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Overfishing destroying livelihoods
African waters are powerful magnets for illegal and unregulated foreign fishing operations
It was midnight on 14 December 2016, when five fishermen in Tombo village near Freetown in Sierra Leone revved up a small outboard engine and powered their boat far out to sea. They threw in their net and soon bagged a good quantity of fish. But as they hauled in their catch, a terrible storm blew in. When the waters finally calmed, one of them, an 18-year-old named Alimamy, could not be found.
Alimamy had stood precariously on the canoe’s edge – something he was used to doing – onloading the fish when the storm waves hit. He was tossed overboard and drowned, despite his colleagues’ frantic efforts to save his life.
“It was a sad day for us in this village,” said Samuel Bangura, the local harbour master, who recounted the story to Africa Renewal. Mr. Bangura, whose job includes the search and rescue of fishermen missing at sea, had dispatched a search party to recover Alimamy’s body.
Dwindling fish populations
Tragedies such as these are common in Africa’s coastal nations but fishing itself is in deep trouble. Fish populations are being lost due to overfishing, forcing boats like Alimamy’s to sail far from home. “There are no fish nearby anymore,” lamented Mr. Bangura.
Overfishing occurs when more fish are caught than the population can replace through natural reproduction. This is linked to illegal, unreported and unregulated fishing (IUU) or fishing piracy.
Some 37 species were classed as threatened with extinction and 14 more were said to be “near threatened” from Angola in the south to Mauritania in the north, according to the International Union for the Conservation of Nature (IUCN).
Mr. Bangura lays blame on foreign trawlers scooping ashore almost every life form at the ocean floor. “We are competing with big trawlers,” he said. “They take all the fish and they destroy our nets.”
The sturdy fishing trawlers, owned mostly by Asian and European companies, are able to drag better and stronger trawl nets over a large expanse of seabed. The trawlers can easily withstand sea turbulence and are able to mechanically haul netted fishes into pre-positioned storage rather than haul them by physical labour.
In Somalia and Tanzania, trawlers “deploy giant, non-selective nets, wiping out entire schools of tuna, including the young ones, which they discard dead,” reports IUUWatch, a European Union based organization whose website is sponsored by The Environmental Justice Foundation (EJF), Oceana, The Pew Charitable Trusts (Pew) and World Wide Fund for Nature (IUU) fishing.
Illegal trawling
Some trawlers are licensed in Africa while others operate illegally. The licensed ones pay taxes, although the dynamic nature of the fishing business complicates tax computation. Many governments lack the capacity to monitor the operations of fishing fleets, thus undercutting efforts to fix fair tax rates, let alone collect revenues.
Mr. Bangura expressed outrage that illegal fishing vessels operate with impunity in Sierra Leonean waters, but it is also a situation that puts African countries in a bind. Governments need revenues, no matter how meager, to invest in agriculture, social services and other sectors that can expand economic opportunities. Yet fishing revenues are low compared to the tons of fish that are carted away.
“The revenue generated by these catches doesn’t make it back into state coffers,” observes Dyhia Belhabib, research associate and fisheries scientist at the University of British Columbia, Canada. “Boats from China and Europe caught fish valued at $8.3 billion over 10 years (from 2000-2010) from the [West African] region. Only $0.5 billion went back into local economies.”
An additional $2 billion worth of fish is “either taken out without prior consent from local governments or is never reported due to illegal, unreported and unregulated fishing,” maintained Ms. Belhabib.
In July last year, a Spanish trawler ‘Gotland’ was impounded in Spain for illegal fishing in Senegalese waters. The vessel, registered in Mauritania with a Russian crew, fled to the Exclusive Economic Zone waters of Mauritania after it was spotted by Senegalese security authorities.
In October 2016, Somali authorities observed a Panamanian-registered fishing vessel named GREKO 1, flagged to Belize, seeking port access in Mombasa. The vessel escaped to Kenya where it was arrested under the FISH-i protocol. The FISH-i is a programme by Comoros, Seychelles, Somalia, Kenya, Madagascar, Mauritius, Mozambique and Tanzania to combat IUU through information sharing and enforcement.
The Somali authorities settled out of court with the registered owner and a $65,000 fine was paid.
In 2015, two of six fishing vessels (dubbed the “Bandit 6”) on Interpol’s wanted list were arrested on the Cape Verdean coast, off the port of Mindelo, as they poached toothfish–a tasty relative of cod typically sold in North America. Their arrest followed a campaign by the ocean conservation group Sea Shepherd.
Overfishing in African waters
West African waters are powerful magnets for foreign fishing operations because they “are amongst the most fertile in the world,” notes Greenpeace, underscoring that the resources are fast dwindling. Some of the endangered fishes include Osteichthyes, popularly known as bony fish, which has 1,288 species, majority of which are found on Africa’s west coast. The Madeiran sardine is overfished in west and central Africa, according to the International Union of Conservation of Nature (IUCN), the world’s largest environmental network. The IUCN reported in January that due to overfishing, “the endangered Cassava croaker is estimated to have declined by 30% to 60% over the past 10 years.”
The United Nations Food and Agriculture Organization further estimates that 57% of fishes are exploited while 30% are over-exploited or depleted.
As far back as 2013, the journal Fish and Fisheries reported that the octopus and grouper fish were hard to find in Mauritanian waters, having been fished away by trawlers from Europe and Asia.
Destroying livelihoods
IUCN director-general Inger Andersen insists that the livelihoods of local coastal communities still could depend on properly managed marine fish species.
“Fish provides a major source of animal protein for the coastal communities, which account for around 40% of this region’s population,” said Mr. Andersen, adding that the current situation undermines Sustainable Development Goal 14, which refers to life below water.
Africa loses billions to illegal fishing, corroborates Kofi Annan, a former UN secretary-general and head of the African Progress Panel, a group of 10 distinguished individuals who advocate for the continent’s sustainable development. Somalia alone loses $300 million annually to pirate fishing.
A direct consequence of overfishing is that communities relying on fish as a source of protein have less to eat. This leads to malnutrition, especially in children. Women who mostly process the fish earn less than they did previously. In West Africa, times are rough for the nearly seven million people who depend on small-scale fisheries.
Efforts underway
To combat overfishing, Greenpeace recommends countries set up regional fisheries organisations, reduce the number of registered trawlers operating in African waters, increase monitoring and control and ensure that fish processing operations are managed by Africans.
The World Bank’s West Africa Regional Fisheries Program (WARFP), whose participating countries are Liberia, Sierra Leone, Cape Verde and Senegal, has empowered countries with information, training and monitoring systems.
Under WARFP, small-scale fishers receive training in the use of GPS-enabled cameras to take photos of illegal trawlers. As a result, by 2016, Liberia had collected $6.4 million in fines from IUU fishing, while the percentage of foreign vessels committing IUU infractions fell from 85% to 30%.
Liberia also enacted a fisheries regulations Act in 2010 and installed a satellite-based monitoring system. Sierra Leone’s sea monitors recently arrested over 14 industrial vessels. In 2015, Senegal enacted a fisheries code, focusing on community-led fisheries management. Some of the 12 participating fishing communities are reporting up to 133% increase in returns.
Fishermen in Cape Verde fishing communities of Palmiera and Santa Maria have organized themselves to protect fishing zones. In southern Africa, Mozambique created and is protecting a conservation area, including a coastline.
The FAO in 2009 framed the Port State Measures Agreement (PSMA) to stop pirate fishing. But it was not until 2016, after the US signed and inspired other countries to join, that the treaty became operational. The agreement makes fishing control easier by, among other measures, designating ports for use by foreign-flagged vessels. This is expected to contribute to stopping IUU.
The efforts of ocean resources conservation advocacy groups, policy frameworks and capacity building of coastal nations spearheaded by international organisations such as the UN and the World Bank, and increasing awareness among countries and citizens of the consequences of IUU, could potentially slow, if not reverse, overfishing in Africa, experts say. Time will tell.
This article appears in the May-July 2017 edition of Africa Renewal, published by the United Nations.
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Review of Investor-State Arbitrations in 2016
UNCTAD launched its annual review of investor-State arbitrations. The IIA Issues Note reviews developments in treaty-based investor-State dispute settlement (ISDS) in 2016. It contains an overview of cases initiated in the past year, overall case outcomes and an in-depth analysis of arbitral decisions.
Highlights
- The rate of new treaty-based investor-State dispute settlement (ISDS) cases continued unabated. In 2016, 62 new cases were initiated pursuant to international investment agreements (IIAs), bringing the total number of known cases to 767. Looking at the totality of decisions on the merits by the end of 2016, about 60 per cent were decided in favour of the investor and 40 per cent in favour of the State.
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The new ISDS cases in 2016 were commenced against 41 countries. With four cases each, Colombia, India and Spain were the most frequent respondents. Developed-country investors brought most of the 62 known cases in 2016. Investors from the Netherlands and the United States initiated the most cases with 10 each, followed by investors from the United Kingdom with 7.
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About two thirds of ISDS cases in 2016 were brought under bilateral investment treaties (BITs), most of them dating back to the 1980s and 1990s. The remaining arbitrations were based on treaties with investment provisions (TIPs). The IIAs most frequently invoked in 2016 were the Energy Charter Treaty (ECT) (with 10 cases), the North American Free Trade Agreement (NAFTA) and the Russian Federation-Ukraine BIT (3 each).
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In 2016, ISDS tribunals rendered at least 57 substantive decisions, 41 of which are in the public domain (at the time of writing). Of these public decisions, half of the decisions on jurisdictional issues were decided in favour of the State, whereas those on the merits were mostly decided in favour of the investor.
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In the past year’s decisions tribunals considered many issues that touched upon topics identified in UNCTAD’s Road Map for IIA Reform (WIR15) and its Investment Policy Framework for Sustainable Development (UNCTAD, 2015). For instance, tribunals addressed the right to regulate to protect public health under the fair and equitable treatment (FET) and indirect expropriation clauses (Philip Morris v. Uruguay), the limitation period for bringing ISDS claims (Berkowitz and others v. Costa Rica), a State counterclaim concerning the investors’ alleged violation of human rights (Urbaser and CABB v. Argentina), and the interpretation of the most-favoured-nation (MFN) clause in IIAs (Içkale v. Turkmenistan) as well as in the WTO General Agreement on Trade in Services (GATS) (MMEA and AHSI v. Senegal).
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The wording of specific treaty provisions is a key factor in case outcomes, underlining the importance of balanced and careful treaty drafting. This not only applies to future treaties, but also calls for modernizing the existing stock of old-generation treaties. UNCTAD’s World Investment Report 2017 presents and analyses the pros and cons of 10 policy options that countries can take to reform their old-generation treaties (chapter III, WIR17).
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Tanzania President asks mines minister to resign after audit
Tanzanian President John Magufuli asked Mines Minister Sospeter Muhongo to resign after an audit of containers of mineral sands showed exports had been understated.
An investigation initiated by Magufuli in March found that 277 containers held as much as 15.5 metric tons of gold, instead of the 1.1 tons that had been declared, the president said Wednesday in a speech broadcast live on state television. Magufuli also disbanded the Tanzania Minerals Audit Agency’s board, fired its chief executive officer and asked authorities to investigate those responsible.
“I really like Professor Muhongo and he is a friend of mine, but on this he needs to rethink and reassess without delay,” Magufuli said after receiving an audit of the containers seized at the port of Dar es Salaam in March. “I’d like him to resign.”
The containers, which had mineral sands from mines including Buzwagi, were located at a privately run terminal and awaiting customs procedures before being shipped overseas. Tanzania is Africa’s third-biggest gold producer, with companies including AngloGold Ashanti Ltd. and Acacia Mining Plc extracting the metal.
Acacia, which owns the Buzwagi mine, dropped as much as 17 percent to 360.40 pence at 11:22 a.m. in London, the biggest intra-day decline since March 3. The company said it declares fully everything of commercial value and pays appropriate royalties and taxes.
Ban Remains
A ban on unprocessed metals effective March 2 should remain in place, according to the eight-member committee that carried out the investigation. The government should also construct a smelter as soon as possible, it recommended.
“The government should retain the minerals export ban until royalties reflective of the full value of the sands have been paid in full,” said Abdulkarim Mruma, the committee chairman.
The containers held as much as six tons of copper instead of the four tons declared and had many unrecorded minerals including iridium, iron and zinc, Magufuli said.
“We have been given all these natural resources, but we are giving them away for free,” he said. “This pains me a lot. It’s embarrassing.”
Magufuli has also ordered a separate probe into mineral exports over the past 19 years. That report will be ready soon, he said.
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tralac’s Daily News Selection
Selected trade and development event pointers:
7th SADC River Basin Organisation officials’ workshop (22-24 May, Johannesburg)
UNCTAD/DTI regional seminar: Bankable Sustainable Development Goal projects (29-30 May, Johannesburg)
East African Organic Policy Forum (1-2 June, Arusha)
ACPC/ATPC seminar: How taking into account climate change can help Africa to pursue better trade policies, with a focus on food security (7-9 June, Purdue)
Nigeria’s 5th Trade Policy Review (13, 15 June, Geneva)
Selected updates from the AfDB Group’s 52nd Annual Meetings:
Prime Minister Modi’s speech at inauguration of the Annual Meeting: Africa-India trade has multiplied in the last fifteen years. It has doubled in the last five years to reach nearly $72bn in 2014-15. India’s commodity trade with Africa in 2015-16 was higher than our commodity trade with the United States of America. India is also working with United States and Japan to support development in Africa. Indian and Japanese research institutions have come up with a Vision Document. I congratulate RIS, ERIA and IDE-JETRO for their efforts in putting it together. This was done in consultation with think tanks from Africa. I understand the Vision Document would be presented at the Board meeting later. The idea is that India and Japan, with other willing partners, would explore joint initiatives in skills, health, infrastructure, manufacturing and connectivity.
Our partnership is not confined to Governments alone. India’s private sector is at the forefront of driving this impetus. From 1996 to 2016, Africa accounted for nearly one-fifth of Indian overseas direct investments. India is the fifth largest country investing in the continent, with investments over the past twenty years amounting to $54bn, creating jobs for Africans. We are encouraged by the response of African countries to the International Solar Alliance initiative, which was launched at the UN Climate Change Conference in Paris in November 2015. The Alliance is conceived as a coalition of countries rich in solar resources, to address their special energy needs. I am happy to note that many African countries have extended their support to this initiative.
Akinwumi Adesina: The time for Africa is now – we can’t slow down, we must quicken the pace. Adesina asked what use it is that Africa produces 75% of the world’s cocoa beans, but produces only 2% of its chocolate. “We simply have to transform African agriculture”, he said. “The African future is not, as some people think, based on oil and gas: you can’t drink oil or smoke gas. The future is food – you can eat food. Our continent’s food and agriculture markets will be worth $1 trillion within 13 years.”
Missing links to Indian-African trade and investment promotion identified: According to a theme paper (Africa-India Cooperation 2017: partnerships to industrialise and move Africa up the value chains) India has steadily opened up its markets to African exports. The result is that Africa’s trade surplus with India has increased rapidly, albeit driven in large part by a narrow range of suppliers and commodities. Consequently, today India’s export to Africa have increased almost four-fold from $7bn in 2005-2006 to $25bn in 2015-2016, accounting for 9.5% percent share in India’s total exports. Conversely, India’s imports from Africa, increased seven-fold from $4.9bn in 2005-2006 to $31.7bn in 2015-2016, accounting for 8.3% share in India’s imports total imports. India’s imports from Africa grew at an annual average of 29.8% during 2005-2006 to 2015-2016, as against India’s exports to Africa that grew at an annual average of 15.9% during the same period.
Selected African maritime trade updates:
FICCI Task Force: Blue Economy Vision 2025 – harnessing business potential for India Inc and international partners
Dynamar: East African to Indian Ocean container trade to grow by 7 million TEUs by 2020
Maersk Line Africa: Container sector enjoying boom in inter-Africa trade
Financing for Development: progress and prospects, 2017 (UN)
In 2016, the first full year of implementation of the Addis Ababa Action Agenda, efforts have begun at all levels to mobilize resources and align financing flows and policies with economic, social and environmental priorities. Progress can be reported in all seven action areas of the Addis Agenda. Nonetheless, a difficult global environment has impeded individual and collective efforts, and many implementation gaps remain. Extracts from Chapter III.D: International trade as an engine for development (pdf). To date, small and medium-sized enterprises are not benefiting sufficiently from the international trading system. Governments, with support from the international community where necessary, should ensure that SMEs have access to adequate and affordable trade finance, including by reducing limitations that hinder access, increasing the size of publicly backed trade finance programmes where possible, increasing capacity-building and support in the local banking sector, and maintaining an open dialogue with trade finance regulators. Higher wages for female employees are likely to have knock-on effects on the wider economy. Women’s participation in international trade supports several SDGs, but has been constrained by a number of challenges. To further efforts to address the constraints on women’s participation in trade, the international community should work collaboratively to enhance the availability of gender-disaggregated economic and social data in this field. Non-regulated trade can undermine the livelihoods of people, species and ecosystems. Governments should collectively reduce non-regulated trade such as poaching and trafficking of protected species and hazardous waste, among others
Funding the SDGs in resource-rich countries (UNDP)
We recently introduced the Extractives Dependence Index (EDI) to measure a country’s dependence on its oil, gas and mineral resources. We found that in 17 of the 27 Sub-Saharan Africa countries analysed in 2011, resource-dependence was driven mainly by export earnings and GDP value-added. However, revenue generation from the sector was comparatively low. The lower than average dependence on resource revenues in SSA countries does not reflect diversified tax bases as these countries do not generate significant non-resource-related corporate and income taxes. The fiscal revenue component of the EDI indicates that SSA countries face challenges in raising revenue from the extractive sector in general, posing challenges to finance the much-needed economic diversification and spending on the Sustainable Development Goals. [The analysts: Degol Hailu, Chinpihoi Kipgen]
UNDP Africa Policy Brief: Strengthening strategic alignment for Africa’s development – lessons from the UN 2030 Agenda for Sustainable Development, the AU’s Agenda 2063, and the AfDB’s High Fives
Philippe Isler: Time to get serious about red tape at Africa’s borders (New Times)
Investment promotion agencies, key players in facilitating investment into priority sectors, must make the link between trade and investment. Similarly, customs and border agencies must understand the impact that improving service delivery has on productive sectors. African countries are investing heavily in trade facilitation projects aimed at accelerating the movement of goods. This is a difficult task and a fine balancing act as they also have to preserve and secure government revenue. Yet, to maximise the yield of these investments, successfully achieve TFA objectives, and in the end increase FDI, it is essential that such projects are implemented in a coordinated, structured and sustainable way. [The author is the executive director, Global Alliance For Trade Facilitation]
Nigeria: Gross Domestic Product Report, Q1 2017 (Bureau of Statistics)
In the first quarter of 2017, gross domestic product contracted by –0.52% (year-on-year) in real terms, representing the fifth consecutive quarter of contraction since Q1 2016. This is 0.15% higher than the rate recorded in the corresponding quarter of 2016 (revised to –0.67% from –0.36%) higher by 1.21% points from rate recorded in the preceding quarter, (revised to –1.73% from –1.30%). Quarter on quarter, real GDP growth was –12.92%. [Rafiq Raji: Can Nigeria replicate the Singapore model like Mauritius did?]
Economic performance indicators for Cape Town: trade and investment (pdf, City of Cape Town)
Africa was Cape Town’s largest export region in 2016, accounting for 43,4% of the city’s global exports, followed by Europe with a share of 24,2%. African markets appear prominently among Cape Town’s export markets with five of the top 10 markets coming from Africa. Namibia was Cape Town’s top export market in 2016, valued at R9,5bn and accounting for 12% of all exports. Other top export markets were Botswana, the US and the UK. Mozambique was the fastest growing export market, among the top 10 with 68% growth between 2015 and 2016, followed by the US and China with growth of 18% and 14,8% respectively. Asia was the largest import region for Cape Town accounting for 53% of all global imports. This demand was dominated by China with imports amounting to R31,86bn in 2016, having increased by 9% from its 2015 level. [Western Cape business delegation to UK]
Swaziland, Namibia trade non-existent (Southern Times)
The two southern African countries drafted several MoUs in 2014 but fast forward 2017 and no agreement has been signed. The two countries are now looking at taking advantage of the SACU summit next month, in an attempt to the said agreements through. The agreements include the exchange of airhostess, trading of sugar from Swaziland to Namibia and the use of Namibia’s Walvis Bay port by Swaziland. The two countries are particularly keen on the areas of industrialisation in line with the SADC and SACU industrialisation policies.
Kenya: State to open one-stop centre for all investors (The Star)
Investment promotion agency, the Kenya Investment Authority, says one-stop shop for investors will be opened by end of next month. The centre, which has been on the cards since 2014, is part of the plan to grow foreign direct investments from less than two per cent of the country’s gross domestic product to the targeted 10 per cent under the long-term development blueprint, the Vision 2030. KenInvest managing director Moses Ikiara said about Sh140 million has been spent on setting up the new ultra-modern centre at the 33-storey UAP Old Mutual Tower – the country’s tallest building. That included the cost of training officers from key state departments and agencies to help hasten the process of setting up business by foreign investors.
Agro-industry players push for regional harmonization of policies and regulatory frameworks (COMESA)
Close to 50 participants composed of agro-industry companies, horticulture processing and producer companies, dairy companies, corporates and SMEs within the agriculture sector, standard setting institutions, agriculture regulatory and trade institutions attended the 2nd Agro-Industry Dialogue (17-18 May) in Kenya. Among the key recommendations from the forum was the need to harmonize policies and regulatory frameworks governing agro industries in the COMESA region as a way of promoting intra-regional trade. The recommendations will be streamlined into an advocacy position for the CBC that will feed into the upcoming COMESA Trade and Customs and policy organs meetings in 2017.
Neglected drivers of urbanisation in Africa (IGC)
Using DHS data from 23 countries in sub-Saharan Africa I calculated rates of natural population increase broken down by rural and urban residence. Somewhat surprisingly, natural urban growth exceeded natural rural growth in nearly a quarter of the country-years analysed. In other words, in these countries and years urbanisation would have happened without a single person moving from a rural area to an urban one. In some countries natural urban growth regularly outpaces natural increase in rural areas (Table 1). [The analyst: Sean Fox]
Today’s Quick Links: African Organisation for Standardisation: recent report to the WTO’s TBT Committee Ghana International Bank is best in trade finance AU Commissioner Amani Abou-Zeid: AU-EU Partnership is one of the strongest partnerships that Africa has Conference of Directors General of Customs of the Americas/Caribbean Region: update New phase for hub and spokes trade initiative launched at Barbados workshop |
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African Development Bank calls for investment in Africa’s future at 52nd Annual Meetings
The 52nd African Development Bank (AfDB) Annual Meetings open today in Ahmedabad, India, calling on the need for increased investment in the development of African continent and its people.
“Africa’s greater future is for all,” said AfDB’s President Akinwumi Adesina, in his opening remark. He stressed the need to invest in the development of Africa today, which will have a considerable market potential and share globally tomorrow.
In his view partnering to develop Africa today is like building the future market of the continent, such as benefiting from its peoples’ consumer spending that is estimated to reach $1.4 trillion in the coming three years.
He further stated that AfDB is about to launch African investment forum soon in order to attract pension funds, hedge funds and insurances, towards the development of the continent. He also noted that his Bank will continue aggressively investing in the bright future of Africa including $12 billion on its light up and power Africa program in the coming five years.
He also mentioned that his bank has also allocated $24 billion in the coming ten years for the development of the continent’s agriculture, which among others is key for ending or cutting food import bill while at the same time creating jobs and improving lives of the people in the rural areas.
In the coming five years AfDB is also planning to create 50 million jobs for the fast growing number of African youth.
Reports show that the number of youth in Africa is growing rapidly. In 2015, 226 million youth aged 15-24 lived in Africa, accounting for 19 per cent of the global youth population. According to the United Nations Populations Division’s report by 2030, it is projected that the number of youth in Africa will have increased by 42%. Africa’s youth population is expected to continue to grow throughout the remainder of the 21st century, more than doubling from current levels by 2055.
In his remark, the host nation of AfDB’s annual meetings, Prime Minister Narendra Damodardas Modi expressed his country’s commitment to continue working with Africa sharing lessons of development to each other. “India has had strong ties with Africa from centuries,” the premier said.
“Many of the challenges we face are the same [with African people]: uplifting our farmers and the poor, empowering women and ensuring our rural communities have access to finance and building infrastructure. India will stand with you shoulder to shoulder for better future for all of us,” he said.
The 52nd AfDB annual meetings is expected to be concluded on Friday.
PM Narendra Modi’s speech at the inauguration of the AfDB Annual Meeting, 23 May 2017
We are gathered today in the state of Gujarat. The Gujarati flair for business is well known. Gujaratis are also famous for their love of Africa! As an Indian and a Gujarati, I am very happy that this meeting is being held in India and that too in Gujarat.
India has had strong ties with Africa for centuries. Historically, communities from western India, especially Gujarat, and the eastern coast of Africa have settled in each other’s lands. The Siddhis of India are said to have come from East Africa. The Bohra communities in coastal Kenya date back to the twelfth century. Vasco da Gama is said to have reached Calicut with the help of a Gujarati sailor from Malindi. The dhows of Gujarat took merchandise in both directions. Ancient links between societies have also enriched our cultures. The rich Swahili language includes many Hindi words.
During the colonial era, thirty-two thousand Indians came to Kenya to build the iconic Mombasa Uganda railway. Many lost their lives during its construction. Around six thousand of them stayed back and brought their families. Many of them started small businesses called “dukas” and came to be known as the “dukkawalas”. During the colonial years, merchants, artisans and later officials, teachers, doctors and other professionals went to East and West Africa creating a vibrant community which combines the best of India and Africa.
Mahatma Gandhi, another Gujarati, perfected his tools of non-violent struggle in South Africa. He also visited Tanzania in 1912 along with Gopal Krishna Gokhale. Several leaders of Indian origin supported strongly, and fought alongside, the leaders of Africa’s struggles for independence, including Mr. Nyerere, Mr. Kenyatta, and Nelson Mandela. After the freedom struggle, several leaders of Indian origin were also appointed in the Cabinets of Tanzania and South Africa. There are at least six Tanzanians of Indian origin who are now serving as Members of Parliament in Tanzania.
The trade union movement of East Africa was started by Makhan Singh. It was during the trade union meetings that the first call for Kenyan independence was sounded. M. A. Desai and Pio Gama Pinto participated actively in Kenya’s independence struggle. The then Prime Minister Pandit Nehru sent an Indian Member of Parliament Diwan Chaman Lall to be part of Mr. Kenyatta’s defence team, when the latter was imprisoned and tried during the Kapenguria trial in 1953. The defence team included two other persons of Indian origin. India was steadfast in its support for Africa’s freedom. Nelson Mandela said, and I quote, “India came to our aid when the rest of the world stood by or gave succour to our oppressors. When the doors of international Councils were closed to us, India opened the way. You took up our battles, as if they were your own.”
Over decades, our ties have become stronger. After assuming office in 2014, I have made Africa a top priority for India’s foreign and economic policy. The year 2015 was a watershed. The third India Africa Summit held that year was attended by all fifty-four African countries having diplomatic relations with India. A record forty-one African countries participated at the level of Heads of State or Government.
Since 2015, I have visited six African Countries, South Africa, Mozambique, Tanzania, Kenya, Mauritius and Seychelles. Our President has visited three countries, Namibia, Ghana and Ivory Coast. The Vice-President visited seven countries, Morocco, Tunisia, Nigeria, Mali, Algeria, Rwanda and Uganda. I am proud to say that there is no country in Africa that has not been visited by an Indian Minister in the last three years. Friends, from a time when we mainly had mercantile and maritime links between Mombasa and Mumbai, we have today
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this Annual meeting which connects Abidjan and Ahmedabad
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business links between Bamako and Bangalore
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cricketing links between Chennai and Cape Town
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development links between Delhi and Dakar.
This brings me to our development cooperation. India’s partnership with Africa is based on a model of cooperation which is responsive to the needs of African countries. It is demand-driven and free of conditions.
As one plank of this cooperation, India extends lines of credit through India’s Exim Bank. 152 credits have been extended to 44 countries for a total amount of nearly 8 billion dollars.
During the Third India-Africa Forum Summit, India offered 10 billion dollars for development projects over the next five years. We also offered grant assistance of 600 million dollars.
India is proud of its educational and technical ties with Africa. Thirteen current or former Presidents, Prime Ministers and Vice Presidents in Africa have attended educational or training institutions in India. Six current or former chiefs of armed forces in Africa trained in India’s military institutions. Two current Ministers of the Interior have attended Indian institutions. Under the popular India Technical and Economic Cooperation Programme, more than thirty three thousand scholarships have been offered to officials from African countries since 2007.
One of our best partnerships in the area of skills is the training of “solar mamas”. Every year eighty African women are trained in India to work on solar panels and circuits. After their training they go back and literally electrify their communities. Each woman is responsible for electrifying 50 houses in her community on return. A necessary condition for the women to be selected is that they be illiterate or semi-literate. They also learn several other skills, like basket making, bee keeping, and kitchen gardening during their stay.
We have successfully completed the Pan Africa e-network project for tele-medicine and tele-network covering 48 African countries. Five leading universities in India offered certificate, under graduate and post graduate programmes. Twelve super-speciality hospitals offered consultations and Continuous Medical Education. Around seven thousand students have concluded their studies. We will soon launch the next phase.
We will soon successfully complete the Cotton Technical Assistance Programme for African Countries launched in 2012. The project was implemented in Benin, Burkina Faso, Chad, Malawi, Nigeria and Uganda.
Friends,
Africa-India trade has multiplied in the last fifteen years. It has doubled in the last five years to reach nearly seventy-two billion US dollars in 2014-15. India’s commodity trade with Africa in 2015-16 was higher than our commodity trade with the United States of America.
India is also working with United States and Japan to support development in Africa. I gladly recall my detailed conversation with Prime Minister Abe during my visit to Tokyo. We discussed our commitment for enhancing growth prospects for all. In our joint declaration, we mentioned an Asia Africa Growth Corridor and proposed further conversations with our brothers and sisters from Africa.
Indian and Japanese research institutions have come up with a Vision Document. I congratulate RIS, ERIA and IDE-JETRO for their efforts in putting it together. This was done in consultation with think tanks from Africa. I understand the Vision Document would be presented at the Board meeting later. The idea is that India and Japan, with other willing partners, would explore joint initiatives in skills, health, infrastructure, manufacturing and connectivity.
Our partnership is not confined to Governments alone. India’s private sector is at the forefront of driving this impetus. From 1996 to 2016, Africa accounted for nearly one-fifth of Indian overseas direct investments. India is the fifth largest country investing in the continent, with investments over the past twenty years amounting to fifty four billion dollars, creating jobs for Africans.
We are encouraged by the response of African countries to the International Solar Alliance initiative, which was launched at the UN Climate Change Conference in Paris in November 2015. The Alliance is conceived as a coalition of countries rich in solar resources, to address their special energy needs. I am happy to note that many African countries have extended their support to this initiative.
As a founder of the New Development Bank, popularly called the “BRICS bank”, India has consistently supported establishment of a Regional Centre in South Africa. This will provide a platform to promote collaboration between NDB and other development partners including the African Development Bank.
India joined the African Development Fund in 1982 and the African Development Bank in 1983. India has contributed to all of the Bank’s General Capital Increases. For the most recent African Development Fund replenishment, India pledged twenty nine million dollars. We have contributed to the Highly Indebted Poor Countries and Multilateral Debt Reduction Initiatives.
On the sidelines of these Meetings, the Government of India is organising a Conference and Dialogue in partnership with the Confederation of Indian Industry. There is also an exhibition in association with the Federation of Indian Chambers of Commerce and Industry. The focus areas range from Agriculture to Innovation and start-ups and other themes.
The theme of this event is “Transforming Agriculture for wealth creation in Africa”. This is an area where India and the Bank can fruitfully join hands. I have already mentioned the Cotton Technical Assistance Programme.
Here in India, I have launched an initiative to double farmers’ incomes by 2022. It will require concerted steps, ranging from improved seeds and optimal inputs, to reduced crop losses and better marketing infrastructure. India is keen to learn from your experiences as we proceed on this initiative.
My African brothers and sisters,
Many of the challenges we face are the same: uplifting our farmers and the poor, empowering women, ensuring our rural communities have access to finance, building infrastructure. We have to do these within financial constraints. We have to maintain macro-economic stability so that inflation is controlled and our balance of payments is stable. There is much for us to gain by sharing our experiences on all these fronts. For example, in our push to a less-cash economy, we have learnt from the great strides that African countries like Kenya have made in the area of mobile banking.
I am happy to share that India has, in the last three years, improved on all macro-economic indicators. The fiscal deficit, balance of payments deficit, and inflation are down. The GDP growth rate, foreign exchange reserves and public capital investment are up. At the same time, we have made big strides in development.
Mr. President of the African Development Bank, it is reported that you have described our recent steps as text book chapters for other developing nations and called us a development beacon. While thanking you for these kind words, I am also glad to know that you have spent quite some time training in Hyderabad earlier. However, I must say that I remain focused on the many challenges ahead. In that context, I thought I could share with you some of the strategies we have used in the last 3 years.
By paying subsidies directly to the poor rather than indirectly through price concessions, we have achieved large fiscal savings. In cooking gas alone we have saved over 4 billion dollars in three years. In addition, I appealed to well-off citizens to voluntarily give up their gas subsidy. Under the ‘Give it up’ campaign, we promised the saving would be used to provide a connection to a poor family. You will be surprised to know that over 10 million Indians volunteered to do so. Thanks to the savings, we have launched a programme to provide gas connections to 50 million poor families. More than 15 million connections have already been provided. This transforms the lives of rural women. It frees them from the health hazards of cooking with firewood. It also protects the environment and reduces pollution. This is an example of what I call ‘reform to transform’: a concerted set of actions which transform lives.
Some of the subsidised urea fertiliser intended for farmers used to get illegally diverted to non-agricultural uses, like production of chemicals. We introduced universal neem-coating of urea. This makes the fertiliser unsuitable for diversion. Not only have we got substantial financial savings but in addition, studies have shown that neem coating has improved the effectiveness of the fertiliser.
We are also providing our farmers with soil health cards which tell them the exact nature of their soil, and advise on the best mix of inputs. This promotes optimal use of inputs, and increases crop yield.
We have made unprecedented increases in capital investment in infrastructure, covering railways, highways, power, and gas pipelines. By next year, no village in India will be without electricity. Our Clean Ganga, Renewable Energy, Digital India, Smart Cities, Housing for All and Skill India missions are preparing us for a cleaner, more prosperous, faster growing and modern new India. Our aim is that India must be an engine of growth as well as an example in climate friendly development in the years to come.
There are two crucial factors which have helped us. The first set of changes is in the banking system. In the last 3 years, we have achieved universal banking. We launched the Jan Dhan Yojana or People’s Money campaign under which over two hundred and eighty million bank accounts have been opened for the poor in urban and rural areas. Thanks to that initiative, virtually every Indian family has a bank account. Normally banks are associated with helping businesses and the rich. We have enlisted them for helping the poor in their quest for development. We have strengthened our state-owned banks by freeing them from political decisions and appointing professional chief executives on merit through a transparent selection process.
Our universal biometric identification system called Aadhaar has been the second crucial element. It prevents claiming of benefits by those who are not eligible. It enables us to ensure that those who deserve government aid receive it with ease, while excluding non-genuine claims.
Friends, let me conclude by wishing you a very successful and productive annual meeting. In the sports arena, India cannot compete with Africa in long distance running. But I can assure you that India will always stand with you, shoulder to shoulder, supporting you in the long and difficult race for a better future.
Excellencies! Ladies and Gentlemen! I now have great pleasure in officially declaring the Annual Meetings of the Board of Governors of the African Development Bank Group open.
Thank you!
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UN forum aims to ensure ‘promises made are promises kept’ on financing for development
Promises made for financing the implementation of the Sustainable Development Goals must be promises kept, speakers said yesterday at the opening of a United Nations forum.
“The eyes of the world are upon us,” said Frederick Musiiwa Makamure Shava, President of the Economic and Social Council (ECOSOC), as he opened the 2017 Forum on Financing for Development follow-up.
The forum is an intergovernmental process mandated to review the Addis Ababa Action Agenda adopted by UN Member States in 2015 as well as other financing for development outcomes and the means of implementing the Sustainable Development Goals (SDGs).
Building on last year’s inaugural session, which devoted particular attention to setting up the monitoring framework for the follow-up to the Addis Agenda, the 2017 Forum is expected to provide impetus for achieving results.
UN Deputy Secretary-General Amina Mohammed, speaking via video message, recalled that the Addis Agenda, the 2030 Agenda for Sustainable Development and the Paris Agreement on climate change have provided a roadmap for a better future for all.
The Forum will closely examine key elements of that roadmap, including the need for long-term, high-quality investment and urgent measures to improve the well-being of the poor and vulnerable, she said, encouraging participants to share their experiences with others and urged all countries to seek out and forge meaningful partnerships.
Developed countries need to deliver and developing countries have to further pursue South-South and triangular cooperation, she added.
Other speakers included Christine Lagarde, Managing Director of the International Monetary Fund (IMF); Mahmoud Mohieldin, Senior Vice-President for the 2030 Development Agenda, United Nations Relations and Partnerships, World Bank Group; and Yonov Frederick Agah, Deputy Director-General of the World Trade Organization (WTO).
Continued slow global growth rates risk leaving 6.5 percent of population in extreme poverty in 2030, says new UN report
New multilateral efforts needed to bring 550 million people out of poverty
Continued slow global economic growth is likely to leave about 6.5 per cent of the world population extremely poor in 2030 without national actions supported by international cooperation, according to a new report issued by the United Nations on Monday.
A continuation of the status quo would severely hamper efforts to achieve the Sustainable Development Goals by 2030. The Goals call for eliminating poverty by 2030.
According to the 2017 “Financing for Development: Progress and Prospects” report, under current trends, least developed countries (LDCs) are likely to fall short by large margins.
Projections indicating that global gross product will grow at less than 3 percent over the next two years, and with slow growth in international trade – it grew at less than 2 per cent per year in value terms 2011 to 2014, before declining by 10 per cent in 2015 – prospects for the poorest remain challenging.
United Nations Secretary-General António Guterres called on countries to take swift action: “Despite the huge strides in the fight against poverty, made possible by globalization and technological progress, inequality has increased markedly around the world. Conflicts are proliferating and other megatrends such as climate change, food security and water scarcity, are putting the progress of the last few decades at risk.”
The report, which is led by the United Nations Department of Economic and Social Affairs, tracks progress on the Addis Ababa Action Agenda, and draws on the expertise, analysis and data from over 50 international institutions that make up the Inter-agency Task Force on Financing for Development, including the World Bank Group, the International Monetary Fund and the World Trade Organization, UNCTAD and UNDP. The Addis Agenda, adopted at the Third International Conference on Financing for Development in July 2015, provides a global framework to support the implementation of the SDGs by ensuring the effective mobilization of resources at the national and international level.
The report contends that many of the challenges that countries face – including slow economic growth, climate change and humanitarian crises–have cross-border or even global repercussions, and cannot be addressed by any one actor alone. It states that a steadfast commitment to multilateral cooperation for sustainable development should support national efforts.
The Addis Agenda points to an infrastructure gap of $1 trillion to $1.5 trillion annually in developing countries, while estimates of the global gap generally range from $3 trillion to $5 trillion annually.
To close these and other gaps, the report finds that there is an urgent need to increase long-term investments in sustainable development and to address economic vulnerability. Such investment will stimulate global growth, leading to a virtuous cycle. “Ramped-up investment in sustainable infrastructure will help stimulate sustainable and equitable global growth, and make available more resources for investment in achieving sustainable development,” said Wu Hongbo, UN Under-Secretary-General for Economic and Social Affairs.
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Activities of the African Organisation for Standardisation (ARSO) related to the work of the WTO TBT Committee
This document contains a statement provided by the African Organisation for Standardisation (ARSO) at the TBT (Technical Barriers to Trade) Committee meeting of 29-30 March 2017 under Agenda Item 4: Technical Cooperation Activities
Introduction
ARSO is an intergovernmental Organisation established by the Organization of African Unity (OAU, currently African Union (AU)) and the United Nations Economic Commission for Africa (UNECA) in 1977, with 21 African Governments. ARSO attained its observer membership in the WTO TBT Committee in November 2015.
The principal mandate of ARSO is to harmonise African Standards and conformity assessment procedures in order to reduce Technical Barriers to Trade to enhance intra-African and international Trade as well as industrialization and Integration in Africa. For this ARSO:
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Harmonises national and/or sub-regional standards as African Standards and issues necessary recommendations to member bodies for this purpose;
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Initiates and co-ordinates the development of African Standards (ARS) with reference to products which are of peculiar interest to Africa;
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Encourages and facilitates adoption of international standards by member bodies;
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Promotes and facilitate exchange of experts, information and co-operation in training of personnel in standardisation activities;
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Coordinates the views of its members at the ISO, IEC, OIML, Codex and other international organisations concerned with standardisation activities.
Currently ARSO has 36 member States (Benin, Botswana, Burkina Faso, Cameroon, Cote d’Ivoire, Congo Brazzaville, Democratic Republic of Congo, Egypt, Ethiopia, Gabon, Ghana, Guinea-Bissau, Guinea, Kenya, Liberia, Libya, Madagascar, Malawi, Mauritius, Namibia, Niger, Nigeria, Rwanda, Senegal, Seychelles, Sierra Leone, Sudan, South Sudan, South Africa, Swaziland, Tanzania, Togo, Tunisia, Uganda, Zambia and Zimbabwe.
The ARSO Standardisation Agenda is driven by AU Decisions on specific areas of interest, the latest which lays greater importance on Quality Infrastructure in Africa and establishment of the Continental Free Trade Area y 2017, are the decisions of the 9th Ordinary Session of the AU Conference of Ministers of Trade of 1-5 December 2014, Addis Ababa, Ethiopia, that directed that:
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All AU Member States that are currently not Members of ARSO should endeavour to attain membership by the year 2017;
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ARSO and other Pan African Standards organisations to refer to the year 2017 as African year of Quality Infrastructure;
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The AUC and ARSO should increase awareness and mobilize all stakeholders on the role of Quality Infrastructure;
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The AUC and Quality Infrastructure Institutions should assess the status of Quality Infrastructure in Africa; and develop a Strategic Plan on Quality Infrastructure in Africa.
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The AUC and ARSO to develop a work plan on Quality Infrastructure to be submitted to the Senior Officials meeting.
Understandably, in order to shape the CFTA as a comprehensive legal framework for the 21st Century challenges and for the CFTA to fulfil its promise in helping Africa to industrialise and boost intra-African trade, understanding the link between standards, technical regulations, conformity assessment and trade remains crucial in the design of broader development programs that will create new industrialisation and trading opportunities and enhance the Trade within the regional value chains, countries and regions in Africa and facilitate Access to global value chains.
In retrospect, the AU and UNECA under the document on boosting intra-African trade and the establishment of a CFTA have undertaken to highlight the responsibilities of the African countries and RECs in the CFTA Programme to Boost the Intra-African Trade:
“The CFTA members will need to appreciate and recognise the importance of standards, metrology, conformity assessment and accreditation…CFTA members will need to harmonise their practices in this area to achieve mutual product recognition…Cooperation with national, regional and international standards bodies will need to be promoted. Members will thus need to develop and adopt a policy framework consistent with the provisions of the relevant WTO agreement (AU 2012).”
In response, ARSO has been engaged, under its 2012-2017 Strategic Framework, in the following activities:
Standards harmonisation through the ARSO Technical Harmonisation Committees (THCS)
During this period, the following ARSO THCs held their Harmonisation meetings based on the WTO TBT Agreement guidelines, Annex 3 on Code of Good Practice for the Preparation, Adoption and Application of Standards:
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ARSO THC 07 – Textile and Leather, 8-10 March 2017, Nairobi, Kenya
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ARSO THC 05 – Chemistry and Chemical Engineering, 28-31 March, Nairobi, Kenya
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ARSO-THC 02 – Agriculture and Food Products, 12-14 April 2017, Kampala, Uganda
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ARSO-THC 02 – Agriculture and Food Products, 25-28 April 2017, Nairobi, Kenya
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ARSO-THC 03 – Building and Civil Engineering, 7-9 June 2017, Moka, Mauritius.
Partners – African Development Bank, PTB-Germany, UNECA. Experts are drawn from the Public and Privates Sectors, Academia and NSBs from all African Countries.
ARSO is currently discussing with CEN-CENELEC (Europe) on how to ensure that Standardisation enhances the operations of the CFTA in similarities with the EU New Standardisation Approach of 1985.
Conformity assessment
Strengthening of the ARSO Conformity Assessment Programme (ARSO CACO) that is focusing on harmonisation of the Conformity Assessment Procedures and encouraging Mutual Recognition Arrangement Agreements among African countries.
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First launching meeting was held in Nairobi, Kenya, in November 2016, the second meeting of the ARSO CACO Experts was held in Kigali, Rwanda on 20-22 February 2017 to develop relevant documentations.
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Participating Countries – Botswana, Côte d’Ivoire, DR. Congo, Ghana, Guinea, Kenya, Madagascar, Mauritius, Namibia, Nigeria, Rwanda, Senegal, Seychelles, Sierra Leone, South Africa, South Africa, Sudan, Tanzania, Togo, Tunisia, Uganda and Zambia.
Awareness Creation on Quality Infrastructure
ARSO organised an Awareness Creation on Quality Infrastructure and the Launching of the celebrations of the 2017 as Africa’s Year of Quality Infrastructure.
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On 1-4 March 2017 at the Elephant Hills Hotel, Victoria Falls, in Zimbabwe, ARSO held the 2nd ARSO President Forum and the Made in Africa Conference and Expo 2017 under the theme: Made in Africa as A Pillar for African Economic Integration, Industrialisation and Transformation Agenda, in an event attended by Sixteen (16) African countries (Benin, Botswana, DR Congo, Gabon, Ghana, Nigeria, Kenya, Liberia, Senegal, South Africa, Sudan, South Sudan, Swaziland, Togo, Zambia and Zimbabwe) and Observer Missions (ACP-EU-TBT Programme, UNECA, RECs (ECOWAS) and Zimbabwe Companies.
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Discussions addressed the role non-tariff measures (TBT/SPS) and related capacity constraints play in promoting Made in African Products and trade. The meeting agreed that putting in place measures to strengthen the capacities, competitiveness and innovative capabilities of domestic enterprises should be an integral part of the African development policy and increased emphasis on compliance to standards, technical regulations and strengthening quality infrastructure is one part of the overall context of reform Agenda. Further details are available here.
Information dissemination
Under the ARSO Documentation and Information Networks (ARSO DISNET) ARSO together with the ACP-EU-TBT Programme continues to develop the Africa Trade Web Portal as a tool for information dissemination on Trade and TBT/SPS requirements of various African Products to facilitate Trade.
On 23 November 2016 in Douala, Cameroon, ARSO jointly with the ACP-EU-TBT Programme organised a workshop for ARSO DISNET Experts from 25 Countries (Botswana, Cameroon, Cote D’Ivoire, DR. Congo, Ethiopia, Gabon, Ghana, Guinea, Guinea Bissau, Kenya, Mauritius, Namibia, Nigeria, Rwanda, Senegal, Seychelles, Sierra Leone, South Africa, South Africa, Sudan, Swaziland, Tanzania and Zambia) to facilitate this process.
Pan African Quality Infrastructure (PAQI) Meeting in Kigali, Rwanda on 6-8 February 2017 focussing on the TBT chapter of the Continental Free Trade Area Negotiations
ARSO and other Pan African Quality Infrastructure (PAQI) institutions (AFRIMETS, AFRAC, AFSEC) held a consultative meeting in the side-lines of the African Union/CFTA Technical Working Group on the Technical Barriers to Trade (TWG/TBT/SPS) held from 9-10 February 2017 in Kigali Rwanda to continue strategizing for a strong, sustainable and integrated approach to the continent’s quality infrastructure, encompassing metrology, standards, accreditation and quality assurance and as a major player in the implementation of the CFTA.
ARSO also held a sideline bilateral meeting at the same time, in Kigali Rwanda, with the British Standards Institute (BSI) Officials focusing on ARSO-BSI cooperation on BSI standards development priorities and how they link to domestic, regional and international priorities; The economic and societal benefits of standards; How to increase use of standards; How African NSBs are integrating the ISO strategic plans into their NSB strategies; and National and regional engagement.
Bilateral Agreements
Bilateral Agreements with SMIIC and CROSQ
On 28 November, ARSO Signed an MoU with the Standards and Metrology Institute for Islamic Countries (SMIIC). SMIIC is an affiliated institution of the Organisation of Islamic Cooperation (OIC) and a mechanism for harmonisation of standards and eliminating technical barriers to trade among the OIC Member States. This will help in addressing TBT issues among the African and OIC member States and boost International trade.
On 19 January 2017 in Nairobi, Kenya during the ACP-EU-TBT Programme Workshop “TBT GOOD PRACTICES” held at the Boma Hotel in Nairobi, ARSO signed and MoU with CROSQ – the CARICOM Regional Organisation for Standards and Quality Headquartered in Barbados. CROSQ is the Caribbean regional centre for promoting efficiency and competitive production in goods and services within its 15 member countries, through the process of Standardisation and the verification of quality. This will help in addressing TBT issues in the ACP regions.
ARSO and Regional Economic Communities (RECs) Cooperation
ARSO-RECs cooperation is influenced by the fact that the need to address the Technical Barriers to Trade (TBT/SPS issues) has become more critical as African leaders are fast-tracking and deepening regional and continental Integration as depicted by the COMESA, EAC and SADC Tripartite agreement and the establishment of the Continental Free Trade Area (CFTA) by 2017, as Flagship projects Agenda 2063.
ARSO had on 25-26 April 2016 signed an Agreement on Guidelines for the implementation of MoUs with the RECS (COMESA, EAC, ECOWAS, SADC) to facilitate quality infrastructure as a means of attaining a coherent and effective continental harmonization of standards and conformity assessment.
ARSO and ECOWAS
ARSO and ECOWAS through the Swedish International Cooperation (Sida) and Swedish Standards Institute (SIS) are jointly implementing a project “Capacity building in international standards setting with ECOWAS region as a case study”; the project was initiated (2014) to facilitate the involvement of ECOWAS member states in influencing international standards processes and applying international standards, emphasizing on ECOWAS and Africa priorities.
In May 2016, in Lomé Togo, ARSO Secretary General addressed the ECOWAS Ministers of Trade and Industry and Technocrats on the project. An inception meeting was held on 13-15 June 2016, a second meeting was held on 15-17 February in Paris France, hosted by AFNOR. The third meeting is on 20-22 March 2017 in Cape Verde.
ARSO-COMESA
ARSO and COMESA are engaging in a “COMESA Sanitary and Phytosanitary (SPS) to enhance Regional Integration and Trade project being supported by the Trade ComII-ACP Trade Capacity Building Programme/COLEACP-Le Comité de Liaison Europe-Afrique-Caraîbes-Pacifique, and targeting 19 countries within COMESA.
On 9-10 March 2017, ARSO held a meeting with COMESA and Trade ComII-ACP Officials at ARSO Central Secretariat in Nairobi to discuss the implementation of Project.
Under the COMESA, EAC and SADC Tripartite agreement, Annex 10, ARSO has a mandate of harmonising the Tripartite Standards which would be recognised as African standards to serve the purposes of trade within the CFTA.
ARSO-SADC
On 13-17 March 2017, ARSO participated in the 32nd Annual Meetings of SADC Technical Barriers to Trade (TBT) Cooperation Structures, Ezulwinin, Swaziland, as part of strategies to fulfil the Tripartite Agreement.
ARSO-EAC
On 27 February-3 March 2017, ARSO participated in the Regional Meeting for Consideration of Public Review Feedback on the Draft EAC Staple Foods Standards in Kigali, Rwanda.
The ARSO 2017-2022 is currently being reviewed with strategies focusing on ARSO Programmes meant to:
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Facilitate the implementation of the Continental Free Trade Area and Africa’s industrialisation and Integration
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Strengthen Quality Infrastructure in Africa through the PAQI Forum and cooperation with African Union, UNECA, RECs and development Partners.
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Increased Harmonisation and implementation of African Standards and relevant international standards.
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Strengthen the Conformity Assessment to serve the interest of African industries, farmers, producers and consumers.
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Promote greater implementation of the WTO TBT Committee Agreement in Africa to respond to the challenges of global trade.
Conclusion
Boosting intra-African trade and deepening regional market integration constitute a necessary response to the challenges facing Africa in the multilateral trading system and the global economy. The boosting of intra-African trade and the deepening of Africa’s market integration, by fostering competition among African countries, will assist in enhancing their capacity and prepare them to compete more effectively on the global market. The issues of Technical Barriers to trade as highlighted under the WTO TBT Agreement remains crucial and ARSO is open to more Technical Cooperation, based on article 11 of the WTO TBT Agreement to address the TBT issues in Africa and within the ACP region.
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Missing links to Indian-African trade and investment promotion identified
Experts at the 52nd African Development Bank Annual Meetings, which started Monday in Ahmedabad, India, have identified the missing links to building a strong trade and investment relationship that will lead to sustainable development in India and Africa.
Those missing links are the inability of African countries to exploit the preferential trade agreements provided by India; the need for capacity-building of small and business enterprises in Africa to bring out their real potential; using technology to leapfrog development in many sectors like education; and the inability of Indian financial institutions to push credit facilities to banks in Africa.
Manoj Dwivedi, Indian Administrative Service (IAS) Joint Secretary, Ministry of Commerce and Industry, Department of Commerce, Government of India, highlighted the four missing links when he address the audience at a panel session on African India Co-operation entitled: “Exploring Diversity: Promoting Trade and Investment”. He was joined by Admassu Tadesse, President and Chief Executive of Eastern and Southern African Trade and Development Bank (TDB), who said that his bank has been opening up to India for support it with credit facilities but it has not taken the opportunity.
“It’s time to consolidate our trade agreement preferably with trade blocs such as the Economic Community of West African States (ECOWAS),” said Dwivedi, adding that out of 21 countries, which offered duty-free partnership 11 of them have not subscribed to it.
Mahmood Mansoor, Executive Secretary of Comesa Clearing House, Zimbabwe, who was a participant at the session, concurred. Mansoor insisted that only India can address the problem.
Other panelists included David Rasquinha, Managing Director, Export-Import Bank of India; Sfiso Buthelezi, Deputy Minister, Ministry of Finance, Republic of South Africa; Abdoulaye Fall, Vice-President, Operations, ECOWAS Bank for Investment and Development.
India and Africa have had robust trade relations. Bilateral trade between them has risen around five-fold in the decade from US $11.9 billion in 2005-2006 to US $56.7 billion in 2015-2016. The rapid growth in bilateral trade flows has come about because both Indian and African Governments have systematically brought down the barriers to seamless bilateral trade flows, by dismantling various tariff and non-tariff barriers. Private sectors in both regions have been at the helm of various trade promotion and facilitation initiatives.
According to a theme paper on “Africa-India Cooperation 2017: Partnerships to Industrialise and Move Africa up the Value Chains”, India has steadily opened up its markets to African exports. The result is that Africa’s trade surplus with India has increased rapidly, albeit driven in large part by a narrow range of suppliers and commodities. Consequently, today India’s export to Africa have increased almost four-fold from US $7 billion in 2005-2006 to US $25 billion in 2015-2016, accounting for 9.5 percent share in India’s total exports.
Conversely, India’s imports from Africa, increased seven-fold from US $4.9 billion in 2005-2006 to US $31.7 billion in 2015-2016, accounting for 8.3 percent share in India’s imports total imports. India’s imports from Africa grew at an annual average of 29.8 percent during 2005-2006 to 2015-2016, as against India’s exports to Africa that grew at an annual average of 15.9 percent during the same period.
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UNDP Africa presents its latest knowledge products to the African Group of Ambassadors to the UN
UNDP’s Regional Bureau for Africa convened a high level event hosted by the African Union Permanent Observer Mission to the United Nations on Tuesday, 16 May 2017.
Billed as a knowledge building and sharing event, the meeting, which was attended by more than 100 participants, including 16 Permanent Representatives of African countries, was marked by the official presentation of the Regional Bureau’s latest publications to the African Group of Ambassadors, experts and stakeholders.
Co-chairing the event’s debate panel with the Regional Director for Africa Abdoulaye Mar Dieye, the Permanent Representative of the African Union H.E Ambassador Tete Antonio underscored the importance of maintaining a strategic dialogue with UNDP Africa, which is viewed as the main development policy guidance provider for the African Ambassadors Group.
Also present on the panel, Ms. Urujeni Bakuramutsa, Deputy Permanent Representative of Rwanda hailed UNDP’s role as a trusted development partner for African Governments; and the organizations’ unique expertise in identifying the degrees of alignment between Africa’s three main development agendas – the Sustainable Development Goals (SDGs), the African Union Agenda 2063, and the African Development Bank’s High Fives.
Echoing them, Mr. Dieye said: “We view the role of the African Group of Ambassadors to the UN to be critical to Africa’s development process. We count on the missions, experts and partners to identify key development priorities that deserve UNDP’s strategic attention and intervention.”
During a follow up discussion led by H.E. Martha Ama Akyaa Pobee, Permanent Representative of Ghana, Mr. Dieye further highlighted the purpose of the RBA’s knowledge products and said: “Our offering is meant to serve as a platform of convergence and to help governments make policy decisions in a rational way.”
The centerpiece of the 2 hour gathering was the presentation of RBA’s latest policy brief, Strengthening the Strategic Alignment for Africa’s Development: Lessons from the SDGs, Agenda 2063 and AfDB High Fives, by Ayodele Odusola, UNDP Africa’s Chief Economist and Head of Strategy and Analysis.
Mr. Odusola expounded on Africa’s evolving development landscape, and on UNDP’s contribution in shaping it through a series of initiatives and policy products. During his presentation, which ran the gamut of RBA’s most recent knowledge products, Odusola underscored the principle of congruence as the most salient feature of Africa’s development agendas.
“2030 Agenda and Agenda 2063 are strategic priorities while High 5s are operation priorities,” said Ayodele Odusola. “Alignment is based on the five principles identified in the Common African Position and the SDGs – People, Prosperity, Peace, and Partnership”.
Capping the event, Ambassador Tete Antonio and Regional Director Abdoulaye Mar Dieye officially designated a publication stand stocked with UNDP Africa’s latest publications right by the African Union Nelson Mandela Conference Hall. “This is a celebration of knowledge – the ultimate currency of development. We want to use this opportunity to share our knowledge products to help to advance Africa’s development agenda.”
During the event, it was confirmed that the Regional Bureau for Africa’s newest publication, Income Inequality Trends in sub-Saharan Africa: Divergents, Determinants, and Consequences, would be released by early July 2017.
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Funding the SDGs in resource-rich countries
Degol Hailu and Chinpihoi Kipgen of the United Nations Development Programme (UNDP) recently introduced the Extractives Dependence Index (EDI) to measure a country’s dependence on its oil, gas and mineral resources. The Index is helpful in crafting the right policies for diversification to achieve successful resource-based development.
The EDI is a composite index made up of three weighted components – the extractive sector’s contribution to export earnings, fiscal revenues and GDP – and ranges from 0 to 100 with 100 being the highest dependence score.
The authors examined the three components of the Index for 81 countries globally. They found that in 17 of the 27 Sub-Saharan Africa (SSA) countries analysed in 2011, resource-dependence was driven mainly by export earnings and GDP value-added. However, revenue generation from the sector was comparatively low.
For example, Chad and Oman have similar high EDI scores of about 70, meaning that they are both heavily dependent on their extractive sectors. Chad then scores 89 for its dependence on the sector to generate foreign exchange, compared to Oman’s score of 64.
Similarly, Gabon scored 78 for its dependence on the sector for GDP value added compared to non-SSA countries with similar EDI scores, such as Kazakhstan (53) and Qatar (43).
Both Chad and Gabon were less dependent on the sector for revenue generation, scoring 41 and 53, respectively, compared to an average score of 63 in equally resource-dependent non-SSA countries.
Guinea, for instance, had a composite EDI score of 51 and a score of 22 for dependence on the sector for fiscal revenues. In comparison, Trinidad and Tobago had a composite EDI score of 48 but a revenue dependence score of 42. See figure below.
The lower than average dependence on resource revenues in SSA countries does not reflect diversified tax bases as these countries do not generate significant non-resource-related corporate and income taxes.
The fiscal revenue component of the EDI indicates that SSA countries face challenges in raising revenue from the extractive sector in general, posing challenges to finance the much-needed economic diversification and spending on the Sustainable Development Goals (SDGs).
Better tax regimes needed
While developed fiscal and administration systems determine the level of revenues, leakages through generous tax incentives, avoidance and evasion have widened the gap between potential and actual revenues collected.
Our own estimates indicate that if resource-dependent countries in SSA collected revenue shares equivalent to that of equally resource dependent non-SSA countries, they would have collected an additional US$11 billion in 2011 alone.
The German Development Institute also finds that even during the most recent commodity boom, SSA resource exporting countries did not collect the potential tax revenues equivalent to about 35 percent of foreign aid.
ActionAid reports that Nigeria lost US$3.3 billion in tax revenues to three oil companies through a series of tax breaks. This was estimated to be twice the size of the country’s entire health budget for 2015.
In 2011, Sierra Leone lost tax revenues equivalent to 14 percent of GDP. This amount was over eight times the health budget and seven times the education budget.
Despite already collecting a relatively lower share of revenues from the extractive sector, in 2013, Guinea cut mining profit taxes from 35 percent to 30 percent.
True. Tax regimes are important to establish a competitive and attractive investment environment. But, provisions of excessively generous incentives are not the only means to attract foreign investors despite their pervasive implementation.
Infrastructure, the ease of doing business, availability of human capital and political stability, for example, have been emphasised in research as well as by the perspectives of mining companies as shown by the annual Fraser Institute surveys.
To address tax avoidance and tax evasion, UNDP, in partnership with the OECD, is supporting developing countries to build tax audit capacity and mobilise domestic resources though the Tax Inspectors Without Borders (TIWB) initiative. In addition, UNDP’s Le Pole programme is supporting 17 countries in West and Central Africa to strengthen national tax systems and mobilise fiscal resources.
Historical trends show that commodity prices will rise again. And the good news is that many countries have begun to reform their mining and hydrocarbon policies and legislation to raise more revenues. Supporting these reforms must be a priority to maximize the gains from resource extraction and finance the SDGs.
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tralac’s Daily News Selection
Featured trade infographics: @ecn_africa: After years of stagnation, east Africa’s clothing industry has more than doubled its exports since 2009; @CB_CII: India’s major exporting and importing countries in Africa, 2016-17
Trade and development event pointers:
(i) Starting today, in Ahmedabad: 2017 Annual Meetings of the African Development Bank Group. The conference flagship publication The African Economic Outlook 2017: entrepreneurship and industrialisation is posted. Extracts from Chapter 3 (Trade policies and regional integration in Africa):
Complex issues including how to handle the conflicting terms of agreement in overlapping trade blocs and the rule of origin requirements need to be resolved to allow the full implementation of trade agreements (see Box 3.1 on rules of origin in Africa’s free trade areas). In such circumstances, managing integration across countries and multiple economic agreements becomes even more challenging. These complications tend to remain even if governments follow the linear step-by-step model of goods, labour and capital markets integration, and eventually monetary and fiscal integration. The institutions of trade policy in many African countries need to be stronger to efficiently participate in trade negotiations.
Similarly, over concentration on harmonising or regulating import tariffs at the expense of other important supply-side factors does not meaningfully help Africa’s integration agenda. A deeper integration that includes services, investment, competition policy and other domestic issues can address national-level supply-side constraints far more effectively than an agenda which focuses almost exclusively on border measures (Hartzenberg, 2011). This would certainly help to exploit opportunities to scale up African businesses and enhance over all competitiveness.
Private sector participation in trade policy formulation and negotiations can ease implementation by ensuring that real-world concerns are raised. The lack of political will and in some cases insurmountable practical implementation challenges are the main causes for the low implementation of regional trade agreements. For this reason, the involvements of the private sector in trade negotiations could address many hurdles that constrain trade and regional integration in Africa. Clearly, other factors such as a well defined government vision and mandate play a vital role in directing government and private sector resources towards improving conditions for business. This is where RECs can also play a transformative role towards a continent-wide integration.
Related: India-Africa ties provides limitless opportunities: Jaitley (Business Standard), Indian investments in Africa: scale, trends, and policy recommendations (ORF), Why the meeting of the African Development Bank in Gandhinagar is important (Hindustan Times)
(ii) Enabling Cross Border Trade: how Chambers of Commerce can lobby in support of the Single Window (22-23, Addis). The meeting (organised by PACCI, ATPC) aims to share with key stakeholders the experiences of African countries in implementing a Single Window to enhance the efficient exchange of information between trade and government, and discuss further what governments, with the support of international organizations, should do to implement the Single Window facility as a national policy. ‘The main objective of the meeting will be to discuss elements of the Trade Single Window, and the experiences in Kenya and Nigeria, as well as the progress made and the challenges encountered by Chambers of Commerce in the issuance of electronic certificate of origin’ said PACCI’s Leul Wondemeneh. ‘PACCI aims to hear from businesses and stakeholders who are involved in cross-border trading, what governments and international organizations should do to alleviate the problems’ explains Leul.
(iii) 1st Extra Ordinary Meeting of African Union Sub-Committee of DGs of Customs (23-25, Abuja): Entering into force of the WTO’s Trade Facilitation Agreement “Implication for African Customs Administration”. Mr Joseph Attah (Nigeria Customs Service): “The meeting will be first of its kind; during this period, the DGs will be discussing issues of mutual cooperation among customs administrations in the AU to forge a common position in the governance of World Customs Organisation.” He said that 50 DGs of various customs administrations in the AU would be in attendance. There would also be a sideline meeting of neighbouring countries like Nigeria, Benin Republic and Niger to discuss the issues of mutual importance.
(iv) 2nd East African Manufacturing Business Summit and Exhibition (23-25 May, Kigali). Topics to be discussed include: manufacturing in the EAC region - public and private sector perspectives; the EAC Treaty and its protocols - objectives vis-à-vis reality; long-term and innovative financing for the manufacturing sector and the participation of the diaspora; and the role of EAC governments in promoting local content with a focus on iron, steel, mining and construction materials.[Conference website]
(v) Commonwealth African countries to discuss priorities for reviving world trade (25-26 May, Mauritius). The regional consultation will take into consideration the outcomes of the Commonwealth Trade Ministers’ meeting, held in March this year in London, particularly to explore avenues through which intra-Commonwealth trade and investment opportunities can be enhanced. The meeting will also provide a platform for African member states to assess various trade policy options, including UK-Africa trade relations post Brexit, advancing African integration through the Continental Free Trade Agreement, and priority issues for the upcoming Global Review of Aid for Trade in July. Past and present trade negotiators will also convene to finalise a proposal to establish an informal Commonwealth African Trade Negotiators Network. [Aid for Trade Global Review 2017: draft programme (pdf)]
18th Ordinary Summit of Heads of State of the East African Community: EAC leaders call for tougher stance on non-tariff barriers (New Times). “The heads of state noted with concern the declining intra-EAC trade and directed the Council to resolve the long-outstanding non-tariff barriers and report to the 19th summit,” reads part of a joint communique issued after the summit. Meeting before the summit, the central decision-making and governing organ of the regional bloc raised concerns that at least 19 non-tariff barriers remain unresolved as reported by a monitoring tool that was put in place. The ministers specifically raised concern over four longstanding NTBs whose solution, they said, requires policy guidance. They include the restriction by Uganda on beef and beef products from Kenya, since 1996. Others are requirement by Tanzania that cigarettes manufactured in Kenya and exported to Tanzania should have a 75% local content, and requirement by the Tanzania Foods and Drugs Authority that companies exporting to Tanzania should register, re-label and retest goods certified by other partner states. This trade barrier has existed since 2003. Raymond Murenzi, director-general of the Rwanda Standards Board, told The New Times that the issues concerning the TFDA are “very serious” as it is “very difficult for our products to be exported to Tanzania.” Another major trade barrier that the Council says has existed since 2009 is inadequate coordination among the numerous institutions involved in testing and clearance of goods at the borders. [Related: Joint communiqué, EAC seeks clarity on EU trade deal, End mistrust to attain EAC integration goals (editorial comment, The Citizen)]
Tanzania: Mega oil pipeline projects to spur economic growth (Daily News)
The government, yesterday, announced plans to set up three mega oil-pipelines connecting the seaports of Tanga and Dar es Salaam to upcountry regions and neighbouring countries partly to reduce fuel prices and spur economic growth. The announcement was made here by Energy and Minerals Minister, Prof Sospeter Muhongo. He was launching the downstream petroleum subsector performance review report for the year 2016. [Related: JPM hints at future oil bonanza for Tanzania, Only two gold mines declare profits despite rising exports, Taxation and the state of Africa Mining Vision implementation: the case of Tanzania, Eurobond: Tanzania renews bid on issuing]
Nigeria Economic Update: fragile recovery (World Bank)
This economic update provides an overview of recent developments in the Nigerian economy. The chapter second describes the World Bank’s view on Nigeria’s economic outlook for 2017. The chapter third summarizes the findings of a forthcoming Bank report Toward Sustainable Growth in Nigeria: Empirical Analysis and Policy options, which analyzes the patterns of economic growth in Nigeria; the underlying determinants of growth from both a macro and micro perspective; and policy priorities to support higher growth. In addition, analysis of constraints to doing business and the impact of current trade policies highlights the need to improve access to finance, improve the reliability of power supply, and adjust trade policies to promote productivity growth. [Chatham House: Collective action on corruption in Nigeria]
Nigeria: Afreximbank’s financing tops $35bn
Speaking on Tuesday when Nigeria’s Acting President, Prof. Yemi Osinbajo, received him in audience in Abuja, Dr. Oramah said that Afreximbank’s current credit exposure to Nigeria stood at $3.5bn. Some of those initiatives, which will be hosted in Nigeria, were the establishment of an internationally accredited inspection and certification centre to improve compliance of African exports with international technical and sanitary requirements; the creation of industrial and export processing zones dedicated to light manufacturing and agro-processing; and the construction of Africa’s first center of excellence in medical services through Afreximbank’s strategic alliance with King’s College Hospital, London, which aims to attract medical tourism and reduce the outflow of Africans seeking world-class treatment abroad. [ATI, International Credendo–Single Risk sign agreement to increase coverage of political risks in Africa]
ECOWAS: Trade expert calls for implementation of axle load policy (Graphic)
The failure of governments in West Africa to enforce the axle load limitation protocols has seen an increase in extortion of monies from drivers along major transit corridors within the sub-region. The Secretary General of the Ports Management Association and West and Central Africa, Mr Michael Luguje, told the Graphic Business in an interview that some of those challenges were hampering the promotion of transit trade. The axle load protocol standards, which came into effect in 2011, were aimed to protect West Africa’s road infrastructure from degradation by overloaded vehicles. Non-compliance ECOWAS member states were required under a proposed act to impose prohibitive sanctions for non-compliance. Presently, only Ghana has complied with weighbridges in ports and along the corridors thus limiting six-axle trucks to a load of up to 60 tonnes per transit journey. The rest of ECOWAS countries, Mr Luguje said, were still at preparatory and initial stages of the policy
Today’s Quick Links: Trade between Ghana and Cape Verde drops from $5m to $200,000 Guinea-Bissau: IMF completes review visit Kenya: GM East Africa retains lead as car sales decline SA’s poultry industry on the road to recovery Dalia Marin: Restoring competition in the Digital Economy Roberto Azevêdo: Re-energising the multilateral trading system (East Asia Forum) New Trump trade rep Lighthizer spars over protectionism in Asia (Reuters) USTR Robert Lighthizer: statement on APEC trade meeting Japan urges unity among 11 nations left in TPP pact (Bloomberg) New Zealand splits with Malaysia over reworking TPP without US (Bloomberg) GST to boost India’s export growth, says Sitharaman (The Hindu) |
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Unlock the potential of African entrepreneurs for accelerating Africa’s industrial transformation, says the African Economic Outlook 2017
African governments need to integrate entrepreneurship more fully into their industrialisation strategies
This is according to the African Economic Outlook (AEO) 2017, released today, 22 May at the African Development Bank Group’s 52nd Annual Meetings.
In 2016, Africa’s economic growth slowed down to 2.2% from 3.4% in 2015 due to low commodity prices, weak global recovery and adverse weather conditions, which impacted on agriculture production in some regions. However, it is expected to rebound to 3.4% in 2017 and 4.3% in 2018. This assumes that as commodity prices recover, the world economy will be strengthened and domestic macroeconomic reforms are entrenched.
In fact, there are promising developments across the continent. Africa’s growth increasingly relies on domestic sources, as shown by dynamic private and government consumption that combined, accounted for 60% of growth in 2016. This growth also coincides with progress in human development: 18 African countries had achieved medium to high levels of human development by 2015. Finally, foreign direct investment, attracted by the continent’s emerging markets and fast urbanisation, stood at USD 56.5 billion in 2016 and is projected to reach USD 57 billion in 2017. Such investment has diversified away from the natural resources sector to construction, financial services, manufacturing, transport, electricity, and information and communication technology.
“Although economic headwinds experienced in the last two years appear to have altered the ‘Africa rising narrative’, we firmly believe the continent remains resilient, with non-resource dependent economies sustaining higher growth for much longer spell. With dynamic private sectors, entrepreneurial spirit and vast resources, Africa has the potential to grow even faster and more inclusively,” stated Abebe Shimeles, Acting Director, Macroeconomic Policy, Forecasting and Research Department, at the African Development Bank.
Still, progress remains uneven. African governments need to push their agenda for job creation with more ambitious and tailored policies. Despite a decade of progress, 54% of the population in 46 African countries are still trapped in poverty across multiple dimensions – health, education and living standards. And demands for better employment opportunities are the main reason behind continued public protests, having motivated a third of all public demonstrations between 2014 and 2016 – albeit in a context of decreasing levels of civil unrest. With the size of the workforce likely to increase by 910 million between 2010 and 2050, creating more and better jobs will remain the core challenge for African policy-makers.
“The key to successful development in Africa is to nurture the emerging culture of entrepreneurship, to use the famous words of Hernando De Soto, “el otro sendero” (the other path) for development; a path that can unleash high-octane creativity and transform opportunities into phenomenal realisations,” said Abdoulaye Mar Dieye, Regional Director for Africa at the United Nations Development Programme.
To turn the challenge of higher population growth into an opportunity, making Africa’s new industrial revolution successful is paramount. Twenty-six African countries today have an industrialisation strategy in place. But most of these strategies tend to emphasise the role of large manufacturing companies at the expense of entrepreneurs in sectors with the potential for high growth and employment creation, including start-ups and small and medium-sized firms. Businesses with fewer than 20 employees and less than five years’ experience provide the bulk of jobs in Africa’s formal sector.
Additionally, the advent of digital technologies and new business models is blurring the boundaries between manufacturing – which is now bouncing back at 11% of Africa’s GDP – and the services sector. Industrialisation strategies thus need to support other sectors where African economies have comparative advantage, such as agri-businesses, tradable services and renewable energy. New strategies need to avoid dependence on businesses that are not environmentally friendly.
“African economies cannot miss out on their next production transformation. Entrepreneurs should be lead actors in Africa’s journey into the fourth industrial revolution,” said Mario Pezzini, Director of the OECD Development Centre and Special Advisor to the OECD Secretary-General on Development.
According to the Outlook, Africa has high untapped potential for entrepreneurship. In 18 African countries for which statistics are available, 11% of the working-age population set up their own firms to tap specific business opportunities. This level is higher than in developing countries in Latin America (8%) and in Asia (5%). However, few of them invest in high-growth sectors, grow to employ more workers or introduce innovations to markets. To turn their dynamism into an engine of industrialisation, African governments can improve the skills of workers enhance the efficiency of business clusters – such as industrial parks and special economic zones – and increase access to finance, with more affordable credit and more innovative instruments, for small and young firms.
Chapter 3: Trade policies and regional integration in Africa
Trade within Africa and its commercial relations with the rest of the world are changing quickly. This five-section chapter focuses on the diversification of Africa’s trade partners and products and the potential for further progress. It assesses global economic developments, explains the eight regional economic communities, their policies and integration initiatives, and provides ideas on how Africa’s private sector can maximise opportunities presented by regional and global value chains.
As the world evolves into a single highly interconnected global market, prosperity no longer depends just on a country’s productivity but also on its strategic choice of trading partners, export products and policies. Africa’s growth in recent years has been helped by advances in trade, policies, the regulatory environment and regional integration.
However, the widespread and uneven impact of commodity price shocks and criticism of the global trade system increase uncertainty about the future. Countries need to make the best use of globalisation by further diversifying their trade away from resources, and increasing trade within Africa. Economic and political changes in China and the United States will have varying effects on Africa’s trade, but to counter risks, the continent must carry out structural and regulatory reforms, improve policy and investment climate, deepen regional integration and maintain its commitment to reform. Africa’s regional economic communities are instrumental to strengthening economies and building resilience against global shocks. Increased political commitment therefore, especially at national level, is needed to actualise regional integration agreements. The proposed Continental Free Trade Area could yield large gains from trade and bolster other development objectives.
The African Economic Outlook is produced annually by the African Development Bank (AfDB), the Development Centre of the Organisation for Economic Co-operation and Development (OECD) and the United Nations Development Programme (UNDP).
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Joint Communiqué: 18th Ordinary Summit of Heads of State of the East African Community
The following communiqué was adopted by the Heads of State and Government of the EAC in Dar es Salaam, Tanzania, 20 May 2017:
- The East African Community Heads of State, their Excellencies President Yoweri Kaguta Museveni of the Republic of Uganda and chairperson of the Summit, President Dr. John Pombe Joseph Magufuli of the United Republic of Tanzania, Deputy President William Ruto of the Republic of Kenya, 1st Vice President His Excellency Gaston Sindimwo of the Republic of Burundi, Hon. Francois Kanimba, Minister of Trade, Industry and East African Community Affairs representing His Excellency President Paul Kagame of the Republic of Rwanda, and Hon. Aggrey Tisa Sabuni, Economic Advisor to the President representing His Excellency President Salva Kiir Mayardit, President of the Republic of South Sudan held the 18th Ordinary Summit meeting of the East African Community Heads of State on 20th May, 2017 in Dar es Salaam, Tanzania.
- The Heads of State commended the United Republic of Tanzania for chairing the affairs of the community for the past two years and welcomed the new chairperson, His Excellency President Yoweri Kaguta Museveni of the Republic of Uganda.
- The Heads of State and Government met in a warm and cordial atmosphere.
- The Heads of State received the annual progress report of the council of ministers for the period 1st December 2015 to 18th May 2017, and directed the council to resolve the outstanding issues and report progress to the 19th Summit.
- The Heads of State considered a report on the implementation of previous decisions of the Summit and noted the progress. The Summit directed partner states and the secretariat to implement the outstanding decisions and the partner states to deposit with the secretary general instruments of ratification of outstanding protocols by 30th November 2017.
- The Heads of State noted with concern the declining intra-EAC trade and directed the council to resolve the long-outstanding non-tariff barriers and report to the 19th Summit.
- The Heads of State noted that the remaining partner states that have not signed the EU-EAC economic partnership agreement (EPA) are not in a position to do so pending clarification of issues they have identified in the agreement. It was however agreed that due to this action Kenya should not be disadvantaged since she has already signed the agreement. In view of this decision, the President of the Republic of Uganda as the new chair of the Summit, was mandated within one month to reach out to the European Union (EU) to communicate the EAC circumstances. In the event that an acceptable way forward is not reached with the EU within the next six months, the chairperson was authorised to explore the use of variable geometry in implementation of the EPA by EAC partner states working with the council of ministers. The Summit also agreed that the EU sanctions on Burundi should be discussed alongside the EPA discussions.
- The Heads of State noted the progress on the issue of sustainable financing mechanism for the East African Community and directed the ministers of finance to meet and finalize work on the modalities required to establish a sustainable financing mechanism for the community and report to the 19th Summit.
- The Heads of State deliberated on the EAC political federation and noted the council’s recommendations. The Heads of State adopted the political confederation as a transitional model of the East African Political Federation and directed the council to constitute a team of constitutional experts to draft the constitution for the political confederation and report to the 19th Summit.
- The Summit appointed Eng. Stephen Daudi Malekela Mlote from the United Republic of Tanzania as deputy secretary general of the East African Community for a three year term with effect from 20th May 2017.
- The Heads of State commended Dr. Enos S. Bukuku, the outgoing deputy secretary general and wished him well in his future endeavours.
- The Heads of State, pursuant to Article 24 (2) of the treaty for the establishment of the East African Community, appointed justice Dr. Charles Oyo Nyawello, from the Republic of South Sudan as Judge to the First Instance Division of the East African Court of Justice and presided over his swearing in ceremony.
- The Heads of State considered a report on the roadmap for the accelerated integration of the Republic of South Sudan into the EAC and noted the steady progress of the integration of the Republic of South Sudan into the Community.
- The Heads of State received the progress report on the EAC institutional review and noted that phase one of the institutional review was being implemented and directed the council to expedite its full implementation and report to the 19th Summit.
- The Heads of State received a report on the verification for the admission of the Republic of Somalia into the EAC. The Summit directed the council to follow-up on the matter and report to the 19th Summit.
- The Heads of State received a progress report on the modalities for promotion of motor vehicle assembly in the region aimed at reducing the importation of used motor vehicles from outside the community and directed the council to finalize the matter and report to the 19th Summit.
- The Heads of State received a progress report on the review of the textile and leather sector with a view to developing a strong and competitive domestic sector that gives consumers better choice than imported used textile and footwear and directed the council to finalize the matter and report to the 19th Summit.
- The Heads of State assented to the East African Community Customs Management (Amendment) Bill 2016, the East African Community Supplementary Appropriation Bill 2016, and the EAC Appropriation Bill 2016.
- The Heads of State presented awards to the winners of the EAC Students Essay Competition, 2016 and commended the students for their interest in the integration agenda.
- The Heads of State declared the EAC as a common higher education area in order to harmonize and enhance the quality of education in the region. The Heads of State directed the council to operationalize the transformation.
- The Heads of State received a progress report from H.E. Benjamin William Mkapa, the facilitator of the inter-Burundi dialogue and thanked him for his commitment to the dialogue. The Summit fully endorsed the assessment and adopted the report.
- The Heads of State received an update and clarifications from the 1st Vice President of the Republic of Burundi on the political situation in the Republic of Burundi and the inter-Burundi dialogue.
- Their Excellencies President Yoweri Kaguta Museveni of the Republic of Uganda, Deputy President William Ruto of the Republic of Kenya, 1st Vice President His Excellency Gaston Sindimwo of the Republic of Burundi, Hon. Francois Kanimba, Minister of Trade, Industry and East African Community Affairs of the Republic of Rwanda, and Hon. Aggrey Tisa Sabuni, Economic Advisor to the President of the Republic of South Sudan thanked their host, His Excellency President Dr. John Pombe Joseph Magufuli of the United Republic of Tanzania, for the warm welcome and hospitality accorded to them and their respective delegations during their stay in Dar es Salaam, Tanzania.
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EAC leaders call for tougher stance on non-tariff barriers
The East African Community (EAC) leaders have directed partner states’ ministers in charge of EAC affairs to resolve long-standing unresolved non-tariff barriers (NTBs) and report to the next summit.
The directive was made at the EAC Heads of State Summit on Saturday in Dar-es-Salaam, Tanzania.
It comes after the Council of Ministers had also called for an end to a host of long-standing unresolved NTBs hindering trade in the region.
“The heads of state noted with concern the declining intra-EAC trade and directed the Council to resolve the long-outstanding non-tariff barriers and report to the 19th summit,” reads part of a joint communiqué issued after the summit.
Meeting before the summit, the central decision-making and governing organ of the regional bloc raised concerns that at least 19 non-tariff barriers remain unresolved as reported by a monitoring tool that was put in place.
The ministers specifically raised concern over four longstanding NTBs whose solution, they said, requires policy guidance.
They include the restriction by Uganda on beef and beef products from Kenya, since 1996.
Others are requirement by Tanzania that cigarettes manufactured in Kenya and exported to Tanzania should have a 75 percent local content, and requirement by the Tanzania Foods and Drugs Authority (TFDA) that companies exporting to Tanzania should register, re-label and retest goods certified by other partner states.
This trade barrier has existed since 2003.
Raymond Murenzi, director-general of the Rwanda Standards Board (RSB), told The New Times that the issues concerning the TFDA are “very serious” as it is “very difficult for our products to be exported to Tanzania.”
Another major trade barrier that the Council says has existed since 2009 is inadequate coordination among the numerous institutions involved in testing and clearance of goods at the borders.
Before the summit pronounced itself on the matter, the Council had recommended that the former directs the EAC Secretariat to convene a dedicated session of ministers of trade and ministers responsible for EAC affairs and planning to resolve all the unresolved NTBs by August 30.
The Council was also of the view that only NTBs that have been reported by the Sectoral Council on Trade, Industry, Finance and Investment (SCTIFI) should be included in the annual report of the Council to the summit.
Tanzania reasoned that the matter should not be part of the report as the SCTIFI had already considered and deliberated on complaints raised pertaining to the TFDA in requiring companies exporting to Tanzania to register, re-label and retest certified products from other partner states.
Tanzania’s position is that technical regulations are not NTBs but international best practice for countries having food and drugs authorities and the country informed the meeting that the technical regulations enforced by TFDA are “mandatory and are in accordance with the EAC harmonized standards.”
Consequently, it is noted, TFDA is simply enforcing or implementing the requirements of East African harmonised standards.
Tanzania also reasons that its processes are not discriminatory but apply to imported and domestically produced products.
Retesting, it says, is done by TFDA for surveillance samples drawn during post marketing surveillance.
Countries defer
However, other partner states do not agree with Tanzania and insist that the issues need to be resolved urgently.
“Kenya informed the meeting that TFDA has continued to require labeling and retesting of drugs from partner states into Tanzania that already carry the marks of quality which are recognised by all partner states bureau of standards,” reads part of the Council’s report.
Further, Kenya says, the matter is in the time bound matrix used to monitor elimination of NTBs and as such the continued delay of clearance of the products frustrates movement of trade in the region needs to be resolved urgently.
Kenya and Uganda are of the view that the requirement by TDFA is an NTB that has remained unresolved for long and should be retained in the report.
“Removing the item from the annual report of the Council to the summit does not address the NTBs, yet addressing NTBs is a matter of critical importance given the declining intra-EAC trade,” reads the Council’s report.
During the Council meeting, it is reported that Rwanda as well expressed concern over whether this issue is a technical barrier to trade or a non-tariff barrier.
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Commonwealth African countries to discuss priorities for reviving world trade
Amid an unprecedented global trade slowdown, African policy-makers, negotiators and trade analysts will meet on 25-26 May 2017 in Mauritius to discuss priorities for reviving world trade and strengthening their trading capacity.
Since 2014, world trade has declined by more than US$3 trillion with Sub-Saharan Africa’s combined exports falling by about 40 per cent – from US$403 billion to less than US$250 billion.
Participants will discuss the most pressing trade and development challenges for Commonwealth African member states, in the light of unfavourable global economic and trade patterns, rising protectionism and growing discontent about globalisation.
The meeting will also be an opportunity for reviewing the current issues for multilateral trade negotiations, especially since the World Trade Organisation is hosting its 11th ministerial conference in Buenos Aires in December.
The regional consultation will take into consideration the outcomes of the Commonwealth Trade Ministers’ meeting, held in March this year in London, particularly to explore avenues through which intra-Commonwealth trade and investment opportunities can be enhanced.
The meeting will also provide a platform for African member states to assess various trade policy options, including UK-Africa trade relations post Brexit, advancing African integration through the Continental Free Trade Agreement, and priority issues for the upcoming Global Review of Aid for Trade in July.
The Commonwealth Secretariat will launch its new Handbook on Regional Integration in Africa: Towards Agenda 2063 in Mauritius. The handbook provides a unique resource on current dynamics, opportunities, challenges and policy options for Africa’s regional integration agenda. Agenda 2063 is the African Union’s strategic framework for the socio-economic transformation of the continent over 50 years.
Past and present trade negotiators will also convene to finalise a proposal to establish an informal Commonwealth African Trade Negotiators Network.
Brendan Vickers, Economic Adviser at the Commonwealth Secretariat said: “African countries are engaged in a range of global, regional and bilateral negotiations on trade and trade-related issues. However, one of the major challenges confronting Africa is the capacity to undertake trade negotiations, although many experienced negotiators from Africa are willing to help.
“This network aims to bring these negotiators together and provide a ‘think tank’ for Africa for future trade negotiations. Drawing on the collective experience, knowledge and wisdom of present and past trade negotiators, the network will help set out strategic priorities for Africa’s current and future trade agenda, assess opportunities and challenges, brainstorm particular negotiating and policy issues, and explore ways to unlock any impasse in some of the negotiations.”
The meeting is being organised in partnership with the government of Mauritius. It will be opened by Seetanah Lutchmeenaraidoo, Minister of Foreign Affairs, Regional Integration and International Trade.
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Nigeria faces prospects of fragile economic recovery in 2017
Nigeria can build on the oil-driven economic recovery anticipated for it in 2017 by strengthening its macroeconomic policy framework and implementing the structural reforms needed to diversify the economy and break out of a boom and bust cycle, according to the World Bank’s new Bi-annual Economic Update.
In 2016, Nigeria experienced its first full-year of recession in 25 years. Global oil prices reached a 13-year low and oil production was crushed by vandalism and militant attacks in the Niger Delta, resulting in the severe contraction of oil GDP. Although the oil sector represented only 8.4 percent of GDP in 2016, lower foreign exchange earnings from oil exports had spillover effects on non-oil sectors (industry and services) dependent on imports of inputs and raw materials, and overall real GDP contracted by 1.5 percent.
Growth is forecast to return into positive territory in 2017, largely on the back of recovery in the oil sector as the government intensifies efforts to restore peace and stability in the Niger Delta, improve its Joint Venture (JV) relationships with international oil companies, and while strong growth in the agricultural sector continues. However, given the risks associated with the oil sector, recovery is fraught with a high degree of fragility and risks; notably from future shocks to the oil price or further unrest in the Niger Delta, which is not yet fully stabilized, as well as from the incomplete implementation of new JV cash call arrangements.
On the upside, as the update highlights, the Nigerian government has recently launched an Economic Recovery and Growth Plan (ERGP) for 2017-2020 that contains critical reforms aimed at diversifying the economy to set it on a path toward sustained and inclusive growth over the medium- to long-term.
“The ERGP, if implemented successfully, would lead to expanded transportation infrastructure, the increased reliability of supply of power by restoring financial viability to the power sector, an improved business environment, improved educational attainment, strengthened public institutions, and improved transparency and anti-corruption,” said Rachid Benmessaoud, Country Director for Nigeria.
The economic update also contains a special chapter which summarizes the findings of a forthcoming World Bank Report, Toward Sustainable Growth in Nigeria: Empirical Analysis and Policy Options. This chapter highlights the fact that, over the last four decades, Nigeria’s GDP growth rate has failed to keep pace with those of more developed economies, an experience common among commodity exporters. Oil has continued to dominate its growth pattern but the volatility of oil-dependent growth imposes welfare costs, which impede progress in social and economic development, as was very clear over the last year.
A cross-country analysis of the determinants of growth carried out for the report underscores the importance of sound macroeconomic management and stability for growth, while confirming that inflation, government consumption, and currency misalignment (overvaluation) are negatively correlated with growth.
Oil and other natural resource rents can have a positive impact on growth when public institutions and governance are strong. Investment in education is also found to be a determinant, one particularly important in Nigeria to increase factor mobility from less productive to more productive sectors. An analysis of the constraints to doing business and the impact of current trade policies highlights the need to improve access to finance, improve the reliability of power supply, and adjust trade policies to promote productivity growth.
The Nigeria Bi-annual Economic Update is produced by the World Bank in Nigeria, and replaces the previous Nigeria Economic Reports that were published on an annual basis in 2013, 2014, and 2015.
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EAC seeks clarity on EU trade deal
East African Community (EAC) partner states that are yet to sign the EU-EAC economic partnership agreement (EPA) are not in position to do so pending clarification of issues they have identified in the draft agreement, the regional bloc has said.
This was noted in a statement issued after the 18th Ordinary Summit of the EAC Heads of State, held under the theme: “Towards sustainable growth and development of the Community” in Dar es Salaam, Tanzania on 20 May 2017.
“It was however agreed that due to this action Kenya should not be disadvantaged since she has already signed the agreement,” the communiqué reads in part.
In September last year, trade ministers of Rwanda and Kenya signed the deal at the EU headquarters in Brussels, Belgium.
Last year, the East African Business Council (EABC) advised the partner states to sign the deal quickly since failure to meet the EU deadline for ratification (which has since passed) could see EAC exports to EU attract import duty, especially for Kenya, the region’s largest economy.
Whereas Burundi, Rwanda, Uganda and Tanzania have an option to rely on the Everything But Arms (EBA) trade arrangement under which they can still enjoy duty-free market access to the EU, Kenya does not have the same privilege as its economy is considered to be more advanced than the others.
Kenya sells some 30 per cent of its exports to the EU.
At the summit, President Yoweri Museveni of Uganda assumed the bloc’s leadership that’s held on rotational basis and was mandated to reach out to the European Union to communicate the EAC circumstances within one month.
“In the event that an acceptable way forward is not reached with the EU within the next six months, the Chairperson was authorised to explore the use of variable geometry in implementation of the EPA by EAC member states working with the Council of Ministers.”
Museveni takes over from President John Magufuli of Tanzania.
The Council of Ministers is composed of the ministers in charge of East African Affairs from the member states.
The summit also agreed that the EU sanctions on Burundi should be discussed alongside the EPA discussions.
The proposed EPA between EAC partner states and the EU was among the key items on the summit’s agenda. Earlier this year, the 35th Ordinary Meeting of the Council of Ministers had mostly considered partner states’ concerns about the deal.
The last council meeting was informed that Uganda’s interest was for the partner states to move to sign the agreement as a bloc and to explore available options in the event that some partner states sign the EPA and others do not.
The council’s report, a copy of which The New Times has seen, says that while Burundi’s only concern is that the EU unilaterally suspended direct partnership with Bujumbura, Tanzania maintains reservations and needs the EAC Secretariat to conduct a detailed analysis on the effects of the proposed deal in order to bring about regional perspective to the Community.
Tanzania highlighted 15 specific concerns including effects of EPA on EAC industrial development, effects of EU subsidies and domestic support on EAC farmers accessing EU market, bridging the gap of revenue losses resulting from substantial trade liberalisation, as well as the effect of Brexit as UK is one of the major trading partners of EAC.
New EAC member South Sudan will also take time to study the issues related to the EAC-EU EPA negotiations, it was announced.
Confederation model adopted
The search for a sustainable financing mechanism was also deliberated by the EAC leaders during yesterday’s meeting with the Heads of State noting the progress on the issue of sustainable financing mechanism for the Community. They directed the ministers of finance to meet and finalise work on the modalities required to establish a sustainable financing mechanism and report to the 19th Summit.
Among others, the Summit “noted with concern” the declining intra-EAC trade and directed the Council to resolve the long-outstanding non-tariff barriers and report to the 19th Summit.
The leaders also deliberated on the envisioned EAC political federation.
The communiqué says they adopted the political confederation as a transitional model of the east African political federation and directed the Council to constitute a team of constitutional experts to draft the constitution for the political confederation and report to the next Summit.
The Summit appointed South Sudan’s Justice Dr Charles Oyo Nyawello as a judge in the first instance division of the East African Court of Justice.
EAC institutional review
The Summit received the progress report on the EAC institutional review and noted that phase one of the institutional review was being implemented and directed the Council to expedite its full implementation.
The leaders also received a report on the verification for the admission of Somalia into the EAC. “The Summit directed the Council to follow-up on the matter and report to the 19th Summit.”
They also received a progress report on the modalities for promotion of motor vehicle assembly in the bloc aimed at reducing the importation of used motor vehicles from outside the Community; as well as a progress report on the review of the textile and leather sector with view to developing a strong and competitive domestic sector that gives consumers better choice than imported used textile and footwear. They directed the Council to finalise both matters.
As expected, the Summit assented to the EAC Customs Management (Amendment) Bill 2016, the EAC Supplementary Appropriation Bill 2016, and the EAC Appropriation Bill 2016.
Common Higher Education Area approved
The Summit also declared the EAC as a common higher education area in order to harmonise and enhance the quality of education in the region.
The Heads of State directed the Council of Ministers to operationalise the transformation.
The creation of a common EAC Higher Education Area (EACHEA) implies that qualifications will be appropriately recognised in all partner states both for continuation of studies as well as in the labour market. With the approval of EACHEA, the education system in the Community will be harmonised, comparable, and compatible, thus boosting knowledge and skills development.
Apart from the host and Chairperson of the Summit, President Dr. John Pombe Joseph Magufuli of Tanzania,
The 18th EAC Summit was attended by President Yoweri Museveni, President Magufuli, Kenya’s Deputy President William Ruto, Burundi’s First Vice President, Gaston Sindimwo, Rwanda’s Minister for Trade, Industry and EAC affairs, and South Sudan President Salva Kiir Mayardit’s economic advisor Aggrey Tisa Sabuni.
tralac’s Daily News Selection
Latest tralac Newsletter: Willemien Viljoen comments on Africa’s recent agricultural trade performance
Just posted: Africans moved more freely in 2016, according to second Africa Visa Openness Index (AfDB)
Overall, Africans were able to travel more freely across the continent in 2016, as visa openness levels improved from 2015. However, many challenges remained. The second Africa Visa Openness Index (pdf) highlights pervasive regional differences in visa openness performance. For example, 75% of countries in the top 20 most visa-open countries are in either East or West Africa, while 20% are in Southern Africa. Only one country in the top 20 most open to visas is in North Africa (Mauritania), while no countries in Central Africa rank in the top 20.
Concluding today: In Addis, Initiative for Food and Nutrition Security in Africa - 1st Partners Meeting; In Livingstone, 2017 EDBI conference - Business reforms for industrialization, value addition and job creation
Highlights from selected recent trade policy events:
EAC multi-stakeholder consultation on Africa’s Continental Free Trade Area (16-17 May, Entebbe)
Tripartite Committee of Senior Officials for Trade, Customs, Finance, Economic matters and Home Affairs: Malawi yet to endorse Tripartite Free Trade Area
ACP-EU: 28th meeting of economic and social actors (15-16 May, Brussels): final declaration (pdf)
Inaugural meeting of the Committee on Trade Facilitation: outcomes (WTO). The committee will develop procedures for the sharing of relevant information and best practices among members. After four years, the committee will review the operation and implementation of the TFA. A seminar will be held on 2 June at WTO headquarters to commemorate the entry into force of the TFA. Members will review the negotiating history of the TFA and be invited to share their thoughts on how to secure effective implementation of the Agreement.
Trade Facilitation Agreement: Ghana update (UNCTAD). Ghana is one of the frontrunners in the region implementing the single window system — one of the key measures in the WTO Trade Facilitation Agreement. “Ghana’s experience as a trailblazer on trade facilitation can serve as a model for the region,” said Dr Kituyi. Dr Kituyi also called for the sharing of regional experiences and highlighted the value in learning from the ECOWAS case. “As had been seen in East and Southern Africa, the top down approach could only go so far, said Dr. Kituyi, adding that “bottom-up efforts and national leadership, particularly in cooperation with the private sector, are needed and go much farther in driving a meaningful locally owned regional integration agenda.” [Mali: Trade Facilitation Committee workshop, 22-24 May, Bamako]
The AfDB has released a set of new working papers:
Simon Roberts: Competition and industrial policies relating to food production in southern Africa (pdf). Ultimately, the analysis points to the challenge of moving the competition discourse from one of enforcement, which assumes that by addressing discrete anti-competitive conduct local competition will flourish, to the integration of competition policy with the development of local productive capabilities. It is important to address international cartels and this, in itself, poses important challenges for the development of international regulatory regimes. However, we need to go further, to frame the agenda in terms of the ways in which industrial policy and economic regulation can reshape markets to generate competition within local and regional markets in southern Africa. Three key areas were identified for this agenda. First, the regional scope of actual and potential linkages needs to be better understood. Big businesses are integrating their activities across the region, but not necessarily to build productive capabilities for competitive production across borders. This relates to the second key area which is understanding how the regional value chains are governed and the extent of market power and its exertion by large firms. The regional reach of businesses can reinforce cartels and unilateral exertion of market power to earn rents and exclude local rivals, undermining industrialisation. A competition policy agenda which links to industrial policy is essential to generate competitive markets and stimulate dynamic rivalry built on investments in improved capabilities. Third, effective regional institutions are required to simultaneously discipline market power and support industrialisation. The appropriate actions and initiatives require sector specific analysis. This paper has assessed the situation with regard to food production, an important sector in its own right.
Haroon Bhorat, Ravi Kanbur, Christopher Rooney, François Steenkamp: Sub-Saharan Africa’s manufacturing sector: building complexity (pdf). In the context of a growing labour force, there has been debate over the prospects of Africa following the economic footsteps of East and South Asia, and pursuing a form of manufacturing-led structural transformation, and thereby creating jobs for a young and growing labour force (McMillan et al., 2014; Rodrik, 2014; Page, 2012). This paper adds to this debate, which has typically viewed manufacturing at the aggregate level, by providing a more granular product-level analysis of SSA’s evolving manufacturing sector, with the Asian experience serving as a counterpoint. The analysis is aided by the tools of complexity analysis, specifically those derived from the Atlas of Economic Complexity (see Hausmann et al., 2014).
Related: Justin Yifu Lin, Célestin Monga, Samuel Standaert: The inclusive and sustainable transformation index, Christian Ketels: Structural transformation: a competitiveness-based view, Julian Alston, Philip Pardey: Transforming traditional agriculture redux, Peter Timmer: Structural transformation and food security: their mutual interdependence, AfDB’s Jobs for Youth in Africa Strategy: report of regional ministerial conferences on youth employment and entrepreneurship in Africa
Dirk Willem te Velde: Implementing industrialisation strategies in Africa
US interests in Africa: Tony Carroll’s statement from yesterday’s hearing in Washington
Among the tools that I recommend be deployed to support increased US investment into Africa include the following: (i) Increase market size: Many American companies are dissuaded by most Africa country’s market size. Sure, Nigeria, South Africa and Kenya are appealing in their own right but Togo, Benin and Malawi may not. Fostering regional integration though bilateral and multilateral technical assistance will create scale and incentivize US firms. But regional integration should also be for investors and not just traders. US technical assistance to Africa’s regional economic communities (EAS, COMESA, ECOWAS, SADC, SACU) and business associations can foster trade facilitation and enlarge market opportunities for US investors. For example, P&G manufactures consumer products for African’s middle class but the scale of initial investment in manufacturing facilities necessities regional market access. Last, as noted below, China is making investments to improve both national and regional transportation linkages. In so doing, they are expanding markets in Africa and opportunities for US trade and investment. [(ii)Enhance US investment in African infrastructure, (iii) Strengthen Africa’s business enabling and innovation environment, (iv) Foster linkages between US and Africa firms, business associations, (v) Maintain US instruments at OPIC, EXIM and TDA, (vi) Maintain USFCS, FAS and domestic USEAC offices] [The author is attached to the School of Advanced International Studies, Johns Hopkins University]
ECOWAS Trade Liberalisation Scheme: update (ECOWAS)
During a briefing session the Chairman of the Task Force, Mr Salou Djibo, former Head of State of Niger Republic, handed over a report of the progress and challenges encountered by the ETLS as observed in several Member States already visited by the Task Force. The Task Force has visited seven ECOWAS Members States (Burkina Faso, Liberia, Benin, Togo, Côte d’Ivoire, Ghana and Nigeria) and has observed similar challenges in all States (with a few peculiar issues observed in some specific countries). One of such challenges is the inadequate awareness of the provisions of the ETLS among stakeholders and community citizens. The President of the ECOWAS Commission assured the ETLS Task Force of the Commission’s commitment and support in addressing these challenges. The President stated that, ECOWAS should aim to increase its inter-regional trade from its current 12% to 50% within the next four years. While the task ahead is huge, the President remained positive that the region will achieve its goal of economic integration in the long term.
No formal talks on investment facilitation at WTO, says India (Mint)
India on Thursday succeeded in ensuring a controversial proposal on investment facilitation cannot be discussed formally at the WTO, making it certain that the dialogue, if any, can happen only at an informal level. India claimed that discussion on investment facilitation as demanded by China, Russia, Brazil, Argentina, Australia and others was not part of “multilateral trade relations,” people familiar with the development said. In an attempt to break the impasse, the chair for the general council ambassador Xavier Carim of South Africa held consultations with India and the proponents of the proposal to find a compromise. Consequently, the two sides agreed to a statement prepared by the GC chair in which Carim made it clear that the proponents can only have an “informal dialogue.”
Selling Brazilian fashions, the women of Angola’s ‘suitcase trade’ spot trends and pedal dreams (The Conversation)
The textile trade’s “suitcase traders”, or moambeiras, as the female importers are often called, are mainly mothers and heads of households aged 30 to 50, who live in Luanda’s poor periphery. Independently but as part of a network, they organise regular buying trips on one of four weekly flights between Luanda and São Paulo, Brazil, a global fashion centre. Though there is no official data on the subject, the number of Angolan women travelling to Brazil is estimated at around 400 per week.
South Africa: IMF completes 2017 Article IV visit
“With limited room for stimulus through macroeconomic policies, the priority to stimulate economic growth and job creation rests with structural reforms, notably in product and service markets and in the labour market. The focus should be on sectors that provide crucial inputs for most firms in the economy, such as power generation, telecommunications, transportation, and financial services for small-and medium-sized enterprises.”
Today’s Quick Links: Uganda: UNRA on the spot over Chinese dominance in roads sector Mauritius: French Development Agency to promote green infrastructure projects KNCHR raises red flag on impact of Lamu mega projects Mozambique ratifies air transport agreement with India Chad P. Bown: What is NAFTA, and what would happen to US trade without it? SDG Action Event on Innovation and Connectivity: Innovators, UN discuss using tech to tackle world’s development challenges Steve MacFeely (UNCTAD’s Head of Statistics and Information): In search of the Data Revolution The future of jobs and skills in the Middle East and North Africa: preparing the region for the Fourth Industrial Revolution Geographic information system driving digital transformation in India |
Related News
Africans moved more freely in 2016, according to second Africa Visa Openness Index
The African Development Bank (AfDB), in collaboration with the African Union Commission and the World Economic Forum Global Agenda Council on Africa, launched on Friday, May 19, 2017, the second edition of the Africa Visa Openness Index, ahead of the Bank’s Annual Meetings in Ahmedabad, India.
The Index measures how open African countries are when it comes to visas by looking at what they ask of citizens from other African countries when they travel. It aims to show at a glance which countries are facilitating travel for citizens of other countries and how: whether they allow people to travel to their country without a visa; if travelers can get a visa on arrival in the country; or whether visitors need to obtain a visa before travel.
Overall, Africans were able to travel more freely across the continent in 2016, as visa openness levels improved from 2015. However, many challenges remained. The second Africa Visa Openness Index highlights pervasive regional differences in visa openness performance. For example, 75% of countries in the top 20 most visa-open countries are in either East or West Africa, while 20% are in Southern Africa. Only one country in the top 20 most open to visas is in North Africa (Mauritania), while no countries in Central Africa rank in the top 20. “I need 38 visas to move around Africa,” says Aliko Dangote, President and CEO of Dangote Group.
Although challenges remain, much progress was also achieved in 2016. Continent-wide, Ghana has made the most progress in 2016 in opening up its borders to African travellers, moving into sixth place in the Index, up 16 places from 2015. Senegal also moved into the top 20 most visa-open countries, up nine places from 2015, and Tunisia moved up 13 places from 2015. Seychelles continues to lead the Index and remains the only African country on the continent to offer visa-free access for all Africans.
“Our leaders have to bring down the walls that separate us, from East Africa to Central Africa to North Africa to West Africa. We need a wider open market,” says Akinwumi A. Adesina, President of the African Development Group, who received an African passport in 2016.
Going forward, the priority now is to continue this positive trend and deliver on the AU’s decision for African countries to issue visas on arrival to all Africans. Greater visa openness in Africa could help create a people-centered African integration that offers much-needed travel, trade, leisure, study and job opportunities for all Africans.
The website of the Visa Openness Index is accessible at www.visaopenness.org.
Source: Africa Visa Openness Report 2017
Related News
House Foreign Affairs Committee Hearing on U.S. interests in Africa
Foreign Affairs Committee Chairman Ed Royce (R-CA) convened a hearing entitled “U.S. Interests in Africa” on Thursday, 18 May 2017. Testimonies were delivered by General William E. Ward, Mr. Bryan Christy, Mr. Anthony Carroll (see below), and The Honorable Reuben E. Brigety II.
Chairman Royce’s opening statement
“Today we focus on U.S. interests on the continent of Africa. As Members know, this Committee has been at the lead of U.S.-Africa policy for many, many years. Last Congress was no different, with several laws passed:
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The Electrify Africa Act will bolster power and electricity projects across the continent, spurring economic growth;
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The END Wildlife Trafficking Act combats the threat posed by the illegal poaching and trafficking of elephants, rhinos and other animals – the profits linked to extremist groups;
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The Global Food Security Act improves our ability to respond to food emergencies; and
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We also successfully reauthorized the Africa Growth and Opportunity Act to expand opportunities for increased trade and investment.
Not too long ago, the Committee fought to establish landmark programs like PEPFAR and the Millennium Challenge Corporation. As this work was done in a bipartisan way – we operate the same way today. I would like to thank Ranking Member Engel, Chairman Smith and Ranking Member Bass for their leadership on these issues.
With nearly one billion consumers, Africa has huge potential as both a trading partner and a U.S. job-creator. Some of the fastest growing economies in the world are African, including 6 of the top 13 countries that grew the fastest over the last three years. This makes our economic engagement on the continent critical. But according to a recent news report, Chinese engagement with the continent “may be the largest global trade-and-investment spree in history.” Simply put: the U.S. cannot get caught watching from the sidelines.
Our efforts to combat Islamist extremism is not confined to the Middle East. ISIS affiliates and alShabaab in Somalia, Boko Haram in Northern Nigeria, and the al-Qaeda affiliate throughout the Sahel region must be addressed head-on through counterterrorism initiatives and support for African partners. One witness today will tell us about his exploits fighting wildlife traffickers, some linked to terrorists. Efforts to strengthen democratic institutions and government capabilities must go hand-in-hand with our efforts to address these challenges. Unfortunately, too many African countries are off the democratic track.
Critical situations require immediate leadership and direction from the U.S government. With three famines looming on the continent, deliberate deprivation of humanitarian aid by South Sudan’s political leaders, and ongoing political instability in the Democratic Republic of the Congo, the U.S. must remain active and engaged.
I am pleased by last week’s nomination of Ambassador Mark Green to lead USAID. We look forward to working with this former Committee member to continue to provide communities with lifesaving aid from the American people. Aid also helps open African markets to sell U.S. goods and services. However, I am concerned by the delay in appointing an Assistant Secretary for Africa at the State Department. And the Department needs to demonstrate how the Administration’s proposed budget cuts don’t put this progress in jeopardy.
As we will hear today, our engagement with Africa is in the strategic interest of the U.S. Not only to address urgent humanitarian needs, but also to advance our critical economic, political, and security interests. Now isn’t the time to pull back.”
Testimony of Anthony Carroll*, Adjunct Professor at John Hopkins University, School of Advanced International Studies
This month marks the twentieth anniversary of the signing into law of the Africa Growth and Opportunity Act (AGOA). That historic legislation would not have been enacted without the efforts of Chairman Ed Royce and a bipartisan group of Congressmen and Congresswomen who wanted to create a new economic relationship with Africa. I specially note the contributions of Jim McDermott, Phil Crane, Charlie Rangel, Bill Thomas, Don Payne and Bill Archer. Since AGOA’s passage Africa economic landscape has changed dramatically. First, from 2008-2014, Africa’s GDP grew on average 5% per annum with some Africa countries achieving above 8% annual GDP growth. And the most dynamic element of this growth has been Africa’s burgeoning services sector. Second, Overseas Development Assistant (ODA) has fallen behind foreign direct investment (FDI) and remittances in volume of financial flows to Africa. And last, in 2009, China became Africa’s largest trading partner and last year total trade was $172 billion, over twice that of the U.S. China’s investment patterns have followed suit.
I will devote my testimony to an examination of the relationship between trade and investment and will identify ways in which both the United States and Africa can benefit from an expanding relationship. My observations are based upon nearly 40 years of advising companies, development agencies, foundations and regional and international organizations on African trade, development and investment and as a private equity investor in various sectors. In my testimony, I will look at the various tools that the U.S. can utilize to deepen that relationship and examine the role China and South Africa.
Trade
AGOA has produced a modicum of success. Total two-way trade (AGOA and non-AGOA) between Africa and the U.S. is approximately $80 billion per year. if you disregard oil imports, which skew assessments of AGOA’s impact because (1) oil imports really have not been created by or even much affected by AGOA, and (2) commodity price fluctuations can have a profound impact on trade statistics without reflecting fundamental changes.
According to USITC’s Dataweb, while petroleum imports from the AGOA countries have fallen rather sharply from 2000 to 2016 (-66% by volume, -47% by value), non-petroleum imports from the AGOA countries have shown strong growth up 75% over the same period from $6.9 billion in 2000 to $12.2 billion in 2016. This growth has been concentrated mainly in automobiles, apparel and agricultural products. China’s trade has been criticized as being unbalanced and defined by the export of raw commodities from Africa and the export of consumer goods from China to Africa. In contrast, AGOA trade includes sophisticated products such as luxury automobiles and fine wine from South Africa and fashion apparel from Lesotho, Mauritius and Kenya. Some trade such as cut flowers from Kenya and Ethiopia and gem diamonds from Botswana and Namibia are not captured by AGOA Trade data as they sent through third countries. Indeed, the US purchases over 1/3 of Africa’s diamonds.
At the same time, the US trade balance with the AGOA countries has improved significantly since 2000. Focusing on non-petroleum trade, the US trade balance has improved from a $1.3 billion trade deficit in 2000 to an $831 billion trade surplus in 2016. (If you include petroleum (which is a mistake in my opinion), the U.S. trade balance has improved significantly but remains in deficit, improving from -$16.0 billion in 2000 to -$7.0 billion in 2016.) US exports to the AGOA countries have grown by a greater percentage since 2000 (up 130%) than have US imports from the same countries (up 75%). This is a winning program for U.S. jobs!
Much is made by the critics of AGOA of the supposed fact that the benefits are highly concentrated in just a few countries, but this is not correct if you disregard petroleum. 36 of the 38 eligible AGOA beneficiaries have regularly exported to the US under AGOA, although in many instances the volumes are quite small. Although job creation statistics in Africa are at best estimates, it is widely believed that AGOA has created hundreds of thousands of new direct jobs and millions of indirect jobs in Africa AND in the United States. In South Africa, it is estimated that 60,000 direct jobs have been created by AGOA and another 100,000 indirect jobs.
In short, I believe there is a very positive story to tell about AGOA, and hopefully the 10-year extension of AGOA in 2015 will provide further impetus for even more growth.
U.S. Investment
The U.S. remains a major foreign investor into Africa. “Blue Chip” US companies like GE, Cargill, Johnson & Johnson, Newmont, Exxon Mobil and Anadarko not only bring money but also global best operating practices, technology and training to Africa. According to the latest UNCTAD data, in 2015 the US was Africa’s largest cumulative non-Asian foreign investor at $66 billion followed closely by the U.K and France. In 2016, the U.S. invested just under $4 billion in Africa. Indeed, there is a relationship with U.S. investment and trade. For example, GE invested in a locomotive manufacturing plant in SA in accordance with local content rules. However, 50% of the content is from U.S. suppliers.
China Investment
According to my SAIS colleagues at the China Africa Research Initiative, China’s FDI between 2000-2014 was $86 billion. Just between 2014-2016 China quadrupled its investment into Africa to $36 billion last year. The growth of Chinese investment into Africa has continued to expand, in a recent Business Daily (Kenya) article, China is reporting a 64% increase in Africa FDI during the first quarter of 2017. Unlike U.S, FDI which is largely private sector led, Chinese investment is a blend of state and non-state actors and often in the form of long term loans and is often geared toward infrastructure development such as the railroads and hydroelectric power dams. However, the recent growth of Chinese FDI into Ethiopia’s manufacturing sector by private companies is perhaps evidence of changing trend. At last year’s Forum on China Africa Cooperation (FOCAC), China committed $60 billion in infrastructure investment in Africa over the next five years. This week’s One Belt on Road meeting in China is evidence of China’s long terms commitment to infrastructure across the globe to foster increased trade and Africa is a major target of the initiative. While the numbers are hard to quantify because of the interfirm nature of transactions, South Africa has also become a larger investor into Africa than the U.S.
Trade Capacity Development
In truth, AGOA is as much as a development as it is trade initiative. Since inception, the U.S. has spent nearly $500 million on trade capacity assistance in Africa. But this assistance has also been coupled with country led measures that may not have been instituted without AGOA’s compliance incentives. The chief vehicle for trade capacity assistance has been USAID’s three regional Trade Hubs. These Hubs have been effective in improving the enabling environment for trade on the national and regional level as well as enhancing the capacity of African firms to access the U.S. and global markets. Since their inception in the early 2000s, the Trade Hubs have supported $854 million in African exports and $195 million in leveraged investments. Because of the interest among Africans to increase US investment into Africa, these Hubs have broadened their mandate to include new capabilities in fostering links between US investor and African opportunities at the firm, project and sectoral level. Just this month, USAID led a group of US pension fund investors to Africa and will organize a reverse mission to the US later in the year.
The Future of U.S. investment into Africa
Africa will be the population center of the planet over the next two generations. The continent’s population could double by 2050 and will be the youngest and most rapidly urbanizing on the planet with 50 cities above 5 million people. The Youth Bulge is both a threat and opportunity for Africa. If properly harnessed, it can provide both a workforce and a consumer market. If not, it can be the font of desperate emigration, civic unrest and terrorism. While the US has fallen behind China and South Africa as the continent’s leading investment partner, we can develop win-win strategies that provide attractive returns to US investors and economic and political stability for Africans.
Among the tools that I recommend be deployed to support increased US investment into Africa include the following:
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Increase Market size – Many American companies are dissuaded by most Africa country’s market size. Sure, Nigeria, South Africa and Kenya are appealing in their own right but Togo, Benin and Malawi may not. Fostering regional integration though bilateral and multilateral technical assistance will create scale and incentivize US firms. But regional integration should also be for investors and not just traders. US technical assistance to Africa’s regional economic communities (EAS, COMESA, ECOWAS, SADC, SACU) and business associations can foster trade facilitation and enlarge market opportunities for US investors. For example, P&G manufactures consumer products for African’s middle class but the scale of initial investment in manufacturing facilities necessities regional market access. Last, as noted below, China is making investments to improve both national and regional transportation linkages. In so doing, they are expanding markets in Africa and opportunities for US trade and investment.
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Enhance US investment in African infrastructure – As I have testified before this committee in the past, MCC is a program that has many benefits. First, it requires accountability and commitment from recipient countries. MCC has been able to improve power supply and transportation infrastructure in targeted countries and it has encouraged improvements in the business enabling environment and human skills development, especially among youth and women. However, MCC could do more leveraging and create more targeted infrastructure investment. Along with regional compacts, MCC should consider allocating a portion of its compacts for sub-national infrastructure investment. As in the US, subnational infrastructure development creates a closer link between the user and sponsor. This will lead to greater accountability and sounder decisions and Africa has financial space to incur such debt relative to other regions. In association with ratings agencies, MCC could develop a set of criteria and operating rules for towns, cities, provinces and then provide guarantees to support local currency denominated bonds that could be purchased by national, Africa or even US and European pension funds, institutional investors and family offices.
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Strengthen Africa’s business enabling and innovation environment. While Africa has been burdened by a brain drain and a collapse of educational institutions, in many countries there has been an explosion in innovation, partly enabled by the boom in the internet. Kenya has become a global Fintech capital, Nigeria’s film industry trails only the US and India in production and South Africa has research universities that are working with firms to create pan Africa solutions in health, agriculture and education. However, innovation cannot be top down. A proper enabling environment must be evolved which offers financial and tax incentives along with strong IPR protection and judicial systems for dispute resolution and contract enforcement. Again, working on the regional level to inculcate innovation should be a target. There may be ways in which countries can share their innovative comparative advantages across borders. For example, Botswana may have a labor pool for certain automotive component manufacturing or 3D printing that might be prohibitively expensive in South Africa. But the latter has Original Equipment Manufacturers that will need support from national and neighboring South Africa Customs Union suppliers. This is already occurring. The business enabling environment is also key. There is an increase in Private Equity investment into Africa and this will only increase if Africa countries continue to modernize its financial institutions and regulations. Few Americans are aware that South Africa’s Johannesburg Stock Exchange is among the oldest exchanges in the world. However, the remainder of African exchanges are weak and limit the ability of PE investors to exit their investments. USAID and US Treasury can provide technical assistance and outreach to US exchanges, ratings agencies and law firms to speed the development of capital markets.
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Foster linkages between US and Africa firms, business associations. Mark Zuckerburg recently toured Nigeria and commented that it reminded him of what Silicon Valley looked like 20 years ago. Last year I participated in the Global Entrepreneurship Summit at Stanford University and witnessed an extraordinary exchange of ideas and energy among entrepreneurs from the US and across the globe. Additionally, each year the Biological Industry Organization hosts an annual confenence in which African entrepreneurs, research institutions and government agencies are invited to share their ideas with US investors. The annual AGOA Forum rotates between Africa and the US. This annual event provides an opportunity for African business and civil society organizations to offer their observations on how trade capacity development assistance and government policies can accelerate trade, investment and economic inclusion. Last, I have been a speaker and mentor to the Young Africa Leaders Initiative’s Mandela Fellows since inception. 1,000 YALI fellows are chosen from tens of thousands of applicants and spend several weeks in the US interacting with research universities, companies and US Citizens. YALI along with other educational exchanges foster the types of linkages and understanding that provide benefits well into the future and represent good value for public diplomacy. I should also note the growing importance of the Africa diaspora in the US in serving as a link to innovation, trade and investment. Often these linkages are facilitated by national (CCA, IGD, BCIU and US Chamber) and regional (Africa Chamber of Commerce of the Pacific Nor5thwest) business organizations.
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Maintain US instruments at OPIC, EXIM and TDA. In a perfect world, such risk mitigating instruments as OPIC, EXIM and TDA would not be needed to facilitate US Trade and investment, Regrettably, we do not live in a perfect world. When I began my commercial career in Africa nearly four decades ago, the usual lament from US firms were the subsidies and non-transparent business practices of our European competitors. Today those complaints are directed at China. In 2015 alone, China extended over $500 billion in export credits whereas EXIM extended $10 billion. When Africans engage with the US, it is over the absence of US FDI and not for increases in development assistance. OPIC plays and important role in incentivizing US FDI without crowding out the private sector, especially into high risk countries. And OPIC provides a profit to the US Treasury and according to the Center for Global Development, only 8% of its services are used by Fortune 500 companies. TDA is a small and useful agency that can directly trace its activities to increase US exports of goods and services and jobs and EXIM Bank a proven and effective means to support exports and jobs.
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Maintain USFCS, FAS and domestic USEAC offices – Such Blue Chips companies as Caterpillar, GE, Merck and Boeing have long established presences in Africa. Small and medium sized US companies have much to offer Africa but are inexperienced and often reluctant to participate in Africa growing market place. For example, Africa has the largest portion of undeveloped arable land in the work and US agribusiness firms offer a suite of products and service that could actualize that potential. There is no possibility for Africa to feed itself without undergoing a technological transformation as happened in India in the Green Revolution. The Foreign Agricultural Service has traditionally been focused on supported US agricultural commodity exports. However, the bigger opportunity lies with US companies to provides good, technology and services. The US Department of Commerce also has an important role in (1) informing these small and medium sized form of the opportunities in Africa and (2) having FCS offices support US firms and business missions when they travel to Africa.
* Mr. Carroll is also Vice President of Manchester Trade Ltd., and founding director of Acorus Capital, an Africa focused private equity fund.