Search News Results
Next month’s ocean conference eyes cutting $35 billion in fisheries subsidies – UN trade officials
Harmful fishing subsidies that contribute to overfishing are estimated to be as high as $35 billion, fisheries experts from the United Nations trade and development agency said yesterday, highlighting one of the key issues that will be debated at next month’s Ocean Conference.
“If you consider that the total export of fish and seafood products is $146 billion, we are talking about that of each $5 in fish products, $1 is subsidized,” David Vivas of the UN Conference on Trade and Development (UNCTAD) told reporters in Geneva.
“So it’s not a small amount. People are paying very expensively for a fish. They pay it by the dish and with their taxes,” continued Mr. Vivas, a Legal Affairs Officer in UNCTAD’s Trade, Environment, Climate Change and Sustainable Development Branch.
This financial motivation creates “a race to the bottom” as fleets compete against each other to harvest increasing amounts of fish – at a time when seafood is already a scarce resource.
The subsidies “create incentives to deplete resources faster than if there weren’t the subsidies,” Mr. Vivas said.
The international community is harvesting fish at unsustainable biological levels, according to UNCTAD. The Mediterranean Sea is about 70 per cent exploited; the Black Sea 90 per cent.
Roughly 56 per cent of all fish products come from wild harvest, with the remaining amount farmed, according to figures cited by the UN.
“The demand remains quite strong, mainly from the Asian region. Hence countries are not only going to NY to consider, issuing a political signal,” said Lucas Assunçao in reference to The Ocean Conference, “they are very concerned about this considerable market.”
The topic of fishery subsidies is “very contentious,” said Mr. Assunçao, who heads UNCTAD’s Trade, Environment, Climate Change and Sustainable Development Branch.
It involves requesting countries to provide information on what subsidies they provide and prohibiting those that contribute to overfishing, as well as potentially giving differential treatment to developing countries.
UNCTAD is working towards a multilateral fisheries agreement that will be discussed at The Ocean Conference in New York in early June, and finalized at the World Trade Organization’s (WTO) Ministerial Conference in Buenos Aires this December.
The idea of such an agreement has support from a number of countries and regional blocs, including the African, Caribbean, and Pacific Group (ACP), the European Union, and Pakistan.
In addition to fishery subsidies, the UN trade agency is focusing in illegal, unregulated and unreported (IUU) fishing, and access to markets.
“Not all countries participate equally,” Mr. Assunçao said of the nearly $150 billion market for fish and marine products. “[The oceans are] a global common good that is not benefitting all countries that have coasts in equitable ways.”
Some Governments have said that they will use The Ocean Conference as an opportunity to seek access to bigger markets. The issue is of particular concern for Pacific and Caribbean island states where processing and transporting goods is often more expensive.
The main areas of work at the Ocean Conference will be a political call to action, a segment on partnership dialogues and voluntary commitments.
See also the UNCTAD-FAO report: Trade-Related Fisheries Targets: Sustainable Development Goal 14 – Summary Document, Informal Preparatory Working Group 4
Related News
UN makes a solid case for the benefits of multilateral collaboration, openness, and the transformative potential of technology
“Scientific and technological progress is an essential means to eradicate poverty and create a better world for all. We should not see it as an existential threat,” said Dr. Mukhisa Kituyi Secretary-General of UNCTAD about the opening of the twentieth session of the United Nations Commission on Science and Technology for Development (CSTD), the premier platform of the UN system that tackles science and technology questions and their implications for development.
The United Nations Commission on Science and Technology for Development (CSTD) brought together over 200 people from 60 countries, including Science and Technology Ministers, renowned scientists, and representatives from national governments, private sector, civil society, regional and international agencies, and the academia.
Dr. Kituyi explained that the international community should not ignore concerns that technology-led development creates winners and losers.
“Sceptical voices about the benefits of technology, trade and of globalization are becoming louder, almost deafeningly so. We must not give in to fearmongering, technophobia and isolationism. It is crucial that the UN continues to make a solid case for the benefits of multilateral collaboration, openness, and the transformative potential of technology,” said Dr. Kituyi.
This year, the Commission will address how new innovation approaches – including pro-poor innovation, grand challenges, and novel forms of digital collaboration – can support the implementation of the Sustainable Development Goals and how science and technology can enable the global community to end hunger by 2030. The twentieth session will also review the progress made in the implementation of the outcomes of the World Summit on the Information Society (WSIS).
Speaking at the opening session, H.E. Mr. Frederick Makamure Masiiwa Shava, Permanent Representative of Zimbabwe to the UN in New York and President of the Economic and Social Council, highlighted the important role of the CSTD in informing the international development community on how the increasing convergence, sophistication, and reach of technology can support the Sustainable Development Agenda.
Mr. Shava remarked, “As the torch-bearer for science, technology and innovation in the United Nations, the role of the UN Commission on Science and Technology for Development has become all the more critical and urgent as the international community sets out to achieve the 2030 Development Agenda with the principle of leaving no one behind.”
The Commission highlighted the transformative power of innovation in global efforts to achieve zero hunger by 2030. Currently, 795 million people – every ninth person in the world – is undernourished, with the majority of them residing in developing countries. Feeding the undernourished and closing the 60% “food gap” for expected calorie demand in 2050 will require innovative applications of science and technology.
One example is the use of drones for soil and field analysis, sowing, crop spraying, animal health monitoring and targeted irrigation. The global market for agricultural drones is expected to reach nearly $3 billion by 2021.
Drones are just one emerging technology which could have a real impact on the world’s food security. Synthetic biology (e.g., CRISPR-Cas9) can be used to cure genetic diseases in animals or develop new traits in plants, artificial intelligence and machine learning can enable precision agriculture, early warning systems can serve as climate-smart technologies for disaster risk reduction, and mobile-enabled index-based insurance schemes can provide financial services for smallholder farmers.
The discussions will focus on how to forge international collaborations to take advantage of conventional as well as newly emerging scientific and technical applications for agriculture. Policymakers are expected to suggest new and novel ways to invest in research and development and talent-building efforts to deliver breakthrough technologies for agriculture. They will also craft concrete action plans and recommendations for linking farmers with scientists, supporting women’s access to agricultural science and technology, sharing agricultural data among countries, and conducting foresight on new and emerging technologies.
Achieving zero hunger is only one of the many challenges that the global community has committed to address by 2030. According to UNCTAD, it has been estimated that $3.9 trillion is the annual funding needed to achieve the SDGs. With only $1.4 trillion in combined public and private investment, the international development community still faces a $2.5 trillion gap.
Given the resource constraints faced by the global community, the Commission will also examine how new innovation approaches, including frugal and pro-poor innovation, can unlock new solutions in agriculture, financial inclusion, access to water, and many other key global challenges.
Supporting inclusive innovation not only for the poor but also by the poor may require resources for improving digital infrastructures, human capital, research and innovation, developing market and non-market linkages, and improved regulatory instruments.
This twentieth session of the UN CSTD will also hear the presentation of the Science, Technology, and Innovation Policy (STIP) Reviews of Iran and Rwanda. These reviews, developed by UNCTAD in collaboration with national counterparts, are designed to assist countries in assessing and strengthening their innovation systems and crafting concrete policy actions to improve their economic competitiveness.
UNCTAD has received a strong mandate to renew and enhance its program on science, technology, and innovation by its Fourteenth Ministerial Conference, convened in Nairobi in July 2016.
Background
The twentieth session of the Commission on Science and Technology for Development is being held in Geneva from 8 to 12 May 2017. The Commission will address two priority themes, namely:
-
New innovation approaches to support the implementation of the Sustainable Development Goals
-
The role of science, technology and innovation in ensuring food security by 2030
The twentieth session will review the progress made in the implementation of the outcomes of the World Summit on the Information Society (WSIS), as well as discuss the contribution of the Commission to the 2017 theme of the Economic and Social Council, “Eradicating poverty in all its forms and dimensions through promoting sustainable development, expanding opportunities and addressing related challenges”
Related News
tralac’s Daily News Selection
Underway, in Kigali: the third Transform Africa Summit. Further details: conference website
Starting tomorrow, in Maputo: the 5th Annual African Mobile Phone Services Policy Initiative
Tomorrow, in Berlin: Africa’s economic transformation within the context of the G20 Partnership with Africa. Download: the programme (pdf). Related: ONE Campaign’s Africa director, Nachilala Nkombo: But German companies and their counterparts across the G20 are not going to invest through this initiative in countries with small markets. These initiatives should focus on Africa’s regions. We need a compact with ECOWAS, with EAC etc.
Regional Economic Outlook: Sub-Saharan Africa (IMF)
Firm ownership in Sub-Saharan Africa and intra-regional spillovers (Box 1.2): Firms in sub-Saharan Africa are increasingly connected with one another through cross-border firm ownership. Figure 1.2.1, constructed based on firm-level relationships across countries (Orbis), illustrates the extent of cross-border firm activity in all of sub-Saharan Africa. While firms headquartered in South Africa own the most subsidiaries in other sub-Saharan African countries (over 2,400 subsidiaries), other regional hubs have also emerged. Kenyan firms play a key role in investing in neighboring countries in East Africa, and Nigerian firms are the major investor in firms in the neighboring region of West Africa. In contrast, cross-border ownership activity is relatively sparse in Central Africa. These intra-regional linkages via cross-border firm ownership bring both benefits and increased potential for spillovers in the event of shocks. On the one hand, the strengthening of regional ties fosters more trade integration, sharing of technology and production practices, diversification, and the leveraging of a country’s comparative advantages and exploitation of economies of scale and scope. But the increased interconnectedness also implies exposure to shocks emanating from the host country or the headquarter-firm country. Overall, sub-Saharan African subsidiaries in other African countries have performed relatively well compared to domestically owned subsidiaries (Figure 1.2.2). They have exhibited higher profit margins and higher profitability during some of the period following the global financial crisis, even compared to subsidiaries not owned by sub-Saharan African firms. However, since 2014 there have been some declines in the profitability of subsidiaries owned by both domestic and non sub-Saharan African firms if measured by return on equity.
In resource-exporting countries, the performance of domestic subsidiaries and subsidiaries owned by other sub-Saharan African firms has deteriorated compared to subsidiaries owned by foreign firms outside of the region (Figure 1.2.3). As governments have reacted with different sets of policies to the decline in commodity prices, the impact on the operation of these cross-border firms has varied as well. Angola and Nigeria have imposed exchange rate restrictions due to external pressures on the currency, hurting businesses that are operating locally because the controlled allocation of foreign exchange disrupts production. Although subsidiaries owned by firms headquartered outside of Nigeria are likely to have easier access to foreign currency compared to their Nigerian-owned counterparts, the deteriorating condition and decreased demand of the host country has a negative effect on the performance of the local subsidiary and thus poses an increased risk for the parent company. On the other hand, for Nigerian firms that own subsidiaries in other sub-Saharan African countries that are still experiencing robust growth—such as many of the nonresource-intensive countries in the East African Community (Kenya, Tanzania, and Rwanda)—these cross-border investments, helped by strong internal demand, could act as buffers to offset some of the profit losses at home. [Downloads: Restoring the conditions for strong and sustainable growth, Restarting Sub-Saharan Africa’s growth engine, The informal economy in Sub-Saharan Africa]
Romola Adeola: Why the African Union must press ahead with a business and human rights policy (The Conversation)
The AU is developing a policy designed to hold companies to account by setting down guidelines on how they should conduct business on the continent. The aim of the policy is to implement a set of guiding principles drawn up by the United Nations. It will provide a roadmap for states, regional economic communities and regional institutions to regulate the impact of business activities on people. The policy also seeks to advance guidance for firms conducting activities in Africa. The policy has been in the making since 2016 and still has to be adopted by an AU technical committee. Because it’s not a treaty it won’t be subject to ratification by all AU member states. This “soft law” approach raises questions about whether the policy will ever be implemented. But the fact that the AU has developed one is a major step forward and could help African countries deal with some major rights issues including: land grabs and environmental pollution. [The author is attached to the Centre for Human Rights and Legal Pluralism, McGill University]
Carlos Lopes: Africa poised for greatness — but governments must act fast (Business Day)
However, all these opportunities — a demographic boom, technological innovation and renewables — will remain just that if governments do not recognise them, change policies and regulate accordingly. Governments need to put policies in place that recognise that their economic vibrancy is shifting to internal consumption and manufacturing and services, away from commodities alone. And they must tax accordingly. Ironically, it is smaller African countries that are leading the way with innovative growth strategies. The continent’s annual growth in 2016 was 4.4% if you removed the “big three” of SA, Egypt and Nigeria from the equation. With them included, it dropped to 1.6%.
Why businesses are not taking political risk cover as Kenya, Rwanda vote (The EastAfrican)
Pan-African insurer African Trade Insurance Agency says that only a few investors are considering taking up political risk and political violence covers, compared with 2013 when Kenyans last voted. The result of the elections in Kenya is important, as it is the gateway to the landlocked East African states. “Compared with 2013, we are not getting many inquiries on political cover, because investors feel that the elections will be peaceful,” said George Otieno, ATI chief executive officer. Although ATI is recording subdued interest, Kenyan insurance companies offering political violence, terrorism and sabotage covers are recording increase in uptake. UAP Insurance, Jubilee Insurance and CIC Insurance have all reported significant interest in the cover.
Council of Ministers says no to increase in 2017/18 EAC budget (Tanzania Daily News)
During the recent meeting of the Council of Ministers in Arusha, Tanzania, the bloc’s Secretary General, Ambassador Libérat Mfumukeko, submitted a budget proposal for financial year 2017/18 amounting to $113.8m compared to the current budget of $101.4m. “Owing to the current economic situation, all partner states are experiencing rationalisation of their national budgets and, therefore, it would be difficult to increase contributions to the EAC Budget,” reads a report of the central decision-making organ of the Community. “The meeting, therefore, agreed to a zero per cent increase in partner states contributions to the 2017/18 Budget.” The Council observed that although there is no increase in the individual partner states’ contribution, countries’ total contribution will increase after including contribution from the Community’s new member, South Sudan. Support from development partners for financial year 2017/18 is set at $52.8m against the current year’s $46.7m, an increase of 13%. [Related: EAC Secretariat should improvise with the available funding (editorial comment, New Times)]
South Africa trade and development policy postings:
Import tariffs aren’t just set up to unfairly protect commercial farmers (Huffington Post). A response to Neva Makgetla: There is a clear lack of appreciation of the tariff formulation process itself. Government does not wake up and decide to implement a particular tariff level. There is an intensive, evidence-based, and transparent public consultation process that is conducted by the International Trade and Administration Commission - which ensures that all views of the role players in the food value chain are captured in the tariff decision. Such process and decisions can take months, or even years, to complete, and all decisions are carefully crafted to ensure a balanced outcome of consumer and producer welfare. Moreover, decisions related to trade instruments such as tariffs are subject to compliance with WTO rules, and anyone who is familiar with the process will know that ITAC does not just give favourable decisions to commercial farmers. There are many reviews in the past in which tariff applications have either led to lower-than-requested tariffs, or even rejected outright. [The authors: Tinashe Kapuya, Wandile Sihlobo]
Retailers opt for local poultry (Business Day). Large food retailers have told Parliament they prefer locally sourced poultry products to imports. Representatives of Woolworths, Pick n Pay, Shoprite Checkers, Spar and Nando’s were called by Parliament’s trade and industry portfolio committee to account for their chicken-purchasing policies on Tuesday as part of the committee’s hearings into the poultry industry crisis. The government, poultry producers, meat importers, animal feed producers, agricultural economists and others have also made submissions.
‘You can’t bite the hand that feeds you’: Contracts between SME suppliers and the large supermarkets (Econ 3x3). This article reports on a recent study which investigates the relationships between SME suppliers of high-value foodstuffs and the four main supermarkets – Pick n Pay, Shoprite Checkers, Woolworths and Spar. It shows that factors such as bargaining power, branding, procurement and contracting practices, automation, and quality and hygiene standards can have a decisive effect on the competitiveness, viability and job-creation potential of small suppliers. These findings have important policy implications. [The author, Marlese von Broembsen, is attached to the Centre for Law and Society, University of Cape Town]
Andrew Donaldson: Elements of an inclusive growth strategy for South Africa (GTAC). A competitive exchange rate: Export-oriented manufacturing, tourism and trade in services are important growth drivers, but they cannot thrive if the exchange rate is highly volatile and overvalued. The present policy stance on the exchange rate is confused – it appears to assume that because a weak rand cannot be defended in the presence of adverse sentiment, it is also impossible to counter unwanted rand strength. It is of course impossible to “stabilise” the rand in real terms, but it doesn’t follow that its value should be left entirely to the vicissitudes of the market. For a time, there was agreement between the Treasury and the SARB to “lean against the wind” through foreign exchange purchases when market trends and global currency movements led to an unwarranted strengthening of the rand; this contributed to a substantial rise in official reserves until about 2010. But there is no longer a shared understanding of the associated security holdings and sterilisation costs, and so the required forex market interventions have fallen away. There is also an unwillingness to contemplate the strategic accommodation of reserve holdings by the private banking and corporate sectors. In the absence of more active exchange rate policy, industrial development and trade rely too heavily on protectionist measures. And in the absence of better coordinated trade and investment policies, the current account of the balance of payments remains both a drag on growth and a continuing drain on national wealth.
South Africa-Tanzania Bi-National Commission: official launch
Trade figures between the two countries in 2016 indicated that South African exports to Tanzania were valued at R6, 5bn, whereas imports from Tanzania amounted to R3.5bn. There are currently over 150 South African companies operating in Tanzania in areas such as the financial services sector, hospitality and leisure as well as ICT and electronics. During the visit President Zuma and his host, President Pemba Magufuli will also address the South Africa-Tanzania Business Forum which will be held on the sidelines of the State Visit to strengthen economic relations between the two countries.
Tanzania: 100 Chinese firms to come for trade forum (Tanzania Daily News)
More than 100 Chinese firms are expected to participate in the Investment and Trade Opportunities Forum in Tanzania this year. Zanzibar’s Minister of Trade, Industries and Marketing, Ambassador Amina Salum Ali said here yesterday already 20 companies have pledged to visit Tanzania next month to identify strategic investment locations in the country. Ambassador Amina made the remarks following an invitation from Guangzhou province to give detailed explanations on key investment opportunities in Tanzania and encourage seizing them. The meeting was attended by investors and representatives of more than 100 companies. She said the group of 20 investors are eying the textile industry, crafts, agriculture, construction and other sectors. [Joburg Chamber signs MOU with Chinese Trade Council]
Nigeria Customs Service: statement on moves to reform import and export processes
Our commitments at the NCS are focused on “Trade across Borders,” where a target was set to reduce import and export time by up to 50%, and ensure that import procedures adhere to international standards. A major first step was taken to achieve the target when the Department of Home Finance of the Federal Ministry of Finance revised Nigeria’s Import and Export Guidelines following a directive from the Honourable Minister of Finance, Mrs Kemi Adeosun, to streamline current procedures. The Guidelines addresses some of the issues causing inefficiency and delays at the ports. I will attempt to explain the stipulations and implications of the revised Guidelines in this piece as it pertains to the NCS.
Nigeria’s Refining Revolution (PwC)
This paper provides a studious analysis of the current state of the refining sector and the refining revolution we predict will take place over the next 3-5 years. It draws attention to the existing gaps in the supply of refined petroleum products in Nigeria and the West African region and it highlights the sizeable potential for domestic refining of petroleum products. Importantly, it identifies key drivers that will spur the growth of the refining sector in Nigeria.
Swaziland gets E1.7bn injection from SACU (pdf, Central Bank of Swaziland)
Gross Official Reserves expanded by 11.8% to E8.2 billion at the end of April 2017, due to the quarterly inflow of the SACU receipts. The Reserves were equivalent to an import cover of 3.8 months. Annually the Reserves declined by 10.5%. [Swaziland Economic Conference 2017: call for papers]
Today’s Quick Links: AU’s Commissioner for Infrastructure and Energy welcomes EU External Investment Plan |
Related News
IMF calls for strong and sound policy measures to restart sub-Saharan Africa’s growth engine
The International Monetary Fund (IMF) has urged sub-Saharan African countries to implement strong and urgent policy action to boost growth in the region.
According to its latest Regional Economic Outlook, Restarting the Growth Engine, growth in sub-Saharan Africa as a whole fell to 1.4 percent in 2016 – its lowest level in two decades – and is projected to record a modest recovery of 2.6 percent in 2017, although a number of countries, especially in Eastern and Western Africa, continue to grow robustly.
“The overall weak outlook partly reflects insufficient policy adjustment,” said Abebe Aemro Selassie, Director of the IMF’s African Department. “The delay in implementing much-needed adjustment policies is creating uncertainty, holding back investment, and risks generating even deeper difficulties in the future. Adjustment in resource-intensive countries has been delayed. In particular, oil exporters such as Angola, Nigeria, and the countries of the Central African Economic and Monetary Union (CEMAC) are still struggling to deal with the budgetary revenue losses and balance of payments pressures, some three years after the fall in oil prices
“Vulnerabilities are also emerging in many non-resource-intensive countries. While they have generally continued to record high growth rates, they have also maintained elevated fiscal deficits for a number of years as their governments rightly sought to address social and infrastructure gaps. As a result, fiscal and external buffers are declining and public debt is on the rise.”
Looking ahead, Mr. Selassie points to a modest growth recovery from 1.4 percent in 2016 to 2.6 percent in 2017, noting that this will barely put sub-Saharan Africa back on a path of rising per capita income. The uptick will be largely driven by one-off factors in the three largest countries – a recovery in oil production in Nigeria, higher public spending in Angola, and fading of drought effects in South Africa. But for other countries, the outlook remains shrouded in substantial uncertainties, including a possible further appreciation of the U.S. dollar, a tightening of global financing conditions – especially for countries where fundamentals have deteriorated. On top of that, he notes that the outlook is further clouded by security issues that have contributed to an increase in food insecurity and even famine in parts of sub-Saharan Africa.
In view of these challenges, Mr. Selassie stressed that “strong and urgent policy action is needed to restart growth where it has faltered and preserve the momentum elsewhere.” While restoring macroeconomic stability is a prerequisite, it needs to be complemented with structural reforms to support the rebalancing and policies to strengthen social protection for the most vulnerable. For the hardest-hit countries, he noted that strong fiscal consolidation is required, with an emphasis on revenue mobilization. In addition, where available, greater exchange rate flexibility and the elimination of exchange restrictions will be important to absorb part of the shock. For countries where growth is still strong, he emphasized the need to address emerging vulnerabilities from a position of strength, including by shifting the fiscal stance toward gradual consolidation
Mr. Selassie further reiterated that sub-Saharan Africa remains a region with tremendous potential for growth in the medium term – provided strong domestic policy measures are implemented.
Sub-Saharan Africa: Restarting the Growth Engine
Sub-Saharan Africa’s growth has fallen to its lowest level in more than 20 years. While some countries like Senegal and Kenya continue to experience growth rates higher than 6 percent, growth has slowed for two thirds of countries in the region bringing down average growth to 1.4 percent in 2016.
A modest recovery in growth, to 2.6 percent, is expected in 2017, but the report said the underlying regional momentum remains weak, and at this rate, sub-Saharan African growth will continue to fall well short of past trends of 5-6 percent, and barely exceed population growth.
Why has growth slowed?
While noting that many countries suffered a very substantial commodity price shock, the report also points to insufficient policy adjustment to account for the broad-based slowdown in growth momentum in the region. This is especially the case among commodity exporters, notably oil exporters, such as Angola, Nigeria, and the countries of the Central African Economic and Monetary Union (CEMAC). According to the report, the delay in implementing critical adjustment policies is leading to higher public debt, creating uncertainty, holding back investment, and risks generating even deeper difficulties in the future.
Vulnerabilities are also emerging in countries that do not rely significantly on commodities for their exports. While these countries – such as Cote d’Ivoire, Kenya, and Senegal – have generally maintained high growth rates, their fiscal deficits have been high for years, as governments rightly sought to address social and infrastructure gaps. But now, consequently, public debt and borrowing costs are on the rise.
No room for complacency
The report also shows that, while the external environment has recently become more favorable, it is expected to offer only limited support. Improvements in commodity prices will provide some breathing space, but will not be enough to address existing imbalances among resource-intensive countries. Oil prices for example, are projected to stay far below their 2013 peaks. Likewise, while they have been on a declining trend since early 2016, financing costs for frontier economies in the region remain higher than for other emerging markets, and they could rapidly tighten further against the backdrop of fiscal policy easing and monetary policy normalization in the United States.
The outlook is also clouded by the incidence of drought, pests, and security issues, according to the report. While the impact of the drought that hit parts of southern Africa last year is fading, food insecurity appears to be rising with parts of southern and eastern Africa facing drought and pest infestations. Worse still, famine has been declared in South Sudan and is looming in northeastern Nigeria as a result of past and ongoing conflicts.
Policy priorities to restart growth engine
With all these challenges, the head of the IMF’s African Department, Abebe Aemro Selassie, says strong policy decisions could turn things around. “Sub-Saharan Africa remains a region with tremendous potential for growth in the medium term, but with limited support expected from the external environment, strong and sound domestic policy measures are urgently needed to reap this potential,” Selassie said. And the report highlights three priority areas.
The priority should be to put renewed focus on macroeconomic stability in order to set the stage for a growth turnaround. For the hardest-hit countries, fiscal consolidation remains urgently needed to halt the decline in international reserves and offset budgetary revenue losses, especially in the CEMAC. In addition, where available, greater exchange rate flexibility and the elimination of exchange restrictions will be important to absorb part of the shock. Meanwhile, for countries where growth is still strong, it will be important to address emerging vulnerabilities from a position of strength.
The second priority is to address structural weaknesses to support macroeconomic rebalancing. Structural measures are needed to ensure a sustainable fiscal position and help achieve more durable growth by improving tax collection, strengthening financial supervision, and addressing longstanding weaknesses in business climate that impede economic diversification.
Finally, the third priority should be to strengthen social protection for the most vulnerable people. The current environment of low growth and widening macroeconomic imbalances risks reversing recent progress made in alleviating poverty. Existing social protections programs are often fragmented, not well-targeted, and cover a small share of the population. The report suggests savings from expansive and untargeted schemes such as fuel subsidies could be put towards helping vulnerable groups.
In two background studies, the Regional Economic Outlook also examines the region’s experience with episodes of sustained growth and what drove them, as well as the role of the informal sector in sub-Saharan Africa.
Related News
Addressing migration requires investments in sustainable rural development
The FAO has welcomed the new report published by WFP on food security, conflict and international migration.
“The WFP report is an important contribution to the debate and analysis of some of the fundamental drivers of migration especially those related to conflict and food insecurity,” said Kostas Stamoulis, FAO Assistant Director-General. Economic and Social Development Department.
Making migration a choice rather than a necessity implies the creation of alternative and resilient livelihood opportunities,” Stamoulis said.
“As three quarters of extreme poor and hungry people in the world are located in rural areas, it is natural that we should prioritize investments in sustainable rural development, climate change adaptation and resilient rural livelihoods,” he added.
Migration supported by well-informed, far-sighted policies and managed in accordance with human rights principles, “is a positive and enriching phenomenon, both for migrants themselves, the communities that receive them, and for countries of origin.”
Addressing drivers of migration – hunger, poverty, conflict and lack of development opportunities – is the foundation to achieving safe, orderly and regular migration and allowing individuals to live in dignity, consistent with the 2030 Agenda for Sustainable Development.
FAO believes that any response to large migratory movements must take into account that a large share of migrants originate from rural areas and that, as the agriculture sectors shrinks, a further increasing number of rural people, especially youth, will migrate to urban areas. Investing in sustainable rural development, climate change adaptation and resilient rural livelihoods is an important part of the global response to the current migration challenge.
In addressing migration, particular attention should paid to youth. Many young people migrate from rural areas, because they find working in low-productivity agriculture unattractive. “We should intervene to enhance their skills and facilitate their entrepreneurship. In Africa, in particular, there is enormous potential to promote agri-business development, which could unleash this ‘youth power',” Stamoulis said.
Climate change is one of the root causes of rural migration that exacerbates other socio-economic drivers of migration, such as rural poverty and food insecurity. The increasing frequency and intensity of climate extremes as well as environmental degradation and resource depletion will lead to increased migration. Sustainable agricultural development is therefore essential to enhance resilience against climate risks, according to FAO.
FAO advocates for increased attention to internal migration movements, including seasonal and circular migration, for which there is currently paucity of evidence and data. Internal and international migration are often interrelated, as poor people might first move to towns and urban centres and eventually, later on, embark on international migration.
FAO and the International Organization for Migration have been appointed to co-chair the United Nations Global Migration Group (GMG) in 2018.
Download the report: At the root of exodus: Food security, conflict and international migration
Related News
Why the African Union must press ahead with a business and human rights policy
The African Union (AU) is developing a policy designed to hold companies to account by setting down guidelines on how they should conduct business on the continent.
The aim of the policy is to implement a set of guiding principles drawn up by the United Nations. It will provide a roadmap for states, regional economic communities and regional institutions to regulate the impact of business activities on people. The policy also seeks to advance guidance for firms conducting activities in Africa.
The policy has been in the making since 2016 and still has to be adopted by an AU technical committee. Because it’s not a treaty it won’t be subject to ratification by all AU member states.
This “soft law” approach raises questions about whether the policy will ever be implemented. But the fact that the AU has developed one is a major step forward and could help African countries deal with some major rights issues including: land grabs and environmental pollution.
Land grabs
Africa’s agricultural sector has attracted significant investment. This has resulted in massive land acquisitions by local and foreign firms which has enabled them to engage in large scale production. But local agrarian populations have been dispossessed of their land with little to no consultation or adequate compensation.
Chinese businesses have become the face of the growing concern over land grabs on the continent. A 2014 report estimated that about 10 million hectares of agricultural land in Africa belonged to Chinese businesses. But the Chinese aren’t the only ones acquiring massive tracts of land on the continent.
In Tanzania for instance, Sweden-based Agro EcoEnergy acquired 20,000 hectares of land to establish a sugarcane plantation and an ethanol-production site. Local people in the Bagamoyo district in Dar es Salaam were deeply distressed by the acquisition.
Although local communities were consulted, they weren’t presented with any alternatives, particularly around the issue of compensation. Nor was the community given adequate information about the impact of the project.
Environmental pollution
Another major business and human rights challenge has been environmental pollution, particularly in the extractive industries. In many cases foreign-owned companies have been involved.
One of the biggest concerns involve oil spillages and gas flaring from business-related activities in Nigeria. For example, over 100 million barrels of oil was spilled in the Niger-Delta between the 1960s and 1997. In 2014 alone, Shell and ENI admitted to over 550 oil spills in the region.
The United Nations Environment Programme estimates that a cleanup process in the Niger Delta will take between 25 to 30 years.
And some estimates suggest that the impact of gas flaring has significantly reduced life expectancy in the region, from 70 years to about 45 years.
Key aspects of the policy framework
All this suggests that Africa needs to regulate business activities with human rights impacts.
The policy framework builds on the three key pillars of the United Nations guiding principles. These are the state’s duty to protect human rights, businesses’ responsibility to respect human rights, and access to remedies.
States need to ensure that business activities don’t negatively affect the livelihoods of local communities. Governments must therefore ensure agreements are drawn up with home states of multinationals and also with businesses to protect human rights.
For their part, businesses have a responsibility to respect human rights. As such, they are required to desist from activities that will have an adverse impact on human rights. To give effect to this responsibility, businesses are expected to develop human rights policies and make a commitment to implement them.
An example is the Coca-Cola Human Rights Policy. This sets out the company’s commitment to conduct due diligence and to address human rights failures if they occur.
Access to remedies talks to the issue of justice. This means that it has to be underpinned by judicial and nonjudicial, state-based and non-state-based measures to protect victims of business related human rights violations.
Businesses are also required to develop grievance procedures to ensure recourse for affected communities. A practical example of this is the grievance mechanism developed around the Trans Adriatic Pipeline which is being built to transport natural gas from the border of Greece and Turkey to southern Italy.
But it’s important that these procedures should not prejudice the rights of victims to seek justice from judicial systems.
Deepening respect for human rights
The AU’s policy is a right step towards ensuring business upholds human rights. But it’s only the start of a long journey towards deepening a culture of respect for human rights among businesses in Africa.
Only time will tell if the policy framework, once adopted, will in fact be used. But the mere fact that it’s being formulated shows resolve on the part of states to tackle key human rights issues related to business activities in Africa.
A number of key steps need to be taken if the policy is to become a reality.
First, sufficient resources must be made available to make sure its implemented by both states and regional bodies.
Secondly, states must drive policy implementation with the political will to regulate businesses within their territories.
And finally institutions must be strengthened at all levels of implementation including national, regional and continental levels.
But successful implementation won’t be achieved unless there’s cooperation between state institutions, businesses, local populations as well as civil society.
Romola Adeola, Steinberg Postdoctoral Fellow in International Migration Law, Centre for Human Rights and Legal Pluralism, Faculty of Law, McGill University
This article was originally published on The Conversation. Read the original article.
Related News
ONE Africa director: African infrastructure needs G20 investment
Africa needs investment from the G20 in its infrastructure if European efforts to increase trade are to have any positive effect. The continent also needs to set up its own internal markets.
By 2050, Africa will have to feed the same amount of people that India and China combined do today. That means that the continent will have to find 18 million new jobs every year.
Global populations are growing particularly strongly in rural areas, which are now home to 3.5 billion people, according to official data. But the process of urbanisation and the lack of opportunities in rural areas mean that more and more people, particularly the young, are being lured to the cities.
Agriculture doesn’t just have the potential to feed populations on a sustainable basis, it could also provide much-needed jobs and opportunities for younger generations and women. At the German development ministry’s Future of the Rural World event, EURACTIV Germany spoke to the ONE Campaign’s Africa director, Nachilala Nkombo, about farming sustainability and learning lessons from Europe’s mistakes.
Nkombo spoke to EURACTIV.de Editor-in-Chief Ama Lorenz.
Do you take any positives from this meeting?
There is now at least a common understanding about what is necessary to strengthen rural communities and their economic power. The current status quo is no longer working. Africa is far behind its potential in terms of technological and agricultural achievements.
Germany’s chairmanship of the G20 this year provides the chance to stop just messing around and make strategic progress.
For Africa’s youth above all, that is important. They long for a better life. We need investment in infrastructure, particularly in rural areas. And it is important that this investment is based on ideas that are sustainable, involve the local communities and take their needs into account. The formula for sustainable investment in Africa means a focus on education, employment and participation.
You argue that agriculture’s biggest potential to offer young people and women sustainable opportunities is in rural areas. Why is that?
We know that women and girls are most affected by extreme poverty because they do not have the same access to agricultural production. Their productivity is anything between 23% and 66% lower than that of men. At the same time, women have the greatest potential to eliminate poverty, with the help of agriculture. Were African women to have the same access to seeds, equipment, land, etc., then the number of hungry people could be reduced by from 100 to 150 million. Empowering women in the agricultural sector benefits their families, their communities and their countries. Agricultural growth in southern Africa is eleven times more effective at fighting poverty than any other industrial sector.
But in terms of the catastrophic effects brought of climate change, agriculture is among the most at-risk sectors. Not just in Africa of course. In Europe, growth cycles are being shortened, people are turning to genetic manipulation, soil is being polluted… How can Africa learn from these mistakes and prevent an environmental disaster, while still increasing productivity?
The development of Africa’s agricultural industry must mitigate the effects of climate change from the outset. It also has to focus on “climate smart” production methods. This is the only way to break Africa’s large dependency on rain-irrigated agriculture by 50% by 2020. If governments were to support smallholders, fishermen and livestock farmers with adequate resources to reduce Africa’s vulnerabilities to the effects of climate change, then that would be a good start. Mapping at-risk areas, managing investments, doing empirical research and collecting gender-specific data in the agriculture sector could help Africa counter these effects.
In addition, African governments have to build up national and regional food reserves, as well as improving the resilience of national and regional food supply chains and setting up social protection programmes. But a bottom-up approach to planning is needed. This is only possible with the support of local people, civil society and the scientific community. Political decision-makers have to include their recommendations and evaluations in developing sustainable agricultural policy.
Are G20 initiatives like the Compact with Africa a step in the right direction then?
This initiative is a first step but it is not enough, because it is mainly focused on pumping investment into just five African countries. This is of help and can act as a catalyst to accelerate necessary reforms in those countries. But I think there is still a lot of work to be done. Key countries like Nigeria have to be involved, on the one hand. But German companies and their counterparts across the G20 are not going to invest through this initiative in countries with small markets. These initiatives should focus on Africa’s regions. We need a compact with ECOWAS (Economic Community of West African States), with EAS (East African Community), etc. We need agreements that develop all regions. The G20 could base what it does on existing solutions. Where something is already working, it simply has to be made available to more people.
What solutions are you thinking of?
Some African countries have already managed to reduce their level of unemployment, including youth unemployment, by investing in incentives that encourage people to set up production centres or to specialise in agriculture. Countries like Ethiopia and Kenya are good examples of how better internal supply chains can be established by shifting from just exporting raw materials to producing high-quality products.
Take the cocoa industry. Everyone loves chocolate. But Africa serves primarily just as a cocoa supplier. Wouldn’t it be economically advantageous for Africa to produce the chocolate itself instead? This is one of the circumstances that could change the G20. It would require the exchange of knowledge and technologies and a willingness to buy African products. In this way, jobs can be created that are sustainable and offer young people and women hope.
Increasing finished product imports, at a fair and sustainable price, instead of just relying on raw materials seems to be Africa’s vision. But Europe and other Western economies are trying to protect their markets through free trade agreements like TTIP and CETA, keeping Africa as a mere sales market. Do you think the G20 can do anything about this?
This has to be changed because it is the cause of many of Africa’s problems and is closely linked to development cooperation. Otherwise, what’s the point of the G20 talking about issues like stability? If Africa doesn’t get a better deal then economies are not going to be able to solve their problems. We have to be empowered to expand production capacities and that is also true of agriculture. Alone that is not enough. Even if Europe opens its markets up to us, we currently don’t have the right infrastructure. As long as this remains the case, trade agreements between Europe and Africa aren’t worth much. Europe is ready, Africa isn’t there yet. We have to develop an African industry, a spirit of African entrepreneurship, first.
This also applies to Africa’s markets, which are still predominantly served by European or Chinese products. We have to set up and develop our own internal markets. That needs investment and that is something the G20 can help with. If that is done, then we could boost our production capacities and would have to rely less on development aid. African economies could then stand on their own feet and support themselves.
This article was originally published by EURACTIV Germany and translated by Sam Morgan.
Related News
Delegates arrive for Transform Africa Summit in Kigali
The third Transform Africa Summit opens today at the Kigali Convection Centre, attracting about 3,000 delegates.
The summit convenes African government leaders and representatives, private sector players, development partners and representatives of organisations in the ICT field.
This year’s summit’s focus is on ‘smart cities’ with an aim to ensure African capitals embrace technology to effectively deliver services.
The conference will have about 10 side events across multiple areas, including ‘smart women’ summit, business leaders symposium, business to business session and Miss Geek competition.
Among the delegates who had arrived by press time include Togolese President Faure Gnassingbé, the Prime Minister of São Tomé and Príncipe, Patrice Trovoada; and Zambian vice-president Inonge Wina.
Among the deliberations at the summit include the Africa Smart and Sustainable Cities blueprint which, once approved, will be used by African capitals in the development and rollout of infrastructure, security, energy and transport, among others.
In a pre-summit statement, Dr Hamadoun Toure, the executive director of Smart Africa Initiative, said cities had been chosen as the agenda for the summit given their role in economic development in the continent.
With the high urbanisation rates and growing urban population, Toure noted, it is important to have intelligent planning of cities to make informed decisions about the correct choice of infrastructure and supporting technology.
“It is anticipated that the share of the African urban population, which was at about 36 per cent in 2010, will increase to 50 per cent and 60 per cent by 2030 and 2050, respectively. With the growing need for urban management, there’s an increasing necessity for intelligent planning of cities to make informed decisions about the correct choice of infrastructure and supporting technology,” Toure said.
He promised a highly interactive conference and exhibition that will showcase homegrown, cutting-edge technologies, real-world solutions and proven strategies government leaders need to build more livable, workable, sustainable cities.
This, he said, will be in an attempt to explore how smart cities can respond to a growing number of challenges and issues related to water and energy management, mobility and transport, housing, health, education, sustainable environments and public safety, among others.
Smart Africa Alliance was borne from the first edition of the Transform Africa Summit in 2013 as government leaders committed to fast-track development using IT.
The alliance membership has since grown to 18 countries, and nine development partners, including the World Bank, African Union Commission, African Development Bank and the International Telecommunications Union.
The alliance has also been able to attract the membership of about 12 high level private sector players and four world renowned academia partners.
By February, more than $1.5 million had been raised to support the secretariat.
The scholarship fund initiative had by February raised more than $1.1 million in contributions from Burkina Faso, Gabon, Mali, Rwanda, South Sudan and ITU, and is already sponsoring several students across the continent.
» Download the info pack (PDF, 5.47 MB)
Related News
tralac’s Daily News Selection
Africa ponders challenges as WTO steps in way of AU self-financing model (New Times)
The WTO and the US government have written to a number of African Union member states on the legality of the implementation of the new self-financing mechanism. Among the aspects that the levy decision is allegedly in breach of is that WTO members may not apply tariffs on a product coming from one WTO member and not apply the same tariff on the same or like product when it originates in another WTO member. This argument depicts the Union’s self-financing mechanism as discriminatory. The other factor is that some African countries could have committed to the international trade body that they would have zero tariffs and would have duty free regimes. Among the options floated by experts to get around the hurdle is that, if Africa was to become a free trade area, then the levy would not be in breach of the organisation’s principles. Speaking to The New Times, African Union Commission chairperson Moussa Faki Mahamat said the hurdle was being addressed by a team of 10 finance ministers from across the continent. Faki said the Union was keen on going ahead with the planned levy mechanism but they were also engaging partners such as the US and WTO to find a way around it.
A look back at the World Economic Forum on Africa (Devex)
Discussions throughout the three-day summit were often underlined by a call to act urgently, though it is unclear if talk at WEF Africa will lead to action, a criticism levied during the event. Fewer heads of state and high-level government officials attended compared to previous years, and some veteran attendees told Devex this year’s event fell a bit flat. Still, the forum saw greater civil society participation and better engagement between civil society and the private sector, one NGO leader told Devex. The Gates Foundation and the Wellcome Trust sought to raise awareness for a new initiative bringing together philanthropists, governments and academics - the Coalition for African Research and Innovation - which will aim to improve research capacity, boost investment, enable career pathways for scientists and help countries meet the African Union target of spending 1 percent of gross domestic product on research and development.
Preview: 11th Biennial US-Africa Business Summit (13-16 June, Washington). Day one will focus on Navigating the African Market; day two will examine Africa and its role in the Global Supply Chain; and day three will explore Regionalization and the Future of Africa.
India, South Africa, US oppose G20 draft on investment facilitation (Mint)
The US, India and South Africa have pulled the plug on a draft deliverable on investment facilitation proposed by the German presidency at a G20 technical experts meeting in Berlin, according to people familiar with the development. The US which had already taken a strong position on investment facilitation said it is not in position to agree to the issue. India and South Africa said they do not see any merit for an outcome on investment facilitation because it would undermine their “policy space” and “right to regulate investment” in strategic sectors. Several countries such as Japan, China, Russia, Canada, Brazil, and Australia supported the German draft during the discussions. It sought to reaffirm “the Principles for Global Investment Policy Making endorsed in the Hangzhou communiqué (in September, 2016) and encourage policymakers to use them as reference and guidance.”
Pakistan overtakes Uganda as top buyer of Kenyan exports (Business Daily)
Official data shows that exports to Uganda grew slower by 27% to Sh9.4 billion in the first two months of the year, while exports to Pakistan more than doubled to Sh11.6 billion. Pakistan is the largest market for Kenya’s tea exports while Uganda mainly imports steel, paper, medicines and salt from Kenya. Kampala’s list of imports from Kenya has been narrowing over the years as investors set up factories in the country to manufacture goods previously imported from Nairobi, including edible oils and cement. The Netherlands, which is Europe’s key entry point for Kenya’s flowers, came in third with Sh8.1 billion worth of goods bought from Nairobi, the Kenya National Bureau of Statisticsdata shows. [KNBS: Table 13(a): Major destinations of domestic exports]
Regional trade in maize set to flourish (COMESA)
Experts from COMESA Secretariat and Heads of Bureau of Standards from Kenya, Rwanda and Uganda conducted a joint review of the COMESA Mutual Recognition Framework, an instrument meant to facilitate greater flexibility in trading of maize and maize products. The review meeting (2-4 May in Nairobi) also discussed the draft COMESA Mutual Recognition Agreement on conformity Assessment before its submission to the respective governments for signature. The signing will pave way for the implementation of the COMESA Mutual Recognition Framework (C-MRF). The C-MRF was launched in December 2015 by six COMESA States which have significant maize trade namely Kenya, Malawi, Rwanda, Zambia, Uganda and Zimbabwe. It was expected that by early 2016, they would have proceeded with negotiations for signature of the full MRA on conformity Assessment for trade in maize and maize products. However, there has been slow uptake of the C-MRF by the six countries.
Informal trade in Zimbabwe ‘will persist’ (IOL)
At the Beitbridge border between Zimbabwe and South Africa, more than 500 transporters cross the border daily to transport goods on behalf of traders and shop owners. Porters use bicycles while women transporters ferry goods on their heads and on their backs as they take goods across the 1.5km no-man’s-land between the two borders. “On a good day I make 5 trips and I am paid R100 to R150 for each trip as I also help with making sure the goods pass the Zimbabwe border without paying tax. I only get my passport stamped on the Zimbabwe side,” Patricia Chironza, a Beitbridge porter said.
Tanzania: Women to gain from Sh12 billion TMEA deal (The Citizen)
Tanzania will benefit from Sh12 billion committed to a trading programme courtesy of TradeMark East Africa to empower women entrepreneurs in the country to have access to the EAC and international markets. The cash will enable them to implement their project on cross border women traders during a Validation Workshop for a Baseline Survey that was conducted to ascertain status of Tanzania women traders export to EAC region in Dar es Salaam over the week end.
South Africa: Industrial Policy Action Plan (IPAP) 2017/18-2019/20 (dti)
Like many of its middle-income peers, South Africa is faced by complex and fast moving demands requiring fundamental economic transformations and transitions. They include adjusting to the end of the metals price boom; factoring in the gathering impacts of climate change and the looming challenges of the fourth industrial revolution; and, critically, grappling with profound domestic socio-economic inequality. The structural and systemic fault-lines in the South African economy have on the one hand caused slower and more fragile growth in manufacturing overall. On the other, they have contributed to a structural shift away from metals refining toward other sectors, especially auto and agro-processing. IPAP responds to these challenges in the following ways: [Downloads: IPAP 2017-2020 Part 1: brief overview (pdf, 1.49 MB), Part 2: engine room of change (pdf, 4.43 MB)]
Mozambique: Nacala coal terminal starts operating in full on 12 May (MacauHub)
The construction of both the terminal and particularly the railway line, which started in 2012, cost about $4.5bn and included the construction of some new sections as well as the reconstruction of others in both Mozambique and Malawi. Mozambican daily newspaper Noticias reported that after the inauguration scheduled for Friday, at least 21 trains will run on that line on a daily basis at one to two hour intervals. Metallurgical coal as well as thermal coal extracted in the mines of Moatize is destined for the markets of Brazil, China and Japan and, to date, about 6.5 million tonnes have been exported through Nacala. The target is to reach 18 million tonnes per year, which is the installed capacity of the port and the railway line.
Abidjan–Lagos Corridor: update (ECOWAS)
Road Infrastructure and legal experts from the ECOWAS Abidjan–Lagos Corridor countries of Benin, Cote d’Ivoire, Ghana, Nigeria and Togo, met in Abuja (4-5 May) to validate the interim report and draft Institutional, Legal framework and communication documentation that will govern the management of the corridor in accordance with the Project Treaty signed by the Presidents of the five countries in 2014. These documents will be finalized and presented at a final Draft Validation Workshop in July 2017. Once finalized and adopted by the Project Steering Committee, they will be presented to the Heads of State of the 5 Corridor Countries for their approval to enable the establishment and operationalization of the Corridor Management Authority. [EOI: Abidjan- Lagos Highway Construction]
Zambia-Tanzania-Kenya power interconnector study almost complete (COMESA)
The final draft report of the feasibility study for the 2,300km power line connecting Zambia, Tanzania and Kenya is expected to be ready by July this year. During the meeting (20-21 April, Livingston) updates on the progress of the ongoing feasibility and Environmental and Social Impact Assessment studies were presented to the delegates. They comprised representatives of Ministries of Energy and Power Utilities from Kenya and Zambia and regional power pools. Mobilization of financing for the remainder of the project will begin once the study report is done. To this effect, a financiers’ roundtable is planned for mid-August this year to be organized by the Office for Promoting Private Power Investment in collaboration with COMESA, NEPAD and the Nile Equatorial Lakes Subsidiary Action Programme.
Nigeria seeks $5.2bn from World Bank for electricity (Bloomberg)
The bank’s private-sector lending arm, the International Finance Corporation, may invest about $1.3bn in power projects and electricity distribution companies. Its political-risk insurer, the Multilateral Investment Guarantee Agency, could provide equity and debt of $1.4bn for gas and solar power programs, according to Power, Works and Housing Minister Babatunde Fashola. That’s in addition to loans of $2.5bn Nigeria is seeking from the lender to help improve the distribution of power, expand transmission-capacity and increase access to electricity in rural areas, Fashola said.
Ghana: Govt fights punitive cost of remitting money (Graphic)
The Ministry of Finance is hopeful that a $2.6m Remittance Grant Facility secured from the Switzerland government will help bring down the cost of remitting money to the country from the current 12% of every $200 remitted to 5%. Remittances from Ghanaians working overseas to their families back home dropped last year for the second consecutive time to $1.92bn amid moderation in the global economic growth that reflects the slowdown in China’s growth prospects and falling oil prices. Figures provided by the Bank of Ghana also show that the record of individual remittances through banks into the country in 2015 was 16.9% below what was recorded in 2014. [Government to construct 1200km of rail in next three years]
A new global network for efficiency in shipping (Ship-Technology)
The Global MTTC Network project, officially titled ‘Capacity Building for Climate Change Mitigation in the Maritime Shipping Industry’, focuses on enabling developing countries to effectively implement energy efficiency measures through technical assistance, capacity building and promoting technical cooperation. The heart of the project lies in setting up five Maritime Technology Cooperation Centres, located in Africa, Asia, Latin America, the Caribbean and the Pacific, which together will form a global network. [30th World Ports Conference: Enabling trade, energizing the world (7-12 May, Bali)]
Today’s Quick Links: Rob Davies: Duty to protect SA steel industry EAC Secretariat should improvise with the available funding KeNHA mulls unmanned weighbridges on new roads Continental workshop, 11-12 May: Framework for Sustainable Agricultural Mechanization in Africa SADC moves towards a Simplified Trade Regime Burundi: Great Lakes Regional Integrated Agriculture Development Project Intergovernmental conference on international migration in 2018: update German exports bolster economy as industrial output drops Regional Economic Outlook: Asia Pacific |
Related News
Africa ponders challenges as WTO steps in way of AU self-financing model
The World Trade Organisation and the US government have written to a number of African Union member states on the legality of the implementation of the new self-financing mechanism.
In July last year, the African Union adopted a self-financing mechanism proposed by Dr Donald Kaberuka whereby a 0.2 per cent levy on eligible imports would be imposed on products from outside Africa.
Implementation of the directive is expected to begin in January next year.
The mechanism was initially supposed to take effect in January this year but most member states asked for more time to make necessary internal preparations.
However, the World Trade Organisation (WTO) has written to member countries, complaining that the move is not entirely compatible with its principles.
Among the aspects that the levy decision is allegedly in breach of is that WTO members may not apply tariffs on a product coming from one WTO member and not apply the same tariff on the same or like product when it originates in another WTO member.
This argument depicts the Union’s self-financing mechanism as discriminatory.
The other factor is that some African countries could have committed to the international trade body that they would have zero tariffs and would have duty free regimes.
Among the options floated by experts to get around the hurdle is that, if Africa was to become a free trade area, then the levy would not be in breach of the organisation’s principles.
The issue was among the major topics of concern during the consultative meeting on the AU reforms held in Kigali over the weekend.
Nigeria’s foreign affairs minister Geoffrey Onyeama is one of those who expressed concern, saying the continent ought to seek a way forward to ensure that the mechanism is legal.
“A lot of countries have received letters from the US regarding WTO obligations. It is something we need to discuss in detail and take into consideration and also be aware of what the implications are. We need to find a way around it. We should agree on whether our response will be collective or different,” he said.
AU seeking ‘compromise’
Kaberuka, whose mandate at the body was last week expanded to include overall AU funding, said he has since received such concerns but assured the delegates that it can be addressed as long as there is political will.
“The concerns of the compliance with national laws and international treaties and other compliance mechanisms are issues finance ministers are handling,” Kaberuka said.
Speaking to The New Times, African Union Commission chairperson Moussa Faki Mahamat said the hurdle was being addressed by a team of 10 finance ministers from across the continent.
Faki said the Union was keen on going ahead with the planned levy mechanism but they were also engaging partners such as the US and WTO to find a way around it.
“We want to liberalise Africa so that it cannot be dependent on others. A objective that the AU is no longer dependent as set has to be attained. The team of the 10 finance ministers and other experts are at the disposable of everybody to ensure that they sort it out well. They will also be engaging WTO and the US on how to go about the issue,” he said.
The New Times understands that some countries such as Mauritius are opposed to the levy model as they currently have a duty-free import regime.
» Download Kagame’s January 2017 Report on the Proposed Recommendations for the Institutional Reform of the AU: The Imperative to Strengthen Our Union (PDF, 167 KB)
Clarification
12 May 2017
Dear Editor,
I would like to draw your attention to the article written by Collins Mwai entitled “Africa ponders challenges as WTO steps in way of AU self-financing model,” which was published in The New Times on 9 May. This error was repeated in an article which ran in today’s edition as well.
The article states in part:
The World Trade Organisation and the US government have written to a number of African Union member states on the legality of the implementation of the new self-financing mechanism.
In July last year, the African Union adopted a self-financing mechanism proposed by Dr Donald Kaberuka whereby a 0.2 per cent levy on eligible imports would be imposed on products from outside Africa.
Implementation of the directive is expected to begin in January next year.
The mechanism was initially supposed to take effect in January this year but most member states asked for more time to make necessary internal preparations.
However, the World Trade Organisation (WTO) has written to member countries, complaining that the move is not entirely compatible with its principles.
Among the aspects that the levy decision is allegedly in breach of is that WTO members may not apply tariffs on a product coming from one WTO member and not apply the same tariff on the same or like product when it originates in another WTO member.
This is incorrect. The WTO never wrote a letter to member countries “complaining” about the AU self-financing mechanism or questioning its compatibility with WTO rules. No such letter exists.
The issue was raised by several WTO members at a meeting of the WTO’s Goods Council on 6 April, but the members were speaking in their own capacity. The WTO itself did not express any views on the matter.
We would therefore be grateful if you could run a correction and inform your readers that the WTO is not taking a position on the AU self-financing mechanism.
If you have any questions, please do not hesitate to contact me.
Regards,
KEITH ROCKWELL
Director, Information and Media Relations Division.
World Trade Organization
Related News
IPAP is critical to radical economic transformation – Minister Davies
The Minister of Trade and Industry, Dr Rob Davies says the Industrial Policy Action Plan (IPAP) is critical to achieving Radical Economic Transformation. Minister Davies was speaking at the launch of the ninth iteration of IPAP which took place in Sandton yesterday.
IPAP is firmly entrenched in government’s overall policy and plans to address the key challenges of economic and industrial growth and race based poverty, inequality and unemployment. The plan, which is a key component of the Nine Point Plan, aims to develop a more competitive and diversified economy with a higher global share of products.
Emphasising the importance that government attaches to Radical Economic Transformation and inclusive growth for the SA economy, Minister Davies outlined new initiatives that are part of concerted efforts to shift the productive base of the economy in order to create decent and sustainable jobs.
“In the simplest terms, Radical Economic Transformation means putting coherent initiatives together that can begin to shift the productive base of our economy away from the inherited colonial division of labour and create decent sustainable jobs – particularly for the most marginalised and vulnerable groups in our society. It means unequivocal and urgent support for programmes such as the Black Industrialists Programme, which are increasingly being strengthened and deepened, to ensure that ownership, management and control of the economy is increasingly in the hands of black people,” said Minister Davies.
He added unless South Africa secured the necessary steps towards structural change in the economy and secure much higher levels of investment in the productive sectors of the economy, Radical Economic Transformation may become a hollow phrase and a moveable feast for any manner of ill-considered economic recipes.
“Radical Economic Transformation is essential. But it is not about quick fixes and big bangs. It is hard, painstaking work. It needs pragmatism. It requires dialogue. It requires policy certainty and programme alignment. It requires a collaborative effort with the private sector. It needs a willingness to accept trade-offs and sacrifices that can deliver social consent and stability,” said Minister Davies.
He identified Radical Economic Transformation as one of the focus areas and key priorities of IPAP 2017/18-2019/20. This will comprise of upscaled efforts to secure shared and inclusive growth with respect to transformation of ownership and management control; empowerment through decent jobs, especially in labour-intensive sectors.
Minister Davies also stressed the need for a step-change to secure a higher impact, lazer-focussed industrial strategy which can secure much higher levels of investment, especially in manufacturing, to lead the country’s economy out of its current trajectory and to address poverty, unemployment and inequality.
He added that IPAP 2017/18-2019/20 will focus on the following key themes which inform the work both of the Department of Trade and Industry (the dti) and act as a roadmap in general for the industrial effort:
-
Growing the economy by working closely with the private sector to secure and support investment in a modernised and competitive manufacturing and export sector.
-
Strengthening efforts to raise aggregate domestic demand, mainly through localisation of public procurement and intensified efforts to persuade the private sector to support localisation and local supplier development.
-
Stepping up South Africa’s export effort, with a focus on key existing exporters, emerging export-ready firms and strong support for new black industrial entrepreneurs.
-
Strengthening ongoing efforts to build a less concentrated, more competitive economic and manufacturing structure in which barriers to entry for new entrants are lowered.
-
Pressing ahead with technology-intensive, value-adding beneficiation projects which fully leverage SA’s comparative resource endowment advantage into a global competitive advantage.
-
Optimising technology transfer and diffusion and a greater effort, working closely with the Department of Science and Technology to commercialise ‘home-grown’ R&D in key sectors.
-
Supporting the further strengthening of energy-efficient production and carbon mitigation efforts and measures in a manner that allows for sustainable adaptation by all the energy-intensive sectors of the economy.
-
Ensuring that the foreseeable effects of the Fourth Industrial Revolution and emergent disruptive technologies are understood, and adapt SA’s productive and services sectors to meet the challenges, including those relating to employment displacement.
Download the Industrial Policy Action Plan (IPAP) 2017/18-2019/20:
pdf IPAP 2017-2020 Part 1 (1.49 MB) : A Brief Overview (1.49 MB)
pdf IPAP 2017-2020 Part 2 (4.43 MB) : pdf (4.43 MB) The Engine Room of Change (4.43 MB)
Selected IPAP Achievement Highlights For 2016/17
-
Localisation
-
Instruction notes for the designation of products were issued for products such as steel products, rail signalling equipment and transformers and associated equipment.
-
Steel industry – primary steel was undeemed in order to be sourced locally going forward.
-
Local production of buses – MyCiTi bus service will be extended with 10 new electric buses which will be assembled in Cape Town.
-
SA’s efforts to up-scale our industrial capacities and capabilities in the manufacture of rail transport and components were boosted by the launch of several new facilities:
-
Bombardier Transportation Propulsion and Control facility launched in Elandsfontein with 100 people employed
-
AVK Valves, in partnership with Premier Valves, launched a R200m new plant in Benoni
-
MTU South Africa unveiled its newly-upgraded workshop facility to assemble the diesel engines for the 232 diesel locomotives for China North Rail
-
The Department of Science and Technology (DST) has provided funding to the value of R9 million for the Bombardier locomotive building project
-
-
-
Automotive sector investments
-
Through the APDP incentive, R7.8 billion has been disbursed which unlocked R28.5 billion in private investments. For example:
-
Beijing Automobile International Corporation (R11 billion)
-
Toyota SA (R6.1 billion)
-
Ford SA (R11.5 million)
-
Volkswagen SA (R120 million)
-
Mercedes-Benz and Government (R130 million)
-
These investments are expected to create approximately 4 720 direct jobs
-
Agro-processing
-
Close to R15 billion private sector investment leveraged through projects by Nestle, AB Inbev, GWK Farm Foods and Citrus and Deciduous Fruit industries
-
R100 million tomato processing Dursots-All Joy plant launched in Tzaneen, to employ 300 people
-
Two Agri-parks are operating while 6 are under construction; Clover, Tiger Brands, McCain and Distell have initiatives to improve market access for small farm
-
-
Clothing, textiles, leather and footwear sector
-
Since inception of the Clothing and Textile Competitiveness Programme, which is a partnership between the dti and IDC, the sector has been supported to the value of R4.2 billion in incentives where 70 000 jobs have been saved and 9 550 jobs have been created.
-
the dti approved R824 million to establish one national and four sub-national clusters which resulted in capacity expansions by many manufacturers.
- 28 new companies established; creation of 2 200 jobs; growth in exports
-
Production of footwear grew by over 2 million pairs in 2016
-
-
Business Process Services: ongoing effort to build this globally competitive and labour-intensive sector
-
6 new projects approved, 5-year projected export revenue R4.5 billion. R193.3 million disbursed, 10,466 jobs sustained
-
Call Centres – EXL call centre in Cape Town plans to create 6,000 jobs
-
SA secured 2 projects to provide tutor services to learners in Asia via online platform, 688 jobs created
-
Since inception of the Monyetla Work Readiness Programme, has seen provision of training opportunities to over 16,000 unemployed youth, with the placement rate well over 70%
-
-
Ocean economy: Ship and boat building
-
Two domestic companies, Southern African Shipyards and Damen Shipyards are preferred bidders to supply vessels to the Navy as part of Project Biro and Hotel.
-
A R290 million new Durban floating dock was launched on the back of support by the dti to the value of R160 million.
-
-
Electro-Technical
-
Government incentives and tariff reviews contributed to enhancing South Africa’s Value Proposition as an investment destination
-
OEM investments by Hisense, Defy and Samsung in the television and White Goods sub-sector
-
Zero Medical SURE – a new off-grid vaccine refrigerator technology – launched
-
Yangtze Optics Africa Company (YOAC) – R150m Optic fibre plant at Dube Trade Port
-
Designation of two-way radio terminals and associated equipment
-
-
Green industry investments
-
The Renewable Energy Independent Power Producers Programme (REIPPPP) attracted total investments to the value of R194 billion, it generated R256 million in socio-economic development contributions and R80 million in enterprise development contributions.
-
All projects from the first two bid windows under REIPPPP are now operational and a total of 2 738 megawatt of electricity generation capacity from 51 Independent Power Producer projects have been connected to the national grid.
-
Supply side measures include:
-
The National Cleaner Production Centre (NCPC), working with Unido, assisted 160 companies
-
R1.7 billion saved in energy costs, 1,744 jobs created/preserved
-
-
-
Fuel cells
-
As part of its hydrogen fuel strategy, Implats will build two fuel cell plants
-
In collaboration with Hydrogen South Africa Infrastructure, Anglo Platinum is developing fuel cell-powered mining equipment for its own operations.
-
Isondo Fuel Cell plant launched in Cape Town
-
-
Technology Localisation Programme
-
Since 2013, the Technology Innovation Agency (TIA) has disbursed more than R1 billion in funding for various technology development projects.
-
Approximately 70 technologies funded by TIA have reached demonstration stage, and 23 technologies were commersialised.
-
-
InvestSA
-
Government has established a national investment One Stop Shop and will open provincial centres in KZN, GP and WC; thus securing a streamlined, inter-departmental ‘clearing house’ system
-
InvestSA, was awarded the Global Investment Promotion Agency (IPA) Award for excellence
-
In 2016, South Africa FDI inflows increased at 38% year-on-year
-
Investments by Nestle, Beijing Automotive International Corporation, ACWA Power, Ford, Toyota, Sumitomo Rubber, Cipla, Johnson & Johnson, 3M, amongst others, have reaffirmed South Africa as a regional manufacturing hub
-
-
Selected dti incentive schemes
-
27 projects were approved under the Black Industrialist Scheme, to the value of R577 million, with a projected investment of R2.5 billion and the creation of a further 5 235 direct jobs and 1 228 indirect jobs.
-
Under the Manufacturing Competitiveness Enhancement Programme, 270 projects were supported, supporting R3.3 billion in investments which sustained 62 235 jobs.
-
-
Export support
-
During the previous 2 years a total of 1 473 companies benefitted from the advanced Global Exporter Passport Programme
-
A support package of R90 million under the export assistance scheme resulted in export sales of R4 billion
-
Related News
Duty to protect SA steel industry
Trade and Industry Minister Rob Davies said on Monday he has signed off on a safeguard duty for hot rolled coil steel, but said the measure was subject to informing the World Trade Organisation (WTO).
Through so-called safeguard measures, WTO members such as South Africa are allowed temporarily to restrict imports of a product if increased imports of that product pose a threat a local industry.
The move is intended to shield the local steel industry from cheaper imports in the face of a global overcapacity.
At the launch of the ninth annual iteration of the Industrial Policy Action Plan (IPAP) in Johannesburg, Davies said the government wanted to retain primary steel-making capacity in South Africa.
“This is for a number of reasons, but the obvious one is that we are an iron-ore producer. If we lose primary steel-making and we continue to be an iron-ore producer, we will be moving further down the value chain,” he said.
Davies said the government was aware of the problems facing local manufacturers.
“The global conditions impacting on manufacturers include the over-production of steel products, which is due to structural changes in other economies. This has meant that steel industries and steel production across the globe have been threatened by the entry of low-priced steel products from over-producing countries.
“Although we are not completely out of the woods with regard to that, we believe that there [is a] greater level of stability in steel manufacturing in South Africa. “We have deployed a number of trade-policy instruments, and we recently signed off on a safeguard proposal, which has now gone to the WTO,” he said.
He said the government wanted to safeguard the South African steel industry, including downstream steel-making operations, which created job opportunities. Davies said the government would not protect the upstream steel sector and leave the downstream sector vulnerable to the products that had benefited from low inputs of imported steel.
He said there would be support for downstream value-added steel-product users, but said his Economic Development counterpart, Ebrahim Patel, would announce the details of the scheme.
“Just to say that there is a substantial programme of financial support run by the (Industrial Development Corporation) that will support downstream steel manufacturers. This is an indication that we are working for the benefit of the steel industry as a whole, not for any part of it. There is an amount which is available to support the directly downstream steel makers,” he said.
He said the downstream steel industry has the potential to create jobs and presented opportunities for black industrialists. “We are supporting the value chain as a whole,” he said.
Meanwhile, Davies said the government’s black industrialist programme was one measure to ensure inclusive growth. He said the government wanted to support 100 black industrialists by the end of the current financial year.
“It is our current intention to support 100 black industrialists by April next year. We have supported 40 at this point in time,” he said.
He said the IPAP was intended to contribute to radical economic transformation. At its simplest, he said, the IPAP should contribute to a radical change in the structure of the economy, “that reduces the economy’s dependence on industries and sectors that we were consigned under colonialism as a producer and exporter of primary commodities.
“I think that we know that this is the least lucrative of any value chain and, in fact, if you look at developments taking place in the global economy and in global value chains now, you will see that the value of finished product that is constituted by the raw material that is included in it is the minor part of the final product and is a diminishing percent of the value the final product,” he said.
He said to create “productive” employment, with higher incomes and development, the economy should move into value-adding activities and industrialisation. He said the economy should promote inclusivity. “We have to promote more involvement of more South Africans, and particularly South Africans that were excluded in the past, in roles of ownership, leadership and participation in the productive economy... If we do not deliberately work in this regard, we will reproduce the existing patterns in which people were historically excluded,” he said.
Related News
SADC moves towards a Simplified Trade Regime
Studies and experiences from other parts of the world show that the simplification and streamlining of documentation requirements as well as import and export formalities significantly reduces transaction costs associated with trade.
Such measures are particularly important for small-scale cross-border traders who often do not have enough financial resources or human capacity to deal with complex administrative requirements.
Moreover, for small or low-value consignments often channelled by such traders, the costs of complying with complex requirements and formalities can be disproportionate relative to the transaction value.
It is against this background that the Southern African Development Community (SADC) ministers responsible for trade have mandated the SADC Secretariat to develop a Simplified Trade Regime (STR) for intra-SADC trade in accordance with the World Trade Organisation (WTO) Agreement and the Kyoto Convention for the Simplification and Harmonization of Customs Procedures.
Article VIII of the World Trade Organization’s GATT Agreement and provisions of the Revised Kyoto Convention for the Simplification and Harmonization of Customs Procedures suggest the development and implementation of simplified trade procedures for eligible small scale traders to overcome these challenges
The Secretariat started the process of engaging consultants in January who are expected to develop the STR.
The draft proposal to be developed by the consultants will be informed by a best practice and scenario analysis.
In addition, the proposal should be accompanied by a background study document that provides information on the potential impact of a SADC STR in terms of benefitting trade volumes, number of traders and the type of traders, such as their socio-economic position and their gender.
It will then be considered by SADC structures for final approval by the ministers later this year.
According to the terms of reference for the exercise, the consultants are expected to undertake a number of activities as part of the process of developing the SADC STR.
These include conducting a desk study to examine best practices and challenges of existing STRs, in particular the one implemented by the Common Market for Eastern and Southern Africa (COMESA).
The desk study will also look at available data regarding the volumes of formal and informal small-scale trade in the SADC region and the type of traders likely to be affected by the introduction of the STR.
The consultants are expected to conduct study visits to major border posts in Malawi, Mozambique, South Africa, Zambia and Zimbabwe to assess the needs of stakeholders and their preferences regarding a SADC STR.
The assessment will include data collection on the following:
-
The most commonly traded goods and product commonality,
-
Affected trade volumes,
-
Affected trade values,
-
Trade frequency appropriate for the regime on the basis of the other generated data.
-
The profile of the affected traders.
In collaboration with the SADC Secretariat, the consultants will conduct a legal assessment on whether the adoption and implementation of a SADC STR will require an amendment to the SADC Trade Protocol, and if so, provide sample legal text based on relevant international and other regional agreements.
On the basis of the desk study and the study visits and related assessments, and in light of the outcome of the legal assessment, the consultants will be expected to develop a negotiation proposal for a SADC STR, including different scenarios.
These shall include numerous options for thresholds (value/volume of trade eligible under the STR), frequency (timeframe in which the value is assessed), product lists, and documentation requirements.
The proposal by the consultants should also provide a roadmap for national implementation, including guidance for Member States on the legislative arrangements and physical and institutional structures that will need to be established in order to implement the STR.
Related News
tralac’s Daily News Selection
Later this week, in Addis: the Assessing Regional Integration in Africa VIII Expert Group Meeting (10-11 May)
Africa Integration Index: Fourth edition launched (Visa)
This index originally covered 55% of the Sub-Saharan population and three-quarters of the region’s output by measuring the depth and breadth of the connectedness of 11 African economies located in three clusters – East Africa (including Kenya, Rwanda, Tanzania and Uganda); West Africa (including Ghana and Nigeria); and Southern Africa (including Angola, Mozambique, South Africa, Zambia and Zimbabwe). With data that have recently become available, we are able to extend the coverage of the index by eight countries and refine the analysis by clustering the countries into four regions: (i) Central Africa (Angola, Cameroon, DRC);(ii) East Africa (Ethiopia, Kenya, Madagascar, Mauritius, Rwanda, Tanzania, Uganda); (iii) Southern Africa (Botswana, Mozambique, Namibia, South Africa, Zambia, Zimbabwe); (iv) West Africa (Côte d’Ivoire, Ghana, Nigeria). Extract (pdf): While low regional integration is a collective attribute, the differences across countries varies materially, with Angola, Madagascar, Nigeria and Zimbabwe displaying the lowest regional integration in the four regions, and Cameroon, Cote d’Ivoire, Ethiopia and Zambia displaying the highest regional integration in the four regions. Extending this analysis to the regional level, East Africa and Southern Africa display a significantly higher level of regional integration than Central Africa or West Africa, which has implications for economic development and growth prospects. As a collective, however, it remains the case that although the connectedness of the region is rising, the drivers are growing global connections rather than connections to neighbours. This feature is universal for the 19 countries covered in the study.
IDEP builds capacity of 25 African policymakers in the design of international trade policies (UNECA)
The 25 officials (from 12 Anglophone and 13 Francophone African states) took part in IDEP’s third short course so far this year on International Trade Policy for National and Regional Development. The main objective of the course is to contribute to the development of a critical mass of highly skilled middle and senior policy officials and decision makers who will be suitably or better equipped to design and manage dynamic trade policies for the development in Africa. Some of the countries represented in the course were Cameroon, Comoros, DRC, Liberia, Madagascar, Namibia, Nigeria and Zimbabwe.
Trans Kalahari Corridor: update (Southern Times)
South Africa’s Director of Regional Corridors, Segodi Mogotsi, revealed that SA’s Department of Transport has developed a Draft Regional Corridor Development Strategy that seeks to better integrate South Africa with SADC initiatives, stimulating regional economic growth and enhancing mobility across the region. “The strategy will guide the department in its role in implementing the Regional Corridor Development Strategy and infrastructure Master Plan and enhanced participation in regional infrastructure investment; and improved trade facilitation and efficient transport in the corridors,” said Mogotsi. He further revealed that South African Government intends to facilitate review of the SADC Protocol with specific reference to corridors. “We also want to ensure that every corridor is governed by a Memorandum of Understanding that subscribes to the SADC Protocol and amend the SADC Protocol and customs legislation to legalise use of e-documents and e-signatures,” he said.
South Africa: Cross-Border Road Transport Industry update (pdf, DoT)
We are equally aware of our counterparts charging exorbitant cross-border fees that only apply to foreign registered vehicles. These fees constitute unnecessary constraints that increase operational costs to all our operators. The C-BRTA has considered and acceded to appeals by freight operators to reciprocate, not with view to be punitive, but to ensure standardisation, harmonisation and fair treatment. To this end, the Agency has since conducted a study of all cross-border charges levied by our counterparts and developed a business case for Government to consider introducing similar charges as a way of equalising regulatory impacts across borders. A task team comprising of the Department of Transport and the C-BRTA has since been established to take the process forward. [The speaker: Deputy Minister Ms Sindisiwe Chikunga]
Mauritius: National Export Strategy, 2017-21 (Enterprise Mauritius)
From a mainly goods-based economy driven by the sugar and garment sectors, Mauritius has progressively shifted towards a service-oriented economy with higher value addition. The loss of preferential access for textiles and sugar in 2004, along with worsening external economic conditions and increasing oil prices, accelerated the diversification process, a vital move for the long-term sustainability of the Mauritian economy. The country has had remarkable success in developing the ‘servicification’ of its economy, boosting economic growth and reducing its reliance on sugar and garments. Tourism, financial and insurance activities are now the major contributors to GDP, and the share of services in value addition has increased steadily, reaching 71% for the period 2010-2014 (see figure 10). This shift towards services translates to profound changes in the composition of employment in Mauritius, with the participation of the labour force in services increasing steadily over the past two decades from 46.7% in 1994 to 63.5% in 2014. In contrast, jobs in the industry and agriculture sectors have fallen over the same period, with shares in total employment falling from 38.9% to 29.8% and from 13.7% to 8% respectively over the same period. Mauritius’ external trade performance: selected highlights (pdf): (i) One of the lessons learned from the decomposition of export growth is that there is an urgent need for Mauritius to diversify its export markets with a view to move from a model of preferential treatments to global competitiveness. (ii) Mauritius’ role in global production networks is limited and has not evolved. After peaking in 2005, the share of imports of parts and components in Mauritius has dramatically declined and Mauritius’ share of parts and components in global or regional supply chains has stagnated at a low level of integration. (iii) The analysis reveals that Mauritian exporters are having difficulties sustaining export relationships over a prolonged period. Mauritius’ performance is below expectations, with the probability of an export relationship surviving until the second year only 33% and maintaining a relationship for more than three years, 28%. Nevertheless, its performance has improved over time.
Angola: Country strategy paper, 2017-2021 (pdf, AfDB)
The negative impact of the oil crisis has provided even greater urgency to accelerate the government’s economic diversification agenda. One priority will be to invest in agricultural transformation and value chains to diversify exports and national revenue sources. The expansion of electricity access, water and sanitation supply, and skills development is critical to improve the business environment and private sector should have a larger role in the economy, including in the development of infrastructure through public-private partnerships and concessions. The other area vital to growth is regional integration in order to unlock the potential of local manufacturing and boost trade. Therefore, the Bank’s strategy will focus on two complementary pillars, namely: (i) inclusive growth through agricultural transformation, and (ii) support to sustainable infrastructure development, in particular, in energy and transport. Extract: Despite the huge potential for economic diversification, import dependency is also growing. Angola’s imports of food basket goods increased from $2bn in 2013 to $3.8bn in 2015 (Table 2 below), with obvious consequences in terms of the pressure on foreign exchange and vulnerability to global prices. In this context, developing the agricultural sector and agribusiness to enhance transformation of local products along the food supply chain and boost both domestic sales and exports, is central to economic diversification. Unlocking Angola’s agricultural potential requires government’s commitment and investments, closing the infrastructure gap, facilitating trade and improving financing as well as skills and technology.
Prevention of illicit financial flows: AfDB Group draft policy (pdf)
The proposed policy, not only expands the scope of the Bank’s IFFs work, it sets a clear path for future Bank interventions in this field, including the recommendation of an organizational framework for the coordination of the implementation of the policy in the Bank. The vision of the Bank Group with regard to the prevention of IFFs is to have an African continent with the requisite capacity to effectively combat illicit financial flows by 2030. The core objective of the Bank’s Anti-IFFs work is to significantly contribute to the continent’s response to the threat of IFFs. This Policy establishes the general framework for the Bank’s work in the fight against illicit financial flows, outlining clear directions and principles across four main areas: Internal control and safeguards, Assistance to regional member countries, Increasing collaboration with international partners, Capacity building for staff. [Delivering the High 5s, Increasing the Bank’s impact on development: Results Measurement Framework 2016-2025 - revised version, pdf], [Yomi Kazeem: Africa is losing billions annually to illegal capital flight (Quartz)]
Own AU reforms process – Kagame (New Times)
President Paul Kagame has called on African countries and regional economic communities to take ownership of the African Union reforms process to facilitate urgent implementation. Kagame made the remarks, yesterday, during a consultative meeting on the African Union Reforms attended by African foreign affairs ministers and ambassadors accredited to the AU, in Kigali. [Full text: President Kagame’s speech at Consultative Meeting]
Managing capital flows: challenges for developing countries (IMF)
On 5 May, the IMF hosted a conference on “Managing capital flows: challenges for developing countries” in Zambia. The Hon. Felix Mutati (Minister of Finance, Zambia) and David Lipton (First Deputy Managing Director of the IMF) opened the conference. Paul Krugman, Nobel laureate and Distinguished Professor of Economics at the City University of New York, delivered a keynote address. Participants agreed that capital flows to developing countries are generally beneficial - particularly in the current context of a much leaner environment - by providing an important source of financing for investments and by helping to maintain foreign exchange reserves. Sound policies and macroeconomic stability were considered key to help reignite high-quality capital flows. Some lessons drawn from the shared experience of participants are that (i) the composition of capital flows matters for financial stability and growth, and (ii) that effectively managing the inflow phase of the capital flow cycle is the best protection against challenges that arise when capital flows reverse. [IMF paper: Can they do it all? Fiscal space in low-income countries]
Windhoek kicks off Brazil’s visit to Southern Africa (New Era)
Brazilian Foreign Minister Aloysio Nunes Ferreira arrived in Namibia yesterday morning to kick off his round of diplomatic discussions with southern African countries over the next eight days. From Namibia, Ferreira is expected to visit Botswana, then Malawi, before travelling to Mozambique, the only country that would receive an extended visit of two days, on 11-12 May. Ferreira will also witness the inauguration of Mozambique’s Nacala Logistics Corridor, an important investment of Vale in partnership with the state-owned Portos and Railways of Mozambique. The project, which has given Brazil the status of the country’s largest foreign investor, is expected to contribute to the development of the Mozambican and Malawian economies.
Uganda: Protests over Chinese retailers (The Independent)
Hostility towards Chinese petty traders appears to be growing in Uganda but so is the dependence on Chinese imports. On April 19, the hostility erupted once again as hundreds of traders in the capital city, Kampala, staged a closed-shop protest and marched along some streets brandishing placards telling the Chinese to “Leave our country.” The protests were led by the Kampala City Traders Association. KACITA which boasts of close to 200,000 traders says over the last seven years the traders have been complaining to the government over aliens doing petty trade but with little success, hence the street protests. What is at stake, it appears, is the control of the growing trade in imports from China into Uganda. [China’s Uganda envoy pleads for Chinese traders]
Research busts China myths on investment in Africa (Business Day)
McKinsey found about 30% of the 10,000 Chinese firms operating in Africa are in manufacturing, 86% of their employees are local – as are 40% of their managers – and 85% of the firms are privately owned. China is by far Africa’s largest economic partner, ranking in the top five for trade, infrastructure finance, foreign direct investment and aid, but the managing partner of McKinsey’s Africa office Georges Desvaux said the study found almost all perceptions of its role were false. “It [China] is creating an industrial footprint in Africa, creating jobs and bringing in new technology and new processes to Africa,” Desvaux said. McKinsey plans to launch the full version of the study, Dance of the Lions and Dragons, at the WEF’s Asia meeting later in 2017. It will include details on individual countries, including SA.
AGOA: Meeting the competition in Africa (Pittsburgh Post-Gazette)
AGOA ensures African entrepreneurs can take advantage of access to the US market at no cost to US taxpayers. As good as the program has been, it is not enough. Changing circumstances and impressive investments by China necessitate the United States increase its economic engagement in sub-Saharan Africa. This means broadening eligibility, opening additional sectors of the US market and strengthening programs that encourage sustainable economic growth. Efforts like these have their skeptics, but here are three reasons increased economic investment in Africa matters for the United States: [The authors: Natalie Gonnella-Platts is deputy director of the Women’s Initiative at the George W. Bush Institute. Laura Collins is deputy director of the institute’s Economic Growth Initiative]
Today’s Quick Links: South Sudan: appraisal report for country membership programme of Trade and Development Bank, African Trade Insurance Agency (pdf, AfDB) 13th CAADP Partnership Platform (31 May - 2 June): concept note |
Related News
Visa launches 4th edition of Africa Integration Index
Visa has launched the 4th edition of its Africa Integration Index that measures the degree of economic integration with key trade corridors of sub-Saharan Africa.
Launched at the World Economic Forum in Durban, South Africa, the report aims to better understand Africa to help unleash the enormous growth potential in electronic payments on the continent, and includes countries of Francophone Africa for the first time since its first edition in 2013.
The Africa Integration Index has become a significant research project for Visa and is now beginning to show trends and deliver insights that are impactful and significant to provide policymakers with an insightful and academically sound tool to help shape economic decisions.
Measuring connectedness
The extent and nature of a country’s connections to both the global and regional economy is one of the single biggest influencers of socio-economic change. While mainstream measures of economic integration have focussed more intently on trade flows and capital movements, they have a tendency to overlook other key pillars of economic connectedness, such as flows of information, knowledge, data and people, across borders.
Measurement becomes more complex in many emerging and frontier economies, as data are often incomplete or missing entirely. This is especially true for the countries that make up Sub-Saharan Africa. The Visa Africa Integration Index, now in its fourth edition, aims to improve our understanding on the importance of economic connectedness and to redress the deficit in information and knowledge about the mechanisms of socio-economic integration, which enable and promote development.
Assimilating country and industry data, together with country-specific information proprietary to Visa, the index has measured and offered insight into economic connectedness for 11 indicative Sub-Saharan economies since 2011. The latest index highlights several important observations that, overwhelmingly, confirm the earlier findings. These are detailed below in this updated version, which extends to 19 countries divided into four regions – Central Africa, East Africa, Southern Africa and West Africa – representing 75% of the subcontinent’s population and 85% of output. Several clear trends emerge:
-
Sub-Saharan African economies rank amongst the least connected in the world. Since our measurement began five years ago, however, the evidence points to connections growing quickly and effectively, particularly in east Africa, although Cameroon, Ghana and Zambia also stand out.
-
In line with data for different countries studied over other periods, there is a strong correspondence between rising connectedness and improvements in economic and social wellbeing. Rwanda is an example of a stand out economy. Over the past five years, the country has displayed the largest relative gain in connectedness amongst the 19 countries in the index. This has manifested in a gain in per person income of 7.0% per year.
-
All boats do not rise with the same tide. Kenya and Rwanda have made large gains in connectedness off relatively low bases over the five years covered by this research, Botswana has not moved much off its relatively high base, and Angola has struggled to improve off a low base. The Democratic Republic of Congo’s score has fallen.
-
The Visa Africa Integration Index makes an important and necessary contribution towards filling gaps in data and knowledge relating to many Sub-Saharan economies. It affords better understanding of the drivers and shapers of economic development in the region, helps inform data-driven policy and offers industrial and economic intelligence to business decision makers.
Download: Visa Africa Integration Index: Connecting for Growth, Economic Inclusion & Prosperity (PDF)
Related News
Africa is losing billions annually to illegal capital flight
Illicit financial flows are generally bad news for any government. For developing countries, though, the impact of illicit financial flows is especially significant. Governments grappling with meeting pressing needs such as plugging infrastructural deficits and improving the quality of life for citizens are further hamstrung by the illegal movement of cash from the economy.
According to Global Financial Integrity (GFI), a Washington think thank, illicit financial flows from developing regions grew at an average rate of 8.5% to 10.1% a year between 2005 and 2014 (the latest year for which data is available). The funds are mainly moved through fraudulent invoicing of imports and exports, in a bid to avoid taxes and hide large sums.
While not all of the illegally moved money may have otherwise ended up in national coffers, illicit flows offer a scope of the tax revenues lost by developing countries. Globally, illegal capital flight nearly reached $1 trillion in 2014, at the high end of the GFI’s estimate, and just over $600 billion at the low end.
![](https://www.theatlas.com/i/atlas_Hywbs4uJ-.png)
Sub-Saharan Africa remains the most affected and vulnerable region in the world. Invoice fraud is particularly aided by the pervasive lax regulation and corruption across the region. Between 2005 and 2014, on average, illicit outflows equaled between 7.5% and 11.6% of the region’s total trade – the highest for any region.
In 2014, illicit outflows were largest in Asia, pegged at between $272 billion and $388 billion. In sub-Saharan Africa, illicit capital flight that year was estimated at $36 billion to $69 billion. However, measured against scale of trade, the impact of the illicit outflows from sub-Saharan Africa was much greater.
![](https://www.theatlas.com/i/atlas_rJaH3V_kb.png)
Find out more about the GFI report here: Illicit Financial Flows to and from Developing Countries: 2005-2014
Related News
Own AU reforms process – Kagame
President Paul Kagame has called on African countries and regional economic communities to take ownership of the African Union reforms process to facilitate urgent implementation.
Kagame made the remarks, yesterday, during a consultative meeting on the African Union Reforms attended by African foreign affairs ministers and ambassadors accredited to the AU, in Kigali.
President Kagame has been leading the reform process following the mandate given during the African Union Summit in Kigali last July.
He said that ownership of the process by African citizens and their representatives is a necessity towards implementation of the reforms and realisation of their goals.
Giving Rwanda’s experience in changing its circumstances, he said that it was necessary to change the mindset from one of reliance to ownership and independence.
“Having resolved to change our circumstances two things became very important, as we struggled to turn aspirations of the new Rwanda into reality. The first was to overcome the mindset of sitting back and waiting for rescue,” he said.
“Doing so involved becoming aware of the substantial means we already had both in our soil and much more importantly in our people. With these resources we found that we had more than enough to get started,” the President said.
Another decisive factor in the implementation process, the president noted is the attitude of stakeholders involved in the process.
“If the mentality was to look for stumbling blocks, you would surely find lots of them and the end result is that goals are not accomplished. Instead of finding reasons to do nothing, look for what should compel us to act,” the Head of State told the foreign affairs ministers.
“The decision and the decisive factor here was changing our mindset from dependence to ownership and from we ‘can’t’ to ‘we can’. That is an asset that cannot be imported,” Kagame added, referring to the mindset that characterised Rwanda’s transformation.
Among the African union reforms is a decision to reduce donor dependence in funding the organisation’s budget. At the moment, over 80 per cent of the union’s budget is sourced from donations which experts say has often seen the body compromise on its priorities.
The Union, in July last year, adopted a proposal to fund 100 per cent of its administrative budgets, 75 per cent of programme budgets and 25 per cent of the peace keeping related activities.
The funds will be sourced from a 0.2 per cent levy imposed on eligible imports entering the continent. The decision takes effect from January 2018.
Kagame said that the decision was taken to avoid dependence on donors and to make the body more effective.
He said that if there are any problems or concerns about some details of the reform, it would be better to amend and improve it as opposed to sacrificing the principle.
“Regardless of the challenges we face in implementing the decisions, there are certainly better problems than the ones we faced before. Let’s work together on the details, while standing firm on our principles,” he said.
Other key reforms adopted by the union include a decision to focus on key priorities with continental scope and to empower Regional Economic Communities to take the lead on regional issues.
The reforms also include realigning AU institution to deliver on its key priorities, connecting the African Union more to citizens for them to have a stake in its work, and managing the business of the union more efficiently and effectively with particular focus on how summits are conducted and how personnel are selected.
Kagame also noted the importance of ensuring that no country or party was left behind in the reforms process as it would cause the entire process to stall.
“This process is not about what each country can do on its own but what we can all do together, for each other and with each other. If some of us get it right while others lag behind, most likely we will all be stuck. We affect each other one way or another,” he said.
Read the full address by President Kagame on AU reforms here.
Related News
Africans rising: The time for action is now
Africa has moved beyond theory and planning; the time for action has arrived. Africa’s first priority should be to embark on a path of sustained, sustainable and inclusive growth.
The fundamental imperative for Africa is to pursue inclusive growth, which will transform it from the continent of potential to the continent of prosperity, said Cyril M. Ramaphosa, Deputy President of South Africa, in the closing address to the 2017 World Economic Forum on Africa on Friday.
Ramaphosa called on the continent’s leaders to think hard about “the type of Africa we are going to leave for future generations.” Will it be a place of ashes or of half-baked solutions, or will it be a product of leaders’ best efforts to be responsive and responsible to their citizens?
“We must lead with respect and dignity,” he continued, “We are trustees and guardians of the continent for future generations.” The scourges of wastage, mismanagement and corruption must be wiped out and replaced with a united drive for inclusive growth, he said.
A comprehensive reform of the approach to education is one of the first calls to action, said Ramaphosa. Promotion of science and innovation must be central to learning, as must broadening access for all, but especially for girls and young women. And education cannot be the preserve of an emerging middle class, thus perpetuating inequality.
Ramaphosa’s call to action to change Africa’s path echoed the comments of the meeting’s Co-Chairs, who formed the discussion panel of the closing plenary session of the meeting.
“There is a real sense of urgency in Africa,” noted Siyabonga Gama, Group Chief Executive Officer, Transnet, South Africa. He suggested that governments should be run as if they are large corporates – with constant monitoring of performance in hitting targets, bold decision-making and the removal of impediments that slow down growth.
For Gama, the priorities are to integrate Africa’s five economic zones into one giant economic marketplace. Integral to this is a major drive to build infrastructure and power-generation capacity.
Winnie Byanyima, Executive Director, Oxfam International, United Kingdom, said she is “optimistic and hopeful” about Africa. She has seen people’s capacity to work together to improve their lives and, if they are given the right space to do so on a continental scale, they will seize the opportunity.
Byanyima called for the cliché phrase “African Rising” to be changed to “Africans Rising”.
Frédéric Lemoine, Chairman of the Executive Board, Wendel, France, referred to the infamous headline “Hopeless continent” and said it is no longer applicable to Africa. He said the continent’s massive challenges mean it is never going to be “a blue-sky scenario” but there is abundant cause for hope. He pointed out that Africa has been economically outperforming many parts of the world in recent times.
The energy and the strength of young people in Africa are a compelling cause for optimism, said Rich Lesser, Global Chief Executive Officer and President, The Boston Consulting Group, USA. He said accelerated reform agendas in all areas of society and a growing emphasis on “human-centricity” are clearly evident.
Ulrich Spiesshofer, President and Chief Executive Officer, ABB, Switzerland, summed up the mood at the end of the meeting: “The time for action is now.”
Outcomes of the meeting included:
-
Leaders of four African countries – Ghana, Kenya, Rwanda and Senegal – joined with private-sector executives and other stakeholders to recommit to mobilizing investment in agriculture through the Grow Africa partnership platform, which to date has mobilized $10.5 billion, of which $2.3 billion has been realized, reaching over 10 million smallholder farmers.
-
The Forum’s Global Shapers community hosted a morning of Community Conversations, bringing Davos-style discussions to an audience drawn from the people of KwaZulu-Natal.
-
The Solutions Summit brought together 200 members of the Forum’s Schwab Foundation for Social Entrepreneurship, Young Global Leaders and Global Shaper communities to discuss ways of scaling their impact.
-
The South African government partnered with the World Economic Forum Internet for All project to accelerate the connection to the internet of 23 million additional South Africans by 2020.
-
The Africa Skills Initiative agreed to make business commitments in six vital areas: large-scale internships and apprenticeships at all skill levels; developing future-ready curricula; foundational education delivery; retraining for unemployed youth; research and development collaboration with universities; and expanding basic IT fluency to reach 1 million people by January 2018.
-
Business leaders from the Partnering Against Corruption Initiative (PACI) and a number of African governments have agreed to create a pan-African network to carve out a strategic response to address corruption.
-
Siemens, a Strategic Partner of the World Economic Forum, entered into a partnership with Uganda, Ghana and Sudan to assist in the areas in power supply, transport and healthcare.
The 2017 World Economic Forum on Africa took place on 3-5 May in Durban, South Africa, under the theme Achieving Inclusive Growth through Responsive and Responsible Leadership. The meeting, which closed on Friday, convened regional and global leaders from business, government and civil society to explore solutions to create economic opportunities for all.
Related News
Mauritius National Export Strategy 2017-2021
Executive Summary
Mauritius’ recent journey of economic transformation has been remarkable. The business environment of the country is one of the best ranked in Africa. Sophisticated services occupy an increasingly large share of total exports and are rapidly moving away from traditional services to modern, higher added value services. The economy has continued to diversify with high value added sectors progressively contributing more to gross domestic product. The significant improvements in reducing poverty and sharing prosperity achieved over the past decades have led to low inequality in comparison to regional standards and peer upper middle-income countries, such as South Africa or Seychelles.
Against this background, there are some clouds and challenges ahead. As many other countries, Mauritius is facing the challenge of a slowdown in growth combined with increased inequality that is in particular affecting the young. In Mauritius, this situation is compounded by relatively low levels of investment in productive sectors, the erosion of trade preferences and a tightening of regulations affecting offshore financial activities. Moreover, Brexit is casting a shadow of uncertainty over market access to the UK and the EU – the biggest export market for Mauritian manufacturing and agro-processed products.
The national export strategy of Mauritius provides a blueprint that aims at reinvigorating growth, and trade in a socially inclusive manner. New sources of growth are needed at this juncture. Innovative and ambitious initiatives are required to consolidate the progress made and to prepare the country to size the opportunities in the future. In order to achieve this, the National Export Strategy provides a vision for the country underpinned by concrete actions both at the national and the sector level encapsulated in a series of specific sector and cross-sector strategies that have been elaborated through a highly inclusive and participatory process involving a broad range of public, private and civil society stakeholders from across the entire export value chain. Main NES document lays down the overarching rationale and strategic framework for the complete national export strategy.
The vision of the strategy is to turn Mauritius into a strategic hub for international trade, an open, dynamic and sustainable economy driven by knowledge and innovation. This vision has provided the necessary inspiration and guidance to the stakeholders throughout the strategy’s design process and will continue to provide a sense of direction during its implementation. Achieving the following three overarching strategic objectives at the national level is to materialize the vision.
-
Transition to a knowledge-based economy thriving on innovation and value addition. This strategic objective strengthens the foundations of the economic transformation process that is to allow Mauritius to achieve the status of high-income country. This is to be accomplished by fostering innovation, improving institutional coordination and strengthening the skills of workers across the economy. The development of several clusters and incubators focusing on high-growth and research-intensive sectors is at the centre stage of this strategic objective. These clusters are expected to generate economy-wide productivity gains through knowledge and technology spill overs. Ensuring that this takes place requires strengthening the trade support network by addressing coordination and capacity challenges, particularly in the provision of support to the services sectors. The three crosscutting functional strategies of “Innovation”, “Institutional Alignment” and “Skills Development” specifically contribute to this strategic objective.
-
There is a need to increase market access and attract more foreign direct investment. The first can be done through better identification of potential preferential trading partners and negotiating new free trade agreements, as necessary. Attracting inward investment requires a tactical approach to identify countries with which to negotiate International Investment Agreements, as well as making the necessary regulatory adjustments to promote productive investment that would contribute significantly to employment, enhance growth and productivity, and eventually lead to greater economic benefits.
-
-
Make Mauritius the reference country and trade partner of choice. This strategic objective aims to position Mauritius as the preferred business location for international traders and investors. Positioning the country as an attractive investment destination intends to further strengthen the supply capacity and innovation potential of the economy. This objective is to be achieved by streamlining customs and export procedures, by improving the dissemination of sector-specific information on market access opportunities offered by existing trade agreements, and by addressing trade finance bottlenecks. Enterprise Mauritius is going to play an active role in the implementation of the activities of this strategic objective. The crosscutting functional strategy in “Branding” is directly aligned and supports this strategic objective.
-
Translate export-led success into sustainable and inclusive growth. This strategic objective aims to generate economic opportunities for vulnerable and disadvantaged segments of the population such as women and young people. Incorporating currently idle resources into the productive and export sectors is intended to achieve a more balanced distribution of wealth while generating new growth opportunities for everyone. This is to be achieved through a combination of specific support for business associations and trade support institutions that have a bearing on gender issues. The cross-cutting functional strategies on the “Internationalization of SMEs”, and the “Rodrigues Island” aim to contribute to this strategic objective.
In addition to the above strategic objectives, the strategy identifies a number of priority sectors and crosscutting support functions that further contribute to materialize the vision. Specific/detailed strategies have been developed for each of these.
Related News
tralac’s Daily News Selection
On Sunday, in Kigali: President Kagame hosts African foreign ministers for AU reform talks. ‘It is an opportunity to engage with Africa’s top diplomats, and others present, on the foreseen impact of the reforms on the continent.’
Africa investors eye niche markets as biggest economies slip (Bloomberg)
Investors targeting Africa are broadening their horizons in their search for yield as sluggish growth and policy uncertainty in Nigeria and South Africa, the continent’s biggest economies, weigh on returns. Ivory Coast, Senegal, Ghana, Rwanda and Ethiopia are among countries featuring on the radar screens of investors attending the World Economic Forum’s annual gathering of the continent’s business and political leaders being held in Durban on South Africa’s east coast. All five economies should grow at more than the double the sub-Saharan region’s average forecast rate of 2.6% this year, the International Monetary Fund said last month. It expects both Nigeria and South Africa to expand 0.8%. [Africa can prosper if Nigeria and South Africa succeed: industrial leaders]
Germany pushes G20 plan to lure more private investment to Africa (Reuters)
Speaking at the World Economic Forum on Africa in Durban, Finance Minister Schaeuble said: “The French election, Brexit - let’s set aside the new administration in Washington D.C. - but (these) are not the major geopolitical risks, with all due respect. I think we have to come back to Africa. We have to tackle the issue of inclusiveness,” he said. “If we fail to stabilize the African continent in the years and decades to come, we will face increasing geopolitical risks,” he said, citing the pressing problem of African migrants fleeing poverty, natural catastrophes, climate change and war. South African Finance Minister Malusi Gigaba welcomed Germany’s push. “Many African countries are coming on board, expressing their commitment to the compact,” Gigaba said.
Africa-EU Partnership: joint communication for a renewed impetus (European Union)
The 5th Africa-EU Summit, due to take place in November 2017, provides a critical opportunity for African and European Leaders to respond to this evolving context and reshape and deepen the Africa-EU partnership. This Communication proposes a revitalised framework for joint action that the EU and its Member States could bring to the Summit and that could be reflected in a Road Map for 2018-2020. It envisages a stronger, deeper and more action-oriented strategic partnership for more prosperity and stability in the two continents. It sets out policy priorities and an initial set of concrete initiatives for 2018-2020 and beyond, to be coordinated and strengthened with EU Member States and further developed jointly with African partners, in response to Africa’s own Agenda 2063 and building on the Global strategy for the EU’s Foreign and Security Policy. It pays particular attention to the aspirations and needs of youth, whose involvement in the overall process
Daniel Pelz: Germany’s Africa policy is well-meaning but lacks coordination (DW)
Nobody can accuse the present German government of failing to take sufficient interest in Africa. German government officials have unveiled a “Marshall Plan with Africa,” a “Compact with Africa” for the G20 and now they are presenting “Pro!Africa” at the World Economic Forum on Africa in Durban. All this has happened within the space of four months, since the beginning of the year. The trouble is that all these policy initiatives have been launched by individual German ministries, and while the ministers in question may bask in the glow of increased media overage, this doesn’t necessarily mean more help for Africa. The problem is one of approach. The German government does not need individual ministerial initiatives, it needs a single, clear, well-constructed, policy plan for Africa. If the individual ministries fail to cooperate with one another, then much time and effort will be needlessly frittered away. [Germany supports strengthening of ECOWAS maritime security architecture]
Siemens aims to double Africa order intake by 2020 (Reuters)
German industrial group Siemens aims to double its order intake in Africa to more than 3 billion euros ($3.3bn) by 2020, its chief executive officer Joe Kaeser said on Thursday. Siemens signed memoranda of understanding with Uganda and Sudan on the sidelines of the World Economic Forum on Africa in the South African city of Durban, as the company seeks to work more closely with the African countries in the areas of power supply, industry, transportation and healthcare.
Nigeria’s balance of trade projected to hit $3.8bn next year (ThisDay): Nigeria’s balance of trade is expected to improve from -$0.5 billion to $3.8 billion before the end of next year, the Chief Executive Officer of the Financial Derivatives Company Limited, Mr. Bismarck Rewane, has said. Rewane made the forecast in a presentation he delivered at a foreign exchange sensitisation seminar titled: “The Nigerian Foreign Exchange Market- Paving the Way towards Restoring Confidence: A Market Perspective,” that was organised by Access Bank Plc in Lagos on Wednesday. He however disclosed that Nigeria’s terms of trade in 2017 is now 15.9 as against 18.9 in 2015.
Why Nigeria Customs revenue fell N216 billion short of 2016 target: Hameed Ali (Premium Times): According to the Customs boss, the agency only succeeded in collecting N 720.7 billion, representing 76.8% of the target revenue between January and December last year. The decline, put at 23.1%, was against the original target of N 937.3 billion set for the year by the agency. The agency, Mr. Ali noted, collected N177.9 billion as Value Added Tax on imports, bringing the total revenue collection to N898.6 billion. Commenting on the drop in revenue, Mr. Ali explained that while there was a proposed policy to collect levies on luxury items consumed by the rich, there was no legal backing to enforce it, adding that luxury goods were imported all through 2016 without the payment of levies.
Nigeria: Manufacturers boosted by new foreign currency policy (Bloomberg): The Nigerian central bank’s creation of a market-driven foreign-currency window has given hope of revival to manufacturers faced with closure or shrinking capacity by easing their raw material imports, an industry group said. “The recent pronouncement of the central bank comes as a relief,” Segun Ajayi-Kadir, director-general of the Manufacturers Association of Nigeria, said in a May 3 interview in Lagos, the commercial capital. “If the intervention is sustained, there’s no doubt that we will have continued improvement in sourcing raw materials.”
Africa Trade Insurance agency to open West African hub to deepen African presence (NewsGhana)
ATI, which is owned by 13 African governments, said that the West Africa hub will enable it to open up in Anglophone West Africa. “We already have two West African francophone states as members but we need to cover most of the region in the next two years,” ATI CEO George Otieno said. ATI which was founded in 2001 by Africa states to cover trade, political and investment risks of companies doing business in Africa reported a net profit of 6.4 million U.S. dollars for 2016. ATI member states include Kenya, Uganda, Tanzania, Burundi, Malawi, Zambia, Zimbabwe, Democratic Republic of Congo, Cote d’Ivoire, Ethiopia, Benin and Madagascar. Kenya is currently the largest shareholder of ATI. The multilateral investment insurer is currently in active talks with Ghana, Nigeria, Cameroon and Sierra Leone so that they join the body by investing a minimum of 7.5 million U.S. dollars. [ATI pledges dividend in 2017 after 15 years]
BRICS Bank at advanced stage (IOL)
Plans to set up the Africa Regional Centre of the New Development Bank, formerly referred to as the Brics Bank, are at an advanced stage, Minister of International Relations and Co-operation Maite Nkoana-Mashabane said on Wednesday. She said the bank would compete with the Development Bank of Southern Africa. [Gauteng seeks R30bn for mega projects]
New pact set to spur trade ties between Turkey and COMESA
Turkey and COMESA have signed a Memorandum of Understanding to promote industrial and technical cooperation. Specifically, the MoU targets to boost business links between entrepreneurs in COMESA and Turkey through joint ventures, production and technology transfers. This will be facilitated through the Foreign Economic Relations Board of Turkey.
Malawi: World Bank resumes budget support
The World Bank Board of Executive Directors have approved an $80m million credit to the Malawi Government for general budget support. This is the first budget support financing approved by the World Bank for Malawi in four years. The budget support operation, fully referred to as the Agricultural Support and Fiscal Management Development Policy Operation, is the first of a proposed series of two operations. It aims to improve incentives for private sector participation in agricultural markets and to strengthen fiscal management through more effective expenditure controls and greater transparency.
Use of AFRICA-TWIX promoted in Republic of Congo and DRC (TRAFFIC)
More than 50 representatives from local wildlife law enforcement agencies and international conservation NGOs attended a workshop promoting the use of the Africa Trade in Wildlife Information EXchange (AFRICA-TWIX) platform: an online collaborative tool developed to facilitate the exchange of information and promote co-operation between law enforcement officers in Central Africa. AFRICA-TWIX comprises a mailing list (Internet Forum), and a database of seized wildlife species and products, and criminal offences. It is modelled on the European Union’s EU-TWIX, which for more than a decade has facilitated information exchange between enforcement officials in European countries.
The Mobile Economy: West Africa 2017 (GSMA)
For the first time in the GSMA’s Mobile Economy series, we focus on West Africa, home to more than 175 million unique mobile subscribers and one of the world’s fastest-growing mobile regions. The study includes operational and financial forecasts out to 2020, and outlines the role of mobile in driving innovation and addressing socio-economic challenges across the 15 markets in West Africa.
India faces piquant situation at WTO (Mint)
India faces a piquant situation at the World Trade Organization after two South American countries - Argentina and Brazil - used New Delhi’s proposal on trade facilitation for services as a basis for discussing a “WTO Instrument on Investment Facilitation”—a proposal to which India remains opposed, according to people familiar with the development. As India presents its TFS proposal formally at the Doha negotiating group on services Wednesday, it could face awkward reminders about what would be its stance on investment facilitation, which is being pushed aggressively by China, Pakistan, Brazil, Argentina, Russia, Hong Kong (China), Mexico, Nigeria, Colombia, Korea, and Australia, among others. Three countries - the US, India, South Africa - have firmly opposed any discussion on investment facilitation at the G20 meeting of Trade and Investment Work Group in Germany more than two months ago.
Rajrishi Singhal: Rising trade walls and shrinking standards (Mint)
The more plausible justification is that these moves - particularly by Australia and the US - are perhaps designed to blunt India’s attempts to introduce trade facilitation in services agreement, somewhat identical to the trade facilitation agreement in goods which came into force in February. According to India’s concept note - introduced in the WTO on 27 September 2016 - like the TFA is intended to “…expedite the movement, release and clearance of goods as well as cooperation on customs compliance issues…”, the TFS can result in “…reduction of transaction costs associated with unnecessary regulatory and administrative burden on trade in services”. India followed up the concept note with an ‘element paper‘ in November 2016 and a draft legal text in February 2017. The TFS is also now pitted directly against TiSA, or Trade in Services Agreement, currently being negotiated outside the WTO by 23 members comprising mostly developed countries. It is aiming for an ambitious overhaul of the General Agreement on Trade in Services, which it hopes will attract more members and eventually be ratified in the WTO. Both India and China (as well as many other emerging nations) are not members. It is, therefore, safe to expect that trade politics and diplomacy will probably focus a lot on services trade in the immediate future, especially at the WTO’s December ministerial in Buenos Aires.
Today’s Quick Links: Diamond industry conundrum: How to reform Kimberly Process Nigeria: FG appoints Lufthansa, five other advisers on establishment of national carrier Mastercard, Rwanda extend financial inclusion pact SA-EU seminar on the circular economy: speech by Minister Edna Molewa (GCIS) |