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EABC moots new strategies to benefit from African continental free trade zone
Regional governments should move fast and expedite integration process to give the East African Community a competitive edge in the proposed continental free trade zone, the East African Business Council (EABC) leaders have said.
Last week, 44 African Heads of State and government officials signed the historic agreement which will enable the creation of the African Continental Free Trade Area (AfCFTA). The treaty, signed in Kagali on March 21, is expected to create largest trade bloc globally, with market share of almost $3.4 trillion and a population of over 1.2 billion people.
However, EABC leaders say the slow implementation of projects expected to improve business climate in the region could put the region at a disadvantage when the treaty finally comes into force. This may leave the region behind if nothing is done to have the projects fast-tracked and late alone cost the region an opportunity to fully participate in the bigger “African market”.
EABC vice-chairman and managing director Kigali Heights, Denis Karera, said full EAC integration will give the region competitive advantage, enabling it to benefit more from continental free trade zone. According to experts, the creation of African free trade area means regional blocs like EAC must find ways that will enable them to compete and benefit from the bigger market. Karera said delaying to ratify or implement some of the important regional treaties and projects could lender EAC almost non-player and irrelevant once AfCFTA comes to life.
“The competition that comes up with CFTA can only be dealt with if we cooporate as a region and embrace strong public-private partnerships,” he told The New Times over the weekend. He was speaking on the sidelines of EABC Excellence Business Awards in Nairobi, Kenya.
Karera said the regional single customs territory and the common market protocol were yet to be fully ratified by all members.
Speaking at the event, Jim Kabeho, the EABC chairman, said EAC states now have no choice, but to fast-track the integration to “ahead of the game”. “There is no doubt that EAC is one of the most organised trade blocs in Africa. However, governments and other stakeholders should do more if the region is to become more competitive in the larger continental free trade area,” he said.
Felix Mosha, the EABC former chairman, called for research-supported solutions in the integration process. He added that it is also important to position the private to take the lead in this integration process, saying this will help make them relevant in the newly created continental free trade market.
The experts said that regional integration can only be expedited when member states avoid protectionism of national interests. Kenya’s cabinet secretary for EAC affairs and Northern Corridor initiative, Peter Munya, said those championing “trade protectionism” should be isolated, saying EAC members should look at a bigger picture and benefits that come with integrating markets. The regional private sector says that integration will, not only boost trade, but equally increase the bloc’s exports to the rest of Africa.
Addressing unharmonised tax regimes
Meanwhile, Donald Kaberuka, a member of nine eminent Africans tasked with reforming the African Union, called on member states to address the question of ‘unorganised’ tax regimes to benefit from the newly-signed CFTA agreement. “The biggest impediment has always been unharmonised tariffs; therefore, if we succeed in streamlining and bringing them down, then we are good to go,” he said.
EAC growth projections
Growth in the East African Community (EAC) remained broadly resilient last year despite challenges related to bad weather. National Bank of Rwanda (BNR) recently indicated that a positive rebound in growth for EAC economies was expected this year, thanks to the improvement in weather conditions.
The World Bank has already projected in sub-Saharan Africa is projected to expand to 3.2 per cent in 2018 and to 3.5 per cent in 2019 on the back of firming commodity prices and gradually strengthening domestic demand.
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Rebounding Africa offers new opportunities for investors, says IFC-Africa CEO Forum report
After a few years of sluggish regional growth, Africa’s economies are rebounding, offering a significant opportunity for investors, according to a new study by IFC, a member of the World Bank Group, in partnership with the Africa CEO Forum.
It finds that the region’s new potential is about more than recovering commodity prices, but other forces such as favorable demographic trends, economic reforms, infrastructure investment, buoyant services sectors, and strong agricultural production.
Hans Peter Lankes, Vice President, Economics and Private Sector Development, IFC, said, “There is considerable opportunity for investors to seize on favorable trends. Africa’s growing middle class is consuming a wide range of goods and services, while technology is changing the services delivered to consumers. The result is enormous potential across a range of sectors in Africa.”
The report, entitled Shaping the Future of Africa: Markets and Opportunities for Private Investors, notes that growth recovered from a two-decade low of 1.3 percent in 2016 to an estimated 2.4 percent in 2017, and is projected to improve further to 3.6 percent in 2020.
The report finds that certain sectors show potential for high growth due to productivity gains or consumer demands. Food production and agriculture stand out in a region that continues to import food while a rapidly urbanizing population requires more choice. Africa’s needs in infrastructure remain vast, and range from power to transport to sanitation, among other areas.
Beyond conventual policies to improve productivity, adopting innovative practices and technology can help Africa’s productivity growth through “leapfrogging.” Access to finance, for example, is low, yet Africa has led the world in innovative financial services based on mobile telephony, that is opening new opportunities to increase financial and other services through reliable payment systems.
Amir Ben Yahmed, Founder and President, Africa CEO Forum, said, “This report demonstrates the abundance business opportunities today in Africa. The Africa CEO Forum was founded to provide a dialogue that engages business leaders and helps investors turn these opportunities into successful projects that create jobs and drive Africa’s economic development.”
The report also highlights obstacles that continue to constrain Africa’s development and competitiveness, which include lack of financing and the infrastructure gap. The report finds that joint efforts by governments and private sector, supported by development partners, can best address such challenges and create opportunities. It presents case studies of investments supported by IFC that are delivering strong development impact across Africa.
Sergio Pimenta, IFC Vice President for the Middle East and Africa, said, “Africa is the top priority for IFC. IFC aims to mobilize more private capital to address development and inclusive growth challenges in Africa, notably in infrastructure and agribusiness. In collaboration with other institutions of the World Bank Group, we work to bridge the infrastructure gap, build a productive real sector, and lead inclusive business approaches that will shape a better future for Africa.”
The report was launched during the 2018 Africa CEO Forum, an annual gathering of influential African and international CEOs, investors, and policymakers.
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Services and structural transformation for development
This report contains papers and contributions delivered at the fifth session of UNCTAD’s multi-year expert meeting on trade, services and development: the role of the services economy and trade in structural transformation and inclusive development, held on 17-19 July 2017.
The Nairobi Maafikiano, adopted at UNCTAD XIV in 2016, called upon the United Nations Conference on Trade and Development (UNCTAD) to “(c)ontinue and reinforce its work on trade in services, services data and statistics and analysis of trade and services for development”. It also mandated UNCTAD to “(c)ontinue and further enhance its work on infrastructure services and support developing countries in the establishment of policy, regulatory and institutional frameworks that contribute to infrastructure development”.
Based on this mandate and also on the outcome of the Trade and Development Board, UNCTAD convened the fifth session of the multi-year expert meeting on trade, services and development to focus on the role of the services economy and trade in structural transformation and inclusive development, as key issues for trade and development. Particular attention was given to infrastructure services such as energy, financial, telecommunications and information and communication technology (ICT), and transport services.
This session builds on the outcomes of the previous four sessions of the multi-year expert meeting on trade, services and development (2013-2016) and on the four sessions of the multi-year expert meeting on services, development and trade (2009-2012).
This was therefore the ninth edition of this unique platform to develop an extended network of experts and partnerships, to improve understanding and generate policy insights to support countries’ efforts to formulate and implement suitable and coherent policy, regulatory and institutional frameworks and engage in international trade, negotiations, trade agreements and cooperative frameworks, at multilateral and regional levels, which enable the development potential of services.
The platform has served for policy options, exchange of experiences and lessons learned between countries and to enhance the coherent contribution of services to the 2030 agenda for sustainable development and its sustainable development goals (SDGs). Achieving these global goals is, to a great degree, a services agenda.
The potential of the services economy and trade for economic transformation, growth, poverty eradication and job creation, is recognised in several goals and targets of these global goals. Many presume efficient and equitable services and their achievement relies on universal access to basic services and infrastructure, including health, education, water and sanitation, energy, financial, transport, telecommunication and ICT services.
The importance of the services sector derives from the servicification trends, where services have major contributions to output, employment and investment and an increasing relevance in international trade, where it has grown more than goods, more resiliently, and more in developing countries.
In addition, services can provide intermediate inputs to all economic activities, be bundled with goods, and be developed within manufacturing companies. Through all these effects, the services sector induces efficiency, effectiveness, productivity and productive and export capacity, particularly in micro, small and medium enterprises. It can thus promote a structural transformation that can support diversification and upgrading aspirations.
Harvesting this potential requires sound and evidence-based policy, regulatory and institutional frameworks. With these regulations as a precondition, international trade can strengthen services sectors and enhance this potential for a services-led growth through pro-development economic adjustment. It is therefore crucial to address domestic-supply constraints and to achieve coherence between several policy areas, as well as between these areas and trade liberalization.
This publication reflects the deliberations and results of the fifth session of the multi-year expert meeting on trade, services and development on services, structural transformation and inclusive development. Together with the multi-year expert meeting, this publication is part of UNCTAD’s overall toolbox to assist countries in developing regulatory and institutional frameworks to allow harvesting the benefits of services for economic transformation and development.
The Global Services Forum, also a part of this toolbox on services, is another important platform to share best practices and form partnerships in trade in services. UNCTAD has also developed country surveys, case studies and dedicated research.
Services Policy Reviews, another central element of this toolbox, provide support to policymakers and regulators in assessing the potential of services productive capacities and trade and the robustness of regulations and institutions. This allows identifying constraints for the development of the services economy and trade and also practical solutions and policy options for best-fit practices to improve services performance. Services Policy Reviews draw on UNCTAD’s longstanding experience of more than 20 years supporting the national assessment of services.
This publication also draws from the results of this toolbox with a view to assist developing and least-developed countries to pursue their development objectives by strengthening their services economy and trade.
This publication was edited and prepared by Mina Mashayekhi, Head of the Trade Negotiations and Commercial Diplomacy Branch (TNCDB) of the Division on International Trade in Goods and Services, and Commodities (DITC) of UNCTAD, and Bruno Antunes, Economic Affairs Officer of the TNCDB, DITC of UNCTAD.
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tralac’s Daily News Selection
African trade policy events starting today:
In Abidjan: Africa CEO forum; In Nairobi: Regional meeting on SPS collaboration, leasing and coordination in Eastern and Southern Africa; In Arusha: EAC workshop to present the outputs of the ACP-EU Tradecom II project
In Pretoria: SADC Council of Ministers’ meeting underway (SAnews.gov.za)
The Southern African Development Community (SADC) Council of Ministers’ two-day meeting kicked off in Tshwane this morning with a call for increased focus on industrialisation. With increased industrialisation, the regional bloc is set to diversify economies and expand value chains in the zone. “Industrialisation remains a core pre-requisite for prosperity in the region and has to be achieved through a strong partnership with the private sector,” International Relations and Cooperation Minister Lindiwe Sisulu said.
Diarise: 5th Africa Think Tanks Summit (5-7 April, Accra). A highlight will be the launch of the book: Creation, management and sustainability of Think Tanks in Africa
AfCFTA special feature following last week’s Kigali summit
Indication of legal instruments signed at the 10th Extraordinary Session of the Assembly on the launch of the AFCFTA: AfCFTA consolidated text, Kigali Declaration, Free Movement Protocol (pdf)
Post-AfCFTA negotiations slated for May – AU official (New Times)
Negotiating teams from countries that last week signed the CFTA deal will spend the first 10 days of May in Addis Ababa to iron out outstanding issues before the final implementation phase. According to the CFTA transition implementation programme seen by The New Times, the Addis meeting, which will be the 11th of its kind, will look at the implementation and practical application of the tariff liberalisation modality on the designation of sensitive products and the exclusion list. The teams will also look into the implementation and practical application of services modality on choice of priority sectors and the next steps. Before that, the month of April is dedicated to stakeholder consultation with regard to CFTA where the business community will be sensitised on the benefits of the CFTA as they also coordinate the ratification of the agreement. [A New Times interview with Stephen Karingi (UNECA’s Director for Capacity Development): CFTA implementation will rely heavily on regional blocs]
ECA reveals a tool to monitor the progress of AfCFTA. ATPC coordinator David Luke stressed that the AfCFTA Country Business Index is a tool for listening to business on the actual effect the AfCFTA has on the business environment and challenges countries to make improvements. “It will be based on periodic surveys of the private sector at different levels, from informal cross border traders to corporates. This will be complemented with additional analysis of public data, including tariff schedules and trade volumes.” The AfCFTA Country Business Index tool will benchmark countries in four areas: AfCFTA implementation; ease of trade; trade for development, the SDGs and Agenda 2063; and AfCFTA Impact.
Niger’s President Mahamadou Issoufou said he was honoured to have been entrusted with the role of “champion for the AfCFTA” and was grateful to the AU team that helped bring it about. He called for the minimum ratification of the treaty – 22 out of the AU’s 55 members – within less than a year.
Dr Kituyi added that leaders had to “put their back into African integration”. “The people who were angry with globalization are not only in the industrialized North where they are losing jobs,” Dr. Kituyi said referring to developed countries. “There’s a lot of people who are angry about trade in Africa, it’s just that they don’t have a voice,” he said. “As we create voices for them, we had better address their concerns before they become politically too angry. If you are committed to a genuine African integration, you must put your back into priority African initiatives.”
A commentary by UNCTAD’s Dr Mukhisa Kituyi. Importantly, most of the criticism aimed at international trade today has been limited (for the moment) to developed countries. Many developing countries remain supportive of international trade. In addition, China’s One Belt One Road Initiative, the continued interest in many countries to finalise a Trans-Pacific Partnership, and the efforts of African countries to launch a Continental Free Trade Area in 2018 are just some examples that show that trade remains at the core of many development strategies. There also remains large potential for deeper economic integration within South Asia, Latin America and especially within sub-Saharan Africa. One important question is not whether these initiatives will deliver benefits, as they surely will, but to what extent the benefits will be shared. The SDGs provide a valuable benchmark against which we should weigh these trade integration efforts. Global efforts to achieve the goals are driving a shift from a mindset based on competition to one more focused on solidarity and sustainability.
UNECA’s Vera Songwe said Africa “will not remain untouched” by the “rising tide of protectionism and anti-globalization” in the developed world, said Ms Songwe, stating that the US – for example – recently announced increases in steel and aluminum tariffs, which will impact Africa given that the continent currently exports around $800m in affected steel and aluminum products to the US. The Executive Secretary also noted that the US has threatened to revoke AGOA preferences for several East African countries, affecting around $450m, of countries the sub-region do not reverse an industrialization plan to reduce imported second-hand clothing. These, along with Britain’s decision in 2016 to leave the EU, come as a blow to the confidence in regional integration processes, she said, adding that “the AfCFTA can help Africa weather these challenges.”
Afreximbank’s Dr Benedict Oramah announced that, as part of the Intra-African trade Strategy, Afreximbank had opened credit lines amounting to $800m to 55 banks across Africa in order to facilitate the confirmation of letters of credit in support of intra-African trade. The Bank’s goal was to extend such lines to at least 500 banks in all African countries by 2021 in order to significantly reduce the cost of intra-African trade finance and to counter the constraints posed by country risks. The President added that the inaugural Intra-African Trade Fair, which the Bank was organizing in collaboration with the African Union (11-17 December, Cairo) would attract more than 1,000 exhibitors and bring in some 70,000 visitors.
AfCFTA Business Forum: President Paul Kagame (Chairperson of the African Union) In summary – Raise our ambition. Ratify. Reform. Increasing intra-African trade, however, does not mean doing less business with the rest of the world. On the contrary, as we trade more among ourselves, African firms will become bigger, more specialised, and more competitive internationally. Let’s also be realistic. We cannot take the Continental Free Trade Area for granted. After it is signed, there will still be challenges. Any concerns or technical issues that remain should be addressed fairly, but also expeditiously. Work on some additional protocols and annexes will also continue. Once again, the full engagement of the private sector will be absolutely essential. Allow me to outline three of the tasks before us.
AfCFTA Questions & Answers: Extract (pdf). To fully utilize the opportunities of AfCFTA, each State Party is recommended to develop an AfCFTA Strategy – complementary to the broader trade policy of each respective State Party – that identifies for that particular country the key trade opportunities, current constraints, and steps required to take full advantage of the continental African market. Key features may include: [La Zone de libre-échange continentale africaine: Questions et réponses, pdf]
Profiled AfCFTA summit inputs: The Gambia’s President Adama Barrow; AfDB President Akinwumi A. Adesina; Egypt’s Minister of Trade and Industry Tarek Kabil; Seychelles’ Vice President Vincent Meriton; South Africa’s President Cyril Ramaphosa: Free movement protocol good for SA; Ramaphosa calls for single African currency
Nigeria: Our grouse about free trade pacts, by OPS, NLC, others (Nigeria Today)
MAN President Dr Frank Jacobs: “The government should, as matter of urgency, convene a special meeting of the relevant stakeholders, including experts on trade policy, to consider tariff lines rates along the line of efficiency, sectoral and sub-sectoral preferences that would be most beneficial to Nigerian businesses under the AfCFTA dispensation. It will also reconsider the national position on EPA vis-a-vis the AfCFTA, especially on tariff lines of products on the sensitive/exclusion list, with a view to ensuring that the EU-EPA is not reintroduced through the AfCFTA’s back door. Review presentations and prepare a detailed submission for the Government on ways and means of participating in the AfCFTA in a manner that our national interest and that of the budding manufacturing sector are effectively protected.”
South Africa and the #AfCFTA: Unions want details from Ramaphosa on Africa free trade plan, warn of job losses (Fin24)
Matthew Parks, parliamentary officer of the Congress of South African Trade Unions said SA unions share Nigerian labour concerns that African states with weak import controls will be used by countries outside of Africa to “dump” cheap imports and destroy local industries. “We know what happened to the textile industry in the 1990’s (and) the poultry industry,” Parks told Fin24. He added that there are already problems within SACU – made up of Botswana, Lesotho, Namibia, South Africa and Swaziland – where he claims Chinese companies set up “false warehouses” in Lesotho and bring their products into South Africa. “It’s fantastic on paper...but a free trade area could destroy the economy overnight and would further de-industrialise the country.”
India to negotiate an FTA with the AfCFTA – Suresh Prabhu (CII)
Complimenting the African nations on successfully concluding the AfCFTA, Mr. Suresh Prabhu, Minister for Commerce and Industry, stated that India would negotiate a FTA with the AfCFTA which will be unique in nature and will be beneficial to Africa needs. The Minister was addressing the Inaugural Session of the 13th CII – Exim Bank Conclave on India – Africa Project Partnership in New Delhi. The Government was seeking to set up a new India – Africa Development Fund which would seek to synergise the Lines of Credit as well as other export promotion and development programmes to bring about a more holistic development of the continent.
Zambia needs more time to study the AfCFTA – President Lungu
Writing on his Facebook page, President Lungu said Foreign Affairs Minister Joseph Malanji, signed the African Free Trade Area Declaration and not the Agreement because negotiations on some of the protocols of the agreement proposed by Zambia were still on-going. “Zambia had negotiated the protocol on Goods, and Services and the dispute settlement mechanism. The remaining protocols that included Protocol on Trade competition, protocol on Investment and the intellectual property were yet to be negotiated,” President Lungu said. Meanwhile, Commerce, Trade and Industry Minister, Christopher Yaluma, said in the same statement that Zambia would not sign the protocol on the free movement of people as the country was not ready for it.
In other African trade news:
(i) East African Business Council 20th anniversary celebrations: Beyond East Africa, moving from aspiration to action. Kenya’s Minister for EAC and Northern Corridor Development, Peter Munya, said the region faced a challenge in the implementation of agreed protocols. “National laws need to be aligned to regional protocols. Partner States also need to push for law reforms back home. The other alternative is to pass overarching laws at the regional level to replace existing legislation. This has been done with success in the European Union.” Hon. Munya called for a review of the Common External Tariff and efforts to make the EAC Single Customs Territory work better, adding that the Community may need to establish a regional institution to make this possible. EABC Chairman Jim Kabeho emphasized the importance of local content especially in huge infrastructure projects being undertaken by governments in the region.
(ii) ECOWAS single currency 2020 take-off not feasible (New Telegraph). Against the background of last Wednesday’s signing of the AfCFTA agreement by 44 countries, emerging and frontier markets focused investment bank, Renaissance Capital, has said that the plan by ECOWAS to have a single currency by 2020 is, “not credible.” In a research note by its Global Chief Economist and head of macro-strategy unit, Charles Robertson, obtained by New Telegraph, the firm said it supports Nigeria’s position that a single currency for the sub region is ill-advised at this time. The firm stated: “Despite the leaders of ECOWAS declaring last month that they will push ahead with a single currency by 2020, we think this is not credible. Nigeria’s critique that a single currency is unwise at this time is valid. We think an East African single currency by 2024 is also unlikely.”
(iii) South Africa to ratify SADC Protocol on Finance and Investment amendment (GCIS). Cabinet approved that the Agreement Amending Annex 1 (Co-operation on Investment) of the SADC Protocol on Finance and Investment be tabled in Parliament for ratification. The purpose of the FIP is to harmonize financial and investment policies of Members States, so that they are consistent with the objectives of SADC. This will ensure that any changes to financial and investment policies in one Member State does not necessitate undesirable adjustments in other Member States. The aim of the Amendments are to preserve the right of governments to regulate in the public interest and to balance the rights and obligations of investors and Governments.
(iv) DP World wins 30-year concession for Congo deepwater port amid Africa expansion push (The National). The Nasdaq-listed global ports operator will manage and develop the greenfield Port of Banana in a joint venture with the government of DR Congo, with the option of a 20-year extension, it said in an emailed statement. DP World will get a 70% stake and the DRC government keeps a 30% holding in the project. Construction will start this year and finish in two years. The Congo project extends DP World’s ambitous push to expand in Africa. Congo has long sought to develop a port along its 37-kilometer coast to handle bigger vessels than those that can reach its existing shallow water ports along the Congo river. The country’s existing ports at Matadi and Boma are inland up the Congo river and are incapable of handling traffic from large cargo liners because of a lack of capacity and draught, according to a PwC study of DRC’s infrastructure. As a result, it relies on transshipments of cargo from Pointe Noire in neighbouring Republic of Congo. The new port will “dramatically improve” the cost and speed of trade and reduce dependency on neighbouring countries for shipments, Jose Makila, DRC Transport Minister said.
Today’s Quick Links: South Africa: Statement by Department of Trade and Industry on Section 232 duties by United States; Rob Davies calls for exemption on US tariffs President Ramaphosa says SA to lift visa restrictions for Rwandans SA BRICS Business Council calls on BRICS to reduce trade barriers |
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SADC Council of Ministers’ meeting underway
The Southern African Development Community (SADC) Council of Ministers’ two-day meeting kicked off in Tshwane this morning with a call for increased focus on industrialisation.
With increased industrialisation, the regional bloc is set to diversify economies and expand value chains in the zone.
“Industrialisation remains a core pre-requisite for prosperity in the region and has to be achieved through a strong partnership with the private sector,” International Relations and Cooperation Minister Lindiwe Sisulu said on Monday.
She was speaking at the opening of the meeting in her capacity as the new chairperson of the council which oversees the functioning and development of SADC and ensures that policies and decisions are implemented.
The council, which consists of ministers from each of the 16 member states (usually from the ministries responsible for Foreign Affairs and International Relations, Economic Planning or Finance), meets twice a year.
Advancing regional industrialisation
Minister Sisulu said all SADC members should focus on the need to strengthen the region’s capabilities both inside and outside of government in order to advance regional industrialisation.
“It is our belief that SADC governments should identify priority value chains and take steps to attract the private sector into these specific sectors.” However, Minister Sisulu said industrial development should be underpinned by sound infrastructure.
The lack of interconnectivity and poor transport within the region have been identified as the key stumbling blocks for the region to fully move forward with industrialisation and beneficiation.
This has pushed the regional bloc to develop and introduce the SADC Industrialisation Strategy and Roadmap 2015-2063, which aims to accelerate the momentum towards strengthening the comparative and competitive advantages of economies in the region.
Plan to address socio-economic issues
The regional bloc also adopted the Regional Indicative Strategic Development Plan, which is a comprehensive 15-year strategic roadmap which aims to deepen the integration agenda of SADC with the view of accelerating poverty eradication and other economic and non-economic development goals.
Tshwane assumed the chair of the SADC in August last year by emphasising the need for improved infrastructure that can help to address socio-economic issues, ensure a better quality of life, boost regional economic integration, bridge the inequality gap and aid industrialisation efforts.
“This is why we adopted the ‘Partnering with the private sector in developing industry and regional value-chains’ as a tenure theme to help mobilise private sector in addressing this challenge,” said the Minister
Through this theme, Minister Sisulu said, Tshwane seeks to build momentum and continuity in the collective aspiration towards regional sustainable economic development and industrialisation.
As such, it has identified key activities which will be the development of a high impact annual operation plan, with targeted interventions and public policy tools to foster the development of regional value-chains in agro-processing, pharmaceuticals and mineral beneficiation.
“As part of our regional strategy, South Africa is also working on a set of deliverables, which will focus on some high-impact cross-border projects in order to support manufacturing and the creation of new regional value chains. We will report back to the next SADC Summit in August this year on progress in this respect,” the Minister told the council.
SA’s vision for chairship
The new Minister outlined South Africa’s vision for its chairship, saying: “It is to provide for policy direction and for all of us an enabling environment for a sustainable programme that prioritises the preparation of high impact cross-border projects that are pragmatic, that enhance skills, create jobs and boost regional trade”.
This, she said, will improve the quality of life for people to advance sustainable economic development.
“We have a long journey to travel and we cannot be found to be wanting or to have failed. It is, therefore, fundamental that we unleash the appropriate resources and make a concerted effort to work together towards the SADC our people deserve and a SADC we can be proud of,” Minister Sisulu said.
Meeting to look at progress made
SADC Executive Secretary Lawrance Tax, who also gave opening remarks, said the meeting will look at the progress made in their plans and will review the implementation of the August 2017 Council and Summit decisions and approve the SADC Secretariat’s budget for the year 2018/2019.
Tax highlighted some of the progress, saying they have made tremendous progress with regional integration by partnering with the private sector in order to develop an active public sector. These ensured that activities of the sector meet the needs of the region.
There has also been cooperation around the mining sector and the implementation of the SADC industrialisation agenda.
The region, according to Tax, also continued with the SADC Integrated Regional Electronic Settlement System (SIRESS) – the region’s cross-border payment system, which uses the South African rand.
“To date, over a million transactions are representing R4.9 trillion have been settled using this system.”
SIRESS offers an alternative platform to settle cross-border payments. The benefits of the system include faster settlement time, the reduction of settlement risk and the low-cost of transacting.
To ensure that the system caters for all currencies, Tax said a multi-currency system along the borders was developed.
During the two-days, the ministers will discuss issues of regional importance; consider a number of strategic documents and receive reports on the implementation of the priority areas.
The council is expected to brief the media on their conclusions on Tuesday.
The SADC Council of Ministers was preceded by the meeting of the SADC Standing Committee of Senior Officials on 22nd March 2018, and the meeting of the Finance Committee on 23rd March 2018.
South Africa: Statement on the Cabinet Meeting of 14 March 2018
Cabinet decisions
1. Cabinet approved that the Agreement Amending Annex 1 (Co-operation on Investment) of the Southern African Development Community (SADC) Protocol on Finance and Investment (FIP) be tabled in Parliament for ratification.
1.1. The purpose of the FIP is to harmonize financial and investment policies of Members States, so that they are consistent with the objectives of SADC. This will ensure that any changes to financial and investment policies in one Member State does not necessitate undesirable adjustments in other Member States.
1.2. The aim of the Amendments are to preserve the right of governments to regulate in the public interest and to balance the rights and obligations of investors and Governments.
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Post-AfCFTA negotiations slated for May – AU official
Negotiating teams from countries that last week signed the African Continental Free Trade Area (AfCFTA) deal will spend the first ten days of May in Addis Ababa to iron out outstanding issues before the final implementation phase.
During the just-concluded extraordinary summit of the African Union that was held in Kigali, 44 countries signed the instrument that is set to make the continent the largest trade bloc in the world.
According to the AfCFTA transition implementation programme seen by The New Times, the Addis meeting, which will be the 11th of its kind, will look at the implementation and practical application of the tariff liberalisation modality on the designation of sensitive products and the exclusion list.
The teams will also look into the implementation and practical application of services modality on choice of priority sectors and the next steps.
In a phone interview, the Head of the AfCFTA Unit at the African Union, Prudence Sebahizi, told The New Times that even though most negotiations were done months before the signing ceremony, there was still need to clear outstanding issues.
“Indeed, the negotiations were done last year but between now and when the deal enters into force, we will be looking at the outstanding issues like schedules of commitment, which have to be cleared for the framework to be easier to implement,” he said.
Before that, the month of April is dedicated to stakeholder consultation with regard to AfCFTA where the business community will be sensitised on the benefits of the AfCFTA as they also coordinate the ratification of the agreement.
“Stakeholder engagement is something that we take seriously and it is a continuous process because they are important to the process. We encourage countries to remember that this is a continuous process,” he said.
Sebahizi says that there is currently no pressure on signatories but countries are expected to start moving toward ratification.
During, a business meeting that preceded that of Heads of State Summit in Kigali last week, Zimbabwean President Emmerson Mnangagwa told participants that though the political commitment to the agreement may be there, it remains to be seen how many would be able to ratify the agreements within the 180-day time-frame.
“First, as SADC the region, and together with the rest of Africa, we should increase the pace. I believe that political commitment is there but the pace at which each individual member state may move may be the issue. But as far as my country is concerned, things are now different. Zimbabwe is open for business,” he said.
SADC is the Southern African Development Community to which Zimbabwe is a member.
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All-Africa free trade deal must be backed with concrete actions, UNCTAD Secretary-General tells special AU summit
Mukhisa Kituyi was speaking at a business forum attended by Africa’s leaders a day before they signed into life the historic African Continental Free Trade Area
Political declarations must be matched with concrete actions, UNCTAD Secretary-General Mukhisa Kituyi told leaders at a business forum on the eve of the signing of the African Continental Free Trade Area (AfCFTA) at a special summit of the African Union.
The forum, held the day before the landmark 21 March summit in Kigali, Rwanda, brought together African leaders, business interests and policymakers to map out a strategy for broad engagement in the AfCFTA and the vision of the African Union’s Agenda 2063 for continental integration.
The AfCTA will create a trade bloc of 1.2 billion people with a combined gross domestic product (GDP) of more than $2 trillion. The agreement commits countries to removing tariffs on 90% of goods and to liberalize services.
“There are sometimes political statements of solidarity which are not matched by concrete action,” Dr. Kituyi told a panel that included President Paul Kagame of Rwanda and President Mahamadou Issoufou of Niger, who is the African Union Champion for the AfCFTA.
Dr. Kituyi said that political transparency was needed to “shatter myths” about free trade in Africa, especially at a time of “rising protectionism” in the global trade environment and “major threats to rules-based multilateralism”.
The benefits from increased intra-trade African under the AfCFTA would create prosperity for every African, Mr. Kagame, who is also the chairperson of the African Union, said earlier in a keynote speech
New opportunities
With the signing of the “historic agreement”, Mr. Kagame said, “a new chapter in the story of African unity is set to begin”.
“The stakes are enormous for Africa, but also for the entire global economy, to which Africa will contribute an ever-greater share in the decades ahead,” Mr. Kagame said.
“The creation of one African market necessarily entails a metamorphosis in how we think and act. The full involvement of the private sector is needed more than ever before. The purpose of today’s forum is to discuss how to make the most of the new opportunities we are creating for ourselves.”
Genuine African integration
Dr. Kituyi added that leaders had to “put their back into African integration”.
“The people who were angry with globalization are not only in the industrialized North where they are losing jobs,” Dr. Kituyi said referring to developed countries.
“There’s a lot of people who are angry about trade in Africa, it’s just that they don’t have a voice,” he said.
“As we create voices for them, we had better address their concerns before they become politically too angry. If you are committed to a genuine African integration, you must put your back into priority African initiatives.”
The AfCTA aims to speed up cross-border trade and tackle “behind the border” regulations – also known as non-tariff measures – which put a brake on trade. The free movement of people is also envisioned.
“The collective commitment has to be: ‘Let us give our priority to the African initiative’,” Dr. Kituyi said.
Ignorance is not bliss
A former trade minister of Kenya, Dr. Kituyi brought his personal reflections to the debate.
“I had the privilege to be a trade minister negotiating free trade agreements before, and one of the main problems we found was government officers at borders pretending they don’t know the rules,” Dr. Kituyi said.
“They will just tell you ‘We don’t know if you are allowed to bring this in’. And they stop your truck at the border for three weeks, pretending they don’t know! So, argumentum ad ignorantiam becomes just an excuse to slow down African integration.”
Dr. Kituyi said three things were needed to make the AfCFTA work.
“No. 1 political will; No. 2 documenting and shaming the bad examples of not walking the talk; No. 3 we all have to ready to say one important thing – that we don’t have all the solutions.”
New mindset
The AfCTA Business Forum “Leveraging the Power of Business to Drive Africa’s Integration” comprised four plenary sessions addressed by several African heads of state and numerous African business leaders.
“There has to be a new mindset in the relationship between governments and business that says that business is not a cash cow to get political money,” Dr. Kituyi said.
“Business has to know that what you buy on the wholesale market collectively is cheaper in the long run. A challenge to African business is this: if African businesses create the conditions at home to invest the surpluses in Africa.”
Dr. Kituyi also spoke at a business breakfast, a plenary on technology, innovation and intra-African trade, a cocktail reception for African entrepreneurs and other events at the summit.
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ECA reveals a tool to monitor the progress of AfCFTA
A key tool for monitoring the AfCFTA will be through a Country Business Index that was revealed at a Business Forum on the eve of the signing of the historic agreement.
The UN Economic Commission for Africa (ECA) through its African Trade Policy Centre (ATPC) developed the index with the aim of measuring the impact of the African Continental Free Trade Area in a way that generates value for private sector operators.
The Executive Secretary of ECA, Ms Vera Songwe explained that the AfCFTA Country Business Index aggregates the opinions of businesses in Africa and articulates them in a way that ranks countries on how well they are implementing the AfCFTA.
“In 2025, if we do well, and if we make the AfCFTA work, the African market will be a $3,6 trillion,” affirmed Songwe. “This is not insignificant for business.”
Presenting additional details on the Index, David Luke, Coordinator of ATPC stressed that the AfCFTA Country Business Index is a tool for listening to business on the actual effect the AfCFTA has on the business environment and challenges countries to make improvements.
“It will be based on periodic surveys of the private sector at different levels, from informal cross border traders to corporates. This will be complemented with additional analysis of public data, including tariff schedules and trade volumes,” he said. Mr Luke highlighted that the index will score countries to recognize performers and identify the laggards.
The AfCFTA Country Business Index tool will benchmark countries in four areas: AfCFTA implementation; ease of trade; trade for development, the SDGs and Agenda 2063; and AfCFTA Impact.
The Business Forum brought together African political and business policymakers to discuss their engagement in the AfCFTA, an agreement expected to create a trade bloc of 1.2 billion people and that commits countries to removing tariffs on 90% of goods and to liberalize services.
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10th Extraordinary Session of the Assembly of the African Union on AfCFTA held in Kigali
The leaders of Africa’s 55 countries made history on 21 March 2018, when they come together in Kigali, Rwanda to sign an agreement that will launch the African Continental Free Trade Area (the AfCFTA). The AfCFTA will make the continent the largest free trade area created since the formation of the World Trade Organisation.
The launch took place at the 10th Extraordinary Meeting of the Heads of State of the African Union convened by President Paul Kagame of Rwanda, the new Chairperson of the AU, who said of the AfCFTA: “This is a historic pact which has been nearly 40 years in the making, and it represents a major advance for African integration and unity.”
In summary, 44 out of the 55 AU member states signed the Agreement establishing the AfCFTA, 47 signed the Kigali Declaration and 30 signed the Protocol on Free Movement of Persons, Right to Residence and Right to Establishment. Download the full list of signatories to the three legal instruments here.
During the opening ceremony, President Kagame stated:
“The Continental Free Trade Area is the culmination of a vision set forth nearly 40 years ago in the Lagos Plan of Action, adopted by Heads of State in 1980. That undertaking led directly to the Abuja Treaty establishing the African Economic Community in 1991.
We continue to be guided by the foundational principles and detailed implementation roadmap that were laid down in those instruments.
Among the most important guidelines is the pre-eminent role of our Regional Economic Communities. They have been the model and the engine for Africa’s economic integration and they will continue to be.
Trade agreements cover many complex details. Behind the scenes, Commission staff, ministers, and technical experts put in countless days and nights of hard work. This effort has paid off and we thank you.
What is at stake is the dignity and well-being of Africa’s farmers, workers, and entrepreneurs, particularly women and youth.
The promise of free trade and free movement is prosperity for all Africans, because we are prioritising the production of value-added goods and services that are “Made in Africa”.
The advantages we gain by creating one African market will also benefit our trading partners around the world, and that is a good thing.
At the same time, we will be in a better position to leverage our growing strength and unity to secure Africa’s rightful interests in the international arena.
This is not just a signing ceremony. Today’s deliberations are critically important as we chart the next steps on our journey towards the Africa we want.”
H.E. Moussa Faki, the Chairperson of the African Union Commission, says the African Continental Free Trade Area will also strengthen Africa’s position in global trade: “AfCFTA will make Africa one of the largest economies in the world and enhance its capacity to interact on equal terms with other international economic blocs.”
On the 20th of March, a day before the signing, Government delegations joined Africa’s top business leaders and other stakeholders to exchange views on the continent’s economic transformation through trade at a special day of celebration and dialogue, the AfCFTA Business Summit.
The progressive trade liberalization of Africa in the years ahead will mean new opportunities for African companies to compete and cooperate across borders and build continental reach. However the success of the AfCFTA will depend on closer collaboration between policy makers and the private sector.
President Kagame says: “We need active support from the private sector. In fact, without your voice something essential is missing.” The AfCFTA is a flagship project of Agenda 2063, the African Union’s long-term vision for an integrated, prosperous and peaceful Africa. The Free Trade Area has the potential to transform the fortunes of millions of Africans by boosting trading ties between Africa’s nations.
His Excellency President Uhuru Kenyatta of Kenya put it succinctly: “(The African) CFTA means an end to poverty. CFTA means prosperity for our continent. CFTA means jobs for our young people who today struggle and are fleeing our own continent. CFTA means peace and security because we have gainfully engaged our population. CFTA means Africa being able to be self-reliant. CFTA means the African Union meeting to discuss what to do with our prosperity and not what to do with the problems we suffer.”
Currently Africa trades far less with itself than it does with the rest of the world. Intra-Africa trade stands at about 16%, compared with 19% intra-regional trade in Latin America, 51% in Asia, 54% in North America and 70% in Europe. The United Nations Economic for Africa estimates that the AfCFTA has the potential to boost intra-Africa trade by 53% by eliminating import duties and non-tariff barriers. It could create an African market of over 1.2 billion people with a Gross Domestic Product (GDP) of $2.5 trillion.
Statement of the Chairperson of the African Union Commission, Moussa Faki Mahamat
This is a historic day.
After Addis Ababa in May 1963, Abuja in June 1991 and Durban in July 2002, Kigali, in this month of March, marks a new step in our march towards greater integration and closer unity.
I would like therefore to express my high and deep appreciation to all the Heads of State and Government, as well as to the other heads of delegation, present here.
By travelling to Kigali, they responded to the call of duty. At this juncture in our history, there can be no bigger task for Africa than the deepening of the integration of the continent.
May I express, on your behalf, our grateful thanks to our hosts. To President Paul Kagame, who leads our Union with dynamism and dedication, to his Government and to the Rwandese people, I say Murakoze! We are grateful for the warmth of your welcome and the excellent organisational facilities provided for our meeting.
We have come here to fulfil the aspiration of our peoples for integration and unity.
We have come here to lay a new milestone, to take another step in the Pan-African journey, whose intellectual seeds were sown more than a century ago.
We have come here driven by the conviction that integration is not an option, but an imperative. To paraphrase Emperor Haile Selassie at the May 1963 Summit, the giant Africa cannot wake up if it remains divided.
The world is changing, and changing at a great speed. International competition is fierce. It leaves no room for the weak.
These last few months have, indeed, demonstrated the urgency of hastening the pace.
Europe is endeavouring to deepen its integration, despite the challenges inherent in such an undertaking.
In the Pacific area, a new entity – the Comprehensive and Progressive Agreement for Trans-Pacific Partnership – has just emerged.
China has launched a major undertaking – the One Belt One Road Initiative.
For Africa, after decades of independence, marked by persistent under-development and a marginal place in the international system, the terms of the debate are laid down in almost Manichean terms: Unite or Perish, as Kwame Nkrumah said at the Addis Ababa founding Summit.
Economic integration thus responds not only to aspirations born out of Pan-Africanism, but also to a practical imperative linked to the economic viability of the continent.
Consequently, the convening of this extraordinary session of the Assembly has raised great expectations across the continent. Our peoples, our business community and our youth, in particular, cannot wait any longer to see the lifting of the barriers that divide our continent, hinder its economic take-off and perpetuate misery, even though Africa is abundantly endowed with wealth.
Outside the continent, our efforts are observed with a mixture of admiration and scepticism.
Admiration for the speed with which our experts and Ministers of Trade negotiated the basic texts establishing the Free Trade Area.
Scepticism, because some actors, but also our own peoples, have seen so many proclamations remain a dead letter, so many commitments without practical execution that they have come to doubt the strength of our commitment.
This Summit must, therefore, mark a break. It must strengthen the confidence of our peoples in their Union and its ability to fulfil their aspirations. It must confound those who, outside Africa, continue to think, with barely concealed condescension, that our decisions will never materialise.
The Free Trade Area is the product of a little more than two years of negotiations, coordinated by Egypt then of Nigeria and under the overall auspices of President Mahamadou Issoufou of Niger.
This is an opportunity for me to pay tribute to President Issoufou and the African Trade Ministers, as well as to our Regional Economic Communities, for the dedication with which they led this process.
I also thank the United Nations Economic Commission for Africa, the United Nations Conference on Trade and Development and the African Development Bank, for their accompaniment and support.
It is obvious that in a process as complicated as this one, compromise is a principle with which everyone must be imbued.
Beyond the debates about what some countries might gain or lose in the short term, the truth, statistically established, is that each of our Member States and the continent as a whole will benefit immensely from the establishment of the Free Trade Area.
In May 1963, the Late Ahmed Ben Bella had urged his colleagues to die a little, if not totally, for the liberation of Africa. Today, we must all be inspired by a similar spirit of sacrifice for the sake of the integration of the continent.
The time is no longer for hesitation. I, therefore, call upon all the Member States to sign and ratify the Free Trade Area Agreement. Our ambition must be to ensure its entry into force before the end of this year.
For my part, I intend, in the next few weeks, to appoint emissaries to carry out, under the authority of President Issoufou and in coordination with the private sector, the required outreach towards all concerned stakeholders.
I would like to take this opportunity to stress once again the importance of other aspects of the integration of the continent.
In addition to the Free Trade Area Agreement, the Commission is submitting to your attention the Protocol on Free Movement of Persons and the African Passport. I urge all Member States to sign this instrument. We should ensure that Africans are no longer treated like foreigners on their own continent, while others move about therein often freely.
Another important component of our agenda is the Single African Air Transport Market. I solemnly appeal to the countries that have not yet done so to join this initiative.
Africa today has the opportunity to transform its potential into reality and translate into deeds the aspirations contained in Agenda 2063. This opportunity must be seized.
In truth, it is a privilege for you, for all of us, to lay down this important milestone in the integration of the continent.
On this day, the Founding Fathers our Union, in their eternal sleep, are inviting us, should I say conjuring us, to make this Summit a resounding success.
In May 1963, in a much less favourable context, they made history by laying the foundations for the institutional Pan-Africanism of which the African Union is the proud heir. We cannot do less than them.
Let me conclude by borrowing some words from Kwame Nkrumah’s speech to the Ghanaian National Assembly in June 1965:
“The task ahead is great indeed, and heavy is the responsibility; and yet it is a noble and glorious challenge – a challenge which calls for the courage to believe, the courage to dare, the courage to do, the courage to fight, the courage to achieve – to achieve the highest excellencies and the fullest greatness of man. Dare we ask for more in life.”
This address has particular resonance as we gather here in Kigali. We need to summon the required political will for the African Continental Free Trade Area to finally become a reality.
I thank you.
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tralac’s Daily News Selection
Profiled trade and development events:
Yesterday, in Kigali: 18th Executive Council Meeting of the Extraordinary Summit on AfCFTA
Yesterday, in Addis: coordination meeting to prepare for 2019 edition of the Economic Report on Africa: Financing sustainable development – the role of the private sector
Yesterday, in Accra: ECOWAS regional border management workshop
Yesterday, in Delhi: Seven trade ministers participate in India’s WTO mini-ministerial
In Kampala: Launch of Uganda’s first Baseline Assessment and Value Chain Analysis of the development minerals sector
The Government of Botswana and the UNDP, this week host the international conference Leave no one behind in the fight against poverty, exclusion and inequality. The keynote address will be presented by Stephen Devereux (University of Sussex).
AfCFTA Business Forum: “Leveraging the Power of Business to Drive Africa’s Integration” (AU)
Keynote Address by President Paul Kagame, Chairperson of the African Union: Tomorrow, we will sign a historic agreement creating a Continental Free Trade Area. The road to this point has been long indeed. It can be measured in decades. And we still have a few more steps to take. But we are persisting, and a new chapter in the story of African unity is set to begin.... The stakes are enormous for Africa, but also for the entire global economy, to which Africa will contribute an ever-greater share in the decades ahead.
The creation of one African market necessarily entails a metamorphosis in how we think and act. The full involvement of the private sector is needed more than ever before. The purpose of today’s forum is to discuss how to make the most of the new opportunities we are creating for ourselves.
Profiled AfCFTA analysis, by Andrew Mold: Much to gain as an African economic single market (The East African)
The conventional wisdom is that Africa trades too little with the global economy, and too little with itself. Neither is quite accurate. First, in comparison with the size of their economies, African economies are fairly open traders. EAC member states typically trade around 40 to 50%of their GDP (around the same as the average for upper income countries and almost double the amount of the US). The second conventional wisdom - that Africa trades too little with itself - is true up to a point, but is also the logical outcome of the fact that many countries are principally exporting commodities like oil and minerals, and agricultural commodities, like tea and coffee, to high income countries. The true challenge for African countries is that too many countries are import-dependent, exporting excessive amounts of unprocessed commodities, and as a consequence running up large trade deficits. This slows down the pace of economic growth and development.
The AfCFTA represents an opportunity for African countries to rapidly increase the share of industrial goods in both production and exports. Within the EAC, for instance, only 20% of exports are manufactured goods, and the rest are primary commodities. But for intra-EAC trade, over 60%is manufactured goods. If we wish to pursue a faster route to industrialisation and the diversification of our economies, then promoting greater intra-regional — and intra-African — trade, is the way forward.
Nigeria and the AfCFTA: Buhari bows to pressure, defers decision on Africa’s free trade deal; Discordant tunes over CFTA agreement; How Continental Free Area will stifle Nigeria’s economy
AU will enhance Free Movement and Single Air Transport Market (AU)
The Extraordinary Summit on the African Continental Free Trade (AfCFTA) held from 17-21 March 2018 in Kigali, Rwanda, will serve as a platform for the African Union to sign into existence another flagship project that will boost intra-Africa trade: The Treaty Establishing the African Economic Community relating to Free Movement of Persons, Rights of Residence and Right of Establishment.
The MoUs are as a follow up of the endorsement at January’s AU Summit of the single market and liberalization of air transport in Africa through the adoption of a Single African Air Transport Market (SAATM). The launch of the single air transport market is expected to bring about greater connectivity across the continent, a key step towards development of the aviation and tourism industry in Africa.
From last week’s AERC Senior Policy Seminar: Regional integration in Africa
(i) Declaration: Rethinking Regional Integration in Africa. Recognize that many well-meaning declarations and strategies have largely not been fully executed, in part owing to the absence of mechanisms and institutions to address the varying and differing interests, costs and benefits, call for immediate action, and a sense of urgency in deepening African integration; Further recognize that financial integration is essential for regional integration, thus the need for consolidation of disparate financial markets, including stock exchanges to finance major integration projects, and recognition of the central and enhanced role and leadership of regional development banks; Commit to undertake policy dialogue and consultations within our own governments, private sector institutions and civil society organizations to identify and address all barriers to intra-Africa trade (including trade in services), improve trade logistics, and ease movement of persons to scale up intra-African cooperation and boost regional industrialization and trade, and thus improve the welfare of our people.
(ii) Central banks asked to stick to growth friendly policies. Central bank governors drawn from 20 African countries have urged governments across the continent to improve economic management in order to achieve sustained growth. This was during a two-day meeting held in Kampala last week. Speaking at the meeting the Bank of Uganda deputy governor, Dr Louis Kasekende, urged Africa Union to be at the centre of having governments accountable, particularly when we [central bank governors] don’t agree with what we sign”. [African Central Bank Governors want AU to regulate members’ revenue management policies; East Africa’s varsities meet to take role in industrialisation]
UNCTAD’s new project to measure illicit financial flows in Africa (UNCTAD)
UN estimates put the annual loss at around $50bn. To put this amount in perspective, it’s roughly double the official development assistance that Africa receives. Yet the estimate may well fall short of reality because accurate data doesn’t exist for all transactions and for all African countries. Angela Me, chief of UNODC’s research and trend analysis branch, provided details on the project’s context, noting that UNODC and UNCTAD are the joint custodians of the indicator for the Sustainable Development Goal dealing with illicit financial flows. Enrico Bisogno, chief of UNODC’s data development and dissemination section, explained the the differences between illicit and illegal flows and outlined some of the statistical challenges. Steve MacFeely, head of UNCTAD’s statistics and information branch, described the project’s broad objectives and key components, the respective institutional roles, and spoke further about the anticipated challenges. [Angela Me: Tools to measure corruption and monitor SDG 16.5, pdf]
Digitalisation and the future of manufacturing in Africa (ODI)
This paper presents new empirical analysis (pdf) of the potential impact of growing digitalisation in manufacturing on Africa, and discusses what policymakers can do to exploit their current window of opportunity, address constraints in traditional manufacturing and prepare for the ‘digital wave’, which will bring with it a whole host of new opportunities and challenges. [The authors: Karishma Banga, Dirk Willem te Velde]
Namibia: !Naruseb offers hope for struggling dairy industry (New Era)
Newly-appointed agricultural minister Alpheus !Naruseb last week promised a concerned delegation from the dairy industry that he would expedite amendments to the Dairy Act so that the necessary support can be given to the crippled local dairy sector, as soon as possible. !Naruseb’s promised lifeline comes just days after New Era reported that if the long-awaited bill to regulate the importation and export of milk and dairy products – due to be tabled in parliament soon – is not given the green light, it could spell disaster for Namibia’s small dairy producers. [Nambia’s EPZ regime: relief for manufacturers]
COMESA Virtual University programme begins in two months (COMESA)
Admission of the pioneer students of the COMESA Virtual University will commence in May 2018 at the Kenyatta University in Kenya. The admission was planned to kick off in September 2017 but was delayed to allow the conclusion of administrative procedures of the university education regulatory authority in Kenya. The teaching modules for 30 courses have been developed with financial support from the African Capacity Building Foundation. The review process was done by academic experts across the world to ensure good quality of the material and knowledge to be passed to the students. To obtain the degree, students will be required to take and pass 10 core courses and five electives, and complete a dissertation and an internship, over a two-year period. Last week, a COMESA Secretariat team led by the Director of Trade and Customs, Dr Francis Mangeni met stakeholders in Kenya to fast-track the remaining steps towards kickstarting the first semester.
Namibia: Geingob urges lawmakers to expedite Africa visa process (New Era)
President Hage Geingob has urged lawmakers to honour a cabinet resolution and AU Agenda 2063 by speeding up the process of abolishing travel restrictions for all African officials and diplomat passport holders. The Namibia Cabinet endorsed the resolution on 24 May 2016, and tasked the Ministry of Home Affairs to spearhead the process but this has been happening at a snail’s pace.
President Kenyatta calls for direct engagement amongst ACP countries (HIVISASA)
President Uhuru Kenyatta today called for direct engagement amongst African-Caribbean and Pacific countries to achieve common historical aspirations. The President who is on a State visit to Cuba said despite the impact of ACP and EU nations cooperation, the three regions can forge a more direct platform among themselves for the benefit of their citizens. He said despite the ACP countries having a long common history; they have always depended on the platform of the European Union nations to interact with each other.
A framework for currency unions and IMF lending (IMF)
In a new paper, Program Design in Currency Unions, we review our experience in supporting the economic adjustment of countries that belong to currency unions and, for the first time, propose guidance on how this support should be designed and managed. The guidance clarifies when and how the IMF will seek supportive policy actions from union-level institutions. It does not confer any new authority on the Fund—rather, it simply articulates more clearly how that authority should be exercised in practice.
Today’s Quick Links: Crans Montana Forum: Africa and South-South cooperation Botswana turns power exporter after a decade of imports Port of Mombasa: report for week ending 7 March EFTA, Egypt hold trade promotion seminar LNG2Africa update: Using African gas for Africa first IGAD workshop to validate HIV, Tuberculosis and Malaria Strategic Plan, 2018-2025 FOCAC 2018: Ex minister bemoans policy inconsistency in Nigeria Forty-five US trade groups urge Trump to avoid tariffs against China |
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AfCFTA Business Forum: “Leveraging the Power of Business to Drive Africa’s Integration”
Keynote Address by President Paul Kagame, Chairperson of the African Union, at the AfCFTA Business Forum
A warm welcome to Kigali, and thank you all for being here today.
I thank Chairperson Moussa Faki Mahamat for convening this event, and I also commend the Commissioner for Trade and Industry, Albert Muchanga, and the entire staff of the African Union Commission for their hard work and dedication.
Tomorrow, we will sign a historic agreement creating a Continental Free Trade Area. The road to this point has been long indeed. It can be measured in decades. And we still have a few more steps to take. But we are persisting, and a new chapter in the story of African unity is set to begin.
The last mile of a race is often the most arduous. I therefore wish to congratulate the Leader of the Continental Free Trade Area process, His Excellency President Mahamadou Issoufou, for keeping us on track.
The stakes are enormous for Africa, but also for the entire global economy, to which Africa will contribute an ever-greater share in the decades ahead.
The creation of one African market necessarily entails a metamorphosis in how we think and act. The full involvement of the private sector is needed more than ever before. The purpose of today’s forum is to discuss how to make the most of the new opportunities we are creating for ourselves.
From now on, the clear wish of everyone is that consultation between business and political leadership, at all levels, becomes a continuous feature of continental deliberations.
It should be understood that profit and power are not an end in themselves. They are tools for creating prosperity for every African.
The Continental Free Trade Area symbolises our progress toward the ideal of African unity, but that is not the only reason why it is so historic. This agreement is about trade in goods and services. These are the kinds of complex products that drive high-income economies.
African workers adding value in Africa. Services offered by African professionals using the latest technologies. Manufactured goods that are “Made in Africa”.
Less than 20 per cent of Africa’s trade is internal, meaning from one African country to another. However, in the world’s richest regional trading blocs, the level of internal trade is three or four times higher.
Increasing intra-African trade, however, does not mean doing less business with the rest of the world. On the contrary, as we trade more among ourselves, African firms will become bigger, more specialised, and more competitive internationally.
Let’s also be realistic. We cannot take the Continental Free Trade Area for granted. After it is signed, there will still be challenges. Any concerns or technical issues that remain should be addressed fairly, but also expeditiously. Work on some additional protocols and annexes will also continue. Once again, the full engagement of the private sector will be absolutely essential.
Allow me to outline three of the tasks before us.
First, let’s now raise our ambitions even higher. Success on free trade shows that we are capable of achieving much more together. This is not the time to sit back and relax.
The right place to start is moving rapidly to accomplish the other flagship projects in the first Ten-Year Implementation Plan of the African Union’s Agenda 2063.
Second, the agreement needs to be ratified by Member States. The speed at which this occurs depends on us. Let’s do our part to communicate the rationale and the urgency of the Continental Free Trade Area to our parliamentarians, civil society organisations, and chambers of commerce, as well as to the media.
Third, implementation will mean reform of procedures and rules at the national level. This won’t happen overnight. It will be a process requiring dialogue and flexibility.
But getting those details right is central. Doing so anchors the case for the next stages of African integration in concrete outcomes that citizens feel in their daily lives.
In summary: Raise our ambition. Ratify. Reform.
The Africa we want is clearly visible on the horizon. And today, more than ever before, so too is the road we will travel together to get there.
Allow me to close by welcoming you all once again, and wishing you productive deliberations and a very happy and pleasant stay in our country.
I look forward to our interactions in the next session, and I thank you very much for your kind attention.
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AfCFTA: AUC Chairperson calls on Member States to promote the image of a United Africa
H.E. Moussa Faki Mahamat, Chairperson of the African Union Commission (AUC) underscored the need for Africa to speak with one voice as African Union member states embark on implementing the African Continental Free Trade Area (AfCFTA).
He was speaking on 19 March 2018 during the opening of the 18th Extraordinary Session of the Executive Council at the Kigali Convention Center (KCC) in the presence of H.E. Thomas Kwesi Qwartey, Deputy Chairperson of the, the Commissioners and officials of the AU Commission, the representatives of the AU Organs, the RECs, and invited guests. The Executive Council is holding ahead of the Extraordinary Assembly of the AU on the AfCFTA scheduled to take place on 21 March 2018.
The AUC Chairperson commended the Ministers of Trade, Justice, negotiators and experts who have worked tirelessly for the completion of the African Continental Free Trade Area project. He also expressed appreciation for the efforts of the Permanent Representatives Committee (PRC) whose collective work in collaboration with the AU Commission, has contributed to push the Pan-African included in report of the PRC meeting submitted for consideration and adoption by the Executive Council.
The establishment of the AfCFTA will result in a unified market of over 1,2 billion people with a combined gross product of over US$3 trillion, the AUC Chairperson said. He added that it would result in an increase in intra-African trade of 52 per cent by 2022 and culminate in substantial improvements of the lives of Africans.
Chairperson Faki underscored the importance of speeding up the integration process through the implementation of the AU flagship projects such as the AfCFA, the Single Market on Air Transport in Africa, the Protocol on Free Movement of Persons and the African Passport, as well as major regional and continental infrastructure projects as articulated in the Infrastructure Development Program (PIDA) in Africa.
“Everything has been said about the African Continental Free Trade Area, its crucial function in African integration, its economic spillover effect, the solidarity, of which it is the symbol against other blocs in a world where competition is fierce, its positive impact on the well-being of our peoples, the expected opening up of immense sources of jobs and the encouraging development prospects it offers to our youths,” said H.E. Mahamat. “Our industrial and agricultural exports will increase significantly”.
The AUC Chairperson further urged the Ministers of Foreign Affairs to exchange views and adopt a Common Position on the Cotonou Agreements so that the continent should speak with one voice during trade agreements with partners taking into account the concerns and interest of the African people. “During negotiations, we must prove our ability to act as a united bloc in defending the interests of our continent,” he emphasized.
Speaking earlier, H.E. Mrs. Louise Mushikiwabo, Chair of the Executive Council and Minister of Foreign Affairs, Cooperation and East African Community of the Republic of Rwanda, welcomed the participants to the beautiful city of Kigali. She urged member states to sign and speed the ratification and implementation AfCFTA to enable us to build the Africa we want.
Minister Mushikiwabo highlighted that, as a flagship project of Agenda 2063, the AfCFTA is one of the key milestones, a critical initiative that has the ability to bring about the social and economic changes that Africa has been envisioning for decades. “I am therefore glad to see many of us reunited here to finally make this flagship project a reality,” she said.
The Chair of the Executive Council further noted that, with the adoption of the AfCFTA Agreement, it will then be important for all countries to sign it, so as to proceed with the speedy ratification and implementation of the AfCFTA.
“This Agreement must enter into force as soon as possible. By signing and ratifying it, we would signal to African people and the world that we are determined to play our part as a global player while promoting the continent’s economic interests as one, through a single market,” said H.E Mushikiwabo.
According to Minister Mushikiwabo, this agreement is not just a simple document, but it has critical economic implications for the African population as it will open up markets to 1.2 billion people, with the possibility of generating enormous wealth on the continent through accelerated investment, economic diversification and increased trade.
Addressing the diplomatic corps, Dr. Vera Songwe, United Nations Under-Secretary-General and Executive Secretary of the Economic Commission for Africa (ECA), first acknowledged the hard work that went into crafting the African Continent Free Trade Area (AfCFTA) and echoed the considerable benefits this agreement has for the people of the continent.
She pointed out that the world is currently witnessing some new and quite extraordinary developments in the global economy. She said that “in the development world, there is a rising tide of protectionism and anti-globalisation. Although we are not the focus of these disputes, Africa will not remain untouched”.
“While we mark the important progress made, the road does not end here today, we must develop the national schedules for tariff reduction in trade in goods and for priority services; we must complete the annex on rules of origin, Above all, we must ensure that the agreement is ratified through our respective national processes.”
Dr. Songwe called on member states to sign, ratify and implement the AfCFTA to ensure the delivery of jobs and prosperity for African citizens. She reiterated that the ECA is ready to provide all the necessary support to the governments of Africa to make the AfCFTA a reality.
“Collectively – as policy makers, technical partners and the private sector – we can ensure that the AfCFTA is effectively implemented for the benefit of the whole of Africa,” she concluded.
The day-long meeting concluded with brief remarks from H.E. Louise Mushikiwabo, who further thanked the AU Commission and her peers for the good collaboration and working spirit during the deliberations. The report of the Executive council will be submitted for consideration and adoption to the Assembly on 21st March 2018 at the Kigali Conference center.
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African Union will enhance Free Movement and Single Air Transport Market during the Extraordinary Summit on the AfCFTA in Kigali, Rwanda
The Extraordinary Summit on the African Continental Free Trade (AfCFTA) held from 17-21 March 2018 in Kigali, Rwanda, will serve as a platform for the African Union to sign into existence another flagship project that will boost intra-Africa trade: The Treaty Establishing the African Economic Community relating to Free Movement of Persons, Rights of Residence and Right of Establishment.
The MoUs are as a follow up of the endorsement at January’s AU Summit of the single market and liberalization of air transport in Africa through the adoption of a Single African Air Transport Market (SAATM). The launch of the single air transport market is expected to bring about greater connectivity across the continent, a key step towards development of the aviation and tourism industry in Africa.
SAATM is expected to spur more opportunities to promote trade, cross-border investments in the production and service industries including tourism, resulting in the creation of an additional 300,000 direct and 2 million indirect jobs.
About the AfCFTA
The main objectives of the AfCFTA are to create a single continental market for goods and services, with free movement of business persons and investments, and thus pave the way for accelerating the establishment of the Customs Union. It will also expand intra-African trade through better harmonization and coordination of trade liberalization and facilitation and instruments across the RECs and across Africa in general.
The CFTA is also expected to enhance competitiveness at the industry and enterprise level through exploitation of opportunities for scale production, continental market access and better reallocation of resources.
The AfCFTA by the Numbers:
- 55 countries
- More than 1.2 billion people
- Over US$2.5 trillion in total GDP
- 52% ($35 billion) increase in intra-African trade by 2022
- 6% increase in African exports
Some of the benefits of the AfCFTA include:
Boosting industrialization: Currently, some 82% of African countries’ exports go to other continents; they consist mostly of commodities. By contrast, over half of intra-African trade is in manufactured products. Supporters of the deal argue that it will create larger, more competitive markets, helping to ignite Africa’s stalled industrialisation.
Speeding up transport times: Research also shows that the largest gains come not from reducing tariffs, but from cutting non-tariff barriers and transport times. That will come as no surprise to drivers in the long lines of lorries queuing at a typical African border post. The World Bank estimates that it takes three-and-a-half weeks for a container of car parts to pass Congolese customs.
Dynamic market: The AfCFTA offers economies of scale and the chance to create regional value chains. It will offer a tremendous boost to job creation by creating new job opportunities at a time when renewed efforts are required to meet the needs of the Africa’s youth and fully harness the demographic dividend.
Attractive destination for FDI: An enlarged continental market fostered by the AfCFTA will attract more foreign direct investment (FDI) to support African infrastructure development, increase productivity, and support diversification and transformation. Africa needs sustained investments rates of 25% of GDP and above to achieve 7% annual growth rate. Average investment rate over the past 2 decades has been about 18%. Larger markets are needed to attract larger investments rates.
Boosting intra-African trade:
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The World Trade Organization estimates that intra-African trade in 2012 was about 12%. Today, intra-African trade is approximately 16%. This is in stark contrast to much higher rates of intra-regional trade in more developed regions of the world: 70% in Europe, 54% in North America, and 51% in ASEAN.
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United Nations Economic Commission for Africa (UNECA) estimates that the AfCFTA could increase intra-African trade by $35 billion, or 52% above the baseline, by 2022.
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It further estimates that agricultural and industrial exports would increase by $4 billion (7%) and $21 billion (5%) above the baseline, respectively.
Increasing exports:
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Africa’s share of global trade is only about 3%
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UNECA estimates that in conjunction with ongoing initiatives, such as trade facilitation measures to reduce time and cost of trading, the AfCFTA would help increase Africa’s export volumes to the rest of the world by 6%.
Improving Africa’s political position via-a-vis the rest of the world:
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UNECA has shown that the establishment of the AfCFTA will better position the African continent to negotiate in the multilateral trading system
As well as:
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Increased food security through reduction of the rate of protection on trade in agricultural produce among African countries
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Increased competitiveness of Africa’s industrial products through harnessing the economies of scale of a large continental market of about one billion people
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Increased rate of diversification and transformation of Africa’s economy and the continent’s ability to supply its import needs from its own resources
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Better allocation of resources, improved competition and reduced price differentials among African countries.
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Growth of intra-industry trade and the development of geographically-based specialization in Africa
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Reduced vulnerability of Africa to external trade shocks, and
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Enhanced participation of Africa in global trade and reduced dependence of the continent on aid and external borrowing.
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New project to measure illicit financial flows in Africa
UNCTAD and other UN bodies present new work on tracking the billions stolen from the continent each year through tax avoidance and such illegal activities as drug trafficking.
UNCTAD, the UN Economic Commission for Africa (UNECA) and the UN Office on Drugs and Crime (UNODC) presented on 8 March their new project to improve statistics on the money Africa loses through illicit financial flows, a catch-all term for tax evasion, capital flight, trade mispricing, drug trafficking, money laundering and other maneuvers that rob the continent of billions each year.
The project was presented at a side-event organized with the governments of Nigeria and Norway during the forty-ninth session of the UN Statistical Commission, convening in New York from 6 to 9 March under the theme “Better Data, Better Lives”.
The money drained out of Africa through illicit financial flows has become a matter of major concern because of the scale and negative effects on social and economic development on the continent, where the majority of the world’s least developed countries are located.
UN estimates put the annual loss at around $50 billion. To put this amount in perspective, it’s roughly double the official development assistance that Africa receives.
Yet the estimate may well fall short of reality because accurate data doesn’t exist for all transactions and for all African countries.
Angela Me, chief of UNODC’s research and trend analysis branch, provided details on the project’s context, noting that UNODC and UNCTAD are the joint custodians of the indicator for the Sustainable Development Goal (SDG) dealing with illicit financial flows.
Within SDG 16, Target 16.4 aims to “significantly reduce illicit financial and arms flows, strengthen the recovery and return of stolen assets and combat all forms of organized crime” by 2030. One of the indicators to measure success, Indicator 14.6.1, is the “total value of inward and outward illicit financial flows (in current United States dollars)”.
Enrico Bisogno, chief of UNODC’s data development and dissemination section, explained the the differences between illicit and illegal flows and outlined some of the statistical challenges. Steve MacFeely, head of UNCTAD’s statistics and information branch, described the project’s broad objectives and key components, the respective institutional roles, and spoke further about the anticipated challenges.
Yemi Kale, statistician-general for Nigeria’s National Bureau of Statistics, added to the discussion by presenting some of the work they’ve done to measure illicit financial flows out of Africa’s largest economy.
The session, chaired by Norwegian Ambassador Tore Hattrem, was closed by his Nigerian counterpart, Tijjani Muhammad-Bande, who stressed the importance of this work for countries all over the world.
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African Continental Free Trade Area gathers strong impetus to boost economic growth
10th Extraordinary Session of the African Union Assembly on the African Continental Free Trade Area (AfCFTA) opens in Kigali at the level of the Permanent Representatives’ Committee
The Permanent Representatives’ Committee (PRC) meeting in preparation for the 18th Extraordinary Session of the Executive Council and the Assembly of the Heads of State and Government of the African Union (AU) kicked off on 17 March 2018 at the Kigali Convention Center (KCC), Republic of Rwanda.
“I am once again honoured to address the Permanent Representatives’ Committee, the linchpin of the African Union, on the occasion of preparations for the Extraordinary Session of the AU Assembly convened for the purpose of executing the decision taken by our Heads of State and Government to lend a strong impetus to the implementation of one of our flagship projects, the African Continental Free Trade Area (AfCFTA),” said H.E. Thomas Kwesi Quartey, Deputy Chairperson of the African Union Commission (AUC), during the opening ceremony of the Permanent Representative Committee (PRC) meeting on Saturday.
Hosted by the Republic of Rwanda, the event was held within the framework of the Extraordinary Session of the AU Assembly on the African Continental Free Trade Area (AfCFTA) in the presence of the AU Commissioners, Representatives of the AU Organs and partner Organisations, the RECs, the UN Agencies and invited guests.
Speaking on behalf of the H.E. Moussa Faki Mahamat, Chairperson of the AU Commission, Deputy Chairperson Quartey expressed his admiration for the city of Kigali, which he described as “a welcoming beautiful and resplendent city.... This time, however, it has enhanced its splendour in a bid to provide us with a suitable working environment, commensurate with the issues that bring us here”.
“This therefore is an opportunity for me to express the gratitude of the African Union Commission to H.E. Paul Kagame, President of the Republic of Rwanda and Chairperson of the African Union, for his commitment and determination to contribute, with his peers, to placing Africa on a path of greater self-assertion on the international stage. I would also like to thank the Government and the Rwandan people for their fraternal welcome,” reiterated H.E. Kwesi Quartey.
The AUC Deputy Chairperson stressed that the Extraordinary Session of the Assembly of the Union on the AfCFTA is timely as it is a strong political symbolism that, “Africa is taking charge of itself and her voice should resonate, from a position of strength that is rooted in the effective implementation of projects of continental dimension that contribute to its development and especially to the consolidation of its integration and unity”.
He underlined that, as a key organ responsible for starting the decision-making process within the African Union, the PRC has the heavy duty of laying the groundwork, through the preliminary consideration of all working documents so as to provide the Executive Council with guidance on the way forward in the consideration of matters to be submitted to the Heads of State and Government.
“With the launch of the Continental Free Trade Area, one of the African integration flagship projects, alongside the Single Air Transport Market and the Free Movement of People and Goods, we are also challenged by the urgent need to develop an African Common Position on the Cotonou Agreement after it expires… Our continent is at a crossroads,” underscored Deputy Chairperson Quartey.
“What path will Africa choose? That of maintaining the status quo, which means making cosmetic changes relating to borderline adjustments which have no real impact on the lives of our populations, or that of effecting a paradigm shift which requires us to look far into the horizon for a truly integrated Africa, which is structurally transformed economically, guaranteeing the freedom of movement and settlement to all her daughters and all her sons, as well as offering, in the final analysis, fulfilling and promising living conditions for her youth, in a bid to reverse the migratory flows?”
“Things are changing, things have to change. In this dynamic, the PRC remains an essential player in this desired change,” noted Deputy Chairperson Quartey.
“Indeed, whether it is the preliminary work on the establishment of the Continental Free Trade Area, the draft protocols finalized by the Specialized Technical Committee on Justice and Legal Affairs which you are called upon to consider, or the draft of the African Common Position, whose consideration is an item on your agenda, you have, during your respective sessions devoted to these issues, shown a convergence of views that largely transcends the hesitations, procrastination and concerns observed here and there,” the AUC Deputy Chairperson (DCP) said to the Ambassadors.
With regard to the Continental Free Trade Area, the DCP underlined that commended the efforts made by all the actors involved under the effective leadership of H.E. Mahamadou Issoufou, President of the Republic of Niger, the designated Champion of the Continental Free Trade Area, before calling on the PRC members to conduct their deliberations in the spirit of Pan-Africanism which has always guided their practice in the discharge of their noble duties.
“I would like, if I may, to dwell on the following three main points:
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The African Common Position must be inspired by Agenda 2063, which is hinged on the key principles of African unity, integration and sustainable development, among others, and the reconciliation of the interests of the three ACP blocs (Africa, Caribbean and Pacific). These principles will obviously have to be supplemented by appropriate financing and governance mechanisms that preserve the continent's major interests.
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The African Common Position should be understood as a general framework that outlines the scope within which negotiations will take place. It is such a general framework that we must decide here in Kigali.
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The negotiators will subsequently be responsible for ironing out with the European side all the details, relating not only to achievements, and in particular the specific agreements that some of our Member States have concluded with the. European Union besides the Cotonou Convention, but also to the continuation of the objectives set out in Agenda 2063, in strict compliance with our basic principles, namely unity, integration, structural transformation of the African economies, sustainable development and shared prosperity.”
Speaking earlier, H.E. Hope Tumukunde Gasatura, Chairperson of the PRC and Ambassador of the Republic of Rwanda to Ethiopia, welcomed the participants to Kigali and reminded them that “the establishment of the AfCFTA is a critical political priority of our African Union leadership. It is also a flagship project of the African Union Agenda 2063”.
The PRC Chairperson stated that by establishing the AfCFTA through a commercially meaningful package of agreements, Africa is now posed to attract investments from both within Africa and the world at large. Through this Africa integration in terms of trade can commence. Jobs will be created, entrepreneurs’ will expand their business, and Africa Value chains will be developed and linked then to the global value chain.
Amb. Tumukunde highlighted that the legal text has gone through intense negotiation, and therefore, called on the PRC members to ensure that the AfCFTA agreements are ratify by their respective countries so that it enters into force without delay and begin implementation. She at the same time acknowledged the work done by the chief negotiators, and urged them to continue to negotiate in the spirit of solidarity and cooperation to enable us achieve the Africa we want.
The PRC Chairperson thanked the African Ministers of Trade “for their excellent work over the past two and a half years since the start of the Phase 1 negotiations of the AfCFTA which has made it possible to gather in Kigali to launch this important flagship project of AU’s Agenda 2063.... I would like to equally commend the work of the Specialized Technical Committee on Justice and Legal Affairs for the excellent work accomplished at their extraordinary session held here in Kigali last week for the legal cleaning of the texts”.
The PRC Chairperson recalled in her speech that at the founding of the Organization of African Unity, Kwame Nkrumah made a clarion call that ‘Africa Must Unite’.
“His vision and that of other founding fathers of our organization were very instrumental in the creation of regional economic communities like the Economic Community of West African States (ECOWAS) in 1975, Southern African Development Coordination Conference (SADCC) in 1980 which later became the Southern African Development Community (SADC), as well as the Preferential Trade Area for Eastern and Southern African States (PTA) in 1982 which later became the Common Market for Eastern and Southern Africa (COMESA); among several other regional economic communities on the Continent,” noted Amb. Tumukunde Gasatura.
In conclusion the PRC Chairperson underscored that “our people can no longer wait for economic fortunes to change, we are the change agents, and we have to create our own future because nobody will do it for us”.
The PRC members deliberated on the report of the Specialized Technical Committee (STC) on Justice and Legal Affairs on the African Continental Free Trade Area (AfCTA) legal instruments and also considered the draft African Common Position on the Post 2020 Cotonou Agreement, among others.
The Cotonou Agreement is a treaty between the European Union and the African, Caribbean and Pacific Group of States. It was signed in June 2000 in Cotonou, Republic of Benin, by 78 ACP countries and fifteen Member States of the European Union. It entered into force in 2003 and was subsequently revised in 2005 and 2010. The African Continental Free Trade Area is expected to bring together the 55 AU member countries.
The Eighteenth Extraordinary Session of the Executive Council will hold on the 19th of March 2018, followed by a Business Forum scheduled for the 20th of March 2018 and the Extraordinary Session of the Assembly of Heads of State and Government of the AU, on the 21st of March 2018.
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Much to gain as an African economic single market
AfCFTA represents an opportunity for the EAC to get back on the saddle.
A statesman once compared regional integration to riding a bicycle – you have to proceed in a forward direction and maintain velocity, or you will fall off!
The EastAfrican recently argued that the East African Community has been losing momentum, and is in danger of “falling off the bike”.
This may be unfair – generally speaking, policymakers are still fully aware of the importance of pursuing the regional agenda. But certain economic realities cannot be denied.
For example, by continental standards the EAC has achieved a relatively high level of intraregional trade, but in recent years that share has stagnated and even declined slightly, to just under 20 per cent.
One of the ways to energise regional integration is by taking action to a different level. That is what political leaders will be doing in Kigali at the AU Summit on March 20-21, when they will (hopefully) endorse the formation of the African Continental Free Trade Area (AfCFTA). This agreement is the fruit of three years of painstaking negotiations.
The agreement gives new impetus to regional integration across Africa. Treated as a single market will give the continent a lot more political and economic clout.
Since its formation 60 years ago, the United Nations Economic Commission for Africa has supported pan-African initiatives. When Uneca’s very first meeting was convened in Addis Ababa in December 1958, there were only 10 independent African countries.
It was, as former executive secretary Adebayo Adedeji put it, “the first major gathering of Africans, under the auspices of the UN, to discuss African problems on African soil”.
Even at that time, member states were clear that the key objectives were, first, for the other countries to shake off the shackles of colonisation and, second, to pursue an agenda of pan-African economic and social transformation.
The formation of AfCFTA is a major milestone towards making the pan-African aspiration a reality. Uneca has estimated that if fully implemented, the AfCFTA could boost intra-African trade by more than 52 per cent.
If simultaneous efforts were made to reduce infrastructural and other non-tariff barriers, then it could double. Yet most intra-African trade currently occurs between neighbouring countries of the same regional bloc. It is perhaps time to increase the share with other African trading partners.
The conventional wisdom is that Africa trades too little with the global economy, and too little with itself. Neither is quite accurate. First, in comparison with the size of their economies, African economies are fairly open traders. EAC member states typically trade around 40 to 50 per cent of their GDP (around the same as the average for upper income countries and almost double the amount of the US).
The second conventional wisdom – that Africa trades too little with itself – is true up to a point, but is also the logical outcome of the fact that many countries are principally exporting commodities like oil and minerals, and agricultural commodities, like tea and coffee, to high income countries.
The true challenge for African countries is that too many countries are import-dependent, exporting excessive amounts of unprocessed commodities, and as a consequence running up large trade deficits. This slows down the pace of economic growth and development.
The AfCFTA represents an opportunity for African countries to rapidly increase the share of industrial goods in both production and exports. Within the EAC, for instance, only 20 per cent of exports are manufactured goods, and the rest are primary commodities.
But for intra-EAC trade, over 60 per cent is manufactured goods. If we wish to pursue a faster route to industrialisation and the diversification of our economies, then promoting greater intra-regional – and intra-African – trade, is the way forward.
As in any agreement involving multiple parties, some countries will be worried about transhipment (goods produced outside Africa being imported through neighbouring countries). Some members may benefit disproportionately. Uneca’s work suggests that this is not the case, and that the whole continent will benefit, albeit some to a larger extent than others.
Lessons to learn
In the negotiating process, lessons should be learned from the fate of The Free Trade Area of the Americas which was launched in 1994 and was supposed to create, by 2005, the world’s largest free-trade area, comprising of 34 economies of the western hemisphere.
In the end, the negotiations failed, and the FTAA process was terminated. As a consequence, intraregional trade remains even lower in the Americas than in Africa, at just 16 per cent of exports. In Africa, intra-regional trade currently stands at 18 per cent – the AfCFTA would boost that closer to 30 per cent.
African policymakers spend much time negotiating trading and economic relations with regions outside the continent. The Economic Partnership Agreements with the EU are an example. The geography of regional trade has changed.
Whereas at the beginning of the millennium, the EU was the EAC’s single largest export market, now the intra-African market is twice as important as the EU.
The AfCFTA represents an opportunity for the EAC to get back on the saddle, and regain momentum. It is an opportunity that should be seized.
Andrew Mold is the acting director, ECA sub-regional office for Eastern Africa. The views expressed in this article do not necessarily reflect those of the ECA or the UN.
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Senior African policymakers reaffirm the critical role of regional integration in economic transformation of African economies
The African Economic Research Consortium (AERC) held its twentieth Senior Policy Seminar from 12-13 March 2018 in Entebbe, Uganda in partnership with the Bank of Uganda on the theme, Rethinking Regional Integration in Africa.
The conference featured four presentations by thought leaders on the subject of regional integration. After two days of dialogue, Senior Policy Makers and other stakeholders, private sector, international organizations, academia and civil society from around the continent adopted a declaration as an affirmation of their strong commitment to accelerating regional integration in Africa.
Declaration
Entebbe, 13 March 2018
We, African Senior Policy Makers and private sector actors assembled here at the AERC Senior Policy Seminar XX, held in partnership with The Bank of Uganda,
Recognizing the challenges that Africa is facing, especially demography (esp. youth employment challenges), geography (many landlocked countries), empowerment of women, climate change, limited diversity of African economies, among others;
Also recognizing that regional integration is lagging behind the Abuja Treaty time lines;
Further recognizing that regional integration should be thought of in its broadest and dynamic sense, including among other things, integration of goods and services markets, financial markets, labour markets and at all levels of society;
Also recognizing that deepening regional economic integration in Africa will require concerted and coordinated efforts, considerable financial resources, communication and sensitization efforts, particularly private sector and civil society and strong political will and commitment from African governments, subsidiarity and readiness to share accountability and responsibility;
Commending the vision and commitment of African Heads of State and Government to the integration agenda, as affirmed by their adoption of the Abuja Treaty of 1991, which became effective in 1994, that lays out the path to an integrated Africa;
Also Commending the African Union on its drive for a Continental Free Trade Area (CFTA), free movement, and single air transport market;
Having also noted the progress made to date in regional integration, beginning with the formation of the eight Regional Economic Communities (RECs) which have greatly enhanced trade and integration within the blocks, and that will serve as building blocks for the African Economic Community;
Further having noted the need to prioritize and harmonize policy, regulatory and governance frameworks across the continent, and the need to implement agreed integration pacts;
Mindful that private sector ought to be at the centre of regional economic integration, and underlining the need to foster alliances between states, private sector, women, youth and civil society actors in order to enhance economic governance for job creation;
Also mindful that, although deepening integration generates large economic gains overall, there is need to ensure the benefits are shared equitably to ensure inclusive growth and development, thus requiring mechanisms and institutions to shield vulnerable groups and populations, including women and youth;
Acknowledging the fact that all African countries are members of at least one regional economic block,
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Affirm that regional integration is a fundamental pillar for Africa to realize her development aspirations as articulated in the SDGs and the African Union Agenda 2063;
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Further affirm the need for political and economic stability and harmonious regulatory frameworks and governance mechanisms to deepen regional integration, especially enhancing regional infrastructure (roads, rail, energy, ICT, water), easing movement of goods and services across borders, facilitating movement of people and service providers across national boundaries;
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Commend the critical role of African Economic Research Consortium (AERC) in capacity building for promoting evidence-based policies and generating the knowledge basis for decision making on such key economic policy issues as regional integration;
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Recognize that many well-meaning declarations and strategies have largely not been fully executed, in part owing to the absence of mechanisms and institutions to address the varying and differing interests, costs and benefits, call for immediate action, and a sense of urgency in deepening African integration.
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Further recognize that financial integration is essential for regional integration, thus the need for consolidation of disparate financial markets, including stock exchanges to finance major integration projects, and recognition of the central and enhanced role and leadership of regional development banks;
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Committo undertake policy dialogue and consultations within our own governments, private sector institutions and civil society organizations to identify and address all barriers to intra-Africa trade (including trade in services), improve trade logistics, and ease movement of persons to scale up intra-African cooperation and boost regional industrialization and trade, and thus improve the welfare of our people.
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Acknowledge African Economic Research Consortium and the Bank of Uganda for organizing this highly productive seminar.
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tralac’s Daily News Selection
AfCFTA updates ahead of next week’s Kigali summit:
(i) tralac’s Ashly Hope: Trade in services and the AfCFTA – no service is an island. The creation of the Continental Free Trade Area is an opportunity to shift the mindset that a liberalised sector takes away the right to regulate, and rather appreciate that well-regulated integrated services sectors on the continent can improve services for consumers, and contribute to development. Pro-competitive services market regulation will always be a worthwhile goal for member states – regardless of levels of liberalisation.
(ii) UNECA Kigali seminar: An opportunity to boost Africa’s economic transformation. Jamie MacLeod, a fellow in the ECA’s African Trade Policy Centre, says by removing tariffs the AfCFTA can increase intra-African trade by 52%, and that by additionally reducing non-tariff barriers it could double this trade. According to MacLeod, however, there are further challenges ahead in bringing about the AfCFTA, with significant implementation issues faced by Member States. First, they must complete the AfCFTA Implementation Roadmap, including preparing schedules of commitments in goods and services. They must also ratify the agreement domestically. Speed is of the essence in business, and this should be done rapidly. The Roadmap should then be complemented by implementing the AFCFTA’s “sister policy”, the Boosting Intra-African Trade Action Plan, in particular through policies to increase productive capacities, improve regional infrastructure and payment systems. National AfCFTA strategies should also be developed to identify and fully utilize the opportunities of the agreement.
(iii) Rwanda’s trade and industry minister: Africa to benefit from Continental Free Trade Area, challenges remain. Rwanda’s Minister of Trade and Industry, Vincent Munyeshyaka said that before the AfCFTA enters into force, AU member states will need to ratify it after it is signed. It could be a challenge to fast track the ratification process and transformational changes brought by the AfCFTA may face resistance, he said. Munyeshyaka explained that there is a need to promote investment along with the AfCFTA, as investment may not follow its creation. The creation of the AfCFTA should be followed by industrialization and infrastructure policies across Africa, which could also pose a challenge to the operation of the free trade area.
(iv) CFTA will transform Africa – Kagame. “What I am seeing is that Africans really want it and the fears they have are outweighed by the benefits. They are huge and we are forging ahead.”
(v) Abuja Chamber commends federal government’s decision. Mr Adetokunbo Kayode, President of Abuja Chamber of Commerce and Industry, said the chamber will do everything it can to ensure that Nigerian businesses take full advantage of the opportunities that are being created by virtue of the AfCFTA. Kayode added that the chamber would work with the government to ensure proper monitoring and evaluation of the implementation of the agreement.
(vi) @AdanMohamedCS: Kenya looks forward to the upcoming ratification of the Continental Free Trade Area that will drastically open up Africa for trade. Locally, we have also begun to remove work permit barriers for investors to further enable business.
(vii) @HannaTetteh: Assuming that we also deal with the major trade facilitation challenges in the continent. It’s great that the CFTA will finally come into being (albeit 7 years since trade ministers recommended same to the AU in Accra in 2011) but now implementation has to be prioritised.
African e-commerce: Pan-African ‘trust mark’ to be launched (Fin24)
Due to the importance of establishing trust in digital trade in Africa, Ecommerce Forum Africa plans to launch what it calls a pan-African ecommerce “trust mark”. Dylan Piatti, the senior chief of staff: consumer, retail and manufacturing at Deloitte, said the EFA is already talking to a number of African countries about establishing a “pan-African ecommerce trust mark”. Legal experts are on board to help with the process. [Song Wei: Training, e-commerce can unlock growth in Africa]
Afreximbank, South Africa’s ECIC sign MOU: pledge $1bn to expand trade between South Africa and other African nations (Afreximbank)
Under the terms of the MOU, signed in Cairo on Monday, Afreximbank and ECIC will jointly implement a South Africa-Africa Trade and Investment Promotion Programme . Kutoane Kutoane, ECIC CEO, said joining Afreximbank as a shareholder had made it possible for South Africa to widen its access to other African markets. Beyond ECIC’s mandate to increase the volumes of South African exports, the institution was committed to contributing to the Africa’s industrialization in an inclusive manner. “We realise that one of the best ways to enhance our exporting capabilities as a country is by intensifying mutually beneficial trade with the rest of the continent,” said Mr Kutoane. [Zimbabwe: AfDB extends $25m trade finance loan facility]
How DR Congo faced down some of the world’s biggest mining firms (Reuters)
In an ornate room in Democratic Republic of Congo’s presidential palace last week, some of global mining’s most powerful men faced off against government officials over proposed changes to the country’s mining code. Facing the officials, including President Joseph Kabila, the executives at times threatened to pursue arbitration or close mines if the government went ahead with changes including royalty increases, according to one of the president’s top advisers, Barnabe Kikaya bin Karubi, who attended the meeting. But there was no mistaking the sense of defeat as executives from Glencore, Randgold, Ivanhoe and other firms descended the red carpeted stairs after six hours to accept before the media a mining code that hikes taxes and removes exemptions for cobalt and other minerals.
West African bourse seeks to charm SA (Business Day)
The Bourse Régionale des Valeurs Mobilières (BRVM), a West African regional stock exchange, is on a charm offensive, holding its first investor roadshow in SA this week, positioning itself as a blueprint for regional integration amid a project to link stock exchanges on the continent. South African investors held about 3%-4% of shares in companies listed on the BRVM, the most of any African country outside of the eight countries that shared the exchange, CEO Edoh Kossi Amenounve said in Johannesburg on Wednesday. The stock exchange is shared by Benin, Burkina Faso, Guinea Bissau, Mali, Niger, Senegal, Togo and Ivory Coast, where it is headquartered.
Namibia and SACU: Namibia must fine-tune national strategy – Schlettwein (The Namibian)
Finance minister Calle Schlettwein says Namibia needs to fine-tune its national strategy to realise increasing value shares within SACU. In a speech read on his behalf at a stakeholders’ meeting of Sacu representatives in Windhoek on Monday, Schlettwein explained that key strategic intervention areas entail developing and strengthening national bodies for effective trade policy setting and implementation. He said other areas include leveraging regional value chains in industries such as agribusiness, transport, tourism and services. SACU is currently reviewing its trade facilitation programme. This process is expected to be completed and ready for implementation after June 2019.
Namibia: IMF’s financial system stability assessment
The sovereign debt/GDP ratio has nearly doubled since 2014 which has reinforced the already strong bank-sovereign link. The rapid rise in housing prices and household debt, banks’ large exposure to mortgages, and banks reliance on wholesale funding are sources of concern. A major decline in real estate prices would adversely affect bank capital and profitability. Economic and financial shocks from South Africa are directly transmitted through the common currency and integrated financial markets.
LDC graduation: four countries tipped to graduate from ranks of poorest (UNCTAD)
With increasing national earning power as well as access to better health care and education, four countries - Bhutan, Kiribati, São Tomé and Principe and Solomon Islands - will be recommended for graduation from the list of 47 least developed countries, UN Committee for Development Policy has said. “This is a historic occasion,” CDP Chair Jose Antonio Ocampo said. “In the 47 years since the start of the category, only five countries have previously left the list.” He added that two more countries, Vanuatu and Angola, are scheduled for graduation in 2020 and 2021. Bangladesh, the Lao People’s Democratic Republic and Myanmar met the graduation criteria for the first time but would need to meet the criteria for a second time at the next triennial review in 2021 to become eligible to be considered for graduation.
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AfCFTA: an opportunity to boost Africa’s economic transformation
The African Continental Free Trade Agreement (AfCFTA) offers a unique opportunity to promote intra-African trade. The United Nations Economic Commission for Africa (ECA) is convinced that it can also have a positive impact on people’s welfare and contribute to Africa’s industrial transformation.
Jamie Alexander MacLeod, a fellow in the African Trade Policy Centre of ECA, says that by removing tariffs the AfCFTA can increase intra-African trade by 52%, and that by additionally reducing non-tariff barriers it could double this trade.
He presented ECA’s analysis at a policy dialogue held in Kigali on 14 March 2018, involving Rwandan officials, development partners and the diplomatic corps, to discuss regional integration in Africa and the AfCFTA, ahead of the African Union (AU) summit on March 21st at which the AfCFTA will be signed.
Introducing the discussion, Andrew Mold, the Acting Director for the ECA in Eastern Africa, insisted on the importance of the AfCFTA, as a “major milestone towards making the pan-African aspiration a reality”. He explained that despite expected losses in terms of tariff revenues (estimated at about 4 billion USD for the continent), the benefits will be more than four times higher, especially through lower prices for consumer goods.
MacLeod stressed that intra-African exports are more diversified, and hence more useful to Africa’s development, than Africa’s trade with outside the continent, which comprise mostly extractive products such as fuels and minerals. Boosting intra-Africa trade will result in longer-term growth, higher foreign investments and contribute to the continent’s industrialization.
According to MacLeod however, there are further challenges ahead in bringing about the AfCFTA, with significant implementation issues faced by Member States. First, they must complete the AfCFTA Implementation Roadmap, including preparing schedules of commitments in goods and services. They must also ratify the agreement domestically. Speed is of the essence in business, and this should be done rapidly.
The Roadmap should then be complemented by implementing the AFCFTA’s “sister policy”, the pdf Boosting Intra-African Trade (BIAT) Action Plan (928 KB) , in particular through policies to increase productive capacities, improve regional infrastructure and payment systems. National AfCFTA strategies should also be developed to identify and fully utilize the opportunities of the agreement.
The AfCFTA is one of the flagship projects of the African Union Agenda 2063 that the ECA is supporting. It is due to be signed by 55 African countries during the next African Union summit, to be held on March 21st, in Kigali, Rwanda.
Download: pdf AfCFTA Questions and Answers (354 KB) - ATPC and AUC, March 2018
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Making progress on sustainable development, four countries tipped to graduate from ranks of poorest
Bhutan, Kiribati, São Tomé and Príncipe and Solomon Islands have been recommended for graduation from the special UN category for least developed countries.
With increasing national earning power as well as access to better health care and education, four countries – Bhutan, Kiribati, São Tomé and Principe and Solomon Islands – will be recommended for graduation from the list of 47 least developed countries, United Nations Committee for Development Policy (CDP) has said.
“This is a historic occasion,” CDP Chair Jose Antonio Ocampo said. “In the 47 years since the start of the category, only five countries have previously left the list.”
He added that two more countries, Vanuatu and Angola, are scheduled for graduation in 2020 and 2021.
The committee’s recommendations follow increases in the national income in all countries, plus improved education and health. Government development policies, as well as an improved global economic environment and the coordinated efforts of the international community have also driven the progress.
“If the recommendation is endorsed by United Nations Economic and Social Council, 2018 has the potential to be a momentous year, increasing by more than half the total number of LDC graduates,” Mr. Ocampo said. “Never before have so many countries been identified at a single review of the Committee for Development Policy.”
Gaining momentum
Paul Akiwumi, UNCTAD’s director for Africa and special programmes, which includes assistance to least developed countries, applauded Bhutan, Kiribati, São Tomé and Principe and Solomon Islands for their efforts to boost jobs, growth and social indicators.
“Since the international community devised the system of support to the most vulnerable countries by recognizing their structural disadvantages more than 50 years ago, a lot has been learned and shared about what it takes for a country to pursue economic and social development in sustainable and inclusive ways,” Mr. Akiwumi said.
“Our Least Developed Countries Report in 2016 identified a path to ‘graduation with momentum’: put simply, this is a way for graduating countries to really embed these gains into the way their economies work and attain long-lasting transformation,” he added.
“This means that while meeting graduation criteria is in itself to be welcomed, countries must safeguard this progress with far-sighted policies.”
Climate shocks
In Bhutan and São Tomé and Principe, per capita gross national income (GNI) tripled, the under-five mortality rate declined and gross secondary enrolment more than doubled from 2003 to 2018. During that same period, the per capita GNI doubled for Solomon Islands while the country’s gross secondary enrolment rate almost doubled.
While in Kiribati the per capita income almost tripled and it continues to perform very well in health and education since 2003, the Pacific island nation remains one of the most environmentally vulnerable LDCs due to its exposure to climate change.
For this reason, the CDP has recommended that Kiribati’s graduation is contingent on the creation of a category of countries that are “highly vulnerable” to climate change and other environmental shocks, Mr. Ocampo said.
Other extremely vulnerable countries should also receive support targeting their specific vulnerabilities to climate change and environmental shocks like rising sea levels and increased storm activity, Mr. Ocampo said.
The LDC category is assessed using three criteria: human assets (health and education targets), economic vulnerability and GNI per capita.
“It is very important to us that the concept of LDCs be accepted in the UN system and, indeed, other international and financial institutions,” Mr. Ocampo said.
Gradual graduation
Countries must meet two of the three criteria at two consecutive three-yearly reviews of the CDP to be considered for graduation. The CDP sends its recommendations to the UN Economic and Social Council for endorsement, which will then refer its decision to the UN General Assembly.
Bhutan, Kiribati, São Tomé and Príncipe and Solomon Islands each continue to meet the gross national income per capita and “human assets” criteria – health and education – but not the economic vulnerability criterion.
“It’s good to see development efforts bearing fruit, but it is important for the international community to keep supporting these three countries in ways that will enable them to reduce their economic vulnerability in years to come,” said Committee for Development Policy member Diane Elson of the University of Essex, United Kingdom.
She said that these signs of progress were particularly good news for rural women, noting that the CPD triennial review took place during the during the 62nd session of the Commission on the Status of Women at the United Nations in New York.
The committee acknowledged the Bhutanese government’s request for graduation to become effective after the conclusion of the 12th National Development Plan 2018-2023, which will serve as the country’s strategy for transition to non-LDC status.
Thinley Namgyel, Secretary of Bhutan’s Gross National Happiness Commission, said the transition period “presents a unique opportunity to mainstream the transition strategy into the national development plan and incorporate our obligation to fulfil the target of the 17 Sustainable Development Goals.”
The graduating country has a grace period (normally three years) before graduation effectively takes place. This period, during which the country remains an LDC, is designed to enable the country and its development and trading partners to agree on a “smooth transition” strategy, so that the planned loss of LDC status does not disrupt the socioeconomic progress of the country.
To boldly go
In the case of São Tomé and Príncipe, the committee noted its government’s request for a preparatory period longer than the standard three years.
“The country could use the extended preparatory period to embark on the transition process and to engage its trading and development partners and the United Nations system,” Mr. Ocampo said.
Solomon Islands Prime Minister Rick Nelson Houenipwela said: “The prospect that we may be graduating from the list of LDCs is a positive step in our development path. It encourages us to be more bold in our approach to implementing the Sustainable Development Goals and our own National Development Strategy.”
The committee found that while Nepal and Timor-Leste also met the criteria for graduation, they were not recommended for graduation at this time due to economic and political challenges. These countries may again be considered for graduation at the next triennial review of the Committee for Development Policy in 2021 if they still meet the criteria.
Bangladesh, the Lao People’s Democratic Republic and Myanmar met the graduation criteria for the first time but would need to meet the criteria for a second time at the next triennial review in 2021 to become eligible to be considered for graduation.
The committee welcomed the efforts of the governments in all countries in increasing income, improving human assets and reducing their vulnerabilities.