and domestic work to relax constraints on women’s time and achieve the 25 by 25 goal
Proposal 12: Initiate the dialogue for the redesign of the rules based multilateral trading system and promote reforms to multilateral trade institutions to make plurilateral agreements possible and provide adequate responses to the interventions and challenges affecting global trade
Proposal 13: Promote a trade system with mechanisms to compensate losers from trade
Proposal 14: Strengthen cooperation on corporate taxation and set up an intergovernmental panel on taxation in the digital economy to promote a fair international tax regime
Proposal 15: Establish global policy meetings among Central Banks and encourage a more extensive use of currency swap lines and Regional Financial Arrangements (RFAs) to promote a stronger and more resilient Global Financial Safety Net (GFSN)
Proposal 16: Design a cross-border framework to put crypto-assets (CAs) on a level regulatory playing field
Proposal 17: Improve global governance through a bottom-up approach
Proposal 18: Align G20 reporting with the 2030 Agenda and report collectively at the High-level Political Forum on Sustainable Development (HLPF 2019) on strategic priorities and approaches to domestic implementations of the 2030 Agenda
Proposal 19: Guarantee the continuity of the Compact with Africa and scale up cooperation between G20 and African countries
Proposal 20: Encourage cooperation among G20 countries and international migration organizations to monitor migration processes and promote regional migration agreements
Related News
The EU’s bank in Africa steps up the action
Whether or not Jean-Claude Juncker’s plans for a “partnership of equals” with Africa becomes reality any time soon, the Luxembourg-based European Investment Bank will have an ever-increasing role in the continent.
The External Investment Programme (EIP) promises to leverage €44 billion of investment, predominantly in Africa, by 2020, commitments that may now be stepped up following Juncker’s State of the Union speech last week.
The EIB has been steadily expanding its operations in East Africa in recent years, opening a bureau in Ethiopia’s Addis Ababa alongside its long-standing office in Kenya.
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 €400 million of projects in 2017 compared to €100 million in the previous year. €400 million 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.
Red tape and domestic political constraints
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,” she says.
“It varies but last year we signed a dozen deals, which is rather exceptional. If we can do on average five or six per year for the region that would be good, but it would be good if we could do more,” she adds.
“Overall, East Africa is a very vibrant region. But the trend is that things are getting more difficult. For instance, the financial sector in the region is now struggling,” says Catherine Collin.
“Likewise, certain countries are more complex like Tanzania, where there is a lot of red-tape and private sector morale is quite low.”
In Kenya, meanwhile, a cap on bank interest rates has “really brought private sector lending to a standstill,” she says.
The cap, which limits the interest that banks can charge on loans at no more than 4 percentage points above the Central Bank Rate – currently 9% – intended to stop banks charging interest of well over 20% – a prohibitive rate for most local businesses and individuals. Instead, it has persuaded banks to lend to the state but dry up private sector lending.
Before the cap, which was introduced in September 2016, local banks often complained that they lacked the cash to lend. Now they have the liquidity but no will to lend.
“There have been quite a few bank failures in Kenya, one of them affecting our portfolio – and non-performing loans have gone up,” says Collin.
“This means that it’s not as smooth as it used to be.”
Thematic lending
The Bank is now focusing more on thematic lending, for example in Kenya, by opening a new line of credit for the agriculture sector, blended with grants from the EU with the aimed of increasing access to finance to all actors of the value chain, including small-holders.
One project backed by the development finance institution (DFI) network that appears to have stalled seeks to create a rapid bus network in Nairobi, in a bid to reduce the number of cars on the capital’s already overcrowded roads. Kenyan President Uhuru Kenyatta wants to have a light version of the scheme operational by December but that looks like a pipedream.
“For us, this BRT project is a priority because it focuses on urban mobility and transport, and will help reduce pollution, a nice fit with our climate action agenda. Nobody questions the usefulness and the impact of this project, but we’ve had it in our pipeline for five years now,” says Collin.
A typical loan from the bank to a public sector project will last for 15 years, including a so-called four years grace period during which only interest is paid and ten years for private sector lending.
The EIB operates with a network of IFIs/DFIs including the World Bank, African Development Bank, Japan’s JICA as well as European bilateral institutions such as the French AFD and Proparco and the German KfW and DEG.
The Olkaria geothermal site has long been one of the EIB’s flagship investment projects in the region. Financing of an additional 70 megawatt unit at Olkaria was signed last year together with JICA and a €45 million to finance the construction of a new sewerage system and a wastewater project in Rwanda’s capital Kigali. Other projects include a $100 million loan to rehabilitate and upgrade berths of the Port of Mombasa on Kenya’s Indian Ocean coast, to be signed hopefully this year.
“Our mandate is very much a private sector mandate and we do not forget that. But you need infrastructure to support the private sector. To generate economic activity and growth you need a port that functions, you need energy, so it is normal that we are still having that as our core métier,” says Collin.
“On the other hand, we have instruments to develop the private sector... and in this region there is potential.
Migration and post-conflict regions
In Ethiopia, the EIB is one of the investors in an industrial park aimed at creating jobs for refugees, and Collin says that she is also looking for ways for the Bank to support projects in the region’s numerous refugee camps which are home to over a million people in refugee camps, many of them fleeing war in South Sudan and Somalia.
“We would like to see what we can do in terms of migration/post-conflict. We are doing the groundwork to see if there’s something we can do in Somalia for instance.”
A study by the International Finance Corporation (IFC) released in May suggested that there is a huge amount of business activity in the Kakuma camp, which would benefit from investment.
“In Kakuma (a refugee camp in north-western Kenya with a near 200,000 population), we have met refugees who have been there 20 years. It is estimated that there is $57 million worth of business being done per year in this refugee camp,” says Collin.
“We want to see if we can invest, though we need to find the right channels and the right instruments.”
Related News
T20 Task Force on Cooperation with Africa: Policy proposals
The T20 task force on Cooperation with Africa aims to integrate cooperation efforts with Africa broadly across G20 work-streams, strengthen G20 members’ commitments to Africa’s Agenda 2063, and explore policy options to promote sustainable development across the continent.
T20 Africa, G20 and Africa: Assessing Our Impact and Influence
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.
Challenge
As one of the key political and economic forums in the world, the G20 Summit was created to facilitate a stable and peaceful world through promoting several development agendas. Decisions taken by this forum help to support reform at the national and international levels. Since its creation in 2012, the T20 has comprised think tanks that aim at developing research and evidence-based briefs and recommendations to guide governments in policy development. The T20 Africa Standing Group established in 2017 should monitor the extent to which its policy recommendations on Africa-related issues have influenced and impacted policies and plans that emerge out of the G20.
This is particularly important for Africa with South Africa being the only African member in the G20. It is clear that African perspectives and priorities are severely underrepresented in the G20. Though the chairs of the African Union and the Heads of States and Government Coordination Committee of the New Partnership for Africa’s Development were accepted as observers at the G20 meetings, this level of engagement is still insufficient. Given the number of relationships and interdependencies between Africa and the G20 countries and the world and how the interests of G20 members are prioritized first and foremost, policies that emerge out of the G20 directly impact development in Africa and the world. As a result, it is critical to assess the impact of T20 Africa on the policy development process and the effects of these policies on social and economic development in Africa.
The T20 was not created to bring about consensus amongst members on specific topics or to participate in the decision-making process. Instead, its objective is to provide concrete, feasible policy recommendations, ideas and visions to inform the policymaking process.
Proposal
Proposal 1: Collectively, as T20 Africa, Define Success – The Engagement Groups were created for a particular purpose but there are no mechanisms currently in place to assess whether the groups’ objectives are met. In order for T20 Africa to know whether it has achieved its purpose or objectives during each Presidency, metrics of success should be developed.
Indicators are useful for monitoring progress and providing feedback on areas of success and areas in which improvement may be required. They define what success and impact look like and determine whether we are moving toward achieving our desired outcomes – in this case, whether T20 Africa contributed to G20 policies and Africa’s economic and social development. These indicators and metrics should be SMART: Specific, Measurable, Achievable, Realistic and Timely.
For starters, simple output-oriented indicators can be developed to track the number of recommendations that emerged from T20 Africa and how many were considered. This will require a little extra work, but having this information, as the B20 does, would allow T20 Africa to collectively speak about its influence.
Proposal 2: Establish a communication structure within T20 Africa – Establishing a communication structure with regular feedback loops within T20 Africa would a) provide greater strategic focus for the policy briefs based on the objectives of each Presidency and b) allow for internal conversations within the group to reflect on the achievements for the year and how to improve the following year. The T20 Africa governance board is well placed for this. The T20 Africa governance board involves member think thanks from the incoming and outgoing T20 presidency as well as rotation among African think tanks. This allows for feedback loops to facilitate greater learning and knowledge sharing.
Proposal 3: Monitor and Share Status of Every Policy Recommendation – While the G20 is not an implementing agency, the decisions that emerge from G20 countries have significant influence. As it stands, engagement groups do not have an official, standardized and public mechanism or tool to monitor the uptake and implementation of policy recommendations. It would be highly desirable to build capacity in the T20 Africa to effectively monitor policy recommendations that emerge from the group and publicly share their status – whether and when they were considered by the G20 and the implementing agency. This can be done by logging all recommendations and their status into a simple online platform. With this information, researchers can continue to track the aftermath and performance of these recommendations to assess impact to the beneficiaries.
Proposal 4: Collaborate with the other T20 engagement groups – For T20 Africa policies that are considered, collaboration should be sought with B20 and other engagement groups to fully assess the financial and social implications of the policy. This thorough cost-benefit analysis would shed greater light on the feasibility on the execution, on any previously unknown positive and/or negative externalities, and the associated financial gains and losses.
Proposal 5: Conduct Impact Assessment in Every Presidency – An impact assessment should be conducted during every Presidency focused on the priorities and agenda of that Presidency. For instance, the Argentina Presidency focuses on three key issues: the future of work, infrastructure for development and a sustainable food future. From here, we can examine the policy recommendations from T20 Africa that are considered by the G20 and begin to assess how and whether they are aligned within the current Presidency’s framework.
Proposal 6: Develop a post G20 Summit strategy to monitor and coordinate – Africa related policies and initiatives Without sufficient African presence in the G20, it is especially important to understand what impact, if any, G20 declarations and initiatives have on African countries. As a result, a strategy should be developed to assess, monitor, and coordinate actions and initiatives related to African countries and institutions at G20 level. Additionally, this information needs to be publicly available. While the G20 Africa Monitor is one possible platform to monitor Africa related policies and coordination, serious conversation is needed in order to decide whether it is the best platform for this objective.
Africa-G20 cooperation: reducing complexity, increasing opportunities
Interest among international partners to cooperate with Africa is high. G20 countries generally follow two parallel tracks: they have their own bilateral initiatives and, in some cases, use the G20 to launch policy initiatives. These parallel bilateral and G20 processes create many opportunities for African actors. But the initiatives are not always complementary and not always sustained in the medium- to long-term. The G20 might want to broaden debates on its impact on development by better coordinating bilateral and G20 initiatives (particularly with regard to support for investments) and by including African representatives in all working groups.
Challenge
Africa continues to be relatively weakly represented in international debates, despite its strong membership within the United Nations and a growing number of country-to-continent dialogue formats, such as the Forum on China-Africa Cooperation (FOCAC), the India-Africa Forum Summit (IAFS) and numerous other initiatives organised by the USA, Japan, Turkey or South Korea. Additionally, there are region-to-region dialogues between the African Union (AU) and the European Union (EU) as well as Africa-South America Summits. Yet, in relevant global governance “clubs”, Africa is barely represented. The G20 is a key example: only South Africa is a member. Pan-African organisations are only observers, and do not have their own seat, unlike the EU. At the same time, developments in Africa are substantially influenced by decisions at the G20 level, e.g. in the areas of trade, taxes, macro-economic stability or climate.
Competition among international partners to pursue new cooperation initiatives with Africa is high. In this regard, G20 countries generally follow two parallel tracks: they have their own bilateral initiatives and only in some cases use the G20 to launch new/different policy initiatives. These bilateral and G20 initiatives are not always complementary and they are not always sustained and followed up in the medium- to long-term. For instance, during the 2017 German G20 Presidency, Germany proposed a G20 Compact with Africa while the EU in parallel launched an EU External Investment Plan during the AU-EU summit in November 2017. Both aim at strengthening the investment environment in African countries and creating incentives for (foreign) investments in infrastructure and other areas. Both remain largely disconnected from other international partners’ investments in infrastructure and other areas. In 2016, the Chinese G20 Presidency launched a new but poorly followed-up G20 initiative on industrialization for Least Developed Countries, while the Belt and Road Initiative – with substantial financial resources linked to it – has remained a bilateral endeavor with multiple and varied implications from region to region. Whether and how the Asia-Africa Growth Corridor promoted by India and Japan will feature during the Japanese G20 presidency remains unclear so far. As development success can only be driven from within, a key success factor for international cooperation is how such cooperation is supportive of African initiatives.
These numerous initiatives provide the opportunity for African countries to leverage their design and decide which cooperation initiatives to prioritise. At least in theory, African countries could also exploit this position of strength to encourage cooperation initiatives to be more aligned with African priorities. At the same time, coordination of various international actors also weighs on African (and international actors’) capacities and some initiatives may not complement one another. This brief develops recommendations on how to best use the interest of G20 countries (and indeed other external partners) in collaborating with Africa to enhance sustainable development and structural transformation across the continent in line with Africa’s agendas.
Proposal
Opportunities for African actors
-
Strengthen engagement beyond the G20 Development Working Group: PanAfrican organisations and South Africa as the only African G20 member may want to strengthen pro-active engagement with G20 working groups beyond the Development Working Group (DWG). The working groups on climate sustainability, trade and investment, agriculture, energy, employment, tax/finance might be particularly relevant as G20 policies in these areas have major direct and indirect consequences for African countries. One way of encouraging wider engagement would be for the G20 to make it a standard rule for all G20 working groups to include African representatives. This would have the further effect of widening African participation beyond South Africa and the AU/NEPAD via directly inviting particular African stakeholders, without necessarily having to change G20 membership. In line with the way in which the AU usually operates, the modality of such inclusion should be determined by the AU chair and the AUC. Co-opting individual African countries would be more ad hoc than systematically including Pan-African institutions.
-
Increase division of labour among African actors when engaging with G20 actors: Pan-African actors could strengthen arrangements for division of labour among them on G20 engagement by identifying which Pan-African actors would lead on specific topics. They could also enhance input to the G20 from African regional organisations. In this regard, the AU and African Regional Economic Communities (RECs) could set up permanent desks dealing with and facilitating engagement with the G20. This cooperative divison of labour should be coordinated by the AU Commission.
-
Define concrete and actionable priorities based on Africa’s Agenda 2063 and its 10-year implementation plan: The AU could publish a yearly list of African key priorities that could feed into G20 discussions. These would not be the kind of long-term transformative goals as seen in Agenda 2063, but – derived from the long-term agenda and the 10-year implementation plan – more concrete, shorter-term goals that could be made actionable by one or two G20 Presidencies. This would allow the continent to take a pro-active role in shaping G20 discussions, and should be tailored to also inform discussions in the various G20 workstreams and Engagement Groups such as the Think20, Business20 or Women20.
-
Enhance monitoring mechanisms: In order to deal with the complexity of working with the G20 club and its individual members at the same time (as well as other international actors), and to highlight contradictions, African actors could strengthen mechanisms to monitor the launch and implementation of various international initiatives and facilitate discussion of how they fit into wider G20 agendas from year to year. This assessment could be done by the AU or the UN Economic Commission for Africa and the key findings could be presented once a year to the AU General Assembly and shared with the G20. Agenda 2063’s 10-year implementation plan could be an important basis against which to assess G20 countries’ initiatives.
-
Primary engagement with G20 anchored with AU Commission rather than AU Chair: The AU has started a fundamental reform process. The AU’s relations with external partners as well as division of labour between AU and RECs are part of this reform debate. Debates are still at an early stage and no decisions have been taken. Until these changes have been finalised, we propose that the primary engagement between the AU and the G20 be anchored with the AU Commission, rather than the AU Chair, as is the current practice. Engagement with the AU Chair is easily disrupted because it changes annually; this disruption is exacerbated by the G20’s own annual change of leadership. More systematic AU-G20 engagement would gain cross-year stability through engagement with the AU Commission under the guidance of and as mandated by the Assembly and Executive Council.
What next?
-
The G20 Presidency of Argentina: The G20 Presidency gives Argentina a historic opportunity to engage with African and other G20 actors. As the chair is traditionally the “honest broker” between all club members, Argentina can use the Presidecy to maintain momentum regarding the cooperation with African partners and thereby build its reputation within the G20 and beyond it. A key priority of the Argentinian Presidency should be to ‘keep the ball in the play’. With the Chinese and the German G20 presidencies, the African dimension of the G20 cooperation has gained prominence. Argentina should grasp the opportunity and support the previous presidencies’ initiatives, while, at the same time, prepare the ground for making cooperation with Africa a prominent topic of the Japanese Presidency.
-
African Union and other African actors: With a view towards the Japanese Presidency, African actors should plan ahead early on. With regard to infrastructure investments, it would be very useful for African actors if conversations are encouraged between different infrastructure-focused initiatives between G20 members and Africa, notably the Compact with Africa launched under the German G20 presidency (2017), the EU External Investment Plan and the China Belt and Road Initiative.
-
South Africa: As the only African G20 member, South Africa has an important role to play. This is a balancing act, as Pretoria cannot claim to speak for the continent. Yet, the country has experiences in engaging in structures of global governance. In 2018, South Africa is the chair of the BRICS and thus can offer a bridge between numerous engagements with the African continent and as a key partner to most external partners to the continent. Argentina has been invited to the BRICS Plus meeting on the last day of the BRICS summit in Johannesburg. Both Pan-Africanism and engagement with global commercial and political partners such as the EU, China, India and Brazil remain in Pretoria’s self-interest, which can provide the necessary energy (and perseverance) to keep African perspectives on the G20 agenda.
Mobilizing Private Investment and the Compact with Africa: A Preliminary Assessment and Steps Ahead
The Compact with Africa (CwA) is a structured partnership between volunteering African countries and the G20 with the inclusion of key multilateral and bilateral partners and, very importantly, the private sector. It was launched by the German G20 Presidency in March 2017. As of May 2018, 11 African countries are participating in the CwA: Benin, Guinea, Côte d’Ivoire, Ghana, Egypt, Ethiopia, Morocco, Rwanda, Senegal, Togo, and Tunisia.
The CwA is an opportunity for increasing private investment (particularly in infrastructure) in Africa through improved coordination and deeper stakeholder engagement. The process can increase transparency and provide better access to information on investment support mechanisms. It will, therefore, help to continue to redefine roles of development actors, including governments, international organizations, and the private sector. An pdf initial assessment of the CwA (575 KB) , one year after its inception, has indicated the need to enhance monitoring and accelerate the implementation of the initiative. Based on this initial assessment and an unattributed pilot survey among private sector actors (undertaken by the authors), the T20 Africa Standing Group proposes the G20 undertake a regular private sector survey, which shall contribute to a systematic integration of the private sector in the monitoring of the CWA, and improve investment tracking.
Challenge
The challenge is to ensure successful implementation of the CwA, which requires robust monitoring and appropriate remediation – as well as stronger participation of the private sector in Africa more broadly. The Africa Advisory Group (AAG), an informal body comprising a sub-set of G20 members, the African Compact countries, the World Bank (WB), African Development Bank (AfDB), International Monetary Fund (IMF), and other stakeholders such as the OECD, governs the CwA. The AAG has adopted a monitoring framework and a light-touch independent review mechanism. Monitoring takes place biannually at the time of the WB/IMF Annual and Spring Meetings and is coordinated by the World Bank.
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. Therefore, we agree with the conclusion of the Monitoring Report that the views of the private sector need to be better represented, ideally through a regularly conducted survey.
To underscore the importance of such a private sector survey, we have undertaken a pilot survey among selected private firms. We stress that the findings of this pilot are only perceptions of the CwA and the challenges investors face in Africa. Yet, the below results highlight the potential benefits of a regular survey for enhancing and accelerating the implementation of the CwA.
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.
The pilot survey largely indicated there is a lack of knowledge and understanding of the CwA among the private sector, including global firms, banks, and industry groups. Those with some exposure to the CwA indicated there has been limited and uneven promotion of the Compact and the benefits to the private sector are not clear. That said, there was overwhelming support, in principle, for the Compact with many respondents noting the entrenched challenges, including risk mitigation and access to local finance that can only be overcome with a collaborative approach among Compact parties, the private sector, and other stakeholders.
Proposal
Integrating the private sector in CwA monitoring and improving investment tracking
We propose that the G20 integrate the private sector into the monitoring framework of the CwA. Specifically, we propose as a first step to regularly survey private sector actors that have engaged in – or are aware of – the CwA to better understand their perception of progress, improvements in policy reforms, and support provided by International Organization or G20 members.
The success of the CwA will hinge on strong private sector participation. Private investment is at the core of the CwA and crucial for its success. It plays a key role in an African Infrastructure Connectivity Alliance. Expanded monitoring can capture “the whole picture of the CwA,” therefore, it is important to include the views on successful practices and challenges for implementation of the private sector. It is furthermore important that views and perceptions of the private investors are taken into account with regard to the actions of all other G20 parties, including the CwA governments, the G20 members, and the IFIs.
A full integration of private firms into the CwA monitoring framework cannot stop at surveying perceptions, but eventually should track their actual investment behavior. We therefore suggest that in a second stage each participating firm reports on its activities, e.g. by stating its planned and realized financial engagement. Such a monitoring has two major justifications: first, as soon as participating firms receive any kind of public support (bilateral or multilateral) they should be obliged to document its use in a transparent manner; and second, given that the CwA’s ultimate aim is to enhance private investment, a regular stocktaking would help assess progress based on up-to-data information. This stocktaking-exercise should go well beyond showcasing successes. It should also systematically track intentions of investment that eventually did not materialize or that experienced delays. The lessons to be learnt from such failures and delays may be as important as the lessons to be learnt from success cases.
The authors of this policy brief are Rob Floyd, African Center for Economic Transformation; Brahima Coulibaly, Brookings Institution Africa Growth Initiative; Jann Lay, Institute of African Affairs, GIGA German Institute of Global and Area Studies; Rainer Thiele, Kiel Institute for the World Economy; and Jing Gu, Centre for Rising Powers and Global Development, CRPD, at the Institute of Development Studies.
Related News
Nigerian President inaugurates first IAPH Regional Conference on African soil
The International Association of Ports and Harbors (IAPH) has held its first regional conference on African soil under the theme “African Ports and Hinterland Connectivity”.
Hosted by Nigerian Ports Authority at the Nigerian capital Abuja, the dedicated conference brings together African ports, port operators and corridor management organisations under one roof to study the interdependent linkage between ports and their hinterlands in the context of Africa, a continent with no less than fifteen inland nations dependent on their neighbours for seaborne access to develop and grow their economies.
In his opening speech on Monday morning, His Excellency Muhammadu Buhari, the President of the Federal Republic of Nigeria, advised African countries to improve on ports infrastructure and utilise all natural maritime endowments to facilitate trade.
“I want to implore participants at the conference to see themselves as people opportuned to stand in positions of responsibility on behalf of Africa,” the President said. He emphasised that interconnectivity would improve African countries’ economic competitiveness and that the maritime sector was central to facilitation of trade and total integration of Africa for development.
International organisations including IMO, WTO, World Bank, UNCTAD, European Commission, African Union, African Development Bank and Pan-African Association for Port Cooperation are represented at the conference together with ports from Asia, Europe and the US, to contribute their expertise and involvement in improving hinterland accessibility in Africa using best practice comparisons already on the continent as well as from other parts of the world.
In her welcome to all delegates, Nigerian Ports Authority Managing Director and IAPH Vice President of the African Region Ms. Hadiza Bala Usman commented: “There is no doubt that Africa holds a special position in the global maritime space. With 39 of the 54 countries on the continent endowed with littoral assets, the development of the continent is to a large extent tied to the optimal exploitation of its vast maritime resources.
“And since we, as brothers and sisters on the continent are also affected by relatively identical limitations and concerns, this conference gives us the opportunity to explore ways of cooperation for the development of our ports and, ultimately, the economies of our countries.”
The three-day meeting will culminate in the formulation of key resolutions to be presented by the Nigerian Institute of Transport Technology (NITT) with a final communiqué of main outcomes to be facilitated by the Secretary General of the Ports Management Association of West and Central Africa.
IAPH Managing Director Patrick Verhoeven applauded the initiative taken by the Nigerian Ports Authority:
“This is the first dedicated conference that IAPH has held in Africa since its new constitution established six world regions. As the world's second largest and second most-populous continent and with six of the ten fastest growing economies in the world, Africa’s 54 countries and their ports are becoming lynch-pins of future global trade and development.
“The recent decade has seen investment in African port infrastructure on a scale never witnessed before in the continent’s history. It is therefore a logical step for IAPH to hold this event and I congratulate our Vice-President Ms Hadiza Bala Usman for taking the initiative.”
Background
From the purchase of raw materials to the delivery of the final product, the entire operations of transport link between coastal countries to hinterlands is integrated into one network. Finished goods as well as raw materials and semi-finished products continually cross borders during the production process particularly as it relates to inland and landlocked counties.
These factors place ports in a strategic position. They are key links in maritime transport because they are the departure and arrival points of maritime transport and are the interface between the port and the hinterland interfacing different modes of transport.
The African Development Report 2010 states that “a port is only as good, and its development only as viable, as the transport networks linking (connecting) the ports to centres of production and consumption (the hinterland)” this assertion shows that port-hinterland connectivity interdependency is beginning to change the definition of port productivity and efficiency also because rail and road transport modes impact the determination of cost of goods. Experts assert that “in order for trade to continue growing in the future, port-hinterland connectivity must become a part of port strategy, planning and management”.
Considering Africa’s large land mass where 15 out of her 54 countries are landlocked (SIPRI 2015), land transport plays a very specific and important role in the economic development of nations because trading requires fast and safe transport. While the ports have major impact to the economic development of coastal countries, port-hinterland connectivity has huge impact on the economics of the hinterlands.
In this sense, Africa’s hinterlands are at economic disadvantages where port-hinterland connectivity is inefficient. If this is the case, an efficient system of transportation characterized by Speed, safety, delivery reliability and frequency is essential in the economic development of African states.
The IAPH Abuja 2018 conference will study the interdependent linkage between a port and the hinterlands in the context of Africa where ports are facing serious challenges with providing even the traditional land-sea interface infrastructure, then explore how best Africa can learn from global experiences and design local solutions to effectively create a smooth and efficient connectivity between its ports and their hinterlands.
To undertake this exercise, the following questions need to be posed for answers to be explored:
-
How adequate is Africa’s port infrastructure in response to contemporary trends of increasing ship size and cargo volumes?
-
What is the present state of Africa’s transport infrastructure (road, rail, inland water, pipeline networks) linking the hinterland to its ports?
-
To what extent have Africa’s ports evolved from the traditional provision of basic infrastructure to developing inland facilities for improved port hinterland connectivity?
-
Given that most of Africa’s industrial and consumption hinterlands are located within the port cities and regions, is railway network a viable investment for hinterland connectivity?
-
In the face of near 100% dependence on road transportation and congested port cities, what options are available to African ports to improve connectivity to the hinterland?
Related News
tralac’s Daily News Selection
Five trade and infrastructure events – from Arusha to Tianjin:
The EALA has resumed its sitting in Arusha (until 6 October). Key agenda items include the East African Community Statistics Bill, 2017 and the EAC Customs Management (Amendment Bill) (No 2), 2017.
Today, in Kampala: Strategy to deepen Uganda-Africa trade (jointly organised by Afreximbank, Uganda Export Promotion Board). Follow @iatf2018 for tweeted updates from the discussion.
Starting today, in Addis Ababa: Ethiopia Railway Summit (jointly organised by China Africa Advisory, RDN Global, Ethiopian Railways Corporation). Follow @ChinaAfricaBlog for tweeted updates.
Starting tomorrow, in Juba: EAC experts meeting to consider the draft Cooperation agreement on investment facilitation. And: a list of other EAC events taking place this week
Outperformers: High-growth emerging economies and the companies that propel them (McKinsey Global Institute)
Across the varied global landscape, we can identify some individual countries that are aspiring newcomers to our list of outperformers. These are countries that are putting in place and strengthening their economic fundamentals, in accordance with the elements of our heat map. Some of them are already achieving GDP per capita growth that exceeded 3.5% in 2011 to 2016. Five countries - Bangladesh, Bolivia, Philippines, Rwanda, and Sri Lanka - have exceeded the 3.5% annual per capita growth rate in 2011 to 2016 and also rank in the top 25% of our performance index.
A second cluster of countries consists of Kenya, Mozambique, Paraguay, Senegal, and Tanzania. These countries have moved into the top quartile of our economic performance scores, reflecting improvement in key productivity, income, and demand drivers, but they have not yet achieved consistent 3.5% GDP per capita growth. Finally, two other countries achieve the 3.5% GDP growth benchmark, but their economic performance is less stellar, which puts them in the second quartile. They are the Republic of Côte d’Ivoire and Dominican Republic (Exhibit 5).
Kenya bans importation of rice from Tanzania (The Citizen)
The government revealed on Saturday that Kenya has stopped importation of rice from Tanzania in yet another sign of unending trade wars between the two largest economies in East Africa. The permanent secretary in the ministry of Foreign Affairs and International Cooperation, Prof Adolph Mkenda, told The Citizen that the Kenyan government stopped the importation of rice from Tanzania over claims of standards and packaging. “We are seeking an explanation [on the ban],” said Prof Mkenda. “We are sure that these are negotiable issues and it is our best belief that they are resolvable.” Apart from rice, there are also other issues that the government of Tanzania is trying to sort out with its Kenyan counterpart. One is that which involves the 15 lorries carrying wheat flour, which are stranded at the Namanga border post. The trucks were stopped to pass through the border following the decision by Kenyan authorities to ask the owner to clear each lorry afresh. This is despite the fact that the owner had already cleared 85 lorries, including those stuck at the border, which were bound various cities of Kenya. The other issue, according to Prof Mkenda, is that involving Bakhresa’s energy drinks product, which the Kenyan authorities overvalue them in contrast to the exact value indicated by the producer. This has made the product to be unfairly taxed by the Kenyan taxman and cause unnecessary inconvenience to
EAC launches its Gender Policy in Arusha (EAC)
The EAC Gender Policy, which was launched today at the EAC Headquarters, in Arusha, Tanzania, 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.
EAC industrialization and SMEs: SCTIFI concludes (EAC)
The Extra Ordinary Sectoral Council on Trade, Industry, Finance and Investment dedicated to Industrialization and Small Medium Enterprises (SCTIFI) has concluded at the EAC Headquarters in Arusha, at the level of the Permanent/Principal Secretaries. The extra-ordinary dedicated SCTIFI was convened to discuss industrialization matters in the community which has become a major agenda for the EAC Heads of State Summit. Agenda items included: the EAC Automotive Industry Action Plan and Draft Concept note on the local assembly/manufacture of affordable vehicles; Establishment of a Regional Automotive Industry Council/Platform of East Africa (AICEA); Concept Note on the manufacture/production of Low Cost Vehicles (Affordable Vehicles) in the Region and Age Limit for imported Used Vehicles.
ECOWAS Fiscal Transition Programme: update
The ECOWAS Commission is training member states in fiscal forecasting and revenue mobilization. The workshop, organized by ECOWAS Commission was held last week in Abuja, to develop capacities in the Quasi-accounting model for revenue administrators from ECOWAS Member States, UEMOA as well as the academia. The ECOWAS Fiscal Transition Programme was developed to assist member states maximize the positive effects of regional integration and minimize the negative effects of tax competition in the emerging customs union within the Community. This programme has six priority intervention areas.
TMEA, COMESA open new chapter of cooperation (COMESA)
Trade Mark East Africa and COMESA have opened a new chapter of cooperation on regional integration programmes following a high-level meeting between the parties, held on 10 September. The two parties agreed to explore closer partnership in four key areas of trade facilitation, development of transport corridors and improvements in logistics, industrialization and promotion of small scale cross-border traders particularly with focus on women and the youth among COMESA Member States by addressing prevailing constraints especially along the borders.
South Africa: Illicit goods amounts to almost 10% of GDP (City Press)
Sectoral Ministerial event outcomes:
G20 Trade and Investment Ministerial: statement
We welcomed the inventory of national experiences, programs, policies and practices on trade and investment aspects of agro-food GVCs. We also welcomed the discussion of key factors for G20 trade and investment policy-making options to support the participation and increasing value-addition in agro-food GVCs, which can particularly benefit developing countries. National policies to support Micro, Small and Medium-Sized Enterprises, and women are also important.
We welcomed the inventory of national experiences, programs, policies and practices on trade and investment aspects of the New Industrial Revolution. We also welcomed the discussion of factors for G20 policy-making options to face the challenges and take advantage of the opportunities that the NIR poses for trade and investment flows, with particular attention to the situation of MSMEs, developing countries and women, thereby contributing to bridge all forms of digital divide.
4th BRICS Communication Ministerial: Declaration
Ministers remained aware of the unique position that BRICS members have and the competitive advantages in particular areas of the Fourth Industrial Revolution. Therefore, Ministers agreed, inter alia, to:
Support the commencement of the full operationalisation of Partnership on New Industrial Revolution (PartNIR), and agree with the setting up of an advisory group, comprising of the appropriate ministries, to develop, as a first step, the terms of reference and a work plan aligned with the Fourth Industrial Revolution priorities, to be submitted to the BRICS Chair. The PartNIR aims at deepening BRICS cooperation in digitalisation, industrialisation, innovation, inclusiveness and investment, to maximise the opportunities and address the challenges arising from the Fourth Industrial Revolution.
India may restrict non-essential imports to check rupee fall (Livemint)
After Friday’s measures to increase capital inflows to check a falling rupee and curb the rising current account deficit, the next in line could be trade-related measures to curb non-essential imports and boost exports. On Friday, finance minister Arun Jaitley said a broad policy decision has been made to take necessary steps to cut non-essential imports and increase exports, in the backdrop of the CAD touching 2.4% in the June quarter. “The items will be identified in consultation with the line ministries in the next few days and necessary decisions will be taken. We will also keep in mind that the decisions are WTO-compliant,” he said. Among non-essential items, imports of gold and electronic goods have picked up significantly in recent months.
The importance of forging a united front amid a full-blown trade war (Livemint)
Last week, Canada circulated a nine-page draft discussion paper called Strengthening and Modernising the WTO, almost on the lines of the EU’s non-paper. Canada, which is facing sustained heat from its neighbour US in the ongoing NAFTA-revamp negotiations, has gone a step further than Brussels by proposing to convene a ministerial meeting of 13 countries next month (24-25 October) in Ottawa. The 13 countries that will take part in the Ottawa meeting include the EU, Japan, Canada, Switzerland, Norway, Australia, New Zealand, Singapore, South Korea, Brazil, Chile, Mexico and Kenya. [China’s deal on investment facilitation runs into WTO roadblock]
Monday’s Quick Links: Jihan Chara: The tale of Morocco in ECOWAS Nigeria: African diplomats call for implementation of Africa’s convention on corruption Zambia to establish mechanism to address COMESA Peace and Prosperity Index Zambia-China: an intricate relationship Zimbabwe: Sino Zimbabwe Cement Company targets 300% export growth Tanzania: Chinese firm states new ‘willingness’ to invest in Bagamoyo port project Ghana: Exports under AGOA hit $748m in 2017 UK imported £23bn worth of food in first six months of 2018 |
Related News
EAC launches Gender Policy in Arusha
The East African Community Secretariat has launched its Gender Policy that seeks an inclusive Community which guarantees equal rights and opportunities for women and men, boys and girls.
The EAC Gender Policy, which was launched today at the EAC Headquarters, in Arusha, Tanzania, 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.
Speaking at the opening session, on behalf of the EAC Deputy Secretary General in charge of Productive and Social Sectors, Hon Christophe Bazivamo, the Director of Social Sectors at the EAC Secretariat, Ms. Mary Makoffu, said that the Gender Policy was developed out of the recognition that there still disparities among men and women in various spheres of life.
“For example, despite various accomplishments by Partner States in educating the girl child, and possessing various skills by women and girls, there was poor representation of women in the employment sector and more so in political representation,” said Director Makoffu.
Ms. Makoffu informed the participants at the launch that there was still misleading data and contradictions between targeted programme interventions and those incorporating gender perspectives across different sectors.
“This lack of accountability delays progress in advancing gender equality and the empowerment of women, girls and other marginalised groups,’’ she said. Ms. Makoffu said that Gender Equality was a key principle of the EAC integration process.
She said that under Article 6(d) of the Treaty for the Establishment of the EAC, Partner States committed to adhere to the principles of democracy, the rule of law, accountability, transparency, social justice, equal opportunities, gender equality, as well as recognition, promotion and protection of human and people’s rights.
Oh his part, Hon. Abdikadir Aden, Chairperson of the General Purpose Committee at the East African Legislative Assembly (EALA) informed the participants that in a bid to contribute to the quest for Gender Equality, EALA passed the EAC Gender Equality and Equity Bill, 2017 on Women’s Day of 2017 in Kigali, Rwanda.
Hon. Aden said it was expected that the Bill, when fully assented to, would give an unprecedented boost to the observance and practice of gender equality in the region.
“I am informed that the training that has been organized to provide relevant knowledge, skills and values that will allow participants to contribute effectively in the implementation of the EAC Gender policy and all efforts at mainstreaming Gender in their respective organizations and in the Partner States,” said the legislator.
He congratulated the EAC Secretariat for this great stride of launching the policy and called for all the EAC Organs and Institutions to practice, encourage and advocate for Gender Equality.
Dr. Kirsten Focken, the GIZ Programme Manager, underscored the importance of the EAC Gender Policy as an instrument saying that it would bridge the gender income inequality gap that has existed for over two decades within the EAC region.
Dr. Focken, who was represented by Joyce Kimaro, Senior Adviser at the GIZ called for joint research among stakeholders on laws and regulatory environments which facilitate or hinder gender equality and women’s economic participation, and develop specific activities or interventions to remove the barriers in the region.
Background
In 2012, the EAC Secretariat with support from the Society for International Development (SID) and the Eastern African Sub-Regional Support Initiative for the Advancement of Women (EASSI) commenced the process of developing the Policy. This was in compliance with the directive of the 25th Meeting of the Council of Ministers (EAC/CM25/Dir25) of August 2012 where the Council directed the Secretariat to develop policies on Gender Equality, Youth, Children, Social Protection and Community Development.
The EAC Gender Policy is anchored in Article 6(d) of the pdf Treaty for the Establishment of the EAC (539 KB) where Partner States committed to adhere to the principles of democracy, the rule of law, accountability, transparency, social justice, equal opportunities, gender equality, as well as recognition, promotion and protection of human and people’s rights in accordance with the provisions of the African Charter on Human and People’s Rights of 1986.
EAC Extra-Ordinary Council on Trade, Industry and Investment dedicated to Industrialization and SMEs concludes in Arusha
The Extra-Ordinary Sectoral Council on Trade, Industry, Finance and Investment (SCTIFI) dedicated to Industrialization and Small Medium Enterprises (SMEs) concluded at the EAC Headquarters in Arusha, Tanzania at the level of the Permanent/Principal Secretaries.
The extra-ordinary dedicated SCTIFI was convened deliberately to discuss industrialization matters in the community which has become a major agenda for the EAC Heads of State Summit.
Among the items on the agenda were the consideration of the:
-
EAC Automotive Industry Action Plan and Draft Concept note on the local assembly / manufacture of affordable vehicles;
-
Establishment of a Regional Automotive Industry Council/Platform of East Africa (AICEA);
-
Concept Note on the manufacture/production of Low Cost Vehicles (Affordable Vehicles) in the Region; and
-
Age Limit for imported Used Vehicles.
Speaking at the opening session of the Permanent/Principal Secretaries, the EAC Deputy Secretary General in charge of Planning and Infrastructure, Eng. Steven Mlote, noted that the dedicated session was important step to the prioritization of industrial development in the Community and a demonstration of regional commitment towards industrialization.
He underscored that the decision to convene a dedicated meeting on industrialization is a landmark achievement and a blessing as it signifies the priority the region is giving to industrialization issues, which have assumed prominence in the integration agenda.
Eng. Mlote disclosed to the meeting that the region is making good progress towards implementing the Summit directives on the Automotive; Cotton, Textiles and Apparels; Leather Sector and Pharmaceutical Sectors. The Community has reached a stage of integration where Industrial development and the promotion of manufacturing have become much more important and necessary than ever added, Deputy Secretary General.
The Deputy Secretary General informed the meeting that ordinarily, it would have been more reasonable to propose for a Separate Sectoral Council to deal specifically with industrialization and SMEs sector, however, mindful of the need for rationalization and resource constraints, we proposed the forgoing as a stop gap alternative, stated Eng. Mlote.
Related News
BRICS Ministers undertake to support SMMEs
BRICS Communications and ICT Ministers have identified Small, Micro, Medium Enterprises (SMMEs) as potential engines for growth and job creation and agreed to help promote the cooperation of SMMEs from BRICS member countries.
In a statement by Minister Lindiwe Sisulu issued at the end of the BRICS meeting for Communications and ICT Ministers, she said: “Key to unleashing their potential is for governments to support and invest in the innovation and development of ICT SMMEs and the broader ICT industry.”
“This collective commitment of the Ministers of Communications is fully supported by the outcomes of the 4th Business to Business Engagements. The Ministers undertook to promote the cooperation of SMMEs from BRICS members. They urged SMMEs to continue to innovate to find solutions which will advance universal telecommunications access,” Minister Sisulu stated.
The meeting, held last week in Durban, agreed to share studies, expertise and information on the roll-out of 5G within BRICS member countries. This includes encouraging intra-BRICS investment on 5G and other new emerging technologies.
The ministers further agreed to continue to cooperate on cybersecurity and to increase partnerships on digital skills training.
A common agenda on the Fourth Industrial Revolution, in particular the participation in the operationalisation of the Partnership on New Industrial Revolution (PartNIR), was agreed on.
The PartNIR aims to deepen BRICS cooperation in digitalisation, industrialisation, innovation, inclusiveness and investment, to maximise the opportunities and address the challenges arising from the Fourth Industrial Revolution, said the declaration.
The PartNIR is one of the resolutions of the BRICS Summit. This will be done through the establishment of the Digital BRICS Task Force to coordinate cooperation on the digital and ICT enabled interventions for the Fourth Industrial Revolution.
The 4th BRICS Ministers of Communication Meeting was held in Durban on Friday and Saturday. ICT Ministers from Brazil, Russia, India, China and South Africa attended the meeting.
The meeting was aimed at taking forward policy approaches to emerging technologies, progress in business linkages and strengthening cooperation on the Fourth Industrial Revolution in the five countries.
Declaration of the 4th BRICS Communication Ministers Meeting
We, the Ministers of the Federative Republic of Brazil, the Russian Federation, the Republic of India, the People's Republic of China and the Republic of South Africa, met in Durban, KwaZulu Natal Province, Republic of South Africa, at the 4th BRICS Ministers of Communication Meeting, on 15 September 2018, under the theme “Advancing Inclusive Growth through Industry and SMME Participation”;
Guided by the overall theme of South Africa’s Chair-ship of BRICS in 2018: “BRICS in Africa: Collaboration for Inclusive Growth and Shared Prosperity in the Fourth Industrial Revolution”;
Recalling the vision agreed in the Ufa Declaration that ICTs are an important medium to bridge the gap between developed and developing countries, that developing countries have great potential in the ICT ecosystem, and that ICTs enhance opportunities for the establishment of global partnerships for sustainable development;
Therefore, we commit to the continued implementation of the programmes and agendas that seek to implement the Ufa ambitions outlined in the Development Agenda and Action Plan (DAAP) as contained in the Bengaluru Communique of November 2016 and consensus decisions of the Hangzhou Declaration of July 2017.
Ministers acknowledged mainly the significant impact of the Fourth Industrial Revolution will have on current industrial manufacturing methods and business models, labour structures, the productivity and competitiveness, the emergence and application of new technologies and digitization including a re-look of current regulatory interventions. The net effect on all this on the economic growth and the development is unequalled opportunities for BRICS Members.
Noting that the Fourth Industrial Revolution will also bring major challenges, Ministers re-affirmed the urgent need for BRICS Members to ready themselves to respond accordingly in policy formulation, development of legislations, and engagement of citizens and effective creation of a conducive environment that will allow members to benefit from the Fourth Industrial Revolution.
Ministers remained aware of the unique position that BRICS members have and the competitive advantages in particular areas of the Fourth Industrial Revolution. Therefore, Ministers agreed to:
-
Support the commencement of the full operationalisation of Partnership on New Industrial Revolution (PartNIR), and agree with the setting up of an Advisory Group, comprising of the appropriate Ministries, to develop, as a first step, the Terms of Reference and a Work Plan aligned with the Fourth Industrial Revolution priorities, to be submitted to the BRICS Chair. The PartNIR aims at deepening BRICS cooperation in digitalisation, industrialisation, innovation, inclusiveness and investment, to maximise the opportunities and address the challenges arising from the Fourth Industrial Revolution. It should enhance comparative advantages, boost economic growth, promote economic transformation of BRICS countries, strengthen sustainable industrial production capacity, create networks of science parks and technology business incubators, and support small and medium-sized enterprises in technology intensive areas as pronounced in the 10th BRICS Summit Johannesburg Declaration on the 27th July 2018. In view of the important role of digitalization in the main areas of PartNIR and the due responsibility of ICTs sector to support achieving it, the Ministers resolved to set up a Digital BRICS Task Force (DBTF) under the WG of ICT Cooperation, to further commit to the full participation of Ministers of Communication in the work of PartNIR and alignment of the ICT sector work-stream program. The DBTF will focus on promoting the deployment of ICT infrastructure, enhancing digital transformation, and facilitating adoption of innovation technologies so as to improve BRICS Members readiness for the Fourth Industrial Revolution.
-
Dedicate greater effort towards the exchange of information and communications technology (ICT) policies, regulation and legislation. To that extent, the 4th BRICS Ministers of Communication Meeting encouraged setting-up of the BRICS ICT Regulators Forum. The purpose of the forum is to share and exchange ideas, best practices and capacity building related to the ICT sector. Ministers noted the different legislative frameworks for regulators, and agreed to the ongoing discussion within member states. The Regulators Forum may, within the framework of cooperation led by the BRICS Ministers of Communications, develop its work program and modus operandi by preparing a concept note and terms of reference.
-
Commit to improving continuous exchange of ideas and cooperation between BRICS Members in the context of international engagements and cooperation. In that regard, acknowledge the effort put by the BRICS members to participate in the ICT activities of international organizations, including UN, ITU and G20.
-
Appreciate the work carried out by the Focus Group of the BRICS Institute of Future Networks (BIFN) and endorse the model of establishment of a Council of decentralised BRICS Institute of Future Networks. The Council, as the BIFN’s decision-making body, composed of the representatives designated by the BRICS Communications Ministers, shall decide on terms of reference and work program of the BIFN. Each BRICS member shall decide on the level of its participation and designate either a premium national body or establish such a body to be the local branch of the BIFN. The Council will be supported by a BIFN Secretariat to be set up at a location of one of the BRICS Members. The Council will develop a mechanism on the operationalization of the Secretariat, at the earliest convenience.
-
Reiterate the commitment made in 2017 at Hangzhou, China to “fully stimulate the innovation of the industry, to continue to expand support to industrial innovation, improve intellectual property protection system, optimize innovation development environment, study and judge technology development trends in depth, and provide guidance for the rapid and sound development of the industry”. Small, Micro, Medium Enterprises (SMMEs) are the most intrinsically vibrant and dynamic enterprise community with the huge potential to contribute to growth and create jobs. Furthermore, SMMEs can create a foundation for enhanced communication and cooperation among BRICS members. Therefore, it is important for government to support and invest in the innovation and development of ICT SMMEs and broader ICT industry. This collective commitment of the Ministers of Communications is fully supported by the outcomes of the 4th Business to Business Engagements. Informed by our collective mission to position SMMEs as the drivers of growth and job creation SMMEs should be actively involved in the ICT sector such as the manufacturing value chains. We further undertake to promote the cooperation of SMMEs from BRICS members.
-
Recognising that to deepen the commitment, there is a need for strengthening and improving the Working Group on ICT cooperation. In this regard, the WG on ICT cooperation needs to hold regular interaction to take stock of the decisions taken and the status of their implementation.
-
Aware of the fast development of the digital economy throughout the world and the ICTs as the essential enabler for the digital economy, we undertake to increase cooperation on the digital economy, enhance exchange and communication, and facilitate an appropriate ICT ecosystem for accelerating the digital economy across sectors for BRICS members.
-
Taking note of the important role of the internet and emerging technologies play in the digital transformation of economies, and facing the historical opportunity the Internet applications provided whilst expanding from the consumer sector to the production sector and the virtual economy to the real economy, undertake to organize relevant activities in the forms of joint research, seminars and workshops, to enhance cooperation in realizing the all-around, whole- industry, and full-value-chain development of traditional industry, comprehensively improving the level of economic development, and facilitating the development of innovative technologies and their use across industries, including the network infrastructure, application platforms, new technologies, standardization, information security.
-
Continue all efforts of eliminating the digital divide between the rural and the urban; between BRICS countries and developed countries; and accelerating the diversified development of the world’s software and IT equipment market. The increased ICT infrastructure investment, sharing of best practice and models of deploying innovations that have contributed to the advancement of universal telecommunications access, remains important and encouraged. Such efforts should be supported by capacity building aimed at creating awareness on the use of ICT, establishing public trust in the use of ICT and promoting the safe use of ICT for the development of all citizens.
-
BRICS Ministers of Communication noted the presentation of a project on improving sustainability of the DNS system of the internet by Russia and China, and on DigiLocker and cooperation for 5G project/M2M by India. Ministers also noted the fast development of industrial internet in China.
-
Ministers congratulated South Africa for the successful hosting of the recently concluded ITU Telecom World 2018 in Durban.
Related News
G20 Trade Ministers call on revitalizing the international trade system
In spite of the current international trade environment, the G20 Trade and Investment Ministerial Meeting ended in Mar del Plata on Friday afternoon with a ministerial statement that calls for keeping markets open, addressing economic development and reinvigorating the international trading system.
The document, agreed by all G20 members, acknowledges that international trade and investment “continue to be important engines of growth, productivity, innovation, job creation and development.”
With respect to current international trade developments, the declaration reads that “the G20 is a platform for political dialogue outside of a negotiating context and for gathering collective efforts to ensure that the benefits of international trade and investment are shared by all.” It recognizes the need to step up “actions to mitigate risks and enhance confidence in international trade.”
The 36 heads of delegation also point out that “agri-food global value chains (GVCs) are one of the important means to achieve a sustainable food future” and underscore the importance of national policies to support micro, small and medium-sized enterprises (MSMEs), as well as women.
The declaration also looks at the implications arising from the new industrial revolution (NIR), an issue high on this ministerial meeting’s agenda: “The NIR has the potential not only to increase productivity, but also to transform comparative advantages among countries and break down the traditional boundary between the physical and the digital world, and between goods and services.“
Press conference
Once the meeting at the NH Gran Hotel Provincial ended, Argentine Minister of Foreign Affairs and Worship, Jorge Faurie, and Argentine Minister of Production and Labour, Dante Sica, gave a press conference to brief on the meeting’s conclusions.
“We hail the ministers’ efforts to agree on a common denominator, which has allowed us to issue the ministerial declaration. This shows that, through dialogue and the search for consensus, we can build a new reality, one that adapts to how the world has changed with respect to work, production and trade,” Faurie said.
“All technological changes and the new industrial revolution are meant to promote the inclusion of small and medium-sized companies into the international trading system,” Sica said. “We must work hard so that technological progress doesn't cause a new digital divide that affects SMEs,” he added.
“Sitting at the table of the G20, this essential international forum whose members account for 80% of global GDP, Argentina was able to do what it does well: working as a mediator and finding common ground,” concluded Faurie.
Ministerial Statement: G20 Trade and Investment Ministerial Meeting
Mar del Plata, Argentina
-
We, the G20 Trade and Investment Ministers, met on 14 September 2018 in Mar del Plata, Argentina, under the chairmanship of the H.E. Amb. Jorge Faurie, Minister of Foreign Affairs and Worship of the Argentine Republic, and H.E. Mr. Dante Sica, Minister of Production and Labor of the Argentine Republic, to further strengthen G20 trade and investment cooperation, under the overall objective of the G20 Argentinean Presidency of “building consensus for fair and sustainable development”, taking into consideration national needs, priorities and circumstances.
-
The G20 Trade and Investment Ministers meeting gathered all G20 members as well as guests from Spain, Chile, Netherlands, Jamaica (on behalf of CARICOM), Senegal (on behalf of NEPAD) and Singapore (on behalf of ASEAN). Also, the following International Organizations participated in the meeting: IMF, ITC, OECD, UNCTAD, World Bank, WTO, CAF, and IADB.
-
International trade and investment continue to be important engines of growth, productivity, innovation, job creation and development. Rapid technological advances are transforming the world economy at an unprecedented level. Economic growth remains robust, while trade shows signs of recovery since the financial crisis, with an increase of 4.7% in 2017 and a projected increase of 4.4% for 2018. However, downside risks, vulnerabilities and growing inequality could affect confidence and the prospects for strong, balanced and sustainable growth.
-
At a critical juncture for international trade and investment cooperation, G20 members will work together to enhance sustainable economic growth, keep markets open, address economic development and to reinvigorate the international trading system.
Promoting inclusive Agro-food Global Value Chains
-
Global and regional value chains have produced deep transformations in patterns of production, trade and specialization around the world. Agro-food Global Value Chains (GVCs) are one of the important means to achieve a sustainable food future.
-
We welcomed the inventory of national experiences, programs, policies and practices on trade and investment aspects of agro-food GVCs. We also welcomed the discussion of key factors for G20 trade and investment policy-making options to support the participation and increasing value-addition in agro-food GVCs, which can particularly benefit developing countries. National policies to support Micro, Small and Medium-Sized Enterprises (MSMEs), and women are also important. Those factors can help to improve access to markets, foster opportunities for value-addition, and create jobs in rural areas to contribute to agricultural productivity and income for small producers.
Facing the challenges of New Industrial Revolution
-
The expansive and transformative changes brought about by the New Industrial Revolution (NIR) and the adoption of digital technologies across all industries has wideranging implications for the scope, scale, speed and patterns of production, trade and investment. The NIR has the potential not only to increase productivity, but also to transform comparative advantages among countries and break down the traditional boundary between the physical and the digital world and between goods and services.
-
We welcomed the inventory of national experiences, programs, policies and practices on trade and investment aspects of the NIR. We also welcomed the discussion of factors for G20 policy-making options to face the challenges and take advantage of the opportunities that the NIR poses for trade and investment flows, with particular attention to the situation of MSMEs, developing countries and women, thereby contributing to bridge all forms of digital divide.
G20 Dialogue on Current International Trade Developments
-
The G20 is a platform for political dialogue outside of a negotiating context and for gathering collective efforts to ensure that the benefits of international trade and investment are shared by all.
-
We recognized the need to step up dialogue and actions to mitigate risks and enhance confidence in international trade.
-
We stepped up our dialogue on current international trade developments, recognizing the urgent need to discuss current events in international trade and ways to improve the WTO to face current and future challenges. In this context, we discussed what the G20 can do to address the current situation in a collaborative manner.
-
We encouraged all G20 Members individually and with other interested parties to continue to come forward with ideas to ensure that the WTO continues to be relevant.
-
We welcomed the continued assistance of international organizations in support of the G20 trade and investment agenda moving forward.
In preparation for the Buenos Aires Summit
- We recommend our Leaders to consider these important topics further at the Buenos Aires Summit.
Related News
tralac’s Daily News Selection
In Washington, DC: IMF’s Christine Lagarde at the launch of a new book, Race to the next income frontier: How Senegal and other low-income countries can reach the finish line
This new book goes beyond the often-discussed “what needs be done” and focuses on the too-often forgotten “how can this be done effectively”. The task is not easy, but Senegal and other low-income countries have an advantage. They can learn from the successes of other countries who have been here before. This book is a fitting example of how knowledge can turn into action. The drafting of this book has enabled policymakers to identify 11 critical reforms in areas ranging from good governance to social protection.
Senegal and ten other nations are now leveraging the new partnership under the G20 Compact with Africa to promote private investment as a way of better integrating their economies with the global economy. And this is just the beginning of what can get done.
Africa Country Policy and Institutional Assessment Report, 2017 (World Bank)
The average quality of policies and institutions in Sub-Saharan Africa was broadly unchanged in 2017, according to the latest review by the World Bank. This is a shift from the deterioration observed in the previous year. This analysis covers 38 countries and describes the progress these countries are making on improving the quality of their policies and institutions. This average CPIA score for Sub-Saharan Africa remains slightly below the average of 3.2 for other IDA countries. “In 2017, African countries had a more favorable global environment that provided them with space to implement reforms” explained Punam Chuhan-Pole, lead author of the report. “According to our analysis, nearly 30 percent more countries strengthened their policy and institutional quality in 2017 compared with 2016. This is an encouraging trend.”
Favorable global economic conditions supported a turnaround in economic activity in Sub-Saharan Africa in 2017, easing pressure on weak policy frameworks. Country-level policy and institutional quality varied widely across the region. Rwanda continued to lead at the regional level and globally, with a CPIA score of 4.0. Other countries at the high end of the regional score range were Senegal, with a score of 3.8, closely followed by Cabo Verde, Kenya, and Tanzania, all with scores of 3.7. Overall, slightly more than half (20) of the region’s IDA borrowers posted relatively weak performance – that is, a score of 3.2 or lower. [Access the report (in English or French) and accompanying country, sector data here. The CPIA 2017 report in five charts]
African Development Bank releases new tool to assess resilience and fragility
Called the Country Resilience and Fragility Assessment, the tool offers a completely new method of assessing resilience and fragility using seven key criteria: political inclusiveness, safety and security, justice, the economy, social cohesion, the regional contagion effect, and climate change. “The creation of the CRFA represents a significant advance in the assessment of fragility, which is a reality that it is not always easy to pin down or discern. By introducing, for the first time, the concepts of ‘capacities’ and ‘pressures’, this new tool brings much more rigour and effectiveness to the assessment of resilience and fragility, especially since it takes greater account of the national context,” explained Sibry Tapsoba, Director of the Transition States Coordination Office. [AfDB’s Board approves policy on non-sovereign operations: the NSO Policy will complement the 2013 Private Sector Development policy framework]
Three perspectives on African structural transformation and governance issues, published by the AfDB:
-
Mushtaq H. Khan: Institutions in transformational governance – lessons for Africa. In the rest of this paper (pdf), section 2 outlines the arguments for market-enhancing institutions and governance, which we describe as the good governance agenda. Section 3 introduces the alternative argument for transformational institutions and governance, followed by three sections discussing in turn important aspects of transformational governance: section 4 looks at the transformation of property rights, section 5 at the institutions and governance required to develop organizational capabilities in emerging firms, and section 6 at political institutions and political inclusion. Section 7 concludes.
-
David Booth: Tackling the governance of economic transformation. The argument of this paper (pdf), then, is that the current policy agenda around economic transformation needs political economy analysis—as an integral component of advice and decision-making, not an optional add-on—and it needs an equally strong element of pragmatic and optimistic searching. Further, this is not a matter of achieving a balanced or optimal combination of hard-nosed analysis and pragmatic action. There are no trade-offs; the soundest approach will be the one that achieves maximum pragmatism along with maximum realism, or minimum delusion, about the political economic framework.
-
Richard Joseph: Governance for structural transformation in Africa. How, we must ask, can African countries advance politically and economically in this uncertain environment? Are there windows of opportunity for African organizations, and their external partners, to provide dynamic leadership, despite the head- and crosswinds. I therefore identify seven key opportunities and challenges in the following sections (pdf).
Somalia Economic Update: Rapid growth in mobile money – stability or vulnerability? (World Bank)
The special focus of the report (pdf) is on mobile money. Despite its fragility and underdeveloped financial institutions, Somalia has one of the most active mobile money markets in the world, outpacing most other countries in Africa. Approximately 155 million transactions, worth $2.7bn, are recorded per month. Mobile money has superseded the use of cash in Somalia, with over 70% of adult Somalis using mobile money services regularly. Nevertheless, the mobile money sector lacks robust consumer protection, and know-your-customer requirements. The mass adoption of services – while impressive – presents opportunities for promoting financial broadening and deepening that will lead to more competition and contestability in the financial services market. The challenge for policymakers and regulators is to how to mitigate system vulnerabilities and avoid macroeconomic effects in the event of service disruptions.
OPIC Board approves projects in Ethiopia, Nigeria (OPIC)
The Overseas Private Investment Corporation, yesterday, approved $895m in financing and political risk insurance across seven projects that will advance development in Africa, Asia and Latin America by expanding access to energy, healthcare, financial services and housing. Expanding an agriculture business in Ethiopia - $126m in political risk insurance to support the expansion of Afriflora, the country’s largest rose producer which grows, harvests and exports cut roses from three farms across the country. Flowers are one of Ethiopia’s major exports and expanded projection will create hundreds of new jobs, many which will be held by women. Promoting financing for women-owned businesses and digital banking in Nigeria - $200m in financing to help Union Bank of Nigeria expand lending to small and medium enterprises, as well as women-led and women-owned businesses, and to invest in upgrades to the bank’s digital banking projects.
Ghana: After China, what next? (GhanaWeb)
The Coordinator of the Third World Network, Dr Yao Graham, has cautioned government against rushing into agreements with powerful nations such as China that may lead to Ghana’s raw material being exported. He argued that the model being adopted by the government in signing the $2bn bauxite deal with China is not new, but an old system that has allowed the country’s natural resources to be exported in their raw state without adding value to it. Dr Graham stated that government’s approach in dealing with the Chinese will face fundamental challenges if Ghana is going to export raw materials from the bauxite. “So whichever way you twist it, it is very much based on a commodity export dependence framework. The agenda of transformation is also an agenda of diminishing your commodity export dependence. So let’s take the example about bauxite. Several people have pointed out there is lack of details and also the contradictory thing”.
The Minister for Information, Kojo Oppong Nkrumah defended government’s decision to partner with China in different economic agreements for national development. According to him, the current global environment makes China one of the best partners to work with for economic gains. “One of our biggest partners Nigeria doesn’t seem interested in that enterprise. So what are your options? You now look at China where EPCs coming, infrastructure coming. Financing that are not necessarily coming at some of these terms that are coming from other parts of the world. They are also looking at your resources that are sitting here literally untapped, undeveloped while you are sitting on them poor. You can do business with the Chinese”. [Abuja FOCAC 2018 Review Dialogue: China not Father Christmas – Chinese envoy]
Ghana’s Cedi depreciation: how do we stem the tide? (GhanaWeb)
A senior economist at the University of Ghana has said the central bank must combine short-term measures to deal with the cedi fall with a reliable strategy to deal with decades-old structural challenges stagnating Ghana’s economy. According to Dr Priscilla Twumasi-Baffour, tackling structural challenges like excessive imports and exporting goods without value addition would prove a more robust strategy to keep the local currency strengthened against the dollar and other major trading currencies. “We basically import everything,” she said during the Cedi Forum on Thursday, September 13, 2018, which discussed issues concerning the plummeting cedi. The cedi has lost almost 7% of its value against the strong dollar since the beginning of the year, prompting fears of dire consequences to the Ghanaian.
Revisiting the poverty trend in Rwanda: 2010/11 to 2013/14 (World Bank)
According to the official statistics published by the National Institute of Statistics of Rwanda, the country registered a decline in poverty from 46% in 2010/11 to 39% in 2013/14. This declining poverty trend was broadly debated and repeatedly questioned in national and international forums, which provided the primary motivation for this study. Using data from the third and fourth rounds of the Integrated Household Living Conditions Surveys, this paper revisits the national poverty numbers and corroborates the poverty rates published by the National Institute of Statistics of Rwanda. Underlying the paper’s conclusions is a detailed theoretical and analytical framework for making poverty comparisons over time. Furthermore, the paper shows that after adjusting for spatial and temporal price differences, the poverty rate based on the international poverty line of $1.90 per day per capita shows that there was a reduction in poverty between 2010/11 and 2013/14. [NISR, June 2016: Poverty Trend Analysis (2010/11 – 2013/14)]
West Africa Monetary Zone: update from 37th meeting of the Committee of Governors of Central Banks (Punch)
The ECOWAS authority had approved the reduction of the macroeconomic convergence criteria from 11 (four primary and seven secondary criteria) to six criteria (three primary and three secondary criteria). The three primary criteria being used are a budget deficit of not more than 3%; average annual inflation of less than 10% with a long-term goal of not more than 5% by 2019; and gross reserves that could finance at least three months of imports. The three secondary convergence criteria that have been adopted by ECOWAS are public debt/Gross Domestic Product of not more than 70%; central bank financing of budget deficit should not be more than 10% of previous year’s tax revenue; and nominal exchange rate variation of plus or minus 10%.
Presenting a progress report at the opening session of the meeting, the Director General, West Africa Monetary Institute, Dr Ngozi Egbuna, explained that as of December 2017, none of the countries met all four criteria. She, however, said the average performance of the member countries of the zone improved during the year under review. For instance, Egbuna stated that The Gambia, Guinea and Nigeria attained three criteria each. She said The Gambia missed the fiscal deficit criterion; Guinea slipped on the gross external reserves, while Nigeria missed inflation criteria. She explained further that Ghana and Liberia achieved two criteria each. Ghana, according to her, missed the inflation and fiscal deficit criteria, while Liberia missed the inflation and central bank financing criteria. Sierra Leone, Egbuna added, met one criterion, which was the gross external reserves criterion.
Friday’s Quick Links: Sudan’s new Minister of Finance and Economic Planning: UNECA’s Deputy Executive Secretary, Dr Abdallah Hamdok The Governor of the Central Bank of Nigeria, Mr Godwin Emefiele, has been elected the new chairperson of the West Africa Monetary Zone US House Committee on Foreign Affairs: access statements from the hearing Reviewing current developments in Ethiopia Nigeria: FG, Japan sign MoU on infrastructure investment Reuters: US concerned about currency swaps between Africa and China Ecobank reports: The high cost of mobile data in Sub-Saharan Africa (pdf); Cryptocurrency regulation in Africa (pdf) Gabon and the IMF: Second Review of the extended arrangement under the Extended Fund Facility The State of Food Security and Nutrition in the World 2018: global hunger continues to rise Seth Schindler: The new international geography of deindustrialisation |
Related News
Race to the next income frontier: How Senegal and other low-income countries can reach the finish line
Opening remarks by IMF Managing Director Christine Lagarde at the Center for Global Development book launch
Good afternoon. Thank you, Masood, for your kind introduction. It is a pleasure to be back at CGD.
CGD is certainly a very appropriate venue to discuss the new book being released today: Race to the Next Income Frontier. Why is that? Because CGD is not just a “think-tank”, it is an institution focused on finding practical solutions to the most pressing issues facing developing countries. And that is precisely what this book does. This new book goes beyond the often-discussed “what needs be done” and focuses on the too-often forgotten “how can this be done effectively”.
Part 1. Senegal as a good example of policy experiment with innovative learning
Senegal is a good example of a policy experiment with innovative learning. Senegal has made considerable progress in building macroeconomic stability over the past few decades. Economic growth has been robust – at or above 6 percent in the last three years. But Senegal faces major demographic challenges – just like many of its neighbors. Moving forward, Senegal will need to maintain growth rates of 7 to 8% to create jobs for the next generation. Indeed, today, 45 percent of the Senegalese population is under the age of 14.
Fortunately, the government has a roadmap and a plan of action. The pdf “Plan Sénégal Emergent” (7.20 MB) aims to make Senegal an upper-middle-income emerging market economy by 2035. The plan calls for a radical break with the past to broaden, accelerate, and deepen reforms. These reforms will provide opportunities for small and medium enterprises to flourish and improve the climate for foreign investment. The goal is to build a first-class business environment, make energy available at fair prices for companies and households, improve governance, and facilitate the diversification of exports.
Part 2. Beyond the Roadmap – Peer to Peer Learning to Reach the Next Frontier
However, a roadmap by itself is not enough. As lawyers like to say, it is a necessary but not sufficient condition for lasting growth. What is required is moving past prescription – what to do – and into practice – how to do. The task is not easy, but Senegal and other low-income countries have an advantage. They can learn from the successes of other countries who have been here before.
Cabo Verde, Mauritius, and Seychelles faced significant economic challenges in the past and have now managed to reach middle income status. This is where the IMF comes in. I believe the IMF – with our 189 members – is uniquely suited to be a hub for best practices and knowledge sharing between nations.
This book is a fitting example of how knowledge can turn into action. It brings together different perspectives and offers invaluable lessons on how best to navigate the reform process. In fact, we are already seeing some of the dividends.
Part 3. Early Dividends
The drafting of this book has enabled policymakers to identify 11 critical reforms in areas ranging from good governance to social protection. The government recently established a monitoring committee with representatives from the key ministries involved in implementing the measures identified by the book. I hope during the discussion Mr. Sembene will provide an update on the status of these reforms.
Senegal and ten other nations are now leveraging the new partnership under the pdf G20 Compact with Africa (1.65 MB) to promote private investment as a way of better integrating their economies with the global economy.
And this is just the beginning of what can get done. Recently the IMF and the Senegalese Ministry of Finance organized a “Hackathon” in Dakar to find ways to improve the government’s tax collection system. 100 young entrepreneurs came to share their ideas and make sure they had a role in writing the next chapter of their country’s development.
The objectives are clear and a good agenda of policy reforms has been put together through the “Plan Sénégal Emergent”. Nevertheless, the road ahead will require continued efforts to improve policies and adapt to new challenges. Let me mention a couple of these challenges. First, despite the recent high growth performance, public debt has continued to grow; this implies that looking ahead, the authorities will have to find a way to mobilize more domestic revenues to preserve debt sustainability while continuing to sustain a high growth performance. Second, the recent discovery of significant oil and gas deposits is of course positive, but the challenge will be to preserve good governance and fiscal transparency in the management of these oil and gas revenues.
This book can help with these challenges. It is not only a call to action, it is a roadmap to reform. Ben Franklin once said, “either write something worth reading or do something worth writing.” Well, the authors here have done both. They have written a book worth reading and they have done it in a way that begins the hard work to make a real difference in people’s lives for years to come. Let me seize this opportunity to congratulate the authors of the book: our IMF colleague and former IMF mission chief for Senegal, Ali Mansoor, Daouda Sembene, the IMF Executive Director representing Senegal, and Salifou Issoufou, former desk economist for Senegal.
Conclusion
Let me conclude by simply saying that I welcome this book’s focus on “how to” get things done rather than just on “what to do.” The world needs more books like this one. The IMF will continue to be part of this dialogue and a strong advocate for peer to peer learning. I hope that by sharing this book more widely we can inspire more countries to reach the next income frontier.
Thank you very much.
Related News
World Bank review reveals unchanged quality of policies and institutional performance in Africa
The average quality of policies and institutions in Sub-Saharan Africa was broadly unchanged in 2017, according to the latest review by the World Bank. This is a shift from the deterioration observed in the previous year.
This analysis covers 38 countries and describes the progress these countries are making on improving the quality of their policies and institutions. Countries are rated on a scale of 1 (low) to 6 (high) for 16 dimensions reflecting four pillars: economic management, structural policies, policies for social inclusion and equity, and public sector management and institutions.
In 2017, the regional Country Policy and Institutional Assessment (CPIA) score was 3.1. This average CPIA score for Sub-Saharan Africa remains slightly below the average of 3.2 for other IDA countries.
“In 2017, African countries had a more favorable global environment that provided them with space to implement reforms” explained Punam Chuhan-Pole, lead economist and lead author of the report. “According to our analysis, nearly 30 percent more countries strengthened their policy and institutional quality in 2017 compared with 2016. This is an encouraging trend.”
Favorable global economic conditions supported a turnaround in economic activity in Sub-Saharan Africa in 2017, easing pressure on weak policy frameworks.
Country-level policy and institutional quality varied widely across the region. Rwanda continued to lead at the regional level and globally, with a CPIA score of 4.0. Other countries at the high end of the regional score range were Senegal, with a score of 3.8, closely followed by Cabo Verde, Kenya, and Tanzania, all with scores of 3.7.
Overall, slightly more than half (20) of the region’s IDA borrowers posted relatively weak performance – that is, a score of 3.2 or lower. The fragile countries had difficulties to face the challenges posed by their environment regarding the high risks of conflict, commodity price shocks, or climate threat.
“The CPIA is important for African countries not only because a better score leads to an increase in concessional financing from the World Bank, but also because it’s an excellent tool for policy formulation and monitoring. Our countries should pay more attention to this important tool and use it accordingly,” declared Albert Zeufack, the World Bank’s Chief Economist for Africa.
Since 1980, CPIA scores are used in determining IDA’s(*) allocation of resources to the poorest countries. They are also useful for monitoring country progress and benchmarking it against progress in other IDA-eligible countries.
* The World Bank’s International Development Association (IDA), established in 1960, helps the world’s poorest countries by providing grants and low to zero-interest loans for projects and programs that boost economic growth, reduce poverty, and improve poor people’s lives. IDA is one of the largest sources of assistance for the world’s 75 poorest countries, 39 of which are in Africa. Resources from IDA bring positive change to the 1.5 billion people who live in IDA countries. Since 1960, IDA has supported development work in 113 countries. Annual commitments have averaged about $18 billion over the last three years, with about 54 percent going to Africa.
Understanding the Africa Country Policy and Institutional Assessment (CPIA) Report for 2017
The Country Policy and Institutional Assessment (CPIA) for Africa is an annual diagnostic tool which measures the quality of policies and institutional frameworks, and their ability to support sustainable growth and poverty reduction. The report provides scores for 16 criteria for each country and an overall regional score, which informs governments of the impact of the country’s efforts to support favorable growth and poverty reduction. It also helps determine the size of the World Bank’s concessional lending and grants to low-income Sub-Saharan African countries.
Here are the top five highlights from the 2017 Africa CPIA:
1. Rwanda continues to be the top performer
Countries are rated on a scale of one (low) to six (high) for 16 dimensions reflecting four areas: economic management, structural policies, policies for social inclusion and equity, and public-sector management and institutions. In 2017, the regional Country Policy and Institutional Assessment (CPIA) score was 3.1. However, policy and institutional quality varied widely across the 38 International Development Association (IDA) borrowers in the region in 2017. Rwanda continued to lead at the regional level and globally, with a CPIA score of 4.0. Other countries at the high end of the regional score range were Senegal, with a score of 3.8, closely followed by Cabo Verde, Kenya, and Tanzania, all with scores of 3.7.
2. Countries with better policy frameworks exhibit higher efficiency of investment
The efficiency of investment measure is positively associated with policy and institutional quality, and this association is stronger with respect to quality of government effectiveness (cluster D). While correlation does not establish causality, a country’s institutions may create incentives for investment and technology adoption and the opportunity for workers to accumulate human capital, thereby facilitating higher growth over the longer term. Weak institutions, by contrast, may encourage rent-seeking activities and corruption, leading to less productive activities; discourage firm investment and human capital accumulation; and lead to worse growth outcomes.
3. The decline in the average quality of polices and institutions observed in the previous years halted in 2017
The average quality of policies and institutions in Sub-Saharan Africa was broadly unchanged in 2017. This is a shift from the decline observed in the previous years. The flattening trend in the region’s overall CPIA score in 2017 is mirrored in that of economic management (cluster A).
4. African countries need to pay attention to the rising public debt relative to GDP
The regional score in the debt policy area fell to 3.1 in 2017, the second consecutive year of decline. The worsening performance in this component of the CPIA reflects the rising burden of public debt across African countries. Rising debt burdens are translating into heightened risks to debt sustainability. The composition of debt has changed, with countries shifting away from traditional concessional sources of financing and towards more market-based ones. In March 2018, nearly half of the region’s low-income countries were classified at high-risk of debt distress or in debt distress, more than twice as many as in 2013.
5. Harnessing the potential of new technologies will be key to Africa’s development
The share of adults with mobile money accounts jumped from 12 to 21% between 2014 and 2017, and it is by far the highest among all the regions. The gradual implementation at the individual country level of regional credit registries offers prospects for gains in financial inclusion during the next few years. Harnessing the potential of new technologies and fully embracing innovation perhaps represents the biggest opportunity of all for Africa.
Related News
Global hunger continues to rise, new UN report says
821 million people now hungry and over 150 million children stunted, putting hunger eradication goal at risk
New evidence continues to signal that the number of hungry people in the world is growing, reaching 821 million in 2017 or one in every nine people, according to The State of Food Security and Nutrition in the World 2018 released on 11 September 2018. Limited progress is also being made in addressing the multiple forms of malnutrition, ranging from child stunting to adult obesity, putting the health of hundreds of millions of people at risk.
Hunger has been on the rise over the past three years, returning to levels from a decade ago. This reversal in progress sends a clear warning that more must be done and urgently if the Sustainable Development Goal of Zero Hunger is to be achieved by 2030.
The situation is worsening in South America and most regions of Africa, while the decreasing trend in undernourishment that characterized Asia seems to be slowing down significantly.
The annual UN report found that climate variability affecting rainfall patterns and agricultural seasons, and climate extremes such as droughts and floods, are among the key drivers behind the rise in hunger, together with conflict and economic slowdowns.
“The alarming signs of increasing food insecurity and high levels of different forms of malnutrition are a clear warning that there is considerable work to be done to make sure we ‘leave no one behind’ on the road towards achieving the SDG goals on food security and improved nutrition,” the heads of the UN Food and Agriculture Organization (FAO), the International Fund for Agricultural Development (IFAD), the UN Children’s Fund (UNICEF), the World Food Programme (WFP) and the World Health Organization (WHO) warned in their joint foreword to the report.
“If we are to achieve a world without hunger and malnutrition in all its forms by 2030, it is imperative that we accelerate and scale up actions to strengthen the resilience and adaptive capacity of food systems and people’s livelihoods in response to climate variability and extremes,” the leaders said.
The impact of climate variability and extremes on hunger
Changes in climate are already undermining production of major crops such as wheat, rice and maize in tropical and temperate regions and, without building climate resilience, this is expected to worsen as temperatures increase and become more extreme.
Analysis in the report shows that the prevalence and number of undernourished people tend to be higher in countries highly exposed to climate extremes. Undernourishment is higher again when exposure to climate extremes is compounded by a high proportion of the population depending on agricultural systems that are highly sensitive to rainfall and temperature variability.
Temperature anomalies over agricultural cropping areas continued to be higher than the long-term mean throughout 2011-2016, leading to more frequent spells of extreme heat in the last five years. The nature of rainfall seasons is also changing, such as the late or early start of rainy seasons and the unequal distribution of rainfall within a season.
The harm to agricultural production contributes to shortfalls in food availability, with knock-on effects causing food price hikes and income losses that reduce people’s access to food.
Slow progress on ending all forms of malnutrition
Poor progress has been made in reducing child stunting, the report says, with nearly 151 million children aged under five too short for their age due to malnutrition in 2017, compared to 165 million in 2012. Globally, Africa and Asia accounted for 39 percent and 55 percent of all stunted children, respectively.
Prevalence of child wasting remains extremely high in Asia where almost one in 10 children under five has low weight for their height, compared to just one in 100 in Latin America and the Caribbean.
The report describes as “shameful” the fact that one in three women of reproductive age globally is affected by anaemia, which has significant health and development consequences for both women and their children. No region has shown a decline in anaemia among women of reproductive age, and the prevalence in Africa and Asia is nearly three times higher than in North America.
Rates of exclusive breastfeeding in Africa and Asia are 1.5 times higher than those in North America where only 26 percent of infants under six months receive breastmilk exclusively.
The other side of hunger: obesity on the rise
Adult obesity is worsening, and more than one in eight adults in the world is obese. The problem is most significant in North America, but Africa and Asia are also experiencing an upward trend, the report shows.
Undernutrition and obesity coexist in many countries, and can even be seen side by side in the same household. Poor access to nutritious food due to its higher cost, the stress of living with food insecurity, and physiological adaptations to food deprivation help explain why food-insecure families may have a higher risk of overweight and obesity.
Call for action
The report calls for implementing and scaling up interventions aimed at guaranteeing access to nutritious foods and breaking the intergenerational cycle of malnutrition. Policies must pay special attention to groups who are the most vulnerable to the harmful consequences of poor food access: infants, children aged under five, school-aged children, adolescent girls, and women.
At the same time, a sustainable shift must be made towards nutrition-sensitive agriculture and food systems that can provide safe and high-quality food for all.
The report also calls for greater efforts to build climate resilience through policies that promote climate change adaptation and mitigation, and disaster risk reduction.
Related News
Somalia Economic Update: Rapid growth in mobile money
Regulation of Somalia’s mobile money market can spur innovation in financial sector development
Somalia’s economy is projected to grow at an annual rate of 3-4 percent, according to the third Somalia Economic Update (SEU), Rapid Growth in Mobile Money: Stability or Vulnerability?, published by the World Bank. The report assesses Somalia’s vibrant mobile money market, and provides concrete recommendations on introducing mobile money regulation that can boost a secure system for widespread financial inclusion.
The SEU aims to provide a comprehensive analysis of economic data, trends and outlook, and sets out a series of recommendations to stimulate reform, growth and improved fiscal performance. The report highlights several improvements in 2017, including the implementation of fiscal policy by the federal government.
As recommended in the previous SEU, domestic revenue mobilization increased, budgets became more realistic, and execution of the budget improved.
“These developments should allow Somalia to build the fiscal buffers that allow the government to start providing meaningful service delivery to citizens,” said John Randa, World Bank Senior Economist for the Macroeconomic, Trade and Investment Global Practice, and lead author of the SEU.
This report comes after the country faced its worst drought in decades. Somalia’s economy grew by an estimated 2.3 percent in 2017, down from 4.4 percent in 2016, reflecting the impact of enormous losses seen in livestock and crop production and exports. The volume of live animal exports – Somalia’s largest export, accounting for more than 70 percent of export earnings – declined by 75 percent, from 5.3 million animals in 2015 to 1.3 million in 2017.
Somalia’s economy has grown modestly in recent years, and it remains vulnerable to recurrent shocks. Between 2013 and 2017, real annual GDP growth averaged 2.5 percent. Nonetheless, growth has not been sufficient to translate into poverty reduction.
“To achieve higher growth, Somalia requires an acceleration of structural reforms,” said Randa. “Somalia needs to continue to build the fiscal buffers to allow greater public investment in basic services. Recent efforts to broaden the tax base, enhance compliance, and reduce wasteful expenditures are starting to pay off.”
The GDP estimate was revised upward in 2017, based on new information and data harmonization with the International Monetary Fund (IMF). The new estimate puts GDP at $6.8 billion in 2016 and $7 billion in 2017. GDP is dominated by private household consumption expenditure, which represents 132 percent of national income, followed by imports (62 percent), exports (15 percent), and gross capital formation (9 percent).
Special Focus: Mobile Money
The special focus of the report is on mobile money. Despite its fragility and underdeveloped financial institutions, Somalia has one of the most active mobile money markets in the world, outpacing most other countries in Africa. Approximately 155 million transactions, worth $2.7 billion, are recorded per month. Mobile money has superseded the use of cash in Somalia, with over 70 percent of adult Somalis using mobile money services regularly. This presents exciting opportunities for the country.
“Private sector actors have given Somalia a unique opportunity to leapfrog towards widespread financial inclusion. We will continue to support the partnership between the Central Bank of Somalia, the National Communications Authority and the key private sector actors as they deliberate on an appropriate regulatory framework for the sector.” said Tim Kelly, Lead ICT policy specialist at the World Bank.
Nevertheless, the mobile money sector lacks robust consumer protection, and know-your-customer requirements. The mass adoption of services – while impressive – presents opportunities for promoting financial broadening and deepening that will lead to more competition and contestability in the financial services market.
The challenge for policymakers and regulators is to how to mitigate system vulnerabilities and avoid macroeconomic effects in the event of service disruptions. “The challenge for policymakers and regulators is to introduce regulations on a mobile money market that has operated without regulatory oversight,” Randa said. Recommendations include:
-
Create safeguards for consumers’ funds and ensure the safety and reliability of services.
-
Adopt the regulatory sandbox approach to encourage innovation, improve compliance and risk management, and reduce opportunities for agent fraud and other harmful conduct and hold providers liable for agents.
-
Protect data and consumer information and ensure that consumers have access to effective redress and complaint-handling mechanisms.
-
Strengthen regulatory reporting and public disclosures, minimizing disruption of mobile money services at each stage of implementation.
“Reducing costs and promoting greater stability is a top priority for the overall development agenda for the financial sector, ensuring that regulation does not stifle innovation by leveling the playing field is a very close second,” said Thilasoni Benjamin Musuku, Senior Financial Sector Specialist at the World Bank Finance, Competitiveness and Innovation Global Practice and co-Lead Author of the SEU.
“There is a need to improve the balance between cooperation and competition between banks, MNOs and other non-bank financial institutions and ensure better integration of mobile money within the broader financial system. This is key to deepening and broadening the financial services market in Somalia for inclusive growth.”
The SEU was prepared in close partnership with Somali stakeholders and aims to contribute to government policy-making and the regulatory environment in Somalia. This is the third in the SEU series for Somalia. The SEU series is financed by the World Bank’s Multi-Partner Fund (MPF).
Related News
tralac’s Daily News Selection
Featured trade, regional policy events:
(i) In Abidjan. @ECOWASParliamnt: Parliament-arians convene in Abidjan for the three day seminar on African Continental Free Trade Area. Challenges and prospects of free trade in Africa – role of the Regional Economic Communities
(ii) In Pretoria. @CharlesKwenin: Day 1 of MIDSA generated fruitful discussions among the various panelists and delegates, on issues such as migration and development relating to harnessing the youth dividend; and on migration governance and the need for a Regional Migration Policy Framework for Southern Africa. Day 2 of MIDSA: Delegates had fruitful discussions on the proposed draft of the SADC Regional Migration Policy Framework.
(iii) In New York. Enhancing global partnerships for the Third Industrial Development Decade for Africa – key for successful implementation of the African Continental Free Trade Area. To be held on the margins the 73rd General Assembly, the high-level event (pdf) is expected to bring together more than 100 high-level stakeholders.
World Export Development Forum
Closing speech by ITC Executive Director Arancha González
In my welcome speech I referenced that Africa - unlike some others - is embracing trade and integration. The AfCFTA is a vehicle to realize the aspirations of a borderless continent. What we have learnt here will be important inputs into that process: (i) That trade facilitation at the border is only really effective if all parties modernize, increase transparency and cut down on red tape. (ii) That placing women and youth at the centre of Trade and development policy - including the AfCFTA - is critical if we are to deliver for inclusive growth. (iii) That adding value to goods and services, in particular in agriculture, and increasing the capacity to develop and extend value chains in Africa must be part of the Continental strategy. (iv) That the voice of youth matter. They will take forward tomorrow for what we are putting in place today. This morning I met with over 120 African youth to discuss trade and development issues and I can tell you the future is bright. (v) That supporting the competitiveness of MSMEs must be at the centre of the Continental development trajectory. From ensuring financial literacy to meeting quality standards and packaging to supporting trade and investment data and intelligence to moving to automation and the digital economy - this is where the cursor must be placed; competitiveness rather than protectionism. (vi) That the future is green. Greening value chains, incorporating sustainability into production methods and promoting green financing.
And the week does not end today. On Thursday and Friday ITC will be supporting an investment discussion between China and Zambia through one of our flagship programmes, the Partnership for Investment and Growth in Africa; we will be facilitating international media exposure of a series of projects that ITC and the EIF have supported in Zambia including on honey and mushrooms; and we will be facilitating a trade and investment discussion with trade promotion organizations from the COMESA region.
AU’s institutional reform process: update (AU)
The Sixth Retreat of the Executive Council opened yesterday, Wednesday, in Addis Ababa. For two days, the Ministers of Foreign Affairs and External Relations from the African Union member states, will brainstorm on the progress made on the AU Reform as well as consider the key reform issues and challenges so as to agree on the specific outcomes that this reform process should deliver. The Retreat of the Executive Council is expected to prepare for the upcoming summit on the AU Reform billed for November 2018 in Addis Ababa. [Deputy Minister Landers to lead South African delegation to Ethiopia]
SACU: SA pushing for a bigger slice of SACU revenue (Business Day)
Finance minister Nhlanhla Nene and trade and industry minister Rob Davies briefed parliament’s finance and trade and industry committees on Tuesday about the deadlocked negotiations. The committees resolved to support their stance and to submit their decision to the National Assembly for endorsement. This will strengthen the position of SA’s negotiators during the talks. Nene told MPs that very little progress has been made in discussions to review the revenue-sharing formula despite intense engagements. The major difficulty was the underlying principle of the negotiations, which was that no-one should be made worse off by any agreement. This meant no-one should be better off either. “A review which will see us being put on a better footing will be very difficult to arrive at,” Nene said.
SA contributed about R30.3bn (98.3%) of the SACU revenue pool annually on average between 2007-08 and 2016-17 but took out R26.4bn (45.8%) while Botswana, Eswatini, Lesotho and Namibia contributed R510m (1.7%) but took out R31bn (54.2%). This was a source of concern, Nene said. SA’s share of SACU revenue has steadily declined. SACU revenues, which are drawn from customs and excise duties, contribute 27% of Botswana’s total revenue; 45% of Eswatini’s; 40% of Lesotho’s; 32% of Namibia’s; and 3% of SA’s. None of the revenue is used for common development to promote the region. [See also: Davies explained that there are differing policy perspectives when it comes to tariffs. Currently, SA views tariffs as an instrument of industrial policy – while other governments rely on tariffs as a source of revenue. SA will also put forward that the agreement focuses on national development. “The focus should be on industrial development. But not one brass cent has been used on development,” said Davies.]
Indian Ocean Commission needs a new impetus, says Mauritius’ foreign affairs minister (GoM)
The Indian Ocean Commission has to be given a new impetus with particular emphasis on restructuring the Commission in view of aligning it with the global strategy and ensuring a consolidated regional cooperation for the benefit of the IOC member states. The Minister of Foreign Affairs, Regional Integration and International Trade, and Chairperson of the IOC, Mr Seetanah Lutchmeenaraidoo, made this statement yesterday at the opening of the 33rd Council of Ministers meeting of the IOC currently being held at Le Maritim Hotel. The two-day meeting is focusing on four thematic areas of intervention namely political and diplomatic cooperation, economic and trade cooperation, environmental sustainability and regional cultural cooperation.
Namibia: Quarterly trade statistics bulletin – 2nd quarter of 2018 (Namibia Statistics Agency)
Exports to key markets: During q2-2018, Namibia’s top five export destinations were United Kingdom, South Africa, China, Botswana and Belgium. Among the largest export partners, the highest growth rates were recorded with United Kingdom (4,839%), China (727%), Belgium (144%), and Botswana (13%). Exports to South Africa, Namibia’s largest trading partner, grew by 11%. Together, these countries made up 70% of the value of all exported goods, with United Kingdom lodging on top of the list as the largest export destination, accounting for 25% of the total exports. South Africa ranked second with 16%, followed by China with 13% of total exports. Botswana and Belgium absorbed 8% of the Namibia’s total exports each.
Imports from key markets: The domestic economy mostly relied on South Africa, Zambia, United Kingdom, Botswana and China for its import requirements (see Chart 3). The aforementioned countries accounted for the largest share of Namibia’s total imports, with 83% of the value of all imports of goods into Namibia coming from these countries. Imports from these markets grew by 27% to register N$19.845 billion compared to N$15.630 billion observed in q2-2017. Whereas, overall imports increased by N$3.373 billion (16%) from N$20.652 billion to N$24.025 billion.
Trade with Export Processing Zone: Trade flow between Namibia and the EPZ was mostly dominated by exports. Exports to the EPZ stood at N$1.819 billion, rising from N$1.196 billion in q2-2017; this translates to a 52% increase. In comparison with the previous quarter, exports rose from N$1.239 billion, indicating 47% growth.
Ghana’s gold mining revenues: an analysis of company disclosures (NGRI)
Focusing on the gold sector, the aim of this briefing is to explore ways company disclosures can be used by government, civil society, media and other oversight actors to better understand the revenues generated within Ghana’s gold sector and use this new data source as an accountability tool within the country.
AmCham Shanghai, AmCham China issue new survey on impact of US-China tariffs
Conducted in early-September, the survey (pdf) found that the negative impact of tariffs is clear and far-reaching. Sixty percent of the 432 survey respondents say the initial $50bn of tariffs from both the US and China has negatively impacted their companies. The percentage of companies expecting to be negatively affected by the second round of tariffs jumps to 74.3% for the US tariffs and 67.6% for Chinese tariffs. Nearly 50 % of US companies expect a “strong negative impact” from this proposed $200bn tranche of tariffs.
Thursday’s Quick Links: Diaspora remittance driving economic growth for Africa – ICAEW report Absa opens UK office to entice post-Brexit trade in Africa Bloomberg: The fear gap’s back as dollar pinch worsens after Zimbabwe vote IATA World Air Transport Statistics released: Africa has a 2.2% market share of the passenger market (88.5 million, up 6.6% over 2016) South-South Cooperation Day focuses in on sustainable development, a ‘new phase of cooperation’ IRU Blog: Training, big data and keeping trade safe The Latin American and Caribbean Competition Forum (18-19 September 2018, Buenos Aires): access documentation, including country submissions |
Related News
Sixth Retreat of the Executive Council kicks off at the African Union Headquarters
The Sixth Retreat of the Executive Council opened on Wednesday, 12 September 2018 at the African Union (AU) headquarters in Addis Ababa, Ethiopia.
For two days, the Ministers of Foreign Affairs and External Relations from the African Union Member States, will brainstorm on the progress made on the AU Reform as well as consider the key reform issues and challenges so as to agree on the specific outcomes that this reform process should deliver.
The Retreat of the Executive Council is expected to prepare for the upcoming summit on the AU Reform billed for November 2018 in Addis Ababa. The opening ceremony of the Executive Council Retreat at the Mandela Plenary Hall of the AU Conference Center took place in the presence of the AU Commissioners.
Addressing the Ministers in her opening remarks, the Chair of the Executive Council, H.E Louise Mushikiwabo, recalled that the Reform of the Commission is a central element of the overall AU reform process. “Agenda 2063 is in place and provides our overall vision. Against this vision, we have developed a set of ambitious continental priorities and targets,” she noted.
“I think we can all agree that we need a strong and effective AU Commission to drive our continental agenda. We have a key opportunity over the next two days to do some collective thinking on how best we can achieve this,” underlined Minister Mushikiwabo.
According to the Chair, the heart of the reform of the AU Commission is about people, systems and processes. We must be able to attract and retain the best that Africa has to offer to deliver for this Continent. Making sure that we have motivated staff driven by Pan-African values, and strong ethics who are delivering within an accountable and rules-based administrative framework.
“Alongside this, the Commission must be able to avoid duplication and overlap, manage its resources prudently, observe the highest fiduciary standards and ensure value for money while delivering results. This is what will give Member States the confidence to meet their financial obligations regularly and on time,” underscored Minister Mushikiwabo before concluding that “time is not on our side, with the ambitious continental plans we have put in place and in an increasingly uncertain multilateral context, we need to put in place a Commission that is fit for purpose and able to drive our continental agenda”.
Speaking earlier, the Chairperson of the AU Commission, H.E Moussa Faki Mahamat, welcomed the Ministers to the AU Headquarters in Addis Ababa, and wished them a Happy Ethiopian New Year celebrated on Tuesday by the host country. He recalled that this meeting was agreed at the Nouakchott Summit last July 2018 and is taking place at a pivotal moment. He also underlined that the retreat is expected to help prepare for the AU's extraordinary summit on institutional reform scheduled for mid-November this year.
“Since the launch of the institutional reform process of our Union, significant progress has been made in its implementation,” noted the AUC Chairperson. He highlighted some of the achievements such as the rationalization of the working methods of the AU Assembly of Heads of State and Governments, improvement in the quality of its deliberations, the strengthening of the interaction between the AU and the RECs with the view of ensuring a better synergy between the continental level and the regional level for better efficiency in the implementation of the continental agenda.
According to Chairperson Faki, one of the AU reform process if well implemented will help address the issue of the financing of the Union. “There is obviously a greater awareness of the imperative of achieving the financial autonomy of our Union,” he underlined.
The AUC Chairperson further explained that the internal procedures and working methods of the Union are being revised to allow effective implementation of these decisions. He also pointed out that one of the most fundamental issues that concerns us all is the restructuring of the AU Commission.
In his welcome remarks, H.E Workneh Gebeyehu, Minister of Foreign Affairs of the Federal Democratic Republic of Ethiopia, began by wishing a Happy Ethiopian New Year to his peers, celebrated on Tuesday 11 September all over the national territory. He recalled that it is also a special year for the IGAD Region where peace and reconciliation is being heralded from Ethiopia to Eritrea to Djibouti and South Sudan. “The Horn region is ready to be a positive force to Africa’s efforts to silence the guns by 2020,” underlined the Minister.
Worth noting that, since 2014, the AU Executive Council has met in Retreat at least once a year. The 1st Ministerial Retreat of the Executive Council was held in Bahir Dar, Ethiopia in January 2014, with major focus on the development of Agenda 2063.
Related News
World Export Development Forum 2018 held in Lusaka, Zambia
The 18th World Export Development Forum (WEDF) was opened by Zambian Vice-President Inonge Wina, Minister of Commerce, Trade and Industry Christopher Yaluma, and Arancha González, Executive Director of the International Trade Centre, on 11 September 2018.
Hosted by the International Trade Centre (ITC) and Zambia’s Ministry of Commerce, Trade and Industry, the two-day event explored how trade can work for the 99% and be made more inclusive, especially for youth and women. This was discussed under the theme ‘Scaling Up Through Trade: Skill, Innovate, Connect’.
Opening speech by ITC Executive Director Arancha González
Good morning, and welcome to you all!
I want to thank the Zambian government for partnering with the International Trade Centre to host this eighteenth edition of the World Export Development Forum.
Lusaka is an appropriate place for us to have gathered this week.
In some other parts of the world today, people and governments have lost enthusiasm for open markets. They are questioning the value of international cooperation on trade. They see international rules as a burdensome constraint on sovereign control.
Not here in Africa.
Africans have embraced economic integration: among neighbouring countries, within regions, at the continental level, and with the rest of the world. In March, I had the honour of being present in Kigali when leaders from across the continent established the Africa Continental Free Trade Area.
The message there was clear:
As others sought to retreat from international cooperation, African governments decided to move forward.
As others railed against trade, Africans recognized that the opportunities offered by trade exceed the downsides.
As others talked about taking back control, African countries affirmed that standing together makes them stronger than standing alone.
The Africa Continental Free Trade Area builds on African governments’ domestic reform agendas, as well as their work to implement the WTO trade facilitation agreement. And, it complements the trade and market integration that has been promoted through the regional economic communities. In this context I would like to congratulate the new Secretary-General of COMESA, Chileshe Kapwepwe, on her recent appointment.
Why are African countries keen to increase trade? Not because sending more merchandise and services across borders is a goal in and of itself. Trade is a means, not an end: a means to encourage value addition, increase living standards and create better jobs.
Continent-wide economic integration will create a larger market than that available in individual African countries or regions. For African businesses, this promises in turn to enable the productivity gains that come with increased scale and specialisation. For African consumers, it promises wider choices and better prices. The evidence suggests that when African countries trade with each other, the goods they exchange are more sophisticated than those they export to the rest of the world. This means deepening regional integration encourages diversification away from the primary commodities on which too many African economies continue to depend.
I am delighted that African Union Trade Commissioner Albert Muchanga is partnering with us on the ‘Youth Unconference’ which will help us to better reflect the views of the youth on the Africa Continental Free Trade Area. I am also pleased that we will be presenting the first copy of ITC’s publication ‘Business Guide to the Africa Continental Free Trade Area’ to the Commissioner. It was after all his request that we developed such a guide for the business community.
But the true test of any trade policy is the impact it has on the lives of ordinary citizens.
And here I see two important challenges for African policymakers, businesses, and their partners. I am proud to say that ITC is doing its part on both.
Challenge one is that market-opening on paper does not automatically translate into increased cross-border trade. Bridging this gap requires hard infrastructure – the road, rail, air, electric and digital connections that enable the production and exchange of goods and services. But it also needs soft infrastructure: policies, tools, and information. Entrepreneurs and traders need a supportive, responsive policy environment. And they need access to intelligence about market opportunities and requirements in other countries.
The second challenge is about equity and inclusion: about ensuring that the gains from trade, and from growth more generally, are broadly shared. The backlash against trade we see in many advanced economies today has much to do with the fact that large sections of society felt excluded from prosperity.
In developing countries, people are generally more optimistic about trade, since the rising tide of growth has lifted wages across the income distribution. But even in developing economies, the biggest gains have also gone to people at the top. We may even now be sowing the seeds of a future backlash against globalisation – this time in developing countries. And there is another kind of exclusion: that of the many developing countries that remain on the margins of international value chains, supplying unprocessed raw materials, if anything at all.
The key to making our economies more inclusive – and the key to making international trade and investment work for the 99% – is micro-, small, and medium-sized enterprises. Because MSMEs account for the vast majority of businesses and jobs, the more that they are able to become more competitive and connect to the global economy, the more the gains from trade will be broadly shared. The less productive and less integrated MSMEs are, the less likely we will be to achieve the Sustainable Development Goals for the reduction of poverty and inequality.
This is why we are here in Lusaka. And it is why ITC has worked since 1964 to empower MSMEs to connect to international markets.
ITC is supporting African governments to bolster the soft infrastructure needed to make the most of sub-regional, continental, and global market integration. Across the continent, ITC has worked to ensure that trade facilitation reforms reflect the private sector’s experiences and needs. Working with local partners, we have surveyed businesses about the non-tariff measures that are keeping them out of export markets, and identified potential solutions at home and in trading partners.
Together with the African Union Commission, ITC is developing an African Trade Observatory to collect and analyse trade data from AU member states. It will enable public sector actors to monitor the implementation of the Continental Free Trade Area, while giving businesses the information they need to make better investment and marketing decisions.
In the West African Economic and Monetary Union, ITC is engaged in a comprehensive effort to support increased intra-regional trade. In the East African Community, we are supporting agribusinesses to meet international market requirements and ramp up exports to Europe and elsewhere. Through triangular cooperation with China and India, we are seeking to ensure that inflows of investment from these new sources of financing go to MSMEs, not just a handful of well-connected large firms.
In The Gambia, ITC is supporting the government’s efforts to upgrade skills training and create economic opportunities at home for young people. And from North Africa to Burkina Faso, and Mali to refugee camps in Kenya and Tanzania, ITC is working to connect vulnerable communities – especially women – to international markets for furniture, textiles, and computer services.
The focus on women and young people is deliberate. When they are equipped to tap into international markets, the socioeconomic benefits are especially large and long-lasting. Here in Zambia, research shows that one of the silver linings of a major economic downswing in Copperbelt Province starting in the 1980s was that it brought large numbers of women into the workforce, in mining but especially in other sectors.
Over time, perceptions of women’s role in the economy shifted. Where working women were once viewed with suspicion, they are increasingly seen as examples for others to follow. When copper prices rose again, more women entered the workforce, notably in health and education. This is good for Zambia’s long-term prosperity. Excluding 50% of the population from the economy is no way to maximise growth or inclusiveness.
This is why I was so pleased that, together with the Enhanced Integrated Framework (EIF), we launched SheTrades Zambia just yesterday. This will be an important platform to support women’s economic empowerment and take the amazing women-led MSMEs in Zambia to regional and international markets.
The World Export Development Forum is where trade policy concerns meet business practice. It is a conversation about what is working – and what needs to be improved – to make international markets work better for MSMEs and sustainable development. The topics we will address here – green finance, women in trade, skills upgrading for young people – go to the heart of trade’s intersection with the Sustainable Development Goals. Based on ITC’s own cutting-edge research, we will hear about how to build the support ecosystems businesses need to thrive in the digital age.
WEDF is not just about talking business, it is about doing business. This year’s business-to-business meetings will focus on agribusiness products and processing equipment. In response to business demand, buyers and sellers of packaging materials are also represented here. Packaging is an unsung hero of food safety, branding, and trade. Too frequently, however, packaging can be both unaffordable and a source of waste. It is possible for African businesses to leapfrog directly to sustainable packaging – and the contacts you will make here can help make that happen.
Over the next two days, we will hear from founders like Tiguidanke Camara, who in 2009 quit her New York modelling job and today heads Tigui Mining Group, Guinea’s only mining company that is headed by a woman. We will meet Michael Ocansey – the victor of last year’s WEDF pitching competition – whose Ghana-based startup allows smallholder farmers to cut out intermediaries and sell directly to buyers. We have already seen Rose Sibisi, who in addition to hosting a talk show is an inspiring entrepreneur in her own right.
And we will hopefully hear views from all of you in this room.
This week is about promoting smart packaging in Africa through our event with FAO and IMA yesterday; about women’s economic empowerment through SheTrades; about investment and business linkages through our B2B sessions; about Trade and Investment through the China-Zambia event that will be held directly after WEDF, about youth, trade facilitation, agri-business, and more. But of equal importance it is about making connections. Speak to each other. Learn from each other. Trade with each other.
Without further ado: let the show begin!
Closing speech by ITC Executive Director Arancha González
We have come to the end of three days of intense learning, sharing and collaboration. New partnerships have been forged. New friends have been made. And once again we have showed how Africa can deliver for Africa.
There have been many speeches so I want to just leave you with some figures:
-
More than 1600 people registered for WEDF from 60 countries
-
The first SheTrades chapter in Southern Africa: SheTrades Zambia.
-
One innovative Youth UNconference which placed a spotlight on the voice of young entrepreneurs and policy makers.
-
4 publications launched including Faster customs, faster trade: Using technology for trade facilitation’ with Huawei Technologies, and the Business Guide to the African Continental Free Trade Area Agreement in partnership with the African Union Trade Commission.
-
70 companies from 17 countries participated in the B2B.
-
1500 Trade leads identified over 300 bilateral meetings.
-
Over 10 training and capacity building sessions held.
-
6 plenary sessions ranging from tearing down Trade borders to agribusiness to women’s economic empowerment.
-
100 local students and visiting from South Africa.
-
6 amazing youth entrepreneurs pitching their ideas
-
All WEDF panels with gender balance
-
One amazing Zambian musician
-
More than 2000 tweets and Facebook shares on social media and you can find all of the photos from WEDF through our ITC app ITC at Hand so download it for your IOS
-
One top trending twitter handle: WEDF18
-
And one amazing host country: Zambia
I first want to thank the Zambian authorities and the Zambian people for the incredible welcome and effective hosting of this conference. Like so many countries Zambia’s economy is facing strong winds but I believe the country stands on firm ground and has the potential to strongly rebound and regain economic stability. That WEDF came to Zambia is a vote of confidence by ITC.
Zambia is a country that has made big progress but still has incredible unrealised potential. We at ITC know this because we have been working with Zambia and Zambian businesses for years. Zambian SMEs have been exposed to international buyers this week and have showcased the ingenuity and creativity of the products and services from this country. One only had to visit the exhibition this week to see this. From traditional weavers adding value to cotton to create beautiful textiles – a project supported by ITC – to Moringa infused peanut butter, teas and soups, to leather work and financial services: this is a country with so much to offer.
In my welcome speech I referenced that Africa – unlike some others – is embracing trade and integration. The AfCFTA is a vehicle to realize the aspirations of a borderless continent. What we have learnt here will be important inputs into that process:
-
That trade facilitation at the border is only really effective if all parties modernize, increase transparency and cut down on red tape.
-
That placing women and youth at the centre of Trade and development policy – including the AfCFTA – is critical if we are to deliver for inclusive growth.
-
That adding value to goods and services, in particular in agriculture, and increasing the capacity to develop and extend value chains in Africa must be part of the Continental strategy.
-
That the voice of youth matter. They will take forward tomorrow for what we are putting in place today. This morning I met with over 120 African youth to discuss trade and development issues and I can tell you the future is bright.
-
That supporting the competitiveness of MSMEs must be at the centre of the Continental development trajectory. From ensuring financial literacy to meeting quality standards and packaging to supporting trade and investment data and intelligence to moving to automation and the digital economy- this is where the cursor must be placed; competitiveness rather than protectionism.
-
That the future is green. Greening value chains, incorporating sustainability into production methods and promoting green financing.
These are just some of the important messages coming out of these 3 days of discussion. But this is only one part of solution. With identifying the constraints and the problems the next step is to create a blueprint for responding and reacting. Through the capacity building that we carried out in tandem with these discussions this week, ITC will continue to be your partner.
And the week does not end today. Thursday and Friday ITC will be supporting an investment discussion between China and Zambia through one of our flagship programmes the Partnership for Investment and Growth in Africa (PIGA); we will be facilitating international media exposure of a series of projects that ITC and the EIF have supported in Zambia including on honey and mushrooms; and we will be facilitating a trade and investment discussion with trade promotion organizations from the COMESA region.
A word on the business-to-business meetings that were held this week. We saw 120 participants in the B2B exchange. Business was discussed and business was concluded. An early estimate is that deals potentially worth around US10 million are on the table.
You all know Moringa – the miracle tree. Moringa Wonder Plus Zambia Limited which is involved in organic production of moringa trees through transforming the leaves into a powder for its consumption. For this transformation process to be effective, machinery that does not alter the properties of the leave is required. Alpatech Process Equipment Pvt. Ltd from India has developed a unique expertise in processing machinery to produce healthy drinks and wine from fruits and honey. The company mainly presently in Asia is seeking new markets in Africa.
Moringa Wonder Plus Zambia Limited and Alpatech are now partnering to use Alpatech expertise and machinery to transform Moringa into powder in Zambia as well as to develop similar product lines in Zambia using mangoes, baobabs and avocados.
In addition, Moringa Wonder Plus uses chillies to create a natural protection barrier against pests’ around Moringa trees. As the company is currently expanding the tree plantations, Moringa Wonder Plus will buy large quantities of chillies that the Indian spices company “Ambodia Tee” is in a position to supply. This is what you can call a win-win-win-win.
Another story from the B2B is around honey. The Bee Hive Ltd. (Malawi) is involved in commercial bee keeping and produces high quality honey and honey by products including bee wax, royal jelly, pollen, propolis and bee venom targeting heath and eco conscious consumers.
The demand for their products outstrips the current supply. The Bee Hive is partnering with the a social enterprise from Zambia (Good Nature Agro) to scale up their production through a contract farming scheme in which The Bee Hive will provide technical assistance to Good Nature Agro and will buy the production of honey to meet the increasing demand in Malawi, Rwanda and Tanzania.
The Bee Hive is also collaborating with Alpatech Process Equipment Pvt. Ltd(India) to use their expertise and equipment to add value to honey through processing into wine.
There has also been a lot of progress on the business aspect of harmonization of food safety. For example Selects Fruits Produce (Kenya) buys and sells sesame seeds, chick peas and groundnuts and it is facing shortages to supply the domestic market in terms of quality and quantities.
Malawi and Zambia are the main producers in the region but production from Zambia does not systematically carry out the toxicity tests required to sell in the Kenyan market where the agricultural products must be Aflatoxin free. Zambia is missing business opportunities as the country is lagging behind in terms of food safety regulations.
With ADMARC from Malawi, the marketing board entrusted with the commercialisation of Malawian produce, Selects Fruits Produce has found the quantity and quality that the company needs and there are discussions to place orders before the planting season to ensure a market for Malawian producers.
Another successful outcome has been seen with Garden of Zucchi (Zambia) which buys fresh fruits and vegetables to supply the local market. There is an unmet demand for avocado pears in Zambia while in Malawi the production of avocado pears is being discarded, as there is no market demand. An agreement has been reached that ADMARC (Malawi) will now act as the collection centre for avocado pears to sell the production to Zambia.
We have also seen success in pooling production to reach third markets. Miyonga Fresh Greens Ent (Kenya) is an export oriented company serving European markets. Dried mango is in high demand in Germany and domestic production is insufficient to supple to the German market.
Chankwakwa Ltd (Zambia) has no experience in exporting to the European market but it can supply dried mango to Miyonga Fresh Greens (Kenya) for re-exporting to Germany. This is regional cooperation in action.
And finally on adding value. E-Kulima from Kenya is involved in the transformation of fresh apple mangoes into puree for the subsequent transformation into mangoes juices.
The company needs to move up to the value chain and start the transformation of puree into juices to increase the shelf life of their products.
Alpatech Process Equipment Pvt. Ltd (India) is collaborating with e-Kulima based on its solid expertise in producing juices and wines from exotic fruits and helping them to move up the value chain and increase export revenues.
To conclude friends – this has been a successful WEDF2018 and a successful launch of SheTrades Zambia. I once again thank Zambia for its collaboration and leadership on this. Let me also recognise past WEDF hosts who are with us: Hungary, Sri Lanka, Qatar, Rwanda and China. And finally I would ask you to give a round of applause to my dedicated staff in the ITC who have been working for months to make this happen. They are dedicated, innovative and passionate.
The future is very bright for Zambia.
Thank you.
Related News
tralac’s Daily News Selection
PIDA Week 2018: Realising Africa’s integration through smart infrastructure and good governance (Nepad)
The 2018 PIDA Week (29 October – 2 November, Victoria Falls, Zimbabwe) will focus on five sub-themes (pdf): Project preparation, resource mobilisation and financing mechanisms; Capacity development, job creation and empowerment; Smart and integrated infrastructure development; Technology, innovation and industrialisation; Policy, legal and regulatory frameworks. As part of the strategy of cross-linkages with PIDA stakeholders, PIDA Week 2018 will incorporate the Africa Forum for Utility Regulators AGM and annual conference.
Strengthening the EU’s partnership with Africa: a new Africa-Europe alliance for sustainable investment and jobs (European Commission)
The European Commission, has today, proposed a new ‘Africa – Europe Alliance for Sustainable Investment and Jobs’ to substantially boost investment in Africa, strengthen trade, create jobs, and invest in education and skills. The package builds on the commitments taken during the AU-EU Summit which took place in November last year in Abidjan. Today’s proposal outlines a series of key actions that include (pdf):
-
Boosting strategic investment and strengthening the role of the private sector, notably through increased de-risking of investment projects via blending grants and loans, and guarantees;
-
Investing in people by investing in education and skills, at continental and national level to strengthen employability and match skills and jobs, also including scholarships and exchange programmes, in particular through Erasmus+;
-
Strengthening business environment and investment climate, in particular by strengthening the dialogue with African partners and supporting their reforms in this field;
-
Tapping the full potential of economic integration and trade: building on the AfCFTA implementation, the long-term perspective is to create a comprehensive continent-to-continent free trade agreement between the EU and Africa. To prepare this, Economic Partnership Agreements, Free Trade Agreements including the Deep and Comprehensive Free Trade Areas on offer to the countries of North Africa, and other trade regimes with the EU should be exploited to the greatest extent, as building blocks to the benefit of the African Continental Free Trade Area;
-
Mobilising an important package of financial resources, as reflected in particular in the ambitious proposal for the future Multi-Annual Financial Framework of the EU on external funding, where Africa is highlighted as a priority region. [Various downloads are available]
Compact with Africa: linking policy reforms with private investment (World Bank)
Over the past year, many of my colleagues in international development have been asking about the G20 Compact with Africa: What exactly is it? What’s in it for African countries? How is it different from what we’re already doing? How does it complement or further the World Bank Group’s ongoing work? Their curiosity reflects a growing awareness of the role the private sector must play in helping Africa achieve its development goals. During the Spring Meetings, the Bank Group presented the first Compact Monitoring Report to the G20 finance ministers. Three significant features of the Compact separate it from past practice..: Extracts (pdf):
From the introduction: Ten African countries - Benin, Côte D’Ivoire, Egypt, Ethiopia, Ghana, Guinea, Morocco, Rwanda, Senegal, Tunisia - have prepared reform matrices that set out commitments to maintain macroeconomic stability and undertake relevant business and financing reforms needed to enhance private investment. Implementation of these reforms is supported by their key development partners. This report, representing the first round of monitoring for the period ended February 28, 2018, is being conducted under the auspices of the G20 African Advisory Group co-chaired by Germany and South Africa. It includes self -assessments by Compact countries, the three IOs and relevant AAG members. It also provides an independent review by the African Center for Economic Transformation.
UNGA adopts three resolutions: including text on New Partnership for Africa’s Development (UN)
The General Assembly (Monday) adopted three resolutions, including one on the New Partnership for Africa’s Development , which it passed by a recorded vote of 159 in favour to 2 against, (Dominican Republic, United States) with no abstentions. By that text, the Assembly notes with concern Africa’s disproportionately low share of the volume of international trade, which stands at approximately 2.65% for 2016, and expresses concern at the increased debt burden of some African countries. It calls upon developing countries and countries with economies in transition to continue their efforts to create a domestic environment conducive to encouraging entrepreneurship, promoting the formalization of informal sector activities in Africa, and attracting investments by, inter alia, achieving a transparent, stable and predictable investment climate with proper contract enforcement and respect for property rights, embedded in sound macroeconomic policies and institutions.
Presenting the draft resolution “New Partnership for Africa’s Development: progress in implementation and international support” (document A/72/L.57/Rev.1) on behalf of the “Group of 77” developing countries and China, Sheyam Hamed Abdelhamied Elgarf (Egypt), said 2018 has seen greater openness in the drafting of the text. However, there was too much emphasis on shortening the text, which could significantly weaken the resolution. She said the draft seeks to emphasize the coherence and coordination of the 2030 Agenda for Sustainable Development and Africa Agenda 2063. The fundamental importance of foreign direct investment is well outlined in the text, as well, she noted, adding that it speaks to international trade as an engine of international growth. It also calls for capacity-building, she said, while expressing the Group’s regret that it does not say more about Africa’s progress in agriculture. She expressed grave concern that a text on Africa’s progress is being put up for a recorded vote in the General Assembly.
African Regional Intellectual Property Organization launches regional IP database (ARIPO)
The centralized database with published IP titles from ARIPO and its member states is free and easy to access. It is designed to efficiently serve multiple purposes, including on-line provision of published IP data, encouragement of regional trade, IP scientific research, IP rights protection and enforcement in the ARIPO region, as well as sustainable development of IP. The database has information from ARIPO, Botswana, Gambia, Ghana, Kenya, Malawi, Mozambique, Namibia, Rwanda, Tanzania, Uganda, Zambia and Zimbabwe.
India dethrones South Africa to emerge as Mozambique’s top export destination (Club of Mozambique)
India has dethroned South Africa as the main destination for Mozambique’s exports, according to the new [bilingual] 2017 yearbook (pdf) from the Mozambican National Institute of Statistics. India is the destination of 34.3% of the total value of exports, worth $1.6bn, almost double the sales to South Africa, which was first in the 2016 yearbook but slipped to second in the 2017 list, with only 18.7% of total Mozambican exports last year. On the other side of the trade balance, South Africa remains the country Mozambique imports most from, with a value of $1.6bn, equivalent to about a third of the total. The United Arab Emirates (9.5%), China (8.5%), The Netherlands (8.5$), India (7.8%), France (4.4 %), Portugal (4.2%), Thailand (2.3%), Japan (2.2%) and USA (1.9%) follow behind. [For the export and import data, see, 4.2.2 - Values of exports by country of destination, 2017 and 4.2.4 - Values of imports by country of origin, 2017, pages 96, 100, respectively] [Recession in South Africa means risks but also opportunities for Mozambique]
Tanzania and the AfDB: an EOI and an appraisal report
(i) Analyzing the macro-economic impact of oil and natural gas: EOI. The scope includes (pdf) : To analyze natural gas contribution in economic growth; To analyze the implications of natural gas on country’s fiscal policy; To analyze the impact of natural gas business on the rate of foreign exchange; To study the estimated oil and natural gas industry’s total impact on labor income; and study jobs directly or indirectly in the industry supported by those in the industry; To study its impact in services, wholesale and retail trade, finance/insurance/real estate/ leasing, manufacturing and transportation; To analyze the domestic and regional social-economic impacts of natural gas business (current and future projections).
(ii) Good governance and private sector development programme: appraisal report. Tanzania’s private sector development has continued to be hampered by several challenges including: infrastructure gaps especially in transport and energy, low access to finance, skills gaps and mismatch, and lack of business development support services. In order to address these constraints and challenges in the business enabling environment, GoT is embarking on a comprehensive program aimed at enhancing the efficiency, effectiveness, transparency and predictability of the regulatory environment. The proposed operation (pdf) will focus on supporting improvements to enhance the enabling environment for the private sector as well as contribute to efficiency in the use of scarce public resources thereby creating fiscal space for Government investments in other priority areas, such as education and health.
Services globalization in an age of insecurity: rethinking trade cooperation (World Bank)
This paper makes the following arguments: Services trade negotiations have not led to much liberalization; Current trade disciplines are a useful but inadequate restraint on regulatory protection; Proposed trade disciplines on domestic regulation add value but do not solve existing problems and can create a new hold back problem; Insulating domestic consumers from international market failure is a precondition for further liberalization in many services sectors, and the relevant international bargain needs to be an exchange of regulatory commitments by exporters in return for market access commitments by importers; Such bargains are already being made or could plausibly be made in the areas of data privacy, financial services, labor mobility, and competition policy; But such bargains create a risk of exclusion for non-participants that can and should be addressed. [The author: Aaditya Mattoo]
Wednesday’s Quick Links: ICTSD’s Shuaihua Cheng: 3 things the G20 can do to save the WTO Casablanca to host Afreximbank’s annual meeting on ‘structured trade finance’ Tanzania’s SGR: update Politics interfering with trade in East African Community Sukuk – a new avenue for funding African infrastructure African Union Day: statement by The Gambia foreign affairs minister The digital economy: unlocking its full potential to drive Malaysia’s development |
Related News
State of the Union 2018: Towards a new ‘Africa-Europe Alliance’ to deepen economic relations and boost investment and jobs
The Commission is proposing today a new ‘Africa – Europe Alliance for Sustainable Investment and Jobs’
On 12 September, on the occasion of his State of the Union Address, President Jean-Claude Juncker said: “Africa does not need charity, it needs true and fair partnership. And we, Europeans need this partnership just as much. Today, we are proposing a new Alliance for Sustainable Investment and Jobs between Europe and Africa.
“This Alliance, as we envision it, would help create up to 10 million jobs in Africa in the next 5 years alone. I believe we should develop the numerous EU-African trade agreements into a continent-to-continent free trade agreement, as an economic partnership between equals.”
The European Commission is proposing a new ‘Africa – Europe Alliance for Sustainable Investment and Jobs’ to substantially boost investment in Africa, strengthen trade, create jobs, and invest in education and skills. Today’s package builds on the commitments taken during the African Union – European Union Summit which took place in November last year in Abidjan, where the two continents agreed to strengthen their partnership. It sets out the key strands of action for a stronger economic agenda for the EU and its African partners.
High Representative/Vice-President Federica Mogherini said: “Europe and Africa share many of the same interests: we both want a stronger Africa – with quality jobs for its youth, a better business climate, and peace and security for all. In these years we have started to build a real partnership of equals with Africa. We are already strong political partners, the next step is to be true economic partners and deepen our trade and investment relationship. We want to give young people opportunities to achieve their aspirations. Boosting responsible investment in Africa is a win-win for both sides.”
Commissioner for International Cooperation and Development Neven Mimica said: “This Alliance is about unlocking private investment and exploring the huge opportunities that can produce benefits for African and European economies alike. It is about stepping up our partnership and putting our weight behind African initiatives such as the African Continental Free Trade Area.”
Today’s proposal shows commitment to reinforce the Africa-EU Partnership and outlines a series of key actions that include:
-
boosting strategic investment and strengthening the role of the private sector, notably through increased de-risking of investment projects via blending grants and loans, and guarantees;
-
investing in people by investing in education and skills, at continental and national level to strengthen employability and match skills and jobs, also including scholarships and exchange programmes, in particular through Erasmus+;
-
strengthening business environment and investment climate, in particular by strengthening the dialogue with African partners and supporting their reforms in this field;
-
tapping the full potential of economic integration and trade: building on the African Continental Free Trade Area implementation, the long-term perspective is to create a comprehensive continent-to-continent free trade agreement between the EU and Africa. To prepare this, Economic Partnership Agreements, Free Trade Agreements including the Deep and Comprehensive Free Trade Areas on offer to the countries of North Africa, and other trade regimes with the EU should be exploited to the greatest extent, as building blocks to the benefit of the African Continental Free Trade Area;
-
mobilising an important package of financial resources, as reflected in particular in the ambitious proposal for the future Multi-Annual Financial Framework of the EU on external funding, where Africa is highlighted as a priority region.
Expected results
The Alliance will lead to concrete results such as the creation of up to 10 million jobs in the next 5 years. With EU financial support mobilised by 2020:
-
35,000 students and academics from Africa will benefit from Erasmus+ by 2020. A further 70,000 will benefit by 2027, reaching a total of 105,000 in ten years.
-
750,000 people will receive vocational training for skills development.
-
30 million people and companies will benefit from access to electricity thanks to the EU’s leveraged investment in renewable energy and a boosted generation capacity by 5 GW.
-
24 million people will have access to all season roads through our leveraged investment in transport infrastructure.
-
3.2 million jobs in Africa are expected to be created under the External Investment Plan just by the Investment Programmes focussed on small and medium-sized enterprises.
-
With a guarantee of €75 million, a single investment programme from the External Investment Plan will generate 800,000 jobs.
Background
The Commission’s proposal for an ‘Africa – Europe Alliance for Sustainable Investment and Jobs’ is part of a package which also includes a proposal for a more efficient financial architecture for investment outside the European Union, which will also support further investment in Africa.
Under President Juncker’s leadership, the EU has been strengthening its partnership with Africa, including with new innovative tools, on top of traditional cooperation instruments, notably the very ambitious External Investment Plan.
The EU is Africa’s closest neighbour and biggest investor, the main trading and development partner and a key security provider. The EU is providing €31 billion in Official Development Assistance to Africa between 2014-2020 to boost Africa’s economy to give young people in the continent a chance to build a future, to ensure food security and access to energy, and to anchor good governance and respect of human rights. The EU’s Member States held an investment stock of €291 billion in 2016, making the EU the biggest investor in Africa. The EU also offers free access to the EU market via Economic Partnership Agreements, Free Trade Agreements including the Deep and Comprehensive Free Trade Areas with the countries of North Africa and the Everything But Arms scheme with African countries.
Related News
2018 PIDA Week: Realising Africa’s integration through smart infrastructure and good governance
PIDA Week 2018 is set to take place from 29 October to 2 November in Victoria Falls, hosted by the Government of Zimbabwe under the auspices of the Common Market for Eastern and Southern Africa (COMESA).
PIDA Week was inaugurated in 2015 as a platform to bring together key stakeholders involved in the implementation of the PIDA programme by showcasing the projects and addressing crucial issues around resource mobilisation and creating an enabling environment, to take stock of progress, and identify ways to continue to advance implementation.
The first PIDA Week was held in Abidjan under the theme “Accelerating Infrastructure Implementation for Africa’s Integration” while the second event focused on job creation – “Creating Jobs through Regional Infrastructure Development”. In 2017, PIDA Week continued with emphasis on job creation and economic transformation – “Regional Infrastructure Development for Job Creation and Economic Transformation”.
The Third PIDA Week Final Communiqué captured specific recommendations and action points emanating from the various sessions and discussions.
The Fourth PIDA Week in 2018 will build on previous events to continue to engage stakeholders on the effective delivery of infrastructure on the continent focusing specifically on good governance and how it can specifically help to:
-
Enable project preparation and implementation;
-
Support resource mobilisation;
-
Promote private sector confidence to invest in PIDA projects;
-
Encourage integration of PIDA projects into national development plans.
The 2018 PIDA Week will focus on five sub-themes:
(i) Project preparation, Resource Mobilisation and Financing Mechanisms
One of the major pre-requisites for the mobilisation of financing for projects is projects preparation as well as demonstration of bankability of the projects. The mobilisation of resources for projects development, preparation and implementation is also an essential step towards ensuring effective infrastructure services delivery. There are various financing mechanisms that African stakeholders could use to ensure the implementation of infrastructure projects including domestic and international financing mechanism from both the public and private sectors. Recent development have also seen a global increase in innovative financing for infrastructure projects including climate finance as well as Public-Private Partnerships (PPPs). This Session will aim to discuss barriers, opportunities and emerging trends in projects preparation, resources mobilisation, and projects financing.
(ii) Capacity development, Job Creation and Empowerment
Low levels of capacity for projects preparation and implementation presents one of the major barriers to infrastructure development on the continent. There is a major need to build and boost technical capacities and skills at all levels of the project life cycle as well as relevant institutions to ensure efficient development and management of infrastructure. In addition, suitable infrastructure development on the continent needs to also provide a platform to absorb capacities, create jobs and empower people including women and youth. This Session will aim to highlight the relevance and requirements for effective capacity development for infrastructure projects as well as discussing the job creation and empowerment potentials of infrastructure development on the continent.
(iii) Smart and Integrated Infrastructure Development
The continuing demand for effective infrastructure services delivery at the regional and continental levels to promote cross-border trade, industrialisation and the movement of goods and services calls for the development of smart and integrated infrastructure in Africa. New and emerging technologies provide ample opportunities to ensure services from infrastructure are made more efficient, reliable and cost-effective. For example, Smart Corridors would enable transport and trade facilitation and also contribute to: (1) improved corridor coordination and management; (2) reduction of transport cost as an overall component of exports and imports; and (3) reduced corruption along the corridors. This Session will cover emerging trends at the global and regional levels on smart infrastructure as well as discussing the opportunities and roadmaps to ensure integrated infrastructure services delivery on the continent.
(iv) Technology, Innovation and Industrialisation
One of the fundamental issues to address in infrastructure development in Africa is the establishment of a comprehensive framework that fosters innovations, technology transfer, technology adoption, technical co-operation as well as research and development. In Africa, where the system of innovation and the capacity is not adequate, the first step is to build innovation capacity that addresses local and specific issues. This will make it easier for technology absorption, modelling of technologies to meet local standards and conditions, and ensure effectiveness of businesses and public services. This will also drive industrialisation and regional integration as well as leapfrog development and economic growth on the continent, amongst others. This Session will aim to deliberate on various technology and innovation frameworks and how best they could be integrated within the wider objective of regional and continental infrastructure initiatives.
(v) Policy, Legal and Regulatory Frameworks
The development of a sustainable regional infrastructure and the promotion of regional integration and intra-African trade require the development of effective, comprehensive and harmonised continental regulatory frameworks, which will enhance regional co-operation and co-ordination of stakeholders including Member States as well as Regional Institutions. A harmonised regulatory framework at the continental and regional levels will facilitate the creation of an African common market, enhance private sector engagement and mobilise the huge financial and technical resources required to provide efficient infrastructure services to all Africans. There is thus a need to analyse existing regional and continental regulations including assessment of regulatory frameworks and institutions with a view to propose and implement action plans for harmonised continental and regional regulatory frameworks for effective cooperation between Member States and Regional Institutions in infrastructure development. This Session will aim to identify gaps, recommend best practices and actions in developing a harmonised continental and regional regulatory framework in infrastructure development.