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tralac’s Daily News Selection
Featured infographics from tralac’s latest resource page: (i) South Africa’s trade relationship with Africa, (ii) US – Africa trade profile 2010-2016, (iii) Africa’s used clothing imports
Infographics from the IMF: Your favourite five charts
Trade event pointers:
(i) Underway, in Kigali: 41st Annual World Tourism Summit (organised by the Corporate Council on Africa and Africa Travel Association in collaboration with the Rwanda Development Board)
(ii) Pan African Chamber of Commerce and Industry: The CFTA - exploring possibilities for business engagement across Africa (12-13 September, Accra; hosted in collaboration with the AUC and the UNECA’s ATPC)
(iii) 3rd AU Customs Experts Trade Facilitation Forum: the major outcome of this meeting will be a set of recommendations and observations on how African Union Member States can best implement both the BIAT as well as the WTO TFA. (20-22 September, Port Louis)
(iv) GIZ Network for Economic Development: Shaping African economies for inclusive growth (25-27 September, Windhoek)
(v) 10th Session of the Committee on Regional Cooperation and Integration: Implementation of the Continental Free Trade Area and shared gains (31 October - 2 November, Addis Ababa). Draft Aide Memoire (pdf): Progress reports and presentations will cover the following areas (p10); Side events during the 10th Session of the CRCI (p10-11); Proposed agenda (p14)
(vi) A reminder, from @AUTradeIndustry: The second week of the 3rd Continental Free Trade Area Technical Working Groups kicked off yesterday in Durban, South Africa
3rd Cycle of the CFTA Technical Working Groups: opening remarks by Ambassador Chiedu Osakwe (Chairman of the NF-CFTA, Chairman of the Technical Working Group for Trade in Services)
A question that has hung over the CFTA negotiations is African population growth and associated pressures, in relation to GDP growth. Concluding the CFTA would provide a boost for accelerated growth and modernization of Africa’s economy and increasing employment opportunities for the millions of African entering the job market. There is a population crisis impacting poverty reduction and the prosperity levels in African economies. Currently, 1bn people, approximately, or 13% of the world’s population, live in sub-Saharan Africa. John May and Hans Groth have sounded a timely alarm in their recent book: ‘Africa’s population: in search of a demographic dividend’. According to recent projections by the UN Population Division, 4bn people (or 36% of the world’s population) could live in the Africa region by 2100. In other words, this projection would more than double the current population of the continent, standing at approximately 1.2bn.
As trade negotiators, we have a collective obligation to situate the CFTA negotiations in a broader economic context. The overriding obligation for us, as trade negotiators, is for job creation and higher levels of prosperity to mitigate and overcome the pressures of the population crisis. According to the International Monetary Fund, Africa would require between 18m and 20m new jobs - approximately the size of the populations of either Mali or Niger, over the next 25 years, to respond to the job pressures, on the Continent. These are the stakes for us, as negotiators, in the CFTA. In conclusion, although we must get the CFTA right and not gloss over technical details, we must now approach it with a greater sense of urgency of the pressures of population growth and jobs that face Africa. [Delivered on 21 August, Durban)
Regional Dialogue Conference on WTO Accessions: Kenya says Horn of Africa states’ accession to the WTO to boost economy (Xinhua)
Kenya’s GDP will expand by at least 10% if all the Horn of Africa states join the WTO, a senior Kenyan government official said on Monday. Amina Mohamed, Cabinet Secretary for Foreign Affairs told a media briefing in Nairobi that by acceding to the global trade body, Ethiopia, Somalia, Sudan and South Sudan will be required to open their economies to international trade. “We therefore anticipate that Kenya will benefit from more crossborder trade and hence its economy could expand by at least 10%,” Mohamed said (pdf) during the opening ceremony of the First Regional Dialogue on WTO accessions. The three-day forum aims to mobilize support for facilitating and accelerating African accessions to the WTO. [Africa and the multilateral trading system: presentation by Ambassador Stephen Karau (pdf)]
West Africa: Impact of administrative barriers on time and cost to trade in West Africa (West Africa Trade and Investment Hub)
Despite an abundance of anecdotes, little data existed to quantify these bureaucratic hassles - which could then determine the time and cost savings due to their elimination. In 2017, the Trade Hub undertook a wide-ranging survey to generate evidence on these questions, fanning out to 20 trading centres and border crossings in eight countries within the ECOWAS region. Survey teams randomly selected and interviewed a total of 290 traders, freight forwarders, and drivers who buy and sell 15 common agricultural and livestock products. All were asked how often they were asked for a COO and phyto- or zoosanitary certificates - and how much time and money they spent to get them. Unsurprisingly for such a large area, responses ran the gamut, from no time and cost spent to multiple days and hundreds of dollars. Yet the averages show that traders are spending significant time and money on these obsolete requirements, costs they in turn pass on to consumers.
Traders said they were required to obtain a COO more than half of the time, which took them an average of 15 hours and cost an average $41.74. Agricultural product traders said they were required to obtain duplicate phytosanitary certificates more than a quarter of the time, which took an average of nearly 13 hours and costs an average $68.28. Livestock traders are asked to obtain duplicate zoosanitary certificates more than half the time, taking an average of just under 19 hours and costing an average $57.76. [Download the study, pdf]
Paul Nugent: When is a Road a Corridor? Reflections from the Abidjan-Lagos Corridor (bordersandwine)
In the case of small-scale traders, it is questionable whether there is a corridor at all. There are a series of inter-connected roads with markets at either end, but the experience of travelling along it is one of fracture and discontinuity. Even large-scale traders and transporters experience ABLAG in a manner which seems to suggest a flow that is uneven and broken into discrete segments. One wonders how many vehicles would ever begin a journey in Abidjan and end it in Lagos. On this particular road trip, I never came across a single vehicle from Côte d’Ivoire heading to or from the direction of Nigeria. The fact that transporting goods between Mombasa and Kigali is routine suggests that there is an underlying problem along the ABLAG corridor that has largely been resolved in East Africa. Translating the rhetoric of regional integration into the functioning of a genuine corridor from Abidjan to Lagos is still a long way off. Governments are forced to deal with their own domestic lobbies – including manufacturers, transport unions and officials on the ground – but the fundamental problem still seems to reside in a lack of political will. And the problem is that, like traffic along the corridor itself, the most cumbersome vehicle dictates the pace of the journey.
Rwanda-Tanzania private sector in fresh effort to boost bilateral trade (New Times)
Rwandan and Tanzanian private sector bodies on Monday reiterated their commitment to collaborate in advocating for elimination of Non-Tariff Barriers (NTBs) between the two countries. A 15-man delegation represented the Tanzania Private Sector Foundation (TPSF) at the meeting whose objectives included identifying policy and regulatory restrictions that undermine free movement of goods, services, capital and investment between the two countries, besides identifying reasonable response measures. Gili Teri, the TPSF Director of Policy, Research and Lobbying, said there are “joint challenges” too, including non-harmonised road user charges or road tolls. “This brings about a difference in charges when transporting to different regions hence varying costs,” Teri said, also noting that there are numerous monetary charges required by various agencies in the EAC Partner States for exports of milk and other dairy products. Further still, Teri said, border management institutions’ working hours are not harmonised and this is costly to business.
Tanzania official says formerly dormant industries to create over 1m jobs after revival (Xinhua)
More than 1m Tanzanians will be employed by 25 formerly dormant industries to be reclaimed by the government after their revival, an official said on Saturday. The revival of the industries that were reclaimed after investors failed to develop them for over 20 years will be jointly funded by the country’s social security funds, said Meshack Bandawe, secretary of the Tanzania Social Security Association. Bandawe said TSSA will team up with the National Health Insurance Fund, the Parastatal Pensions Fund, the National Social Security Fund , the Workers Compensation Fund and the Zanzibar Social Security Fund to invest in the reclaimed industries. Bandawe said feasibility studies for 15 industries have been completed, while studies on the other 10 industries will be completed within a short time. “We have started to implement some of the projects. Our target is to ensure that all the factories become operative before 2019,” said Bandawe.
Kenya Revenue Authority raises taxes on used Mercedes, Mazda imports (Business Daily)
The Kenya Revenue Authority has rebased its taxation of used car imports, raising the duty payable on prices of some Mercedes and Mazda models by more than 50%. The higher taxes will in turn increase the prices of the models by between Sh145,000 and Sh364,000, according to the Kenya Auto Bazaar Association (KABA) which represents second-hand car dealers.
Nigeria to establish commodities’ certification centres – Ogbeh (Premium Times)
The Minister of Agriculture, Audu Ogbeh, said the federal government will soon establish commodities’ certification centres across the six geo-political zones to aid certification and standardisation. Mr Ogbeh made the disclosure in Kano on Monday during the flag-off of the nationwide advocacy on agricultural quality control and standardization. He said that the country received 48 notifications between July 2016 and June 2017 from EU on export goods due to aflatoxin and many other contaminants either biological or chemical. “We will establish commodities certification centres across the zones to aid certification, standardisation and traceability. “The ban on dry beans from Nigerian origin by EU therefore geared our attention to what is an eye opener that we have actually been consuming poison unknowingly,” he said.
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3rd Cycle of the CFTA Technical Working Groups
Opening remarks by Ambassador Chiedu Osakwe, Chairman of the Negotiating Forum for the Continental Free Trade Area (NF-CFTA) and Chairman of the Technical Working Group for Trade in Services (TWG-TiS)
I am honoured to welcome you all and call to order this 3rd Cycle of the Technical Working Groups, providing inputs to the Negotiating Forum for the CFTA.
On your behalf, I have the honour to thank the Government of South Africa for hosting us here in Durban and pay tribute to the leadership of this great country.
I am equally pleased to acknowledge and pay tribute to the African Union Commission (AUC); providing indispensable support as we move to conclude the CFTA Negotiations no later than the end of this year.
At this stage, our work is more important than ever. Concluding the negotiations for the Continental Free Trade Area (CFTA) is a strategic and urgent economic and trade policy necessity for addressing the development challenges that face Africa.
The CFTA is required for the structural transformation of Africa to industrialize, diversify and modernize Continent’s economy. If we design it well, as a platform and trigger for reforms and market opening, the CFTA will spur a sustained growth dynamic that will create employment for millions of Africans entering the job market. This the rational and key choice for Africa. There is no other option. We must trigger a reform dynamic for sustained growth, based on the the CFTA that creates an integrated single market for trade in goods and services. If we don’t, we risk serious decline as a Continent, falling further behind other regions in the global economy with serious consequences.
The Strategic Importance of the CFTA for our individual economies and the place of Africa in the global economy is greater than ever before.
This is why our leadership – collective and individual – shall count.
As we start, the 3rd Cycle of the TWG, after the successful foundational work at the First Cycle in Kigali, and progress made at the Second Cycle in Nairobi, I am reasonably confident that we shall consolidate and build further here in Durban. We must be dutiful in Durban and understand the high stakes.
As we start prepare to start, let me also underline a number of technical points that relate to the state-of-play; and, progress we have made so far.
I can report to this opening session that progress was made at the 6th Session of the CFTA Negotiating Forum in Niger. Although there is considerable technical work to be done, we received very useful guidance from Niamey in a number of key areas.
For instance, usefully, for the Technical Working Group on Legal and Institutional Affairs (LIA), We agreed in Niamey on the titular provision, now settled as the “Treaty Establishing the Continental Free Trade Area”, although further technical work remains to identify the “Covered Agreements” for the CFTA Treaty.
In Niamey, the Negotiating Forum that here in we finalize work on the identification of priority sectors for Trade in Services that would contribute to the modernization of the Continental economy. This would provide the basis for offers to be made by States Parties based on a Positive List.
A question that has hung over the CFTA Negotiations is African population growth and associated pressures, in relation to GDP growth.
Concluding the CFTA would provide a boost for accelerated growth and modernization of Africa’s economy and increasing employment opportunities for the millions of African entering the job market. There is a population crisis impacting poverty reduction and the prosperity levels in African economies. Currently, 1 billion people, approximately, or 13 per cent of the world’s population, live in sub-Saharan Africa today. John May and Hans Groth, have sounded a timely alarm in their recent book: ‘Africa’s Population: In Search of a Demographic Dividend’). According to recent projections by the UN Population Division, 4 billion people (or 36 per cent of the world’s population) could live in the Africa region by 2100. In other words, this projection would more than double the current population of the Continent, standing at approximately 1.2 billion.
As trade negotiators, we have a collective obligation to situate the CFTA negotiations in a broader economic context. The overriding obligation for us, as Trade Negotiators, is for job creation and higher levels of prosperity to mitigate and overcome the pressures of the population crisis. According to the International Monetary Fund, Africa would require between 18m and 20m new jobs – approximately the size of the populations of either Mali or Niger, over the next 25 years, to respond to the job pressures, on the Continent. These are the stakes for us, as negotiators, in the CFTA.
In conclusion, although we must get the CFTA right and not gloss over technical details, we must now approach it with a greater sense of urgency of the pressures of population growth and jobs that face Africa.
It is in this context that I have the honour to open this Third Cycle of the Technical Working Groups for the CFTA Negotiations.
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Kenya hosts first Regional Dialogue on WTO Accessions for the Greater Horn of Africa
The Ministry of Foreign Affairs of Kenya, the University of Nairobi and the WTO opened the first Regional Dialogue on WTO Accessions for the Greater Horn of Africa on 28 August in Nairobi, with the focus on regional integration and strengthening the multilateral trading system. The Regional Dialogue continues up to 30 August.
Initiated and hosted by the Government of Kenya, this event is specifically tailored for acceding governments in the Greater Horn of Africa region – Ethiopia, Somalia, Sudan and Comoros. South Sudan is also participating in the Dialogue, as it is planning to submit its application for WTO membership shortly.
The Regional Dialogue on WTO Accessions was jointly opened by: Amina Mohamed, Kenya’s Cabinet Secretary for Foreign Affairs; Professor Peter Mbithi, Vice-Chancellor, University of Nairobi; and Maika Oshikawa, Officer in Charge of the WTO’s Accessions Division.
Ambassador Mohamed said: “The conference provides us with the opportunity to reflect on ways in which the WTO membership can foster regional integration and cooperation. This is crucial considering that the priority of the continent is to deepen and intensify regional economic integration… The accession of the sister countries in the region will directly contribute to the smooth finalization of the negotiations and ultimately promote intra-African trade which is extremely low compared to other regions of the world.”
Ms Oshikawa, in her opening remarks, noted this was the first initiative by an African country for African accessions. “Today, 8 out of the 21 countries seeking WTO membership are African… The Greater Horn of Africa constitutes one of the largest concentrations of countries outside the WTO.”
“This Regional Dialogue is not only a noble African contribution to strengthening the multilateral trading system, but also, it is very timely,” she added. “Accession activities from this region – Comoros, Ethiopia, Sudan and Somalia – have intensified since the Nairobi Ministerial Conference, especially since the second half of 2016.”
Professor Mbithi conveyed the support of the University of Nairobi for acceding governments in the Greater Horn of Africa region: “The acceding countries are Kenya’s immediate neighbours and we expect to see more cross-border trade in goods and services, and increased demand for skilled human resources. The University of Nairobi is ready to play its rightful role of training requisite manpower for our region.” Professor’s Mbithi’s opening remarks are available here.
Over 80 participants attended the opening ceremony, including five ministers from African acceding governments and acceded members, representatives of the Kenyan Ministry of Foreign Affairs and the University of Nairobi. Several development partners also joined the event, namely, the representatives of the African Development Bank (AfDB), the UK Department for International Development (DFID), the Executive Secretariat for the Enhanced Integrated Framework (EIF), the Intergovernmental Authority for Development (IGAD), the Islamic Development Bank (IDB), the United Nations Conference for Trade and Development (UNCTAD) and the World Bank Group (WBG).
The programme of the event is available here, where all presentations and interventions will be posted. The Regional Dialogue will be followed by a two-day Specialized Training on WTO Accessions for Somalia and South Sudan. South Sudan’s participation in both events is funded by the EIF.
Background
Africa has emerged as an increasingly important player of the multilateral trading system. Africa’s active participation has been most evident in the Tenth WTO Ministerial Conference (MC10) held in Nairobi, Kenya in December 2015. Today, one quarter of the WTO's 164-membership is African. These include Cabo Verde, Seychelles and Liberia, which acceded to the Organization pursuant to Article XII of the Marrakesh Agreement.
While this is significant, several are still outside the WTO. Currently, 8 of the 21 countries in the queue for WTO membership are from the African continent, and several lie within the Greater Horn of Africa: Ethiopia, Somalia and Sudan. This region is also host to two countries which are yet to seek WTO membership – Eritrea and South Sudan, in addition to the two original WTO members (Djibouti and Kenya). Comoros, another country in the process of accession, is located south to the region.
The Tenth WTO Ministerial Conference (MC10), held in Nairobi, Kenya in December 2015, laid the foundation for a stronger multilateral trading system for all the Members. More specifically, MC10, which was the first WTO Ministerial Conference held in the African continent, has stimulated a dynamic shift in African accessions, in addition to the successful conclusion of the accessions of Liberia and Afghanistan, both post-conflicts LDCs.
On the margins of the MC10, the Fourth China Round Table was held to reflect and exchange views on the role of Africa in the future of the multilateral trading system, as well as the support for WTO accessions, especially for LDCs.
Since the Ministerial Conference, several African countries have reaffirmed their commitment to accede to the WTO. In particular, since the second half of 2016, Comoros and Sudan have been proactively engaged in their respective accession processes by adopting an ambitious roadmap towards early conclusion.
More recently, Ethiopia has expressed its readiness to resume its accession process, following several years of inactivity. Somalia, which formally started its accession process with the establishment of the Working Party in December 2016, has recently appointed a chief negotiator and a technical team and expressed its readiness to start the technical work. Moreover, South Sudan has conveyed its intention to submit an application for WTO accession shortly.
It is in this context that a Regional Dialogue on WTO accessions is being held for the Greater Horn of Africa.
This Regional Dialogue will offer a platform to: (i) exchange experiences and lessons learned from the accession processes in the region; (ii) reflect on ways in which WTO membership can foster regional integration and cooperation; and (iii) mobilize support for facilitating and accelerating African accessions.
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Rwanda-Tanzania private sector in fresh effort to boost bilateral trade
Rwandan and Tanzanian private sector bodies on Monday reiterated their commitment to collaborate in advocating for elimination of Non-Tariff Barriers (NTBs) between the two countries.
Restrictions that result from prohibitions, conditions, or specific market requirements that make importation or exportation of products difficult and or costly continue to trouble business people from both countries and, this was high on agenda of a one-day peer to peer meeting held in Kigali.
“Unlike politicians, business people don’t have term limits or constituencies. All that is important is a good doing business environment; and that is what we all desire. We must continuously collaborate, or regularly share views on how best we can collaborate to further make things better,” Stephen Ruzibiza, the PSF chief executive, said.
A 15-man delegation represented the Tanzania Private Sector Foundation (TPSF) at the meeting whose objectives included identifying policy and regulatory restrictions that undermine free movement of goods, services, capital and investment between the two countries, besides identifying reasonable response measures.
This Rwanda-Tanzania peer to peer meeting is, among others, expected to increase private sector engagement in the bilateral framework to deal with issues pertinent to doing business.
Participants said unresolved NTBs and non-conforming measures or regulations which violate certain articles of investment agreement – faced by Tanzanian companies in Rwanda include the requirement from Rwanda Revenue Authority (RRA) to pay US$200 deposit at the border by transporters from Tanzania.
Others are hurdles in registering a clearing and forwarding (C&F) company in Rwanda and obtaining the related license from RRA.
Rwandan business folks in Tanzania also point out concerns over a work permit requirement for clearing and forwarding agents’ staff to work in Tanzania which is reportedly limiting them when it comes to setting up offices in Dar es Salaam.
Clearing and forwarding agents from Rwanda are not allowed to access the port premises without work permits.
Other issues raised by Rwandans ranged from theft of minerals from Rwanda at Dar es Salaam port, to Fuso truck drivers being denied entrance to Tanzania to buy local agriculture products such as rice, bananas, dried cassava, and beans.
Only Tanzania registered trucks are said to be allowed to carry these products and offload them at the Rusumo border post in Rwanda.
This, it is noted, requires additional time and documentation which is a cumbersome procedure and a waste of time.
Gili Teri, the TPSF Director of Policy, Research and Lobbying, said there are “joint challenges” too, including non-harmonised road user charges or road tolls.
“This brings about a difference in charges when transporting to different regions hence varying costs,” Teri said, also noting that there are numerous monetary charges required by various agencies in the EAC Partner States for exports of milk and other dairy products.
Further still, Teri said, border management institutions’ working hours are not harmonised and this is costly to business.
Shedding light on how difficult it is to move goods across the border, Badal Gurung, the logistics manager of Mount Meru Petroleum-Rwanda, first pointed to the problem of depot closing time as well as issues of documentation in Tanzania which hampers their business.
“On normal working days they close depots at 4:30 pm and this, really, is too early. Please consider helping to have this time increased. On Saturday, it is 11:30am,” Gurung said, adding that the border closing time of 10pm is also “a big issue” as it delays their operations.
Participants from both ends however agreed to work persistently to push policy makers in their respective capitals to find solutions.
The expectation of their bilateral engagements is to unlock the existing and future trade potential between Rwanda and Tanzania.
Robert Opirah, the Director-General for Trade and Investment in the Ministry of Trade, Industry and EAC Affairs, told the meeting that the two countries are important trading partners with a firm commitment to increasing trade and cooperation through their joint membership of the EAC.
Opirah said Tanzania is Rwanda’s third largest trading partner – behind Uganda and Kenya – with total trade between the two countries accounting for 14 perc ent of Rwanda’s trade with EAC.
Rwanda and Tanzania recently launched a new Rusumo International bridge and a One-Stop-Border Post.
Working hours at the border of Rusumo were extended from 12 to 16 hours and at the port to 24 hours and there is hope the Rusumo border will in the future operate for 24 hours too. Introduction of an Electronic Cargo tracking system has also meant less transit checkpoints.
Opirah assured participants of Rwanda’s “unwavering commitment to seeking practical ways” of completely eliminating NTBs in order to facilitate easier trade across borders and the region.
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Hub survey quantifies time and cost spent on West African trade barriers
Certain administrative barriers to trade in the Economic Community of West African States (ECOWAS) have been eliminated on paper for decades. But the gap between policy and reality has meant that those trading agricultural staples across West African borders are still asked for certificates of origin (COO) despite these being rendered moot under the ECOWAS Trade Liberalization Scheme (ETLS) in 1985.
Likewise, ECOWAS member states had declared they would recognize the mutual equivalence of each other’s phyto- and zoosanitary certificates, which show that plants or animals have been inspected and are clear of diseases that threaten public health. But in practice, traders reported they were still required to obtain duplicate phyto- or zoosanitary certificates when they crossed borders.
Despite an abundance of anecdotes, little data existed to quantify these bureaucratic hassles – which could then determine the time and cost savings due to their elimination. In 2017, the Trade Hub undertook a wide-ranging survey to generate evidence on these questions, fanning out to 20 trading centers and border crossings in eight countries within the ECOWAS region. Survey teams randomly selected and interviewed a total of 290 traders, freight forwarders, and drivers who buy and sell 15 common agricultural and livestock products. All were asked how often they were asked for a COO and phyto- or zoosanitary certificates – and how much time and money they spent to get them.
Unsurprisingly for such a large area, responses ran the gamut, from no time and cost spent to multiple days and hundreds of dollars. Yet the averages show that traders are spending significant time and money on these obsolete requirements, costs they in turn pass on to consumers.
Traders said they were required to obtain a COO more than half of the time, which took them an average of 15 hours and cost an average $41.74.
Agricultural product traders said they were required to obtain duplicate phytosanitary certificates more than a quarter of the time, which took an average of nearly 13 hours and costs an average $68.28.
Livestock traders are asked to obtain duplicate zoosanitary certificates more than half the time, taking an average of just under 19 hours and costing an average $57.76.
These findings – verified by the Trade Hub’s research team – show that ending illegal or ill-informed requests for these documents would save significant time and money. Since late 2015, the Trade Hub has successfully persuaded six West African countries – Benin, Burkina Faso, Côte d’Ivoire, Guinea, Mali, Togo – to formally drop the COO requirement.
The study recommends next steps to end officials’ practice of requiring traders to obtain certificates that are not officially required, including a scorecard, educational campaigns, operational changes, and suggested incentives and sanctions.
This publication was produced for review by the United States Agency for International Development. It was prepared by Betsy Ness-Edelstein and Carol Adoum of Abt Associates for the West Africa Trade and Investment Hub.
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tralac’s Daily News Selection
TICAD Ministerial Meeting in Maputo: selected highlights, reviews
Remarks by Mr Taro Kono (Minister for Foreign Affairs of Japan):
(i) Opening Session (pdf): In this context, Japan has been actively engaged in negotiating bilateral investment agreements for high-quality investment in Africa. In this connection, I am delighted to announce that the Japan-Kenya Investment Agreement signed in Nairobi last August will soon come into force. It will be Japan’s third investment treaty concluded with African countries, following Egypt and Mozambique. In the past one year, we have started investment treaty negotiations with others and we are planning to announce the launch of negotiations with more countries in the coming days. Owing to these latest developments, Japan will be working on new investment treaties with thirteen African countries in total.
(ii) Plenary 1: Our efforts for sustainable growth should not be hindered by security concerns such as conflicts, acts of terrorism and the spread of violent extremism. Global challenges of climate change and environmental degradation should not stand in our way neither. Rapid growth and urbanization should not endanger healthy communities. There were lively discussions this afternoon during the side event on African Clean Cities Platform with the participation of local authorities. We need to intensify our cooperation and collaboration to tackle these human security issues and build resilient society.
(iii) Closing Session (pdf): During the session on the promotion of human security and resilient society, we reaffirmed that the steady implementation of TICAD policies and commitments undoubtedly contributes to the realization of the Africa’s own Agenda 2063 and the 2030 Agenda for Sustainable Development. We underlined the nexus between development and security in Africa, and highlighted the importance of good governance and the prevalence of rule of law. We also agreed on the need for concerted efforts to promote maritime security by ensuring freedom of navigation and a rules-based maritime order in accordance with the international law.
Opening remarks by UNDP’s Abdoulaye Mar Dieye: As we take stock, during our meeting, on how we have collectively performed, so far, and how we would guide further implementation, I would also suggest, in our deliberations, that we consider the following imperatives, which are sine qua none for sustainable development in the continent, and which can advance the future evolution of TICAD, and help plant the seeds and shape the contours of TICAD VII. First, the imperative to ensure that the various regional and international initiatives on Africa, work in synchronicity. TICAD has demonstrated its integrative value and its instrumentality as one of the most central global partnership on Africa. We could, down the road, review how it relates to other initiatives; and how all initiatives collectively contribute to Agenda 2063. Second, the imperative to ensure that all initiatives foster regional integration; as only through regional integration can Africa get out of the syndrome of fragmented markets. The question, therefore, is: How can we use the three pillars of TICAD VI to effectively accelerate regional integration in Africa?
TICAD publications disseminated during the Ministerial: note that the reports are available in English, French, Portuguese, Japanese
(i) TICAD Progress Report 2017: For the benefit of clear presentation, progress in the six pillars of “Yokohama Action Plan 2013-2017” and the three pillars of “TICAD VI Nairobi Implementation Plan” is illustrated under two broad themes.
(ii) TICAD Japan’s Initiatives 2017: Since 2016, Japan has implemented measures worth more than $5bn. In the context of TICAD V, since 2013, Japan has steadily implemented TICAD V-related measures worth a total of approximately JPY 2.67 trillion (about $26.7bn, including ODA spending of approximately JPY 1.39 trillion, equivalent to about $13.9bn).
(iii) UNDP and Japan: Working together for an emerging Africa (pdf)
Customs contributions explained at the TICAD Ministerial meeting in Mozambique (WCO)
Secretary General Mikuriya emphasized Customs contributions to economic development by ensuring connectivity at borders and improving business environment through various initiatives that pertain to the establishment of Single Windows, the implementation of the Transit Guidelines and the introduction of One Stop Border Posts. He also stressed the crucial role Customs play in protecting human security, and enhancing social resilience by fighting illicit trade and trade-based illicit financial flows. Dr. Mikuriya added that these two functions would eventually enlarge the tax base and prevent a loss of State revenue. He therefore urged African governments to recognize the multiple missions of Customs. Furthermore, he appealed to African governments to establish adequate legal frameworks to empower Customs, support coordination between Customs and the other government agencies, and provide the necessary resources for Customs to achieve its objectives.
Spur self-sustaining development of Africa via more Japanese investment (editorial comment, The Yomiuri Shimbun)
The Japanese government will establish a representative office at the headquarters of the African Union in Ethiopia within this fiscal year. For Japan to realize its aim of becoming a permanent member of the United Nations Security Council, it is vital to expand cooperation with African countries. Japan must build ever-closer relations with these countries, on both the political and economic fronts.
Income inequality trends in Sub-Saharan Africa: divergence, determinants and consequences (UNDP)
The book we are launching today, being the first comprehensive income inequality study on Africa, systematically explores income inequality and draws lessons to reduce income inequality in Africa. To accomplish this objective, the book presents an Integrated Inequality Dataset for Sub-Saharan Africa, an innovation that helps overcome persistent problems of scarcity and inconsistency of data on income inequality. This book explores the dynamics and complexities of income inequality and offer solutions around the following five key messages. First, seven outlier countries (South Africa, Botswana, Namibia, Zambia, Central African Republic, Comoros, Lesotho) drive income inequality in Africa, making the continent’s Gini significantly higher than the global average. Fourth, this book brings to the fore an important policy lesson to policymakers: Policies that reduce poverty are not necessarily the same as those that reduce income inequality. For instance, quality education and enhanced productivity help accelerate reduction in poverty, but can raise income inequality – if not accompanied by a progressive tax system and effective social protection programmes. [Remarks by M. Abdoulaye Mar Dieye, Regional Bureau for Africa]
Related UNDP SSA inequality analysis: (i) Building the integrated inequality database and the seven sins of inequality measurement in Sub-Saharan Africa; (ii) An econometric analysis of the bifurcation of within-country inequality trends in Sub-Saharan Africa 1990-2011
Towards democratic developmental states in Southern Africa (OSISA)
While the first chapter (pdf) looks at the concept of developmental states in historical perspective, it makes the case for a transition from the autocratic states of the twentieth century to democratic developmental states in the twenty-first century in order to meet the complex challenges involved. Chapter 2 examines developmental states from gender perspectives, while Chapters 3 to 8 are based on the six country case studies [Botswana, Namibia, Malawi, Zimbabwe, Angola, South Africa], each of which follows the outline below: (i) Brief overview of the history of dispossession as well as the resulting levels of poverty and inequality. (ii) Brief analysis of state interventions after independence. (iii) Identifying shortcomings since independence and the need for developmental interventions that promote structural transformation from low productivity activities to high productivity activities. (iv) Analysis of the potential for developmental state interventions, considering the various political, social and economic factors involved. (v) Identifying the obstacles to developmental state interventions (internal and external). (vi) Drawing a country-specific conclusion based on the above analysis. The last chapter provides the synthesis and way forward.
Sylvian Boko: A strong infrastructure base critical to Africa’s economic transformation (UNECA)
Speaking during an ECA-sponsored session at the annual Nigerian Bar Association conference in Lagos, Nigeria, Mr. Boko, the Principal Regional Advisor and Head of Development Planning and Statistics at the ECA, said it was imperative for the continent to create an enabling environment for investment in transboundary infrastructure projects that will change the lives of millions of ordinary people. He said the harmonization of policies, laws, and regulations through the ECA’s Model Law on transboundary infrastructure projects, will go a long way in strengthening existing continental, regional, and national institutional capacity. He added there was also an urgent need for the ECA and its pan African partners to help develop the knowledge base of transboundary infrastructure projects and technical advisory capacity on such projects on the continent. “There’s also a critical need for capacity development,” he said, adding private perception of risk and uncertainty in the past may have been exacerbated by the disparity and lack of harmonization of the regulatory and legal frameworks governing transboundary infrastructure projects even if such projects are otherwise profitable. [ECA unveils model law on transboundary infrastructure development in Africa]
Bringing e-money to the poor: successes and failures (World Bank)
Moving toward universal access to financial services is within reach, thanks to new technologies, transformative business models, and ambitious reforms. Instruments such as e-money accounts and mobile accounts, along with debit cards and low-cost traditional bank accounts, can significantly increase financial access for those who are excluded. Bringing e-Money to the Poor: Successes and Failures examines the lessons of success from four country case studies of “gazelles” -Kenya, South Africa, Sri Lanka, and Thailand - that leapt from limitation to innovation by successfully enabling the deployment of e-money technology.
Report of the Kenyan private sector meeting with Jack Ma (pdf, KEPSA)
Opening the Round Table, Ms Carole Kariuki, the CEO of KEPSA, pointed out that Kenya is the East Africa landing point for China’s One Belt, One Road initiative which aims to stimulate investments in and development of trade routes from China to the world. Ms Kariuki emphasized that Kenya’s strategic location also makes it the sea and air gateway to the East and Central Africa with an expanded Port of Mombasa and air connections to over 54 destinations on the continent. Chairman Ma supported Dr Kituyi in noting that the first 20 years of any technology is about the innovation while the next 30 years is about using and leveraging the technology. Electronic commerce is no longer new and for Africa and African entrepreneurs, it is going to be about the using of the technology. Chairman Ma reemphasized his belief that the youth are Africa’s future and small businesses and women are part of that future and will be the rising power for the 21st century. Specific attention needs to be paid to them. He challenged entrepreneurs to think globally, and win locally.
Botswana: Fresh attempt to revive AGOA exports (Mmegi)
Despite duty free access to the US market, exports from Botswana have virtually dried up due to inadequate awareness of the African Growth Opportunities Act programme and the high cost of compliance with technical regulations, standards and quality certification. From the peak of exports worth around $17m in 2011, which were dominated by textiles, exports under the AGOA pact to the US in 2016 were at a paltry $4m. At its peak in 2011, Botswana had over 10 textiles and apparel firms exporting under AGOA. Of these textiles and apparel firms that operated in Botswana, some have shifted focus from exporting to the US market towards South Africa while some have relocated mostly to Lesotho with others having closed down.
Why the 11 countries that rely on the Nile need to reach a river deal soon (The Conversation)
Fresh evidence now points to the fact that both the political and ecological situation in the Nile basin is becoming more precarious. Water quality appears to be worsening, there are growing water quantity issues and agricultural yields appear to be falling. These challenges are exacerbated by the looming completion of various dams on both the Blue Nile and the White Nile. The biggest of these is the Grand Renaissance Dam in Ethiopia. There are also new, and increasing, concerns over the potential impact of climate change on the Nile river basin. Recent studies point to two contradictory scenarios that would require completely opposite adaptation strategies: one entails floods and increased runoff, the other water scarcity and possible drought. [The author: Richard Kyle Paisley]
Today’s Quick Links: South Africa-Mozambique Bi-National Commission: updates DBSA’s support to the SADC Master Plan: presentation at SADC Industrialisation Week 2017 Financial Times: edited transcript of interview with Rwanda’s President Paul Kagame The Federal Reserve Bank of Kansas City: global trade analyses delivered at Jackson Hole symposium Mario Draghi (President of the ECB): Sustaining openness in a dynamic global economy Reuters: Trump renews threat to scrap NAFTA going into next round of talks AfDB appoints Dr Abdu Mukhtar as Director, Industrial and Trade Development UNIDO: Nigeria prepares for Third Industrial Development Decade for Africa APEC/FAO: Agricultural trade in Pacific Rim economies faces challenges due to climate change |
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TICAD Ministerial Meeting in Maputo, Plenary 1: Economic transformation for Africa’s growth
Remarks by H.E. Mr. Taro Kono, Minister for Foreign Affairs of Japan, at the TICAD Ministerial Meeting in Maputo, Mozambique
At the outset, I would like to express my sincere appreciation to all the participants for sharing their robust and constant efforts to steadily implement the policies contained in the six priority areas of the TICAD V Yokohama Declaration, its Action Plan, the three pillars of the TICAD VI Nairobi Declaration and its Implementation Plan. The two sets of reports you have in front of you present the progress made during the past year, highlighting respectively the African and international efforts and Japan’s efforts.
First, allow me to take this opportunity to explain how Japan has been working on the implementation of the commitments made at TICAD V and VI.
At TICAD V in 2013, Japan announced an assistance package for the growth of Africa to expand public and private means of up to 32 billion US dollars from 2013 to 2017, including 14 billion US dollars’ worth of Official Development Assistance. At TICAD VI, Japan committed to invest for the future of Africa amounting to approximately 30 billion US dollars between 2016 and 2018 under public-private partnership.
Today, I wish to report to you all that Japan has disbursed approximately 5 billion US dollars since 2016 and the amount of our assistance from 2013 to 2016 has reached 26.7 billion US dollars. I believe that such contribution has driven forward economic transformation for Africa’s growth and promoted the realization of human security and resilient society.
Secondly, I would like to share my thoughts on the international partnership for Africa’s development and the progress made in that respect.
It is Japan’s firm belief that without self-sustaining growth and peace in Africa, which embraces 1.2 billion people, with its economy growing at a higher rate than the global average, we will never achieve international peace and stability. That is why the international community as a whole must be involved in Africa’s development.
To this end, TICAD has, since its inception, engaged multiple actors including non-African countries, international and regional organizations, private sector and civil society to stand united under the principle of partnership and ownership.
Here, I would like to highlight some good practices of trilateral cooperation, being promoted for African development.
The Governments of France and Japan are steadily implementing the “Franco-Japanese Plan for Sustainable Development, Health and Security in Africa”, which lead to the signing of a memorandum of cooperation in the area of sustainable cities by the Government of Côte d'Ivoire, France Development Agency (AFD) and JICA.
The Governments of the UK and Japan are co-funding NGOs’ activities on landmine clearance program in Angola.
Furthermore, last year, the Prime Ministers of India and Japan agreed to promote cooperation and collaboration with a view to synergize their effort in the areas of capacity building, health, infrastructure and connectivity in Africa.
These are just few examples of enhanced international partnership Japan has been working on for African development.
Needless to say that African ownership is the key for achieving long-term development. Sustainable development cannot be carried out without Africa’s firm will and engagement. I would like to emphasize that the Africans are and will always be on the driver’s seat of any international partnership including the trilateral cooperation that I have just mentioned, for African development.
Thirdly, I wish to add few words on the challenges ahead and the way forward.
Despite the significant progress we’ve made to date, we need to scale up our efforts to achieve our targets. Huge potential still remains in the field of private direct investment. Good governance, diversified economy, and basic infrastructure are keys to promoting domestic and foreign investment, and I would like to call on our African friends to further their reform efforts in these key areas. The Government of Japan stands ready to provide necessary support and will continue to facilitate Japan-Africa business partnership.
Our efforts for sustainable growth should not be hindered by security concerns such as conflicts, acts of terrorism and the spread of violent extremism. Global challenges of climate change and environmental degradation should not stand in our way neither.
Rapid growth and urbanization should not endanger healthy communities. There were lively discussions this afternoon during the side event on “African Clean Cities Platform” with the participation of local authorities. We need to intensify our cooperation and collaboration to tackle these human security issues and build resilient society.
All the views and information shared during this session regarding the implementation of our commitments made at TICAD V and VI form an invaluable basis for more effective measures in the future. I hope that we will have a more concrete and in-depth discussion on the way forward along the substantive agenda items during tomorrow’s sessions. To conclude, I wish to thank once again all the participants for actively engaging in the follow-up activities of the TICAD process.
Thank you for your attention.
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Time to increase trade and investment with Mozambique is now – SA envoy
SA High Commissioner to Mozambique Mandisi Mpahlwa says the participation of the South African companies in the Maputo International Trade Fair could not have come at a more opportune time as the country’s economy is recovering from the challenges it experienced last year.
Mpahlwa was speaking in Maputo last night at a briefing session organised for the South African business delegation ahead of the opening of the trade fair today. More than thirty SA companies that are funded by the Department of Trade and Industry (the dti) and those supported by the Mpumalanga Economic Growth Agency (MEGA) will participate in the trade fair which runs until 3 September 2017.
“The Mozambican economy is in the process of recovering from the challenges that it experienced last year. The government has not only committed to ensuring that the expected economic growth of 4.6% for 2017 is achieved, but it is also reaching out to the private sector and soliciting its active participation and support as an important partner in stimulating the country’s economic growth,” said Mpahlwa.
He added that in an attempt to woo business and gain its confidence, the Mozambican government has recently hosted two major conferences on infrastructure development and investment to engage business.
“The conferences, which outlined the country’s infrastructure development projects and identified investment opportunities in various sectors, demonstrated the government’s resolute determination to accelerate the growth of the Mozambican economy. This is the opportune time for the South African companies to seek investment opportunities and also contribute in strengthening our economic relations and growing trade between the two countries,” stressed Mpahlwa, adding that the political environment in Mozambique was also conductive to doing business in the country.
He also said that the timing companies’ arrival was also perfect as it came hot on the heels of the high-profile meeting of Bi-National Commission between South Africa and Mozambique that took place on Friday.
President Jacob Zuma and his Mozambican counterpart, President Felipe Nyusi attended the meeting where they emphasised the need for increased economic cooperation and invited businesspeople from both countries to take advantage of the opportunities that exist in SA and Mozambique to invest and expand the existing business.
“The participation of the South African companies in FACIM received a particular recognition during the BNC as one of the platforms that business communities in the two countries can use for engaging on possible cooperation and partnerships for increasing trade and investment between our countries,” said Mpahlwa.
Mozambique is South Africa’s third largest trade partner in the Southern African Development Community (SADC) region after Botswana and Namibia. Trade between the two countries increased from R29 billion in 2012 to R43 billion in 2016. There currently 300 South African companies operating in Mozambique.
President Jacob Zuma on South Africa-Mozambique Binational Commission progress
President Jacob Zuma has applauded the registered progress at the second session of the South Africa-Mozambique Binational Commission (BNC) in Maputo where political, economic and social relations have been taken to a higher level.
The President has concluded his successful Working Visit to Mozambique this afternoon, where he co-chaired the BNC with President Filipe Nyusi of the Republic of Mozambique.
The two Presidents took stock of the progress made since the inception of the BNC in 2015, and both agreed that the bilateral cooperation between South Africa and Mozambique had gone from strength to strength.
The relations between the two countries have expanded to various areas, including agriculture, arts and culture, trade and investment, energy, mining, banking, telecommunication, defence and security, water, environment, transport, immigration as well as science and technology.
“We have noted that we need to do more to further expand cooperation. We have thus directed our Ministers to ensure a full implementation of all the signed Agreements and Memoranda of Understanding,” said President Zuma.
To date, seventy sectoral agreements have been signed between the two countries, demonstrating the strength and the depth of bilateral cooperation, while discussions were underway to conclude other instruments including in the areas of trade and higher education and training.
President Zuma and President Nyusi also discussed the need for increased economic cooperation, which is an apex priority for the two countries, noting that it was through economic growth that the peoples of their respective countries could be uplifted out of poverty and unemployment.
Trade relations between the two countries remain strong, with about 300 South African companies operating in Mozambique.
President Zuma further invited the business community in both countries to take advantage of the existing opportunities in the two respective countries to invest and expand the existing businesses.
He said the BNC session was in line with the 37th Ordinary Summit of SADC Heads of State and Government which met in Pretoria last weekend which emphasised the need for strong partnerships with the private sector in SADC, in the pursuit of economic development and progress.
The two Heads of State also stressed the importance of maintaining peace and stability in their respective countries and in the SADC region.
In this regard, President Zuma said: “I wish to commend His Excellency President Nyusi for his continued commitment towards achieving lasting peace through reaching out to the leader of Renamo.”
“We fully support the peace initiatives and stand fully behind you Mr President as you continue the process,” he added.
President Zuma said the developmental goals that the two countries aspired to were linked to the objectives of Agenda 2063, of silencing the guns in Africa by 2020 and that a peaceful and stable Africa would translate into a developed Africa.
The two leaders also underscored that good governance and democracy remained the strong pillars upholding peace and stability in the region and Continent.
“We therefore commend the sister nations of Rwanda and Kenya who recently held successful general elections, and have also noted the general elections that were held this week in Angola this week,” President Zuma said.
“On the environment,” he continued, “we welcomed the fact that the region is slowly recovering from the adverse effects of the El Nino weather patterns and the drought which affected food production and energy shortages. We will continue to work together to mitigate the impact of such extreme weather patterns in our region.”
President Zuma also extended South Africa’s heartfelt gratitude to the Government of Mozambique for declaring the Matola Raid Monument a National Heritage site in June 2017.
The President said “the Matola Raid and Interpretive Centre is a reminder of the joint history of struggle and solidarity that we share, which is the reason for the unbreakable ties between the two nations.”
President Zuma concluded by congratulating Mozambique for the successful hosting of the Tokyo International Conference on African Development (TICAD) simultaneously with the SA-Mozambique BNC, where South Africa had another delegation participating in the TICAD, given the importance of the meeting, which seeks to boost economic development cooperation.
President Zuma was accompanied by the Minister of International Relations and Cooperation, Ms Maite Nkoana-Mashabane; Minister of Trade and Industry, Dr Rob Davies; Minister of Environmental Affairs, Ms Edna Molewa, Minister of Arts and Culture, Mr Nathi Mthethwa, Minister of Energy, Ms Mmamoloko Kubayi and the Minister of Transport, Mr Joe Maswanganyi.
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A strong infrastructure base critical to Africa’s economic transformation
A strong infrastructure base is critical for Africa’s economic transformation, Economic Commission for Africa’s Sylvian Boko said Thursday.
Speaking during an ECA-sponsored session at the annual Nigerian Bar Association conference in Lagos, Nigeria, Mr. Boko, the Principal Regional Advisor and Head of Development Planning and Statistics at the ECA, said it was imperative for the continent to create an enabling environment for investment in transboundary infrastructure projects that will change the lives of millions of ordinary people.
He said the harmonization of policies, laws, and regulations through the ECA’s Model Law on transboundary infrastructure projects, will go a long way in strengthening existing continental, regional, and national institutional capacity.
He added there was also an urgent need for the ECA and its pan African partners to help develop the knowledge base of transboundary infrastructure projects and technical advisory capacity on such projects on the continent.
“There’s also a critical need for capacity development,” he said, adding private perception of risk and uncertainty in the past may have been exacerbated by the disparity and lack of harmonization of the regulatory and legal frameworks governing transboundary infrastructure projects even if such projects are otherwise profitable.
He said adequate infrastructure can accelerate Africa’s growth, adding the continent can actually fund its development priorities, especially infrastructure projects, with domestic resources.
Mr. Boko said Africa, though still faced with the arduous task of mobilizing adequate resources to fund its own growth and transformation, it had the potential to do so.
He said infrastructure can trigger development on the continent and eradicate inequalities across borders.
“It is critical for the continent to have a competitive industrial sector and transboundary infrastructure to advance its integration thus promoting strong and sustained growth by reducing poverty; enhancing economic activity and competitiveness by reducing transportation cost; improving living standard by minimizing transaction costs of business,” he said.
Mr. Boko said this would also raise productivity and promote economic competiveness and in the process assist governments in domestic resource mobilization.
However, by and large, he said, the continent still lacks adequate infrastructure such as roads, railways, waterways and ICT to support its growing economies.
Emmanuel Nnadozie, Executive Secretary of the African Capacity Building Foundation (ACBF), gave the keynote address during the panel discussion.
He said to accelerate regional integration in Africa, the continent must develop efficient and effective institutions that will be in a position to do a number of important things beyond promoting trade and regional infrastructure programs.
These include enhancing leadership; informing, educating and changing mindsets to foster a spirit of Africanness; enabling the right decisions to be made and acted upon, the right laws and policies to be designed, implemented, monitored and evaluated.
“Transformative leadership and political will are important for identifying and defending Africa’s interests at all levels,” said Mr. Nnadozie.
“Visionary and effective leadership is an essential requirement for accelerating regional integration because, leaders must be able to provide inspiration, motivation and clear direction to ensure that decisions are implemented.”
He said the spirit of Africanness is essential to ensure that “people from the continent would think of themselves first as Africans before thinking of themselves in terms of their respective nationalities.”
Africa, he said, must allow for a solid financial mechanism and that will enable capacity to flourish through the development, employment, retention and full and optimum utilization of human capacity, in particular capacity for policy design, implementation and monitoring and evaluation.
Mr. Nnadozie said establishing institutions which matter for regional integration in Africa was easier said than done.
“Building or strengthening these institutions could benefit from experience and best practices elsewhere. However, there would be need for institutional design experimentation that recognizes the existing sociopolitical and economic circumstances,” he said.
He also spoke on the need to identify, strengthen and rationalize overarching integration institutions; developing more functional institutions and strengthening existing pan-African institutions and establish new ones where necessary.
“Ways must be found to strengthen Africa’s institutions in order to deal with the political, legal and policy issues sighted above. It is also critical to involve the private sector in the integration process,” said Mr. Nnadozie.
“It should not be expected that all private sector groupings will favor regional integration, as some sects will definitely take some protectionist stance in fear of competition. However, as has already been experienced in some countries, the disparities in economic weight that exist between members of some groupings require that we enforce those policy instruments that deal with fears of economic polarization.”
Also on the panel were Akshai Foforia, a partner at Pinsent Mason Law Firm and Makane Mbengue, Professor of Law at the University of Geneva who spoke on opportunities of the pan-African investment code, the African arbitration mechanism and funding of transboundary infrastructure projects, among other things.
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SADC Industrialization Week 2017: Roundup
The SADC Secretariat, the Southern African Business Forum (SABF) and the NEPAD Business Foundation (NBF) kick-started the second annual SADC Industrialization Week alongside the third SABF Conference at the Focus Rooms in Sunninghill, Johannesburg, South Africa on Monday, 31 July 2017.
The theme for this year’s SADC Industrialization Week was ‘Partnering with the private sector in developing regional value chains’, and the event aimed at bringing together government, business, civil society and academics in order to form strategic partnerships that will facilitate the implementation of the pdf SADC Industrialization Strategy and Roadmap 2015-2030 (2.34 MB) .
Attending delegates participated during the SADC Industrialization envisioning exercise which looked at what an industrialized region would like in 2030 and what necessary steps and partnerships where required to achieve the vision.
Day 2 provided a dual sector focus on Financing Infrastructure and Pharmaceuticals. The former focused on Infrastructure and Finance Public-Private Dialogue, while the latter was structured around the launch of the SADC Pharmaceutical Business Plan.
The Financing Infrastructure Conference emphasised the importance of developing quality infrastructure as a requirement to ensure the implementation of SADC’S Industrialisation Strategy and Roadmap. The NBF profiled the North-South Rail Corridor as a quintessential example of the type of projects the region should prioritise.
The Development Bank of Southern Africa (DBSA) presented a response to the topic, entitled DBSA’s support to the SADC Master Plan.
The Regional Pharmaceutical Conference launched SADC’s Pharmaceutical Business Plan which will look at the gaps within the entire value chain process in order to form public-private partnerships that will develop solutions required in the industry.
The remainder of the Week included the following topics of discussion: SME development and integration into Regional Value Chains; Regional B2B matchmaking; ‘Made in Afrika’ showcase; Sustainability and green finance; Cross Border Electronic payments; and Understanding Trade and Investment Agreements (AGOA, EPA etc.).
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Working together for an emerging Africa: UNDP and Japan
Foreword by Abdoulaye Mar Dieye, Assistant Secretary-General and UNDP Regional Director for Africa
The United Nations Development Programme (UNDP), the Government of Japan, and their partners from the Tokyo International Conference on African Development (TICAD) have worked tirelessly for more than two decades to articulate a bold vision for the development of Africa. They kept faith in the continent’s future even when it was not fashionable to do so.
The efforts of this unique partnership are now bearing fruit. Africa has witnessed a remarkable economic performance in the last 15 years, with at least 10 countries graduating to middle-income status. In recent years, African nations are resolved to chart their own development path with the adoption of the Sustainable Development Goals and the African Union’s 2063 Agenda. This aligns with the TICAD mandate, which calls for national ownership and collaboration between all stakeholders.
The TICAD VI Conference, organized last year in Nairobi, Kenya, took stock of these accomplishments. Its key outcomes, enshrined in the Nairobi Declaration, underscored the need to consolidate Africa’s development gains through sustained economic structural transformation, the building of resilient health systems, and the promotion of social stability to bring about prosperity for all.
As UNDP and its partners gather in Maputo, Mozambique, from 24 to 25 August 2017 for the TICAD Ministerial Meeting, I am confident they will exercise their foresight and diligence in following up on their commitments and that they will do so with an added sense of urgency to ensure that lingering challenges do not rollback the past decade’s hard-won achievements.
The path toward African emergence is a marathon race that requires the mind of a sprinter and a long-term commitment. Through TICAD, UNDP and its partners will remain fully committed to supporting African governments on that journey and work to ensure they are well poised to reap the rewards of a promising future.
Opening Remarks by Abdoulaye Mar Dieye at the TICAD 12th Ministerial Meeting
There are few places in this word that display sublime charm and mystic magic, so powerful and enchanting, that you can only be inspired by the muses, when you visit them.
Graciosa Maputo ranks very high in that exclusive club!
We are then blessed to have our 11th Ministerial meeting, here in this most welcoming city; and I would like to thank the Government of Mozambique for its generous hospitality.
Our TICAD Ministerial meetings have been quite instrumental. They are the locus where we shape the TICAD Agendas, monitor the action plans, and give further impetus for implementation. Overtime, they have grown in vitality, depth and reach. They have become special moments to renew and reinvigorate this unique spirit of partnership, and inject added momentum and energy to Africa’s development Agenda.
Judging from the deliberations of the experts meeting and side events held during the last two days, I am pleased to see that the tradition is maintained. Our meeting can then inspire brighter development prospects for the continent and can further translate the TICAD Strategy into enhanced development actions and outcomes.
As shown by the 2017 African Economic Outlook, 2016 was a difficult year, with regional growth dipping to 2.2%, the lowest growth in more than 2 decades. A modest recovery in growth is expected in 2017, but this fall short of the past trend of 5.0%, and too low to put Africa back on its emergence track. The dip in international commodity prices has seriously affected growth. A major lesson from this development is that Africa is yet to maximally learn from primary commodity price cycle by successfully modernizing agriculture and effectively transforming its economy from, mostly primary commodity sector to value added secondary and tertiary sectors that promote inclusive and sustainable growth and development.
TICAD has all the ambition and potential to contribute to that process given its full congruence with the 2030 Agenda and Agenda 2063. As agreed in Yokohama, during TICAD V, and in Nairobi, last year, during TICAD VI, if we invest massively in the continent ‘s structural economic transformation, human security and resilient institutions and societies, private sector development, youth employment and gender equality, peace and stability, then Africa’s path to inclusive and sustainable development will be further amplified, secured and made irreversible.
As we take stock, during our meeting, on how we have collectively performed, so far, and how we would guide further implementation, I would also suggest, in our deliberations, that we consider the following imperatives, which are sine qua none for sustainable development in the continent, and which can advance the future evolution of TICAD, and help plant the seeds and shape the contours of TICAD VII.
First, the imperative to ensure that the various regional and international initiatives on Africa, work in synchronicity. TICAD has demonstrated its integrative value and its instrumentality as one of the most central global partnership on Africa. We could, down the road, review how it relates to other initiatives; and how all initiatives collectively contribute to Agenda 2063.
Second, the imperative to ensure that all initiatives foster regional integration; as only through regional integration can Africa get out of the syndrome of fragmented markets. The question, therefore, is: How can we use the three pillars of TICAD VI to effectively accelerate regional integration in Africa?
Third, the imperative of seeing Africa beyond its challenges, and building massively on its opportunities. Today, Africa offers one of the highest business profitability in the world, with many countries such as Botswana, Ethiopia, Ghana, Gabon, Mozambique, Rwanda, Senegal and Zambia having the highest Business Profitability Index. I call on Japanese businesses to leverage these opportunities.
Addressing these imperatives can strategically position TICAD as a partnership of choice, further frame the future of all development initiatives and stretch development frontiers in Africa, in a secured and irreversible way.
I wish our Ministerial Meeting all the success.
And I thank you.
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Income inequality trends in sub-Saharan Africa: Divergence, determinants and consequences
Opening remarks by Abdoulaye Mar Dieye, UNDP Assistant Administrator and Regional Director for Africa, at the inaugural launch of the UNDP study on “Income inequality trends in sub-Saharan Africa: Divergence, Determinants and Consequences”
I am pleased that we are having this launch at the margin of our ministerial meeting, as TICAD has, since its inception, always put at the heart of its agenda, the reduction of inequalities as sine qua none conditions for peace and development.
As development practitioners, we have all seen how inequality is frustratingly putting a break on development and how it dangerously fuels exclusion, insecurity, instability, and at the moment, violent extremism.
Nelson Mandela was right when he said that “massive poverty and obscene inequality are such terrible scourges of our times... that they have to rank alongside slavery and apartheid as social evils.”
Hence, if we don’t radically address this disease of our modern civilization, all our efforts to move forward the Universal Agenda 2030, Africa’s Agenda 2063, and the various national development strategies, maybe in vain.
This is what prompted us, in UNDP, to further revisit this very critical issue, which has been certainly widely studied in the literature, but not investigated with enough empirical depth and statistical refinement to guide effective policy making.
In this regard, the book we are launching today, being the first comprehensive income inequality study on Africa, systematically explores income inequality and draws lessons to reduce income inequality in Africa. To accomplish this objective, the book presents an Integrated Inequality Dataset for Sub-Saharan Africa, an innovation that helps overcome persistent problems of scarcity and inconsistency of data on income inequality.
The book also helps to crystalize the indivisibility of the SDGs and the centrality of low income inequality in accelerating the achievement of the 2030 Agenda for Sustainable Development and in helping operationalize the implementation of SDG 10 in Africa.
In spite of economic progress achieved over the past one and a half decades, with GDP growing at approximately annual average of about 5.0 percent, poverty remains very high in Africa – 41 percent compared to other developing regions – 3.54 percent for East Asia and the pacific and 5.4 per cent for Latin America and the Caribbean. The high level of inequality weakens the poverty-reducing power of economic growth in the continent. Although the average unweighted Gini for Sub-Saharan Africa declined from about 0.47 to 0.43 between 1991 and 2011, Sub-Saharan Africa remains one of the most unequal regions in the world – with, of the 19 most unequal countries in the world, 10 residing in Africa.
This book explores the dynamics and complexities of income inequality and offer solutions around the following five key messages.
First, seven outlier countries (South Africa, Botswana, Namibia, Zambia, Central African Republic, Comoros and Lesotho) drive income inequality in Africa, making the continent’s Gini significantly higher than the global average.
Second, the determinants of income inequality in SSA are multi-dimensional and complex. The basic structural drivers of inequality in the continent can be divided into three groups: (i) the highly dualistic economic structure, where high income sectors, such as multinational companies and the extractive sector, offer limited capacity to generate employment compared to the informal sector, where the majority of workers earn far lower incomes; (ii) the high concentration of physical capital, human capital, and land, especially in the economies of Eastern and Southern Africa, as well as in specific groups and regions; and (iii) the limited distributive capacity of the state, which often manifests in a ‘natural resource curse’, an urban bias of public policy, and ethnic and gender inequalities.
Third, there is no single, ‘silver bullet' to decreasing income inequality – multiple actions are required. This book establishes the policy actions to accelerate a reduction in income inequality: (i) Improving distribution of human capital (particularly secondary education), which positively affects inequality, therefore encouraging state authorities to increase the supply of secondary education to build a fairer society; (ii) Increasing direct taxation and efficiency of tax administration, as well as increasing well-targeted social expenditures, all of which reduce inequality; (iii) Enhancing productivity in the agricultural sector, which is important to reallocating labour to other sectors of the economy and helps to reduce rural poverty, rural poverty gaps, and income inequality; and (iv) Implementing structural transformation, which is path-dependent. A country’s current productive capabilities embodied in its export structure influences the extent to which a country can shift production toward increasing manufacturing activity.
Fourth, this book brings to the fore an important policy lesson to policymakers: Policies that reduce poverty are not necessarily the same as those that reduce income inequality. For instance, quality education and enhanced productivity help accelerate reduction in poverty, but can raise income inequality – if not accompanied by a progressive tax system and effective social protection programmes.
Finally, this book offers policies that could help plant and nurture the TREE of EQUITY in Africa by suggesting four strategic approaches to reducing income inequality: 1) making growth inclusive and pro-equity; 2) enhancing the inequality-reducing power of the population dynamics; 3) accelerating equity through quality investment in human development; and 4) building supportive macroeconomic and institutional environments. The various policy actions for advancing equity are addressed during the presentation of the book.
In conclusion; I want to quote President Franklin Delano Roosevelt’s conclusion on the role of the State in addressing inequality:
“The test of our progress is not whether we add more to the abundance of those who have much; it is whether we provide enough for those who have too little.”
In this regard, both states and markets have distinct roles to play in accelerating equity in Africa. In the process of generating prosperity through the market, hard-to-reach communities, excluded groups, and marginalized individuals do not benefit from this growth. Therefore, the State has an unequivocal role to play in ensuring that these excluded groups benefit from development by expanding and targeting equalizing social protection mechanisms and promoting progressive taxation. These tools are powerful to achieve Roosevelt’s ambition to provide enough to those who have too little and the global agenda of leaving no one behind by 2030.
We trust this report will infuse added and effective dynamism and inspiration in inequality reduction policies in Africa.
Thank you.
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Profiled trade and integration events:
(i) Today, in Maputo: South Africa-Mozambique Bi-national Commission. The South African government’s proposal to lead regional efforts to harness natural gas resources to boost industrialisation will top the agenda during the South Africa-Mozambique Bi-national Commission which gets underway at the Mozambican capital Maputo this morning. President Jacob Zuma and his host Filipe Jacinto Nyusi will co-chair the high level ministerial meeting, which will review the state of bilateral trade and investment between the two neighbouring countries. SA-Mozambique trade: “Trade figures between the two countries in 2016 indicated that South African exports to Mozambique were valued at R33bn, whereas imports from Mozambique amounted to R10bn. There are currently approximately 300 South African companies operating in Mozambique in areas inclusive of the financial services sector, energy, hospitality and retail sectors.”
(ii) Today, in Arusha: Sectoral Council of Ministers responsible for EAC Affairs and Planning. The meeting is considering several reports including; the status of implementation of Previous Decisions of the SCMEACP; implementation of the EAC Common Market Protocol; Summit directive to appoint a team of experts to draft the constitution of EAC Political Confederation; EAC-COMESA-SADC tripartite arrangement and report of Chiefs of Immigration. The meeting will also consider progress reports on the elimination of non-tariff barriers; preparations of the 5th EAC Development Strategy (2016/17 - 2020/21); technical working groups information resource centers; EAC Secretariat Quality Management System; integration of the Republic of South Sudan into the Community; Partner States’ budgetary contribution for the financial year 2017/2018 to the EAC; and consolidation of the EAC calendar of activities for the period July - December 2017, among others.
(iii) Starting Monday, in Nairobi: Forum on Horn of Africa States’ accessions to WTO. Foreign Affairs Cabinet Secretary, Amina Mohamed, said the conference (28-30 August) will build on previous initiatives aimed at facilitating Horn of Africa countries to become part of the multilateral trading regime. “The regional dialogue meeting has been convened for four African countries from the greater horn of Africa region that are in the process of acceding to WTO,” said Mohamed. The target countries include Union of Comoros, Ethiopia, Somalia and Sudan. South Sudan which has expressed interest to join WTO will also participate, she added. The foreign minister revealed that China, Liberia, Oman, Yemen and Seychelles have also been invited to attend the regional forum. “Their participation is significant as they are expected to share their accession experiences,” said Mohamed, adding that representatives of multilateral institutions and regional trade blocs will also be in attendance.
(iv) India-Rwanda Innovation Growth Programme: update (pdf). The Federation of Indian Chambers of Commerce and Industry is leading a 25 companies strong Indian trade and technology business delegation to Kigali (22–25 August), which also includes the Council of Scientific and Industrial Research. The delegation will also participate in an India-Rwanda Business Forum, B2B meetings, interactions with senior government officials and industry visits. The visit continues to strengthen the bilateral relationship between the two nations with a focus on the key pillars of science, technology, innovation and entrepreneurship.
Kenya: Port of Mombasa records shorter ship average working time (Kenya Ports Authority)
Container ship average working time at the port of Mombasa improved by half a day to record 1.93 days in the week ended August 16th. The previous week saw this period which is basically between the first and last slings register 2.55 days. While this happened, the container dwell time at the port recorded 4.35 days down from 4.85 days experienced in the previous week. During the week under review, 10,438 TEUs were delivered out of the port through road transport marking an increase of 1,567 TEUs or 17.66 percent compared to the previous week. Deliveries by rail plummeted to 109 TEUs down by 48%.
The performance by other transit countries indicates that Tanzania bound cargo accounted for 336 TEUs. The upward trend for the Tanzania bound is arguably bound to continue following the completion of the upgrading of the road from Voi to Taveta by the Government. It is argued that this development has seen increased number of shippers in northern Tanzania prefer routing their consignments through the northern corridor. Other transit destinations were South Sudan which accounted for 302 TEUs, followed by the DRC with 268 TEUs, Rwanda with 260 TEUs, Somalia with 51 TEUs while Burundi and Ethiopia stagnated at 11 TEUs and 08 TEUs respectively.
Tanzania: Freight forwarders concerned by inspection on transit cargo (Daily News)
Tanzania Freight Forwarders Association has raised concern over Fair Competition Commission inspection of transit cargo, claiming that it makes Dar es Salaam uncompetitive. TAFFA Secretary General, Tony Swai told the ‘Daily News’ yesterday that FCC has been seizing some cargo on grounds that they do not meet standards of the destined countries. “This is becoming a big challenge since traders who import cargo through Dar port are likely to opt for another port in the region.” When reached for comments on the matter, Deputy Minister for Works, Transport and Communications, Eng. Edwin Ngonyani, said inspection of raw materials by the Chief government chemist cannot lead to the drop of cargo volume at the main port. He said what is said to be the major causes are fees that are collected by various government institutions. According to Eng. Ngonyani, his office will discuss the matter by involving the Parliament with the purpose of resolving the challenges.
Botswana: High diamond exports extend trade surplus in May 2017 (pdf, Statistics Botswana)
Botswana recorded a trade surplus of P1, 134.5 million in May 2017. The trade surplus was influenced by the high value of diamond exports while imports of the same commodity recorded a low value. Total exports for May 2017 were valued at P5, 381.7 million, with 92.7% (P4, 990.7 million) attributed to exports of diamonds. During May, exports destined to Asia were valued at P3, 262.9 million, representing 60.6% of total exports. India and the UAE received exports representing 17.7% (P950.9 million) and 16.9% (P911.8 million) respectively. Singapore, Israel and Hong Kong followed with 10.0%, 9.5%, and 4.8%, respectively, of total exports.
Exports destined to the SACU region were valued at P558.9 million, representing 10.4% of total exports (P5, 381.7 million) for the month. Namibia and South Africa received exports accounting for 5.3% and 5.0% respectively, of total exports during the same period. The major commodity exported to Namibia was diamonds, representing 91.2% (P261.7 million) of total exports to the country. SACU was the major source of imports into Botswana during May 2017, accounting for 84.6% (P3, 594.0 million) of total imports. South Africa was the main source of imports during the month, having contributed 64.5% (P2, 739.1 million) to total imports. Namibia contributed 19.8% (P843.0 million) to total imports during the month under review. [Botswana: Revised March 2017 figures, pdf]
Ghana 2016 country profile (UNECA)
Ghana and trade integration: extract from Box 1 – Africa regional integration index (pdf). Trade integration: good score (fourth in ECOWAS, twelfth in CEN-SAD). Ghana has an average applied tariff of around 4.8% on imports from ECOWAS (based on data for 2014). This is the eighth-highest in the bloc. The country’s average applied tariff on imports from CEN-SAD is 16.5%. Trade (as a share of GDP) with the rest of the regional economic community is mixed. The share held by Ghana of total trade in the bloc is 9.2% (based on data for 2015); this is the second highest in the bloc after Nigeria (76.0%). Over the period 2010 to 2013, imports from the rest of ECOWAS accounted for only 5.4% of GDP, which was the seventh lowest equivalent statistic for any other ECOWAS member country. Imports from the rest of CEN-SAD accounted for 6.0%, the ninth-highest level among 24 countries for which data were available. Ghana exports to ECOWAS countries as a share of GDP averaged 2.4% over the same period, the sixth-highest level among ECOWAS member countries. Over the same period, exports to CEN-SAD countries averaged around 3.0% of GDP, which was the eighth-highest level among the 24 CEN-SAD member countries.
Productive integration: good score (third in ECOWAS, eighth in CEN-SAD). The integration of Ghana into regional value chains appears to be mixed. Its trade is moderately complementary with that of its partners. It has a merchandise complementarity index of 0.15 (based on data from 2013). Its share of intermediates in terms of imports from the regional economic communities was 0.02%. The share of intermediates in terms of total exports within the region averaged 0.46 per cent, the fourth-highest level among ECOWAS member countries, while 0.08% of the country’s imports from CEN-SAD were intermediates (meaning that it ranked thirteenth out of 14 countries for which data were available).
IGAD starts national consultations on IGAD protocol on free movement of persons
The three-day workshop was aimed at getting inputs from national stakeholders and experts on benefits and barriers to free movement of persons; deriving national recommendations towards the provisions of the Protocol and developing a road map for the negotiation and adoption of the Protocol in the IGAD Region. The Protocol on Free Movement of Persons is aimed at promoting the regularization of the high volume of informal movement that currently takes place in the IGAD region, and is to increase the opportunities for legal mobility.
New industrial policy and the extractive industries (UNU-WIDER)
The paper takes a two-step approach. First, section 2 sets out the case for intervening in markets and applying industrial policy more generally. It highlights several themes and argues that the consensus on new industrial policy is, at best, very high level. Section 3 then discusses the nexus between the extractive industries and industrial policy over time and where it has got to in terms of the extractives-led development agenda. Section 4 sets out four forward-looking observations on new industrial policy and extractive industries. Section 5 concludes. [The author: Evelyn Dietsche]
India should avoid abuse of trade remedy measures: China’s MOC (ecns)
A spokesperson for China’s Ministry of Commerce said Thursday that India should follow WTO rules and avoid abusing trade remedy measures. “India has always been an active user of anti-dumping measures as a member of the WTO,” spokesperson Gao Feng said at a press conference. Since 1994, India has launched 212 anti-dumping investigations against Chinese products, with 13 investigations launched this year. The country currently has 93 anti-dumping measures against China, according to Gao. “China is highly concerned with India’s trend of frequent investigations and asks India to use trade remedy measures in a prudent and restrained manner,” Gao said.
Fishery exports and Least Developed Countries (UNCTAD)
A new UNCTAD study examines the development potential of the fishery sector in selected Least Developed Countries in Africa and Asia, providing policy recommendations to overcome challenges on both the supply and demand sides. The fisheries sector is also a viable alternative to manufacturing as a source of export-led growth. Developing countries as a whole have substantially increased their share in world fishery exports, from 34.6% in 1981 to 50.2% in 2013. However, despite their ample fish stocks, not many LDCs have been able to follow suit, and their share in global fish exports has only risen marginally, from 1.6 to 3.5% in the same period. The work of UNCTAD reveals that the fishery sector in LDCs remains predominantly traditional or artisanal. In its research, UNCTAD presents case studies of six of the world’s 47 LDCs (Bangladesh, Cambodia, the Comoros , Mozambique, Myanmar and Uganda) and identifies a series of supply-side and demand-side challenges undermining the role of their fishery sectors.
Fishing to live: Time for action to support and protect small-scale fisheries (FAO)
The small-scale fisheries guidelines: global implementation offers more than 30 case studies ranging from Greenland to Zanzibar and addressing diverse issues including gender and sustainable resource use. It serves as an initial report on progress in implementing the Voluntary Guidelines for Securing Sustainable Small Scale Fisheries in the Context of Food Security and Poverty Eradication, endorsed in 2014 with the aim of bolstering the livelihoods of the 100 million+ people who work in the sector and increase their contribution to global food security and nutrition.
Today’s Quick Links: In the dark: Bringing transparency to Canadian supply chains (pdf) World Economic Forum: A pragmatic assessment of disruptive potential in financial services Financial Services Mauritius rated as an OECD compliant jurisdiction Rwanda: Pour une intégration du Forum National de l’Agroprocessing dans le Conseil des Exportations |
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Fishery exports and Least Developed Countries
A new UNCTAD study examines the development potential of the fishery sector in selected Least Developed Countries in Africa and Asia, providing policy recommendations to overcome challenges on both the supply and demand sides.
Fish is one of the world’s most traded food commodities and, with the global population growing to an expected 9.7 billion people by 2050, demand for it fish also expected to increase. That offers valuable trade opportunities. In addition to human consumption, industrial need for fishery resources is projected to rise in the coming decades due to growing demand for fish oil and animal feed.
Wild catch alone will not sustain the increase in demand for fish. There should be deliberate actions by Least Developed Countries (LDCs) to enhance aquaculture development so as to meet the increase.
The UNCTAD study documents that, over the last three decades, global aquaculture production has tripled, growing at an average annual rate of 8.3 per cent. In 2014, aquaculture constituted 46 per cent of world fish production compared to 26 per cent in 1994.
Fishing, both coastal and inland, holds significant potential for socioeconomic development for a number of LDCs. Many have comparative advantages in fishery resources due to a combination of low-cost labour and waters rich in highly-prized varieties of fish.
The social, economic and environmental benefits of the fishery sector are substantial. In addition to creating employment and increasing foreign exchange earnings, fishing provides a major source of protein in many LDCs and is important for improving food security. The study urges governments and stakeholders in LDCs to view the fishery sector as a key driver in enabling the countries to meet the Sustainable Development Goals (SDGs).
The fisheries sector is also a viable alternative to manufacturing as a source of export-led growth. Developing countries as a whole have substantially increased their share in world fishery exports, from 34.6 per cent in 1981 to 50.2 per cent in 2013. However, despite their ample fish stocks, not many LDCs have been able to follow suit, and their share in global fish exports has only risen marginally, from 1.6 to 3.5 per cent in the same period. The work of UNCTAD reveals that the fishery sector in LDCs remains predominantly traditional or artisanal.
In its research, UNCTAD presents case studies of six of the world’s 47 LDCs – Bangladesh, Cambodia, the Comoros, Mozambique, Myanmar and Uganda – and identifies a series of supply-side and demand-side challenges undermining the role of their fishery sectors.
On the supply side, the main challenges are deficient transportation and storage facilities; poor energy infrastructure and high electricity costs; a lack of investment, finance or credit for small operators; overfishing and depletion of fish resources; water pollution; and a lack of common fishery policies among countries that share water resources.
On the demand side, LDC fish products face few or no tariff barriers in developed country markets. However, the biggest non-tariff trade barrier for producers and processors from LDCs are the stringent quality and safety standards systems imposed on fish products in major overseas markets, instituted in the 1990s and 2000s.
The study argues that stringent public safety norms are often compounded by further cumbersome private quality and safety standards. The confluences of public and private standards have effectively restricted access to major importing markets for many LDC fishery exporters.
This is mainly due to the fact that standards are not harmonized and are costly for LDCs to meet. It is also due to structural problems in LDCs, including in processing facilities and procurement methods, as well as a lack of testing and certification of products throughout the value chain.
The study provides policy conclusions and recommendations aimed at helping LDCs to realize the full development potential of their fisheries sectors, including the provision of infrastructure, the improvement of regulatory and institutional capacities, monitoring and regulation of domestic fishing, and the harmonization of international standards.
This publication is the result of the implementation of the Development Account Project titled: “Building the capacities of selected LDCs to upgrade and diversify their fish exports”. The project has been implemented in Cambodia, Comoros, Mozambique, Myanmar and Uganda.
The project was implemented by a team consisting of Mussie Delelegn and Benjamin McCarthy, under the overall supervision of Taffere Tesfachew and Guillermo Valles and of Paul Akiwumi, Director: Division for Africa, LDCs and Special Programmes, UNCTAD. Patrick Osakwe, Head: Trade and Poverty Branch, UNCTAD, provided guidance on the overall implementation of the project.
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Today’s trade policy tweets:
(i) Nigeria’s chief trade negotiator, Ambassador Chiedu Osakwe, @ChieduOsakwe1: Tough negotiations at the CFTA, but the gains when concluded will be innumerable
(ii) Southern Africa Trade and Investment Hub, @SATrade_Invest: AGOA strategy in Botswana set for launch in Sept, Malawi and Zambia strategies on the same track for launch - US Amb Earl Miller
(iii) Charlie Robertson, @RencapMan: Across Africa only Mauritius and Botswana still have only investment grade sovereign debt ratings [Related: Bloomberg analysis]
SADC trade protocol: SADC gives Tanzania three years to boost local sugar production (Daily News)
SADC member states have granted Tanzania a three-year grace period to tax sugar imports from SADC states. Mr Mwijage said the country has been seeking the regional bloc’s approval to impose 25% import tax on sugar from SADC states, against the protocol’s provisions. As a SADC member, the country is supposed to allow products from its co-members to enter the domestic market tax-free. “We have been asking SADC members to allow us to tax the imported sugar because in industrialisation agenda if we allow exempted sugar, our local industries will not grow,” he clarified. The current annual demand of sugar stands at between 600,000 and 700,000 against the country’s production capacity of 302,000 tonnes. Tanzania therefore has been importing sugar from SADC countries to bridge the deficit. The minister was optimistic that within the given three years, the country will boost production because there is arable land for cultivation of sugarcane to produce two million tonnes.
Uganda: Support BUBU policy, trade minister tells Central Bank (Daily Monitor)
Trade Minister Amelia Kyambadde has asked Bank of Uganda Governor Emmanuel Mutebile to support some government policies such as ‘Buy Uganda Build Uganda’. Ms Kyambadde said: “I am a bit disappointed - I think you need to interest yourselves with some of the policies by government. I would like the Governor to revise this issue. BoU is supposed to be the champion of the economy and support us.” Ms Kyambadde was responding to the Governor’s speech (pdf) read for him by deputy director research David Sajjabi, in which he, for the second time, criticised the BUBU policy saying it will jeopardise Uganda’s export trade with her neighbouring states in the EAC. “What you should know is that all other partner states have restrictive public procurement policies that restrict local content globally. Even if you’re the best you will not wake up and compete,” she explained.
Luke Patey: Whatever happened to East Africa’s oil boom? (African Arguments)
Over a decade on from the initial discoveries, East Africa’s oil is still yet to deliver on its promises. There have been many factors behind the delays, but many have been caused by domestic and regional politics, both of which will continue to be central in determining the success of new growth opportunities.
Kenya lifts poultry ban for 3 large Ugandan export firms (Daily Nation)
Kenya has partially lifted the ban on the products from the neighbouring country after an eight-month embargo that saw chicken and eggs locked out of the Sh500m market following the outbreak of avian influenza disease. The move, which will be strictly monitored by authorities for safety purposes, will see three firms approved by the Ministry of Agriculture - having met the required safety conditions - export the products. The three are Hudani Manji Holdings-Rainbow - a wholesale and retail supplier in Uganda, South Sudan, Congo, and Rwanda - SR Afrochick and Kukuchic.
Malawi’s sugar exports to United States increase (Nyasa Times)
US Ambassador to Malawi, Virginia Palmer, has announced that Malawi’s country-specific allocation of the tariff-rate quota for raw cane sugar imports to the US has increased by 45% in fiscal year 2017. Sugar is Malawi’s third largest export to the US, following tobacco and tea. Other significant exports include coffee, macadamia nuts, and apparel. Since 2013, sugar exports from Malawi to the US have more than tripled, accounting for 14% of Malawi’s total exports to the United States. Malawi exported $75.6m worth of goods to the US in 2016, while it imported $46.6m from the US.
Mozambique: Government introduces new border policy (Club of Mozambique)
The government yesterday approved a resolution establishing the basic principles for the integrated management of Mozambique’s terrestrial, marine and aerial borders. The new border policy, the implementation of which instrument will require changes in the coordination scheme between the different institutions currently engaged in border management, was approved by the 29th ordinary session of the Council of Ministers. According to Ana Comoana, spokeswoman for the session, the document is aimed at fine-tuning integrated inter-sectoral border management and strengthening the defence of national sovereignty.
Kenya and Ghana: models of intra-Africa trade (Graphic)
In my opinion, what is required to make intra-Africa trade a reality is a deliberate action by private sector players that seek to ensure these bi-lateral agreements do not remain documents collecting dust in our embassies government offices. The Biennial Kenya Trade Expo, Ghana, has taken the initiative to fast-track the benefits of these agreements by giving businessmen on both sides of the Rift Valley a platform to explore opportunities in each country. The forthcoming Kenya Trade Expo in Ghana, in November 2017 will, therefore, go a long way to enhance bilateral trade ties between both countries, offering participants an opportunity to promote their businesses to the right target audience in Ghana and Kenya. They will be able to better understand business treaties, policies and procedures, while stimulating intra-African conversations around joint ventures and partnerships for economic prosperity. [The author, Leah Nduati Lee, is the co-founder of the Kenya Trade Expo Ghana], [Botswana-Kenya: Businesses urged to utilise trade agreements]
Ghana, Equatorial Guinea must help make AU regional market - Akufo-Addo (Graphic)
President Nana Addo Dankwa Akufo-Addo has underscored the need for Ghana and Equatorial Guinea to be at the forefront in the process that will convert the AU into a true continental market. President Akufo-Addo said he was hopeful that his visit to Malabo would restart the formal sessions of the Permanent Joint Commission of Co-operation between the two countries, since the last meeting was held in Accra in 2010. He said he was keen to revive the air services agreement and re-establish direct flights between Accra and Malabo. His government, he added, had also committed itself to expanding the Tema Port into a trans-shipment hub to improve sea trade within Africa.
Nigeria: Capital importation during Q2 2017 (Bureau of Statistics)
The total value of capital imported into Nigeria in the second quarter of 2017 was estimated to be $1,792.3 million. This figure was $884.1m more than the figure recorded in q1 2017, a growth of 95.02%. Year on year, this was an increase of 43.6% from the $1,042.2 million recorded in q2 of 2016. A month-on-month analysis of capital importation in the second quarter shows that the month of May recorded the highest of amount of capital importation ($616.5m), followed by June ($612.6m) and May ($563.3m). The main driver of the quarterly growth in capital importation in the second quarter was Portfolio Investments, which increased by 145.7%, followed by Other Investments, which grew by 95.02%, and then Foreign Direct Investment, which increased by 29.8% over the previous quarter.
Poverty trends in South Africa (StatsSA)
According to new data released by Stats SA, poverty is on the rise in South Africa. The latest Poverty trends in South Africa report (pdf) shows that, despite the general decline in poverty between 2006 and 2011, poverty levels in South Africa rose in 2015. More than half of South Africans were poor in 2015, with the poverty headcount increasing to 55,5% from a series low of 53,2% in 2011. The figures are calculated using the upper-bound poverty line of R992 per person per month in 2015 prices. This translates into over 30,4 million South Africans living in poverty in 2015.
Power Africa Annual Report: Fourth year in review
Since its inception, Power Africa has facilitated the financial close of 80 power transactions valued at more than $14.5 billion, and expected to generate more than 7,200 MW of power in sub-Saharan Africa. In addition, Power Africa has facilitated more than 10 million electrical connections, bringing electricity to more than 50 million people. The report also highlights the role of women in Africa’s power sector, chronicling the contributions of select members of Power Africa’s Women in African Power network.
Tanzania: Jica support hits Sh75 trillion in five years (The Citizen)
In the last five years, Japan’s assistance to Tanzania through the Japan International Cooperation has reached a total of Sh74.93 trillion. This was revealed as the minister for Finance and Planning, Dr Philip Mpango, held talks with the agency’s president Shinichi Kitaoka. The cash substantially includes a 76.0% subsidy, concessional loans of 3.8% and 20.1% technical support. Dr Mpango asked the Jica president to increase funding in the projects on electricity, infrastructure, health, agriculture and fisheries so as to help support the pace of the government in pushing for an industry-driven economy.
India agrees to discuss its investment policy in BRICS (Economic Times)
In a move to boost investment in the BRICS bloc, New Delhi has agreed to discuss issues in investment policymaking. This marks an important shift in the country’s stand, say experts. The issues of easing investment guidelines and bringing transparency in investment policy fall in the ambit of investment facilitation, which India has always said to be a matter of domestic policy. The decision was made earlier this month at the seventh meeting of BRICS trade ministers in Shanghai, where the bloc adopted ‘Outlines for BRICS investment facilitation’. India’s move to open up in this area is important because Russia, Brazil and China have already made separate proposals in the WTO for easing investment rules. “The terms of the agreement are on a best endeavour basis. It is nonbinding and voluntary,” the official said.
7th meeting of BRICS Trade Ministers: download the six annexes to the joint statement [Terms of reference of BRICS Model E-Port Network; Outlines for BRICS investment facilitation; BRICS trade in services cooperation roadmap; BRICS e-commerce cooperation initiative; BRICS IPR cooperation guidelines; Framework on strengthening the economic and technical cooperation for BRICS countries]
Today’s Quick Links: Trade finance: Afreximbank’s touts depositary receipts to Nigerian investors Inaugural Polish-Nigeria Business and Investment Summit (25-26 September, Poznan) Tanzania: Local goods Achilles’ heel - poor packaging Kenya: S&P says increasing debt is largest threat to Kenyan economy Kenya: Poll feud, drought to hurt growth, say global analysts Rwanda: Police to enforce ban on street vending Ghana: GUTA denies threatening to take over Nigerian businesses Ghana: Paperless port processes to be rolled out in September |
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Fishing to live: Time for action to support and protect small-scale fisheries
New study maps the policy dilemmas affecting those who provide most of the fish we eat
Two-thirds of the caught fish that humans eat are taken by small-scale fishers, many using canoes carved from logs or stationary beach seine nets such as the rampani that dot India’s eastern coast.
Far from being relics of a bygone age, small-scale fisheries technologies and practices are usually well adapted to the ecological and social circumstances within which they operate. Yet small-scale fisheries often struggle to compete due to regulatory frameworks that tend to ignore them or that are tailored to the concerns of large commercial fleets, according to a new book published by FAO.
The Small-Scale Fisheries Guidelines: Global Implementation offers more than 30 case studies ranging from Greenland to Zanzibar and addressing diverse issues including gender and sustainable resource use.
It serves as an initial report on progress in implementing the Voluntary Guidelines for Securing Sustainable Small Scale Fisheries in the Context of Food Security and Poverty Eradication, endorsed in 2014 with the aim of bolstering the livelihoods of the 100 million+ people who work in the sector and increase their contribution to global food security and nutrition.
“Now it’s time for policymakers to take concrete action – ranging from legislation, technical capacity development and especially engagement with the fishing communities themselves – to make sure the guidelines are implemented,” says Nicole Franz, FAO’s lead officer on sustainable small-scale fishery issues.
Policy coherence – pursued through inter-ministerial collaboration on trade, environment, tourism as well as social and economic development issues – must be the keystone for protecting the rights and livelihoods of the often poor and marginalized people engaged in the world’s small-scale fisheries, she says.
“It’s going to be a long and windy path, but there are many entry points, so yes, we can do it,” Franz adds.
Ways of life and viable skills
One key issue for small-scale fisheries is tenure rights, which, the guidelines stress must be designed from a broad human rights perspective that takes into account the local complexities of small-scale fisheries.
For example, in the Solomon Islands, tenure rules are based on customary principles, restricting the right to fish only to locals and strictly defining how they do it and even requiring that catches not be sold but used only for household consumption, barter or ceremonial purposes. These customs can put non-indigenous fishers at a disadvantage.
Environmental protection
An emerging challenge is how to ensure continued access by small-scale fisherfolk to marine protected areas, where in some cases all fishing is prohibited. The trade-offs between conserving marine resources on the one hand and protecting the livelihoods and food security of vulnerable communities on the other need to be carefully considered.
Costa Rica, a leader in creating biodiversity protection zones, is with FAO’s help implementing the SSF Guidelines using a novel approach that actively engages small-scale fishers – many of whom are fairly recent and poor migrants from the countryside – as partners in dialogue in a bid to allow them to use more marine resources in a sustainable way.
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Launch of the 2016 Country Profile for Ghana: Improving energy supply to drive growth in the country
The Ghanaian Government, in collaboration with the United Nations Economic Commission for Africa’s (ECA) Sub-Regional Office for West Africa, launched the 2016 Country Profile for Ghana on 21 August 2017 in Accra.
The purpose of this initiative is to provide analyses and recommendations specific to Ghana following its drive towards structural transformation that will foster significant growth and sustainable social development, including its performance in areas such as regional integration and the fight against social exclusion.
According to this Country Profile, Ghana has, since 2013, been grappling with a severe energy crisis, which has brought about profound dismay within the population and paralysed the economy. The Country Profile holds that “Since December 2014, the situation of power cuts resulting from load-shedding has gone worst. Serious problems relating to the availability of quality electricity have dampened the economic prospects of the Country”.
Based on the 2014 study conducted by the Institute of Statistical, Social and Economic Research, Ghana loses, on average, some 2.1 million dollars per day (that is, 55.8 million dollars per month) in production because of the energy crisis alone. This figure is said to have stood at some 680 million dollars in 2014, that is, 2% of the GDP. Production and sales made by companies that did not have sufficient access to electricity ranged between 37% and 48% below the annual base.
According to Mr. Dimitri Sanga, Director of ECA’s Sub-Regional Office for West Africa, “Ghana in its quest to stimulate its socio-economic development, has just passed a reform, through a ten-point agenda, aimed at transforming the industrial sector, this August 14, 2017. Boosting production, transportation and the distribution of electricity in Ghana should greatly contribute towards implementing this reform geared at creating jobs and prosperity for all Ghanaians.”
The analysis contained in this Country Profile has shown that the economy of Ghana is strongly reliant on a per capita electricity consumption. The load-shedding experienced in recent years, caused by an inadequate supply of electricity, thus, has a negative impact on the Ghanaian economy. It also impedes Ghana’s economic recovery which is underpinned by lower production levels, high inflation, growing unemployment rates and lower living standards.
Consequently, the 2016 Country Profile for Ghana recommends the implementation of concrete policies within the electricity sector to boost economic recovery. These policies should mainly raise awareness among the population on how to better use electricity, run programs such as the prepaid meter system, invest in the electricity sector and develop renewable energy.
Background
ECA is one of the five regional commissions of the United Nations Economic and Social Council (ECOSOC). Its Office for West Africa aims to support the development of 15 countries across the sub region (Benin, Burkina Faso, Cabo Verde, Côte d’Ivoire, the Gambia, Ghana, Guinea, Guinea-Bissau, Liberia, Mali, Niger, Nigeria, Senegal, Sierra Leone and Togo) by helping them formulate and implement policies and programs that support their economic and social transformation.
The ECA Country Profiles were designed in 2015 in accordance with Resolution 917 of the Conference of African Ministers of Finance, Planning and Economic Development (Abuja, 2014). Their aim is to provide African decision-makers with an independent analysis of their countries’ economic and social development and the progress made to achieve regional integration. Each Country Profile is based on data provided by member States and complement ongoing ECA efforts to improve the collection of statistical data in Africa.
The Country Profiles include various innovations such as the African Regional Integration Index, co-designed by the Economic Commission for Africa (ECA), the African Development Bank (AfDB) and the African Union Commission (AUC), based on the five pillars of regional integration (trade, infrastructure, production, free movement of people, and financial and macroeconomic integration).
Follow the link to find out more about the 2016 Country Profiles.
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Power Africa Annual Report: Fourth Year in Review
Now in its fourth year, Power Africa is laying the foundation for sustainable economic growth in Africa while creating opportunities for American businesses as it makes progress towards its goal of increasing installed generation capacity by 30,000 megawatts (MW) and adding 60 million new electricity connections by 2030.
Since its inception, Power Africa has facilitated the financial close of 80 power transactions valued at more than $14.5 billion, and expected to generate more than 7,200 MW of power in sub-Saharan Africa. In addition, Power Africa has facilitated more than 10 million electrical connections, bringing electricity to more than 50 million people.
The report also highlights the role of women in Africa’s power sector, chronicling the contributions of select members of Power Africa’s Women in African Power (WiAP) network. It includes an executive letter from the Honorable Irene Muloni, Minister for Energy and Minerals in Uganda, as well as profiles of women strengthening Africa’s power sector.
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Power Africa Annual Report: Third Year in Review - September 2016
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Power Africa Annual Report: Second Year in Review - July 2015
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Power Africa Annual Report - July 2014
Progress towards Power Africa’s 2020 and 2030 Goals
In June 2013, Power Africa launched with the goal of doubling access to electricity in sub-Saharan Africa by increasing installed generation capacity by 30,000 megawatts (MW) while adding 60 million new household and business connections by 2030.
In February 2016, the U.S. Congress passed the Electrify Africa Act of 2015, which charges Power Africa with increasing installed generation capacity by 20,000 MW, while adding first-time energy access for 50 million beneficiaries by 2020 – an effort that directly supports and complements Power Africa’s original goal.
Power Africa has Supported Private Sector
Companies and Utilities in Connecting a Total of 10.6 million Homes and Businesses
Power Africa has made significant progress toward its connections goals. Sales of off-grid system sales are increasing as companies scale in more established markets, enter new markets, and expand product offerings to meet customer demand.
Power Africa assists these companies by refining and strengthening marketing and retail strategies, developing new partnerships with distribution and retail entities, analyzing project data to optimize operations, and providing business, network and distribution intelligence. Power Africa also supports larger-scale energy solutions by advancing micro-grid standards, piloting new micro-grid business models, and supporting expansion of and planning by utilities. Power Africa expects to see increased connections from these efforts in the coming years.
To date, Power Africa has supported private-sector companies and utilities in connecting a total of 10.6 million homes and businesses to power solutions – that is approximately 53 million people who have gained access to electricity since 2013. While Power Africa is proud of this achievement, our job is far from over. Approximately two-thirds of these connections are from solar lanterns, which provide basic access to a single light and mobile phone charging. For many households – particularly in remote and low income areas – gaining access to this kind of system represents a critical first step and results in dramatic livelihood improvements. However, larger systems – including solar home systems, micro-grids, and central grids – are required to provide people with the power they need to run major appliances and create businesses. To date, Power Africa has connected more than two million households and businesses to such solutions, which has provided more than 10 million people with higher levels of energy service.
U.S. Businesses and U.S. Investment
Power Africa is delivering results for American firms. Applying U.S. Government resources in support of U.S. business growth in Africa; Power Africa has a hand in developing multi-million and billion dollar projects that are producing returns for U.S. investors, and supporting job growth at home.
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80 Power Africa transactions valued at more than $14.5 billion are now either online, under construction, or have reached final close, and 26 of these deals currently involve the U.S. private sector.
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Power Africa transactions and energy-sector projects in sub-Saharan Africa that are at or near completion are projected to include more than $500 million in U.S. exports.
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Power Africa’s pipeline includes more than 100 additional transactions and projects involving the U.S. private sector that are projected to support approximately $7 billion in export opportunities.
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U.S. Private-sector partners: 64 partners across 22 states. Additionally, the U.S. supply chain for Power Africa projects includes another 60 U.S. companies and growing which has extended Power Africa’s domestic network to 33 states.
Connecting U.S. Businesses to African Markets
Through USTDA, Power Africa offers critical support to small and medium-sized U.S. companies that are new to the African market. Our boots-on-the-ground approach provides expanded market intelligence, opens relationships with African stakeholders, and helps develop new opportunities for U.S. commercial partnerships in some of the fastest growing markets in the world.
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Support ‘Buy Uganda Build Uganda’ policy, Trade Minister tells Central Bank
Trade Minister Amelia Kyambadde has asked Bank of Uganda Governor Emmanuel Mutebile to support some government policies such as ‘Buy Uganda Build Uganda’ (BUBU).
BUBU is a policy geared towards promoting use of locally manufactured goods and use of local skills / personnel.
While speaking at the 12th International Private Sector Uganda Trade Expo at Lugogo on Tuesday, Ms Kyambadde said: “I am a bit disappointed – I think you need to interest yourselves (BoU) with some of the policies by government. I would like the Governor to revise this issue. BoU is supposed to be the champion of the economy and support us.”
Ms Kyambadde was responding to the Governor’s speech read for him by deputy director research David Sajjabi, in which he, for the second time, criticised the BUBU policy saying it will jeopardise Uganda’s export trade with her neighbouring states in the East African community (EAC).
Mr Sajjabi said: “The proposal for BUBU legislation would, if implemented, offer domestic producers preferential treatment on the domestic market over our EAC partners, for example, through preferential public procurements policies.”
Protectionism
According to Mr Mutebile, BUBU offers trade protection through administrative measures rather than tariffs.
“It is therefore inconsistent with the EAC customs protocol which bids any EAC partner state from undertaking any administration measures which discriminates in favour of its own producers at the expense of those of its partner states,” he added.
He said a level playing field for producers in all partner states is a fundamental principle of the Customs Union and the common market. BUBU is not consistent with this proposal.
“We therefore need to reflect on the potential and adverse repercussion of the BUBU proposal. If it is implemented BUBU will invite retaliation from other partner states why should they offer a level playing field yet Uganda is not doing the same,” he added.
The EAC market has become indispensable for Uganda’s products we can choose one but not both.
Ms Kyambadde said BUBU is not conflicting with regional exports but supports through the competition generated locally.
“What you should know is that all other partner states have restrictive public procurement policies that restrict local content globally. Even if you’re the best you will not wake up and compete,” she explained.
She added that BUBU will not retaliate because there is already an agenda to promote government procurement locally.
“BUBU is premised on the PPDA clause which – it came from a PPDA Act which talks about preference of 23 per cent which is built into a policy and then into a local content bill. Please support us,” Ms Kyambadde said.
Exports to EAC
Over the last 10 years, Uganda’s exports to other EAC member countries have risen rapidly at an average of 20 percent.
In 2016/17 fiscal year Uganda exported $1.3 billion (Shs4.6 trillion) of goods to the EAC which amounted to 41 percent of all Uganda’s total merchandise exports.
“The EAC is also our fastest exports growing market, ten years ago, it accounted for only 25 per cent of Uganda’s exports. For Uganda’s manufacture exports, the EAC is even more important accounting for 54 per cent of all Uganda’s manufactured exports in 2016,” Mr Sajjabi said.
He added that if Uganda is to develop a vibrant manufacturing export base, create employment and export earnings-exporting to the regional market is an essential first step in that development.
Providing opportunities, strengthen productivity, learning by doing and chipping in the economies of scale.
However, Mr Moses Ogwal, PSFU manager policy advocacy, said that BoU spends at least 9 per cent of the country’s GDP which equivalent to $3 billion (Shs10.8 trillion) every year to stabilise the economy.
“If this same amount is spent on supporting the local producers through BUBU, it will stabilise the economy,” Mr Ogwal noted.
He said if BUBU is supported, BoU would save this money.
60 per cent of the National Budget goes in development and most of it is for construction. Out this, 90 per cent is done by foreign companies and once this money is paid, it is remitted back to the respective countries.
On the claim that BUBU will jeorpodise the EAC export market agenda, Mr Ogwal proposed that the policy be harmonised at regional level.
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Poverty on the rise in South Africa
According to new data released by Stats SA, poverty is on the rise in South Africa.
The latest “Poverty Trends in South Africa” report shows that, despite the general decline in poverty between 2006 and 2011, poverty levels in South Africa rose in 2015. More than half of South Africans were poor in 2015, with the poverty headcount increasing to 55,5% from a series low of 53,2% in 2011. The figures are calculated using the upper-bound poverty line (UBPL) of R992 per person per month (pppm) in 2015 prices. This translates into over 30,4 million South Africans living in poverty in 2015.
While the recent increase in the headcount is unfortunate, we are still better off compared to the country’s poverty situation from a decade earlier, when it was estimated that close to two-thirds of South Africans (66,6% or roughly 31,6 million people) were living below the UBPL in 2006.
The South African economy in the last five years, notably between 2011 and 2015, has been driven by a combination of international and domestic factors such as low and weak economic growth, continuing high unemployment levels, lower commodity prices, higher consumer prices (especially for energy and food), lower investment levels, greater household dependency on credit, and policy uncertainty. This period has seen the financial health of South African households decline under the weight of these economic pressures and, in turn, has pulled more households and individuals down into poverty.
Who are affected most by poverty?
In general, children (aged 17 years and younger), black Africans, females, people from rural areas, those living in the Eastern Cape and Limpopo, and those with little or no education are the main victims in the ongoing struggle against poverty.
In the figure above, we see that while poverty is highest amongst children (aged 0-17), poverty levels tend to drop as one gets older and only starts to increase again from the age of 55 onwards. The poverty gap, as well as the severity of poverty, shows a similar trend to the poverty headcount for the 0-17 age group. Poverty gap values highlight that not only are children more likely to be poor but they are also residing in households that are further away from the poverty line.
Growing up in poverty is one of the greatest threats to healthy childhood development. Unfortunately, in 2015 this was a reality for over 13 million children living in South Africa according to the latest Living Conditions Survey data.