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AU to host Heads of Government and captains of African industry in the Inaugural African Economic Platform in Mauritius
The African Union, through The African Union Foundation, will for the first time host a multi-stakeholder forum that will bring together African Heads of State and Government, Private sector business leaders and academia at the inaugural African Economic Platform (AEP), to be held in Mauritius from the 20-22 March, 2017.
The AEP is the first truly African-owned and driven initiative bringing together African state and non-state actors to discuss issues affecting Africa and how the continent can harness its vast resources to enhance the development of the African people. The platform is a result of an urgent need for Africa to move from the side-lines of other global forums, often not held in Africa, and in which business opportunities and economic development issues are discussed but which may not of necessity prioritise Africa’s need to develop an integrated African economy for the continent to realise its potential for growth and stronger competitiveness in the global economy.
The AEP which will be an annual event will provide an environment for constructive multi-stakeholder dialogues around common themes for Africa led by Africans and which will ultimately influence continental policy.
The Inaugural AEP will focus on four key themes namely: Industrialisation, Intra-African trade, Free movement of people and goods, and skills development. These will be discussed in plenary sessions to be attended various presidents of African nations as well as , blue chip private sector leaders and leading academic minds.
The platform will present an opportunity for private sector to work with African leaders to remove policy obstacles for doing business in Africa, increasing the investment attractiveness of the continent, the implementation of strategies for economic diversification and industrialization, and domestic and other resource mobilization.
Issues such as the removal of barriers that hamper communication and the flow of goods, people and services across the continent will be feature greatly in the discussions as well as identifying opportunities for articulating common African positions on global affairs thereby increasing global awareness of Africa’s emerging role in world affairs. How to Leverage the potential of the African Diaspora to participate in and advocate for Africa’s integration and development is an area in which the AEP will focus its attention in future sessions.
The outcome of the AEP shall be endorsed through an AU Summit decision to ensure inclusion in African states national agenda.
Visit the African Economic Platform website for more information.
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Customs reform and trade facilitation in the Horn of Africa: Somaliland under the microscope
Somaliland faces a number of challenges related to Customs and trade facilitation. First and foremost, though the Somaliland Constitution requires a legal basis for the collection of duties and taxes, the intermingling of international norms which are not always well understood, and the cultural tendency to negotiate and consult on everything, leads to unpredictability in the international trading environment.
Introduction
The Horn of Africa refers to the easternmost extension of Africa, and for the purposes of this article, includes the region covered by Djibouti, Eritrea, Ethiopia, Somalia, and Somaliland. This area has been a theatre of struggle between and amongst world powers for more than one century: the desire to control the Red Sea by colonial strategic interests; struggles for control over the waters of the River Nile among the riparian states, with some Nile River Basin countries questioning the relevance of the Anglo-Egyptian Agreement of 1929); ‘Cold War’ politics that saw countries in the region switching sides at different junctures; and, more recently, issues related to the ‘Global War on Terror.’
Interestingly, Article 10 of the Somaliland Constitution, which was adopted in 2000, recognizes, as part of the country’s foreign relations, that there has been “long-standing hostility in the Horn of Africa,” and that this needs to be replaced with “better understanding and closer relations.” This context informs issues relating to Customs and trade facilitation in the Horn of Africa generally, and in Somaliland in particular.
Somaliland has been cited as an example of locally-driven reconstruction in the period following the fall of Maj. Gen. Mohammed Siad Barre’s regime that ruled Somalia from 1969 to 1991. Siad Barre’s rise to power came in a bloodless coup after a police officer assassinated the then President, Dr Abdirashid Ali Shermarke, on 21 October 1969. On assuming power, Siad Barre adopted scientific socialism as the political ideology of the new state, with the justification that such an approach was not in contradiction with the tenets of Islam, and aligned himself with the Soviet Union.
In 1977, Siad Barre’s army invaded the Ogaden region of south-eastern Ethiopia, setting off a war that ended with the defeat of Somalia in 1978. He immediately changed his alignment to the United States for military support in exchange for American access to use Berbera Port. Siad Barre was also smarting from the failure of his long-standing war with Kenya – which began in the 1960s – over control of Kenya’s so-called Northern Frontier District that is inhabited by Somali-speaking and other related ethnic groups, such as the Borana, Burji, Garre, Ajurran, and Degodia.
War broke out in 1988 between the government and secessionist guerrillas from the north, known as the Somali National Movement (SNM), who contended that they had been systematically discriminated against by Siad Barre’s government. After the government was overthrown in January 1991, the SNM took control of north-western Somalia and unilaterally declared independence from the rest of Somalia to become the new ‘Republic of Somaliland,’ defined by the borders of the former British Protectorate. This was reaffirmed at a conference in Burco (April/May 1991) and in Borama (May 1993).
The complex relationship between Somaliland and Somalia partly arises from the fact that the former British Somaliland gained independence and became a sovereign state on 26 June 1960, but chose to enter into a union with Somalia on 1 July 1960. But, as we have seen, the union ended in 1991 after a civil war that started in 1988 due to long-standing grievances over discrimination by the Somalian regime.
The new Republic of Somaliland has not received international recognition in spite of it having all the key elements of a modern state, such as a defined territory, a stable government, and a Constitution. Its success in state-building is partly attributed to the fact that it has integrated traditional ways of governance, which are based on consultation and consent, with the apparatus of a modern state. Establishment of an effective and efficient Customs administration is a contribution towards building a sustainable Somaliland state.
Delayed recognition of Somaliland’s sovereignty means that the country does not belong to any regional or international organizations. However, this has not prevented it from exercising some functions associated with sovereign states, such as the negotiation of agreements with other states. In this regard, Somaliland has a transit and trade facilitation agreement with Ethiopia, and in mid-2016, agreements were signed between the Berbera Port Authority (owned and operated by the Republic of Somaliland) and DP World (the Dubai-based global maritime port terminal operator), providing for a 30-year concession for Berbera Port, and the establishment of duty free zones.
These developments, as well as the decision to create a revenue authority in the near future, mirror what is happening elsewhere in the Horn of Africa, such as the establishment of the Djibouti Duty Free Zone, or the coming into existence in 2008 of the Ethiopian Revenues and Customs Authority (ERCA) – a merger between the Ethiopian Customs Authority and the Federal Inland Revenue Authority.
In addition to political instability and geopolitics, the Horn of Africa region has also been shaped by complex ethnic and clan dynamics, especially in the Somali-speaking countries of Djibouti (colonial era French Somaliland), Somalia (colonial era Italian Somaliland) and Somaliland (colonial era British Somaliland).
The major clans in Somaliland include the Isaaq, Gadabuursi, Ciisa, Dhulbahante and Warsangeeli, and clan membership is taken into account in the distribution of government positions, rather than pure meritocracy. In spite of Somaliland having been a former British Protectorate, it did not inherit the sort of bureaucracy usually associated with Commonwealth member countries, as there was an overlay of practices associated with the Italian system of governing, introduced during the union period which ran from 1960 to 1991.
Context for reform
Article 2 of the Constitution of Somaliland clearly defines the territory of Somaliland in terms of location (“between latitude 8° to 11° 30’ north of the equator and longitude 42° 45’ east; and consists of the land, islands, and territorial waters, above and below the surface, the air space and continental shelf ”) and borders (“the Republic of Somaliland is bordered by the Gulf of Aden to the east; the Federal Republic of Ethiopia to the south and the west; and the Republic of Djibouti to the north-west”).
In terms of Article 6, “the official language of the Republic is Somali, while the second is Arabic, and other languages shall be used when necessary.” Furthermore, Article 14 (paragraph 1) provides that “no taxes or duties which have not been determined by law shall be collected,” and that “the levying, waiver and changes in taxes and other duties shall be determined by law.”
Customs reform in Somaliland is being undertaken as part of the government’s Public Financial Management (PFM) Strategy, which was launched in 2011. During the launch, the then Minister for Finance, Eng. Mohamed Hashi Elmi, identified the four key challenges in raising revenues for the country:
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a lack of capacity in the tax administration system, and low compliance levels among taxpayers;
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a need for tax law and tax administration reform, and a development-oriented system of taxation;
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the difficulty in taxing the dominant pastoral and informal economy;
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the need to fight corruption, as the tax administration is widely perceived to be corrupt.
Customs and revenue reform is also in line with the Somaliland National Development Plan (2012-2016) which focuses on reform of the Ministry of Finance through strengthening revenue policies and systems, reviewing and updating all procedures related to the Customs and Inland Revenue Act, introducing and enforcing value-added tax (VAT) and establishing a training centre for the Ministry. A government-wide Civil Service Strengthening Project, supported by World Bank “with the overarching goal of strengthening institutions to deliver services to citizens” according to Country Representative Hugh Riddell, was launched in November 2016.
Five years after the launch of the PFM Strategy, Customs Law No. 73 was adopted on 16 July 2016, repealing the Customs Rules and Procedures Law No. 91/96. This was a critical step in Somaliland’s reform process. As WCO Secretary General Dr Kunio Mikuriya said in 2005, “without an effective legal framework that guarantees transparent, predictable and prompt Customs procedures, the international private sector will find it highly cumbersome to conduct business with, or invest in, a country in a competitive business environment” (Customs Modernization Handbook, p. 51).
The repealed law provided for the classification of goods based on the Convention on Nomenclature for the classification of goods in Customs tariffs (1959), Customs valuation using the Brussels Definition of Value (1953), the coordinating role of Customs at the border, and anti-smuggling measures. This is in contrast to the new law which provides for the use of the WCO Harmonized Commodity Description and Coding System (HS Code), the Valuation Agreement of the World Trade Organization (WTO), and modern Customs procedures that include risk management and post-clearance audit.
Moreover, and just as equally important, Revenue Act No. 72 of 2016 made provision for the establishment of the Somaliland Revenue Authority (SLRA), and makes fundamental changes to the administration of tax law in Somaliland.
Customs and trade facilitation challenges and reform initiatives
Somaliland faces a number of challenges related to Customs and trade facilitation. First and foremost, though the Somaliland Constitution requires a legal basis for the collection of duties and taxes, the intermingling of international norms which are not always well understood, and the cultural tendency to negotiate and consult on everything, leads to unpredictability in the international trading environment.
Even when the current law provides for the use of international standards (such as valuation methods based on the WTO Valuation Agreement, or goods classification based on the HS Code), the understanding of these standards tends to be localized and country-specific. For example, the General Rules for Interpretation of the Harmonized System may be used and interpreted selectively, with an eye to increasing revenue rather than the strict application of the HS rules and the provisions contained in national law.
To remedy this situation, workshops on Customs law, rules of origin and Customs valuation were held in 2015 and 2016 for technical officers and managers from the Ministry of Finance, as well as relevant stakeholders. The objective being to create a sound foundation for Customs operations, based on simple, clear and predictable rules. These workshops were held at three locations, namely Berbera, Burco and Borama.
There is also a need to enhance strategic and operational planning capacity in the Ministry of Finance, in the envisaged SLRA, and, more specifically, in the Customs Department. In this regard, a Tax Policy Unit (TPU) has been established and staffed, under the Strengthening Revenue Policy and Administration in Somaliland Project (2015/16), funded by the Department for International Development (DFID) in the United Kingdom (UK).
Technical assistance delivered under the DFID-funded project includes development and training in the use of a revenue forecasting model. A comprehensive national strategy for a modern Customs and revenue administration has also been developed, validated and adopted. At a workshop in October 2015, Customs managers adopted the following principles for a modern Somaliland Customs administration: integrity (sharaf/hufnaan); fairness (daacadnimo); transparency (daah-furnaan); mutual respect and cooperation (iskaashi-shaqo/talo-wadaag); and professionalism (aqoon-xirfadeed).
In addition, successful reform requires appropriate project management structures, and several have been established:
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a PFM Coordination Unit;
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a Revenue Reform Steering Committee (RSC) chaired by the Minister for Finance, which meets monthly, and which includes representatives of DFID and the implementing partner, the Director General in the Ministry of Finance, the PFM Coordinator, and Directors from the Inland Revenue, Customs and Planning Departments;
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a Revenue Technical Working Group (RTWG), which meets weekly to monitor project progress and address any bottlenecks that may be encountered;
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a Customs Reform and Modernization Committee (CRMC), at departmental level, has been established as the focal point for the identification of the needs and reforms in the Department.
Without adequate cooperation, communication and partnerships with external stakeholders in the public and private sector, Customs reforms can easily encounter conflict and lose steam. Training and sensitization provided under the DFID-funded project has, therefore, included representatives of the Ministry of Commerce and Industry, the Berbera Port Authority, the Somaliland Chamber of Commerce & Industry, the Quality Control Commission, the Central Bank of Somaliland, and the Accountant General among others. This partnership approach is reflected in the concept of ‘iskaashi-shaqo/talo-wadaag’ (mutual respect and cooperation).
Conclusion
Customs reform and trade facilitation in a post-conflict environment like Somaliland has its special challenges, but as we have seen, efforts are being made to address these challenges comprehensively through strategic and policy interventions, as well as through implementation at the operational level.
Nevertheless, it will take time to enhance the capacity of the country to operate a modern Customs and revenue administration with adequate structures, including the necessary human and financial resources. On the positive side though, the support of development partners has certainly provided the needed impetus for Customs and revenue reform and modernization, but more needs to be done. Somaliland is the definitely on the right track!
Creck Buyonge Mirito is the CEO and Principal Consultant of Customs & International Trade Associates (CITA) Ltd., based in Nairobi, Kenya. The views expressed in this article are his own.
This article was first published in WCO News Magazine, February 2017 (PDF). Republished with permission.
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EALA passes key Gender Bill: Committee report
International Women’s Day was celebrated on 8 March 2017. As the globe came together to commemorate the day under the theme; “Be Bold for Change”, EALA legislators sitting in Kigali, Rwanda prized the region with passage of the EAC Gender Equality, Equity and Development Bill, 2016 as the House resumed.
The EAC Gender Equality, Equity and Development Bill, 2016, whose mover is Hon Nancy Abisai makes provision for gender equality, equity, protection and development in the Community. The Treaty for the Establishment of the EAC in Article 121 recognises the significant contribution that women make towards progress of socio-economic transformation and sustainable growth and the importance of full participation of women and men in the economic and social development of the Partner States.
The Bill contends that whereas the Partner States recognize the importance of gender equality and have developed programmes and enacted legislation in this pursuit, these efforts are at different levels and contain differences particular to each Partner State. As a result, gender initiatives affect women, men and children differently across the East African Community.
The passage of the Bill whose debate started yesterday, followed the successful 2nd Reading and 3rd Reading. The Bill was preceded by a presentation of the Report of the Committee on General Purpose on the public hearings held in the Partner States. Chairperson of the Committee, Hon Dr Odette Nyiramilimo presented the report in the House.
During the Public Hearings, stakeholders in Republic of Kenya welcomed the EAC Gender Equality and Development Bill, 2016, stating it would give effect to the Treaty for the Establishment of the East African Community and the African Charter on Human and Peoples’ Rights. In the spirit of the EAC, the Bill should propose programmes and policies that would curb cross border practices of FGM in a bid to eradicate the practice and adopt a mutual assistance strategy.
In Uganda, stakeholders called for broadening of the terms with regards to affirmative action including that around deliberate actions and initiatives in favour of marginalized groups, the child as well as issues around discrimination against women.
Republic of Uganda according to the report, states that Governments should have legislations that make it mandatory for all schools to have facilities that are accessible to disabled persons and sanitary facilities that are separate for girls and boys.
In Republic of Burundi, as far as Health sector is concerned, the Bill is considered helpful since it serves to strengthen the policies already put in place by the Government of the Republic of Burundi even though a law governing gender equality is not yet enacted.
In the United Republic of Tanzania, stakeholders recommended the proposed Bill awaits the EAC policy document on Gender Equality and Development in order to align/adhere to the decision of the responsible Sectoral Council.
In Rwanda, stakeholders maintained the importance of addressing Gender based violence, the right to life, dignity, integrity and security of persons at all levels. Towards this end, the Bill expressly prohibits all forms of exploitation, cruel, inhuman or degrading traditional practices. The stakeholders in attendance were also of the view that FGM practices should be prohibited to protect women rights to physical integrity.
Members who rose up in support of the Bill during debate were Hon Maryam Ussi, Hon Mumbi Ngaru, Hon Shyrose Bhanji, Hon Valerie Nyirahabineza, Hon Frederic Ngenzebuhoro, Hon Oda Gasinzigwa and Hon Martin Ngoga. Others were Hon Sarah Bonaya, Hon Dora Byamukama, Hon Pierre Celestin Rwigema, Hon Mike Sebalu, Hon Peter Mathuki and Hon Dr James Ndahiro.
In their contributions, Hon AbuBakr Ogle and Hon Abubakar Zein remarked it was necessary for the Bill to be in consonance with respective Partner States’ Constitutions and in line with the Islamic law.
The enacted Bill shall now await assent by the EAC Heads of State.
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tralac’s Daily News Selection
The Abidjan Declaration (pdf), issued at the conclusion of the Industrialization in Africa seminar (AERC, AfDB, UNU-WIDER). Presentation slides (pdf) by Finn Tarp, Carol Newman.
India’s Trade Facilitation for Services proposal draws mixed response (LiveMint)
India’s proposal on trade facilitation for services, which seeks to eliminate several hurdles in global trade in services, has received a mixed response from members of the WTO. India made a formal presentation of the 13-page draft legal text at a meeting of the WTO’s Working Party on Domestic Regulation on Tuesday. Significantly, the Indian proposal was subjected to critical scrutiny by the African Group of countries, Bolivia, and Venezuela, among others, on grounds that it would impose burdensome requirements on developing countries. On behalf of the African Group, South Africa expressed sharp concern over the Indian proposal as it remains “broad” in its commitments without any prior mandate. South Africa said the Indian proposal would impose burdensome/costly multilateral obligations, suggesting that it cannot be fitted into the template for trade facilitation agreement for goods. [India’s February exports rise for sixth straight month]
WTO Trade Facilitation Agreement and its implementation in southern Africa (tralac)
This Trade Brief (pdf) considers some of the major challenges and inefficiencies in cross-border trade in the southern Africa region and the benefits that implementation of the World Trade Organisation’s Trade Facilitation Agreement could bring for SADC countries. Out of the 15 SADC Member States only 8 have to date ratified and accepted the agreement on trade facilitation. Notable by their absence are Angola and South Africa. [The analyst: Elisha Tshuma]
Annual Review of the implementation and operation of the TBT Agreement (WTO)
The WTO Committee on Technical Barriers to Trade will conduct its 22nd Annual Review of the implementation and operation of the WTO Agreement on Technical Barriers to Trade under Article 15.3 at its next meeting on 29-30 March 2017. This document contains information on developments in the Committee relating to the implementation and operation of the TBT Agreement (1 January - 31 December 2016).
AUC’s Moussa Faki Mahamat lauds Dr Dlamini Zuma for championing continental agenda (RNA)
In his first public address as African Union Commission Chairperson, Mr Moussa Faki Mahamat outlined his cabinet’s priorities. His top priorities included: the need to implement structural reforms, informed by Summit decisions and President Kagame’s reform report, to efficiently and effectively implement the continental vision and deliver the aspirations of the people; to silence the guns by 2020; to place the women and youth at the centre of Africa’s development agenda; to focus on intra-African trade, including accelerating free movement of goods, people and services within the continent; as well as to strengthen Africa’s voice in the global arena.
A handbook on regional integration in Africa: towards Agenda 2063 (Commonwealth)
A handbook on regional integration in Africa: towards Agenda 2063 provides a ready and accessible resource for trade policy-makers, parliamentarians, the private sector, academia and civil society, as well as the general public. Advising and informing on current dynamics, opportunities, challenges and policy options for Africa’s regional integration agenda, the publication is a unique resource for supporting capacity-building on African regional trade issues. [The author: Brendan Vickers] [Table of contents: The political economy of regional integration in Africa, Formal frameworks and policies for African economic integration, The Tripartite and Continental Free Trade Areas]
Central Africa: a sub-region falling behind? (UNDP)
Central Africa scores at, or close to, the bottom of global development indices – with the ECCAS countries recording the highest incidence of poverty among all African REC blocs, despite their shared mineral and other natural resource wealth. Central African countries also score particularly poorly across governance indicators, with Cameroon, CAR, Chad, DRC, Equatorial Guinea and the Republic of Congo among the countries at the bottom of the global indices, underscoring fragility in the region as recent elections has shown. In this publication, UNDP Africa offers a sub-regional strategic assessment of the development context in the sub-region. The Central Africa: A Regional Falling Behind? report is the first in a series of studies taking an explicitly sub-regional approach to analyzing development priorities in Africa.
Comparative perspective: Deeper integration vital for growth in Latin America and the Caribbean (World Bank)
Better Neighbors: toward a renewal of economic integration in Latin America, argues that a renewed integration strategy that takes advantage of the complementarities between regional and global economic integration can contribute to growth with stability. This is particularly relevant for a region that is just coming out of two years of recession. The report proposes an “open regionalism” that reaps unexploited synergies between regional and global economic integration, on the premise that pro-growth integration with the world cannot be achieved without first strengthening the region’s own neighborhood. The report lays out a five-pronged interdependent strategy: [The analysts: Chad P. Brown, Daniel Lederman, Samuel Pienknagura, Raymond Robertson]
COMESA Virtual University of Regional Integration: update (COMESA)
The pioneer students of the COMESA Virtual University of Regional Integration are set for admission in September 2017. The students will be admitted for a Masters of Regional Integration at the Kenyatta University of Kenya, which is the host institution of the programme. Today, in Lusaka, 20 subject experts drawn from the academia began a five day review of 29 learning modules that have been developed for the programme. The modules include 10 core units and 19 electives. The COMESA Director of Trade and Customs, Dr Francis Mangeni, said the review of the modules is the last preparatory step before the commencement of the programme. “This region will not be the same again as we shall now have a special cadre of professionals specially trained on regional integration to move forward the integration agenda.” The 22 participating universities are:
Enhance implementation of the Common Market Protocol – EALA says as it passes key report
The regional assembly has called on the EAC bloc to work closely with cross-border pastoral communities to ensure the proactive and effective implementation of the Common Market Protocol. At the same time, it is anticipated that effective operationalization of One Stop Border Post in the Namanga frontier shall ease trade in the area, specifically in the border areas of Longido, Tanzania and Kajiado, Kenya. The House yesterday unanimously passed a Report of the Committee on Regional Affairs and Conflict Resolution on the public hearing on pastoral communities on Longido in Tanzania and Kajiado in Kenya on the implementation of the Common Market Protocol projects.
DHL’s Growing Beyond Borders programme: training African SMEs about cross-border trade (Citizen)
Business Leadership South Africa disputes proposed customs functions transfer (Engineering News)
Business Leadership South Africa on Wednesday said it opposes the proposed transfer of the South African Revenue Services’ customs functions to a new border management agency, which is what the Border Management Agency Bill, currently before Parliament, proposes. “Sars must remain the responsible agency for customs and excise,” it stated.
Namibia: Quarterly Trade Statistics Bulletin Q4 of 2016 (pdf, Statistics Agency)
Namibia’s overall trade (exports plus imports) amounted to N$44,358 million in q4-2016. This is 9.2% higher than N$40,631 million recorded in the corresponding period of 2015, and 7.4% higher than the N$41,313 million deficit witnessed in the previous quarter. Overall export revenue recorded in the period under review stood at N$15,144 million while the import bill was valued at N$29,268 million, hence giving a merchandise deficit of N$14,153 million. The deficit witnessed in q4-2016 signifies a 28.2% growth, when compared to a revised deficit of N$11,016 million listed in the corresponding quarter a year earlier. In comparison to the previous quarter, the deficit rose from N$7,297 million, representing a 93.9% jump.
Rwanda: Economy grew by 5.9% in 2016 (New Times)
Rwanda’s economy grew by 5.9% in 2016 with gross domestic product at current prices estimated at Rwf6,618bn, up from Rwf5,956nbn in 2015. The main drivers for growth in 2016 were industry and service sectors, which both grew at 7%. However, the growth fell just short of the 6.0 projected by the Ministry of Finance and Economic Planning as well as the IMF. The growth was also slower compared to 6.9% registered in 2015. According to the National Institute of Statistics of Rwanda director-general, Yusuf Murangwa, the failure to meet the projected performance is largely due the performance of the agriculture sector, which performed minimally in the second half of the year due to prolonged drought and floods in some parts of the country. [Download: GDP National Accounts, 2016]
The relocation of Chinese manufacturing companies in Africa (SET, ODI)
China’s outward investment has expanded in an unprecedented speed during the past decades, which also brought nearly 100 Chinese overseas industrial parks across different continents. Yet, only few have been abloom and fruitful. Huajian international Ethiopia is often cited as one of the most well-known stories. Following the ‘The belt, the road’ initiative, Huajian Group is now preparing their next overseas attempt to Bangladesh, another popular low-cost investment destination. [The analyst: Jun Hou]
Ethiopia inaugurates third integrated agro-industrial park (UNIDO)
Ethiopia yesterday inaugurated the third integrated agro-industrial park being developed within the framework of the Programme for Country Partnership for Ethiopia, a flagship programme of UNIDO. The new industrial park is located in Yirgalem, a town in the Southern Nations, Nationalities and People’s region, and will focus on agro-industries as a means to drive rural industrialization and job creation. The park is expected to create around 134,000 new jobs in the region. IAIPs will provide modern infrastructure, and support services to companies, as well as provide opportunities for skills development, and help attract domestic and foreign investment. Four such parks are being established within the framework of the PCP for Ethiopia.
Enterprise Mauritius launches 3rd edition of its Export Directory (GoM)
The CEO of Enterprise Mauritius, Mr Arvind Radhakrishna, highlighted that Enterprise Mauritius is executing its Strategic Plan 2015-2018 which lays emphasis on market consolidation and expansion, entry in new and emerging markets, an effective Africa Strategy and capacity building in areas of enterprise needs. Eight new and emerging countries have been targeted since 2016 namely: Russia, Dubai, Japan, Australia, China, Hong Kong, Turkey and Czech Republic. He stated that in the face of numerous challenges such as Brexit, worldwide competition, currency fluctuations and new trade policies in the USA, the main objective now is to aim at achieving more product and market diversification and working closely with enterprises.
IMF deals for CEMAC countries would ease oil pressures (Fitch Ratings)
Our country forecasts do not incorporate IMF funding or technical support due to uncertainty over the timing and content of possible programmes. Even so, our latest fiscal forecasts show Gabon’s budget cash deficit averaging less than 3% of GDP in 2017 and 2018, down from an estimated 4.4% in 2016; Cameroon’s deficit narrowing slightly to an average 5.1% over the same period from 5.4%; and Congo averaging 1.8%, from 9.1% last year. But these forecasts chiefly reflect recovering oil prices rather than consolidation.
From aspiration to reality: unpacking the Africa Mining Vision (Oxfam)
Eight years after its inception, implementation has been slow and there is a low level of awareness of the framework among key stakeholders in the mineral sector. This paper shows that the AMV has specific weaknesses that should be addressed through its national implementation, in order to enhance the benefits for African citizens. Africa’s leaders and citizens must act now to ensure that the goals of the AMV are realized.
Africa’s green bonds: a way to finance the future (IPPMedia)
Apart from potential tax incentives, African states may be able to achieve more sustainable growth in relatively early stages of development in contrast to more developed states. The introduction of the issuance of green bonds increases the priority for sustainable development on the continent, thus encouraging African countries to avoid the mistakes (in sustainable development) that developed economies made in their infancy. A potential challenge for African states hoping to attain finance for funds through green bonds is the size of the projects and their financing needs. The size of the projects may need to be increased in order to ensure that they are more attractive.
Tweet by Muhammadu Buhari, @MBuhari: Today I signed the Instrument ratifying the Treaty on the Establishment of the Abidjan-Lagos Corridor among Benin,CIV, Ghana, Togo & Nigeria
Mozambique and Japan sign transport cooperation agreements
Malawi Investment and Trade Centre: EOI for consultancy services competitiveness of local businesses in Nacala Corridor
Climate change adaptation and financial protection: synthesis of key findings from Colombia and Senegal (pdf, OECD)
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Twenty-second Annual Review of the implementation and operation of the WTO TBT Agreement
The WTO Committee on Technical Barriers to Trade will conduct its twenty-second Annual Review of the implementation and operation of the WTO Agreement on Technical Barriers to Trade (TBT) under Article 15.3 at its next meeting on 29-30 March 2017. This document contains information on developments in the Committee relating to the implementation and operation of the TBT Agreement from 1 January to 31 December 2016.
Executive summary
In 2016, the TBT Committee:
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oversaw the launch of “ePing”, a new SPS and TBT notification alert system developed in cooperation with ITC and UNDESA;
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set a record on transparency: a total of 2,336 notifications were submitted by 79 Members in 2016 – the most notifications submitted in one year in the Committee’s history. The majority of notifications (76%) in 2016 were submitted by developing and Least-developed Members
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discussed 173 specific trade concerns, a record number. Among these the Committee addressed its 500th STC. DG Azevêdo said on 9 March 2016: “Today WTO Members discussed the 500th specific trade concern. It sounds technical but actually this is about dealing with all sorts of real-life issues that we all care about – from the use of chemicals in toys to the sugar, salt and fat content of our food. The WTO provides a forum for members to raise and resolve these concerns thereby avoiding them escalating into disputes. This is the unseen but essential daily work that keeps trade flowing – and it can only be done through the WTO.”
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held seven thematic sessions and launched a new stream of work on regulatory cooperation between Members, including discussions on energy efficiency and food (nutritional) labelling
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held its Eighth Special Meeting on Procedures for Information Exchange
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was informed about technical assistance activities delivered by the WTO Secretariat. A total of 37 TBT technical assistance activities were delivered in various formats during 2016; 15 of these were organized specifically on the TBT Agreement (Section 5)
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was informed about the launch of a new WTO ISO Standards Information Gateway. This gateway provides information on standardizing bodies that have accepted the Code of Good Practice and, if available, their work programmes; and,
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granted ad hoc observer status to the CARICOM Regional Organization for Standards and Quality (CROSQ).
Ms. Esther Peh (Singapore) was elected by the Committee as its Chairperson for 2016 and three regular meetings were held: on 9-10 March, 15-16 June and 9-10 November. In addition to the review of measures, during these meetings, seven thematic sessions were organized. Representatives of the ACP, ARSO, BIPM, Codex Alimentarius, CROSQ, IEC, ISO, OECD, OIML, UNECE and WHO updated the Committee on activities relevant to the work of the TBT Committee, including on technical assistance.
Review of TBT Measures
Notifications of technical regulations and conformity assessment procedures
Trends in new notifications and follow-up (addenda, corrigenda, revision)
The TBT Committee set a record in 2016 for total number of notifications (2,336) submitted in one year. This total comprises 1,653 new notifications of technical regulations and conformity assessment procedures, 651 addenda or corrigenda to existing notifications and 32 revisions. There was wide participation in submissions of notifications in 2016: 79 Members submitted at least one notification during the year. Compared to 2015, the total number of notifications rose by 17.5%. Compared to the previous peak in 2014, the number of notifications rose by 4%, following the trend of a steady increase since 2012. Since the entry into force of the TBT agreement and up to 31 December 2016, 134 Members submitted 27,726 notifications.
Over the past fifteen years, the number of new notifications has tripled, largely due to an increase in notifications from developing Members. The use of addenda and corrigenda has also increased remarkably and since 2011 more than 500 addenda and corrigenda were notified every year. Between 1995 and 2016, the US (1465), Brazil (623), Ecuador (585), Mexico (366) and Colombia (351) have submitted the most addenda and corrigenda. The number of revisions submitted is relatively low but also grew over the years; since 2012 the WTO received about 28 revisions per year. The Members that notified the most revisions since 1995 were China (39), Brazil (21), Thailand (17), Canada (16) and South Africa (16).
Notifications by Member
The US, Brazil, Israel, EU, Korea, Chile, Mexico, Kenya, Egypt and Uganda notified the most TBT notifications in 2016. Several Members among the top notifying Members in 2016 do not appear among the top notifying Members for the period 1995 to 2016, namely Chile, Kenya, Egypt and Uganda.
Taking a closer look at the five top notifying Members over the past ten years (2007-2016), there is limited fluctuation in the number of notifications submitted. Exceptions to this are the number of notifications submitted by the US over the last two years, which increased significantly from 2014 to 2016. In addition, China and Saudi Arabia experienced peaks in submission of notifications in 2008-2009, and 2012-2013, respectively.
Notifications by development status and region
The rise in new notifications since 2005 is to a large extent explained by a very marked increase in notifications submitted by developing Members. Again in 2016 the majority of notifications (66%) were submitted by developing Members (90). Least-developed Members (36) were responsible for 10% of new notifications in 201614 and developed Members (38) for 24%.
Members in the Middle East submitted about one quarter of all new notifications in 2016, the most of any regional group. African Members submitted 18%, followed by Members in Asia and North America, each submitting 16%. Compared to 2015, the main change was an increase in notifications from the Middle East and North America, and a decrease in notifications from Asia.
Stated objectives of notifications
“Protection of human health or safety” was overwhelmingly the primary objective stated in new notifications submitted in 2016. The second most cited objective was “Prevention of deceptive practices”, followed by “Protection of the environment” and “Quality requirements”. When comparing this with the most cited objectives for the period 1995 to 2016, the top five objectives remain unchanged.
Other TBT notifications
Notifications under Article 10.7
Four agreements were notified under Article 10.7 in 2016, all of them between Brazil and other Members.19 Since 1995, 140 Agreements, four revisions and four corrigenda have been notified under article 10.7.
Notifications under Article 15.2
In 2016, eight notifications under Article 15.2 of the TBT Agreement with respect to measures in existence or taken to ensure the implementation and administration of the TBT Agreement have been submitted. Five Members notified for the first time under Article 15.2: Brunei Darussalam, Burundi, Kazakhstan Vanuatu and Yemen. Three Members revised their previous notifications: Japan, South Africa and Ukraine.
Notifications under the Code of Good Practice for the preparation, adoption and application of standards
In the context of cooperation between the WTO and ISO on notifications under the Code of Good Practice, in 2016, a new WTO ISO Standards Information Gateway was launched. It provides information on standardizing bodies that have accepted the Code of Good Practice and, if available, their work programmes. The WTO forms for the acceptance of and withdrawal from the Code of Good Practice as well as the form to notify work programmes can also be found on the gateway.
In 2016, three standardizing bodies notified their acceptance of the Code of Good Practice: the Afghan National Standards Authority (Afghanistan), the Institute of Standards of Cambodia (Cambodia) and Bureau Haïtien de Normalisation (Haiti). There were no withdrawals in 2016. With respect to work programmes, 12 notifications on work programmes were submitted in 2016, 10 of which contained a link to the organization’s website, a specific link to the work programme or an electronic version of the work programme.
Between 1995 and 2016, 178 standardizing bodies from 138 Members or observers have accepted the Code of Good Practice. In addition, one regional standardizing body has accepted the Code of Good Practice: the African Organisation for Standardisation. 14 standardizing bodies have withdrawn from the Code of Good Practice since 1995.
Specific Trade Concerns
The TBT Committee provides Members with a forum to discuss trade issues related to technical regulations, conformity assessment procedures and standards, prepared, adopted or applied by other Members. These discussions are referred to as “specific trade concerns” (STCs) and relate either to proposed measures, or to measures currently in force. Members thus have the opportunity to review these concerns in a multilateral setting, and to seek further information and clarification, working towards mutually acceptable solutions.
Trends in STCs
In 2016, Members reviewed a total of 173 STCs, a record number. The number of new concerns, however, dropped to 31, that is 6 less than in 2015. This continues a new trend in declining number of new concerns raised in the Committee: in 2015, the number of new trade concerns dropped by 21% compared to 2014. On the other hand, the number of times previously raised STC were discussed continues to increase and more than makes up for the declining number of new concerns raised. In 2016, Members discussed 142 previously raised concerns in TBT Committee meetings (in 2015, this number was 124; in 2014, 100).
A new calculation method has been applied in this year’s Annual Review for what concerns the category “previously raised STCs”. In previous reports, an STC raised in the Committee in a given year was only included once in the statistics, either as a new or as a previously raised STC, regardless of the number of times the STC was raised that year. An STC raised for the first time in June and again in November, for example, was included as new, but not as previously raised. This method underreported the number of previously raised STCs. In this review, an STC is counted each time it has been raised in a TBT Committee meeting. If raised for the first time, it is counted as a new STC. If it is raised again, it is counted as a previously raised STC. This gives a more accurate reflection of the number of concerns actually discussed in the Committee in any given year.
STCs by Member
As in 2015, the EU, US and Canada most frequently raised STCs in the Committee, followed by Australia, Japan, Guatemala, Mexico, New Zealand, Korea and Chile. The large majority of these STCs are not new but raised previously.
The EU and US have raised the most new STCs, more than 200 each. Canada (100), Mexico (78), Japan (74), China (61), Australia (57) Korea (56), Brazil (47) and New Zealand (37) are also among the 10 Members most frequently raising new STCs.
Members subject to STCs
Measures of India, the Russian Federation and Indonesia have been most frequently subject to concerns raised in the Committee in 2016, followed by Ecuador, Brazil, Korea, Thailand, Peru, Saudi Arabia and Colombia. Most of there were previously raised STCs, only 12 of the 96 concerns were new.
The EU, China and the US were most frequently subject to new STCs raised in the Committee between 1995 and 2016.
STCs by region and development status
In 2016, Members from North America raised 20 new STCs, from Europe 17 new STCs, and from Asia 14 new STCs. Members from the Middle East did not raise any new STCs. On the other hand, Members from Asia were most frequently subject to new STCs, followed by Members from Europe and CIS.
In 2016, about one third of the new STCs were submitted by developing Members, one third by both developing and developed Members and one third by developed Members alone. No LDC Member raised a new STC during the year. These shares have fluctuated over the years, but in general developing countries have become more active in raising new STCs.
Types of concerns raised in STCs
Of the issues highlighted by concerned Members in new STCs raised in 2016, 22 dealt with “Unnecessary barriers to trade”, 19 with “Further information and clarification”, 15 with “Transparency”, 15 with “Rationale and legitimacy” and 13 with “International standards”
Stated objectives of measures subject to STCs
Information about the stated objective of measures subject to STCs may be derived from the notification itself, or through the discussion of the particular measure in the Committee. By far the most frequently stated objective of measures subject to STCs between 1995-2016 was “Protection of human health and safety”, matching the main objective cited in TBT notifications.
Relation between notifications and STCs
When comparing the number of new notifications submitted versus new STCs raised from 1995 to 2016, a similar upward trend characterizes both sets of data. However, since 2014, the number of new STCs has decreased somewhat.
61% of the new STCs raised in 2016 concerned a measure notified to the WTO. While this number is quite low compared to the general trend in the last decade, it represents a 12% increase compared to 2015.
Disputes involving provisions of the TBT Agreement
Since 1995, 52 disputes have cited the TBT Agreement in their respective requests for consultations, the first formal step to initiate a WTO case. Important developments during 2016 included:
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The establishment and composition by the DSB of compliance proceedings (second recourse by Mexico) with respect to US measures on canned tuna labelling;
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The establishment by the DSB of a Panel concerning certain Indonesian measures concerning the importation of beef;
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The establishment by the DSB of a Panel concerning certain measures by the Russian Federation affecting the importation of railway equipment;
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The composition of a Panel established by the DSB in 2015 concerning certain Indonesian measures affecting exports of chicken meat and products.
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SADC Council of Ministers held in Ezulwini, Swaziland: statement of outcomes
The two-day SADC Council of Ministers meeting was opened on Thursday 16th March 2017 at Royal Swazi Hotel in Ezulwini, Kingdom of Swaziland. During the two days, Ministers will discuss issues of regional importance and consider a number of strategic documents, ahead of the Extra-ordinary Summit of SADC Heads of States and Government that will take place on the 18th March, 2017 in the Kingdom of Swaziland.
The Council of Ministers will, among others, receive the reports of the meeting of the Senior Officials, the Ministerial Task Force, and the Ministerial retreat held before their meeting. Furthermore, the Council of Ministers will discuss the Draft Costed Action Plan of the pdf SADC Industrialization Strategy and Roadmap 2015-2063 (2.34 MB) , and the Annual Performance Report of the SADC Secretariat covering the period 2016/2017, and consider the SADC Secretariat’s Corporate Plans for 2017/2018 with an estimated expenditure of US$71.195 million.
Delivering his opening remarks, during the opening session, the Deputy Prime Minister of the Kingdom of Swaziland, Honourable Senator Paul Dlamini commended the Ministers for the outcomes of their retreat held on March 12-13, 2017. Referring to the report of the latter, Senator Dlamini stated that “These options and resolutions on the future direction need to be taken seriously and implemented to make SADC a better organisation”.
SADC Executive Secretary, Dr. Stergomena Lawrence Tax welcomed the Ministers and Officials at the meeting and took the opportunity to pay tribute to His Majesty, King Mswati III and his Government for the guidance provided in the implementation of the SADC Regional Integration and Development Agenda since he assumed chairpersonship of SADC in August 2016.
The Council is attended by Ministers from the 15 SADC Member States and was preceded by the meetings of Senior Officials of the Ministerial Task Force on Regional Economic Integration; the Finance Committee; the Standing Committee of Senior Officials; the Ministers of Justice; the Ministerial Task Force on Regional Economic Integration and the Ministerial Retreat, from 6th to 14th March 2017 in the Kingdom of Swaziland.
Chairperson of SADC Council of Ministers briefs the media on outcomes
The Southern African Development Community (SADC) Council of Minister concluded its business after two days of deliberations. The Council of Ministers was held on Wednesday and Thursday, the 15th and 16th March 2017 at the Royal Swazi Hotel in Ezulwini, Kingdom of Swaziland to prepare for the extraordinary Summit of SADC Head of States and Government that will take place on the 18th March 2017 at Lozitha Place, Swaziland.
His Royal Highness Prince Hlangusemphi, Minister of Economic Planning and Development of the Kingdom of Swaziland and Chairperson of the SADC Council of Ministers briefed the Media on the outcomes of the two-day SADC Council of Ministers Meeting. The Chair was accompanied by, Mr Bertram Stewart, Chairperson of the Standing Committee of Officials, and SADC Deputy Executive Secretary for Regional Integration, Dr. Thembinkosi Mhlongo.
The Council of Ministers was preceded by the meetings of Senior Officials of the Ministerial Task Force on Regional Economic Integration; the Finance Committee; the Standing Committee of Senior Officials; the Ministers of Justice; the Ministerial Task Force on Regional Economic Integration and the Ministerial Retreat from the 6th to the 14th of March 2017 here in the Kingdom of Swaziland.
Among others, Council received the Annual Performance Report of the SADC Secretariat covering the implementation of the approved Corporate Plans for 2016/2017, and approved the SADC Secretariat’s Corporate Plans for 2017/2018 with an estimated expenditure of US$71.195 million.
Council also received the Draft Costed Action Plan of the SADC Industrialization Strategy and Roadmap 2015-2063 and recommended it for approval by the Extraordinary Summit.
The Council of Ministers oversees the functioning and development of the Southern African Development Community (SADC) and ensures that policies are properly implemented.
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SADC Extraordinary Summit to cost industrialization programme
Southern African leaders are expected to make a bold statement on taking forward the regional integration agenda when they meet in Swaziland to approve a costed action plan for the industrialisation strategy adopted in 2015.
The costed action plan for the pdf Industrialization Strategy and Roadmap (2.34 MB) is expected to be presented to an Extra Ordinary Summit of the Southern African Development Community (SADC) in Ezulwini, Kingdom of Swaziland on 18 March.
The action plan seeks to establish a coherent and synergistic implementation scheme containing strategic options and general policies towards the progressive attainment of time-bound targets set out in the strategy and roadmap.
It was developed as an inclusive long-term plan for modernisation and economic transformation that should enable substantial and sustained economic development to raise living standards. The strategy and roadmap is anchored on three interdependent strategic pillars:
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industrialisation, as a champion of economic transformation;
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enhanced competitiveness; and,
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deeper regional integration.
Strategic interventions for each of these pillars are proposed in the action plan. These include an improved policy environment for industrial development, increased volume and efficiency of public and private sector investments in the SADC economy, creation of regional value chains and participation in related global processes, as well as increased value addition for agricultural and non-agricultural products and services.
In order to improve the operating environment, there are plans to develop and operationalise a Protocol on Industry by 2020, which should lead to the development of industrialisation policies and strategies at national level.
Where Member States already have such policies and strategies, these should be reviewed and aligned to the SADC Industrialisation Strategy and Roadmap.
Member States will be required to develop national Industrial Upgrading and Modernization (IUM) Programmes by 2018 and implement these by 2020.
These should be in line with the SADC IUM Programme, which provides the basis for a sector-specific approach to industrialisation in the region, focusing on upgrading existing manufacturing capacities, modernising productive facilities, reinforcing the institutional support infrastructure, and strengthening regional capacity for research and innovation.
There is also a target to progressively increase the share of gross domestic investment to gross domestic product to 25 percent by 2020 and to 30 percent by 2025.
To achieve these targets, there are plans to develop a SADC Investment Promotion Framework as well as a SADC Regional Action Programme on Investment to accompany it.
To encourage the creation of regional value chains and participation in global processes, the region has identified five priority areas in which the value chains can be established and for which regional strategies should be developed by 2020.
These are in the areas of agro-processing, minerals beneficiation, consumer goods, capital goods, and services.
A detailed value chain study is proposed for specific products or services in the priority areas.
As part of the process of promoting value-chain participation, there are plans to develop model legislation and regulations for intra-SADC agro-processing, minerals beneficiation and other manufacturing activities and services.
Reduction or removal of structural impediments to industrialisation is another target being pursued by SADC. In this regard, there is need to improve power generation capacity and facilitate an increase in the development and use of renewable sources of energy as well as ensure adequate water supply.
There is also need to reduce delays at ports and border posts and shorten the duration of movement of goods across borders in the SADC region. This will involve harmonization of border-crossing procedures in SADC by 2020.
The action plan also proposes an active role for Small and Medium Enterprises (SMEs) in the SADC industrialisation agenda. SMEs are an important variable in SADC development plans, representing 90 percent of all businesses and accounting for more than 50 percent of employment.
Interventions under the Competitiveness pillar are aimed at strengthening of both the macro-economic and microeconomic environments in the region.
Initiatives proposed include the development of industrial investment programmes to support SMEs by 2018; training for skills, entrepreneurial and managerial development; and centres of specialization for priority sectors.
The regional Integration pillar aims to widen the economic space for development and create incentives for industry to expand, thus providing opportunities for economies of scale, clustering and economic linkages.
Specific interventions under this pillar include full implementation of the SADC Free Trade Area to cover all Member States; a common external tariff by 2025; gradual phase-down and abolition of rules of origin by 2025; liberalization of exchange controls to allow free movement of capital within SADC by 2030; and ratification of the SADC Protocol on Trade in Services for implementation by 2020.
Visit the tralac SADC Legal Texts and Policy Documents page for more.
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EACJ hears an application seeking Court’s order for stay of signing the EPA by partner states
The First Instance Division of the East African Court of Justice heard an Application filed by Castro Pius Shirima, a Tanzanian resident, against the EAC Partner States and the Secretary General.
The Applicant is seeking the Court’s order for stay of signing the European Partnership Agreement (EPA). According to the status of the Partner States on the signing of EPA, the Counsels representing the Respondents confirmed that the Republics of Kenya and Rwanda have signed the Agreement. And Kenya has even ratified. However they are asking Court to order the 2 Partner States stay any other pending procedures.
The Applicant’s agent Mr. Moto Matiko Mabanga, submitted that, it is very clear that Kenya and Rwanda have signed the EPA, however they also have to come to an agreement with other EAC Partner States to sign one single document of the Agreement. He also said that the Republic of South Sudan as a state which did due diligence before joining the Community and the fact that it is a member of the EAC, makes it automatically part of the negotiation and therefore it cannot say it was not involved in the negotiations.
He further urged that the Community must ensure that it does not fall into the same disagreements and different conclusions by different Partner States which led to the collapse of the previous EAC, but rather achieve the fundamental Principles of the Community, to build a sustainable Community and its economy.
Moto also said that, the legal representatives of the EAC should not be involved into arguing on the technicalities but look at what will sustain the region. He again added that, even if Kenya and Rwanda signed the EPA, due to purposes of Justice, it can be reversed. He finally called Court grant orders as sought.
Mr. Nestor Kayobera representing Burundi submitted that, the Applicant is requesting Court to stop the Partner States which have not signed stay from signing but did not ask for withdrawal of those that have signed already. He further said that, it is the 1st Respondent’s contention that, the Application is not necessary neither desirable in accordance to Article 39 of the Treaty for the Establishment of the East African Community on granting of interim orders. Article 39 provides that, “the Court may in a case referred to it make any interim orders or issue any directions which it considers necessary or desirable.” He also added that Burundi as sovereign state will sign EPA at an appropriate time as other Partner States have signed.
Further still, Kayobera submitted that, the Court has set three conditions for granting interim orders; 1) that if the Reference has a pre-mafacie case and a probability of success. That in his view there is no pre-mafacie case and no probability of success; 2) that if the Applicant will suffer irreparable injury, he urged that, the Applicant has not shown court which economic injury he will suffer if the 1ST Respondent signs the EPA; 3) that the other important condition is that the Court will consider the balance of convenience. He also added that the Applicant has not shown why he is requesting for the stay but rather based on his arguments which are speculative. He asked Court to dismiss the Application.
2nd Respondent Kenya represented by Ms. Jenifer Gitiri, submitted that they raised points of pre-preliminary objections pursuant to rule 41 of the EACJ Rules of Procedure; whether the Court has jurisdiction to hear the matter; whether the disputes raised by the Applicant are a dismissible; whether an order of stay should be granted especially for Kenya which has signed the agreement already.
Ms. Gitiri urged that, pursuant to Article 27 (1) of the Treaty which provides that; “Court’s jurisdiction to interpret under this paragraph shall not include the application of any such interpretation to jurisdiction conferred by the Treaty on organs of Partner States”. She further said that the signing of EPA is a Treaty making process which is a mandate of the sovereign state and therefore jurisdiction of the Court does not extend to the sovereignty of the Partner States in EAC.
She also submitted that the process of signing of EPA begun way back in 2004 under the APC African Pacific Caribbean group of states under EU and that mandate was in exercise of their sovereignty as states, that so it cannot be challenged in this court. She again stated that EPA negotiation were made pursuant to Article 37 of the Protocol for the Establishment of EAC Customs Union as well as Article 37(1) of the Protocol for the Establishment of EAC Common market, that therefore it cannot be admissible in this Court.
Ms. Gitiri also urged that Article 130 (3) of the Treaty provides that “with a view to contributing towards the achievement of the objectives of the Community, the Community shall foster co-operative arrangements with other regional and international organizations whose activities have a bearing on the objectives of the Community”.
She therefore added that when EAC Member States agreed to negotiate on the EPA, they were doing it to foster the activities that are a bearing to the objectives of the Community. That therefore the Applicant cannot purport to stop the functions of the sovereign states in signing this agreement. Again she added that on the 17th Extra-ordinary Summit, the Heads of State discussed the issue and agreed that they will meet at a later time so that other Members which have not signed can sign. She therefore submitted that if the Summit have seized the issue then it is not admissible to this Court.
The 2nd Respondent (Kenya) further contended that according to Article 30 (2) of the Treaty which provides that; “any proceedings must be constituted within two months from the day the Applicant came into the knowledge of the complaint”. She added that the negotiation in EAC started in 2004 and the EAC Member states chose configuration where they will negotiate as the block. From that time the Summit met in 2004 and 2007 and made decision that they will negotiate. That the negotiations were completed in 2014 when the agreement was initiated by the Heads of State which signified the finalization of the EPA negotiation and the Partner states proceeded with the legal translation of the documents and completed in September 2015. She therefore challenged the Applicant that failure to file the dispute within the time limit as stipulated in the Treaty makes the application being time barred and so asked Court to dismiss the Application.
In addition Ms. Gitiri submitted that, the Applicant has not tendered any evidence to Court, how he will be prejudiced by the signing of the EPA. That failure to do that the Application should not be granted.
Mr. Onguso also for the 2nd Respondent added that the Applicant failed to demonstrate the other processes that should be stayed as against the States which have already signed and ratified (Kenya and Rwanda) and also that he failed to show which errors those two Partner States have made by signing the EPA. So in conclusion he said that, on that basis the applicant doesn’t qualify to benefit from the prayers he sought.
The 3rd Respondent (Rwanda), the Counsel Mr. Nicholas Ntarugera submitted that he fully supports the submissions of the 2nd Respondent (Kenya), he went ahead and said that the Applicant has failed to clarify the damages he will suffer from the signing and the Community as whole and that Rwanda signed EPA as its obligation as a Member of EAC. That the unmentioned pending procedures the Applicant is complained of should not be entertained by this court.
The 4th Respondent (South Sudan), represented by Mr. Moses Swake submitted that, RSS was not part of the negotiations which took place before its admission to EAC and that the ruling this Court will deliver will not be binding South Sudan. He furthers added that the Applicant has not exactly mentioned what the issue is but he just said that the EAC Member states are not working together. In his view he said that, the members came together for the benefit of the region and its people.
The 5th Respondent (Tanzania), represented by Mr. Mark Mulwambu submitted that the Applicant has no cause of action against the 5th Respondent. He also said that, Tanzania has not signed EPA and has not indicated that they intend to sign the Agreement, that the allegations by the Applicant don’t have anything substantive and therefore wastage of time and abuse of process and should be dismissed with costs.
The 6th Respondent (Uganda), represented by Elisha Bafirawara, submitted that, they associate themselves with other respondents and also added that looking at the benefits of signing EPA Agreement will bring to the EAC as a region, that they find that to injunct the process of signing will cause a lot of inconvenience to the EAC Partner States and the Applicant will not be affected at all.
The 7th Respondent Secretary General represented by Stephen Agaba, submitted that, the Secretary General disapproves the urgency of the application and that it is based on misinformation and speculation because he did not show the cause of action against the 7th Respondent. He again said that the order sought by the Applicant court to direct the Secretary General to withdraw from negotiations, that the applicant does not know the role of the Secretary General in the negotiations of signing the Agreement.
Agaba still said that, the negotiations are spearheaded by the Heads of State and therefore the SG cannot be directed to withdraw from the negotiations. Further, that there are no negotiations going on, they were concluded and now on the level of signing and ratification and so the 7th Respondent from something that is not taking place. That they find the order sought misplaced and so be dismissed.
The Court will deliver its ruling on notice. The matter was held before Honorable Mr. Justice Isaac Lenaola (Deputy Principal Judge), Honorable Dr. Justice Faustin Ntezilyayo, Honorable Mr. Justice Fakihi A. Jundu.
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Enhance implementation of the Common Market Protocol – Assembly says as it passes key report
The regional Assembly is calling on the EAC bloc to work closely with cross border pastoral communities to ensure the proactive and effective implementation of the Common Market Protocol.
At the same time, it is anticipated that effective operationalization of One Stop Border Post (OSBP) in the Namanga frontier shall ease trade in the area and specifically in the border areas of Longido, Tanzania and Kajiado, Kenya.
The House on Wednesday unanimously passed a Report of the Committee on Regional Affairs and Conflict Resolution on the Public hearing on Pastoral Communities on Longido in Tanzania and Kajiado in Kenya on the implementation of the Common Market Protocol projects. The report presented to the House by Hon Mike Sebalu follows a Public Hearing by the Committee on the Pastoral Maasai Communities of Longido in Tanzania and Kajiado in Kenya on February 19-27, 2017, in the context of the Common Market Protocol.
The assessment was a follow up of the fact-finding mission earlier conducted by the Assembly’s Committee on Pastoralists living in Kapenguria and Kacheliba in Kenya and Nakapiripirit in North Eastern Uganda, in May 2012.
The Committee examined the free movement of persons in the pastoral communities as it sought to understand the level of security among pastoral communities. It further sought to identify the challenges faced by pastoralists in the context of the Common Market Protocol; and the problems thereto.
In its findings, the Committee observed that the two cross border pastoral communities of Longido, Tanzania and Kajiado, Kenya, are interrelated by blood and marriage. Essentially, the report depicts the Maasai speaking people transcend the Tanzania and Kenya borders thus share a cosmology and history that predates colonial experience.
One of the negative impacts of the Berlin Conference, the report states, is the interference and interruption of family and cultural ties of the Maasai that occupy the Longido and Kajiado plains.
“This is the historical context under which the Committee on Regional Affairs and Conflict Resolution undertook the oversight visit to the Maasai communities living on both sides of the Namanga border,” a section of the report states.
The report calls for proactive measures when it comes to providing rapid response, investigation and dispute resolution at community level.
According to analysts, pastoralism is a viable livelihood for a considerable population of East Africans, for over a century now. However, pastoralists have suffered prejudicial treatment reinforced by discriminatory laws and state policies. Developmental interventions in pastoral areas have been characterized by ignorance about pastoralists and the pastoral system.
The Committee’s report further states that many developmental projects have failed in pastoral areas because of stereotypical views held by those in authority (development agencies, NGOs and CSOs). Pastoral areas today are characterized by poverty, lack of economic opportunities, conflicts, low education and poor infrastructure.
The report also states in part that Namanga OSBP did not make provisions for livestock trade and still restricts trade in livestock.
The report observes that a majority of stakeholders on the Tanzanian side of the border lack sufficient knowledge on the operations of the EAC Common Market.
“Most of them thought of an existence of a big market under one roof where people meet for trading purposes,” the report says in part.
Stakeholders at Longido (Tanzanian side) expressed concern about the issue of special passage fee charged per head of cattle transiting on private parcels of land and or boreholes while taking them to the market at the Kaijado County on the Kenyan side.
On the reverse, stakeholders and pastoral communities on the Kenyan side lamented about the challenges encountered, including high population growth rates, encroachment of crop farming on grazing lands, privatization of rangelands and resultant land grabbing as well as insecure land tenure and environmental degradation.
Other challenges faced include conflicts (violent/arms), climate change and variability, unsound development and unfavourable trade policies biased in favour of crops. At the same time, the report cites cheap cows and or beef from Tanzania leading to distortion of prices, ineffectiveness of pastoral traditional risk management strategies, increased food insecurity and poverty levels among pastoralists.
During debate, Hon Dora Byamukama noted that infrastructure had been enhanced on both sides of the border and said this was a good move aimed at enhancing trade and the integration process. “There is also a good foundation and every reason for the communities living at the border to speed up integration. The people are already moving and integrating,” she said.
“Policy makers must do their part to ensure we realise the objectives of integration,” Hon Byamukama added.
Hon Martin Ngoga said the communities living at the border points were ahead of the technocrats when it comes to enabling movement, mutual support to each other and business.
“In future planning, we should think of joint sensitisation programmes and joint on-spot assessments so we can understand the issues together and understand integration,” Hon Ngoga said.
Hon Sarah Bonaya said women were key stakeholders in the pastoralists communities since they were the home makers. Hon Bonaya remarked that the vast lands the communities owned and inherited were no longer tenable due to the increase in investments among other things.
Others who raised support during debate were Hon Susan Nakawuki, Hon AbuBakr Ogle and Hon Dr Nderakindo Kessy.
tralac’s Daily News Selection
Yesterday in Addis: Dlamini-Zuma hands over AU Commission chair
Twelve points for the new African Union Commission Chairperson (International Crisis Group)
Mr Faki arrives at a time of upheaval for the AU. At January’s summit, heads of state agreed to proposals from Rwanda’s President Paul Kagame that the organisation should focus only on a limited number of key priorities with continental scope, such as political affairs, peace and security and continental integration, and that institutional structures should be redesigned to reflect this. He will have to carefully manage this radical reform, as well as Morocco’s recent re-admission, to avoid aggravating existing tensions and divisions and maintain morale in a beleaguered secretariat. The geopolitical context for multilateral diplomacy is also changing rapidly.
Dr Richard Sezibera: Africa must trade itself out of poverty (The EastAfrican)
Africa must trade itself out of poverty. That is why it is critical to implement the Market Integration Pillar of the Tripartite Free Trade Area. Unless and until this is done, a continental free trade area will remain a mirage. Important, but not insurmountable challenges to implementation remain. Tariff offers must be concluded, rules of origin agreed, and business persons must be allowed to move freely. It is unacceptable that some countries and regions would like to offer their African partners less than they have offered the rest of the world, or simply those tariff lines that are currently zero rated. Rules of origin should not serve protectionist interests that frustrate intra-African trade. They should simply provide a framework to avoid to trade deflection. The focus should be on promoting cross national value chains that provide a basis for shared industrialisation. The temptation to adopt SADC-type rules of origin, for example, should be resisted. These rules are protectionist, and have failed to advance the development of regional value chains.
Efosa Ojomo: For African countries, innovation must trump our focus on trade (Quartz Africa)
Considering Africa’s lackluster performance, it is no coincidence that many African countries and global development institutions are now prioritizing a strategy of trade over aid. But what if focusing on trade - such as partnerships with Chinese and American governments and companies - is the wrong way to look at the problem? What if instead, African countries focused on innovation? The opportunities for growth and prosperity would be much brighter. [The author is attached to the Clayton Christensen Institute for Disruptive Innovation]
SADC has huge potential for funding own programmes (SARDC)
Southern Africa has the potential to mobilise more than $1.2bn from alternative and innovative sources as part of efforts to reduce the reliance on donor support. According to a series of studies commissioned by the SADC Secretariat, the Southern African Development Community could access a huge pool of resources available in the region if it adopts some or all of the six options on alternative and innovative sources of funding being proposed. The six options for innovative sources of financing regional integration in SADC are the introduction of an export and import tax; a tourism levy; a financial transaction tax; a lottery system; philanthropy; and regional events.
Kenya: Kinyua steps into Amina, Adan fight for control of trade docket (Business Daily)
President Uhuru Kenyatta’s chief of staff, Joseph Kinyua, has stepped in to try to resolve a simmering row between Cabinet secretaries Amina Mohamed and Adan Mohamed over control of the international trade docket. Mr Kinyua has written to the Foreign Affairs ministry rescinding an earlier transfer of functions related to economic cooperation and commercial diplomacy to the Ministry of Trade and Industrialisation. The State House chief of staff had in May 2016, through an executive order, moved international trade to the Industrialisation and Trade ministry, causing friction between the two ministers.
Key hurdles still stand in the way of business in East Africa (Daily Nation)
Needless charges and regulations as well as closed skies are bottlenecks to cross-border business in East Africa, a lobby has said. The East African Business Council now wants the regional parliament to fast-track the removal of these barriers to boost trade. The council executive director Lilian Awinja said the slow pace of opening up the borders exposes local traders and professionals to cutthroat competition from importers and consultants servicing individual markets directly.
WCO Global Transit Conference: update
Today’s international trade landscape is characterized by high trade costs related to transportation and administrative requirements, constituting one of the challenges to the accelerated economic growth and development of developing countries. The highest trade costs are still in Africa, accounting for an ad valorem tariff equivalent of over 260, which means that for each dollar it costs to manufacture a product, another US$ 2.60 will be added in the form of trade costs. These trade costs relate to transportation costs, tariff and non-tariff measures, Customs fees and charges, information costs, and the costs of possible delays. Improvement of transit potential and the elimination of unnecessary and adverse burdens from transit operations, will contribute to increased trade volume, better interconnectedness of global markets, and integration of peripheral landlocked economies into global supply chains. The WCO Global Transit Conference will be held 10-11 July at WCO Headquarters in Brussels where the new WCO tool, Transit Guidelines, will be presented to Customs administrations, governments, international organizations and the private sector. [Draft agenda, pdf]
Botswana Railways next in privatisation drive (Mmegi)
The Minister of Transport and Communications, Kitso Mokaila has made known plans to privatise Botswana Railways, a move he says will ease the financial burden of running the parastatal from government coffers. “It is important to privatise these parastatals and give investors an opportunity to come up with strategies that would make them self-sustainable thus creating jobs in return. Government needs to privatise to ensure that the economy grows,” he said. Although no details were availed on the intended privatisation of BR, it is expected that an unbundling exercise would be carried out first to ring-fence the parastatal’s key national strategic assets as was done with BoFiNet. Among some of BR’s key assets include land and subsidiaries such as BR Properties and Sea Rail Botswana.
Uganda to team up with Tanzania on standard gauge railway project? (IPPMedia)
Ugandan president Yoweri Museveni will this week meet officials from the country’s works and finance ministries to discuss the possibility of changing the country’s envisaged standard gauge railway route from Kenya to Tanzania. The officials are expected to table before the Ugandan leader a comparative cost analysis of Uganda’s SGR project in relation to Kenya and Tanzania’s costs. They will also brief him on the progress of various infrastructure projects, particularly upgrading the Lake Victoria ports of Bukasa, Port Bell and Jinja that are meant to connect Uganda to the southern corridor via Musoma to Tanga, and the central corridor via Mwanza/Bukoba to Dar es Salaam.
OSBP Sourcebook: Govts challenged to enhance intra-Africa trade, ease travel (New Times)
Efforts aimed at deepening trade among African countries have been boosted by the launch of a new trade facilitation tool. Launched yesterday, the One-Stop Border Post Sourcebook is tipped to help governments improve cross-border and intra-regional trade across Africa and enhance the continent’s competitiveness. Dr Ibrahim Assane Mayaki, the New Partnership for Africa’s Development chief executive officer, said the trade facilitation tool seeks to promote a co-ordinated and integrated approach towards easing trade, the movement of people, and consolidating security. Mayaki was speaking at a regional domestication workshop for the OSBP sourcebook yesterday. The workshop, which started yesterday, ends on March 16.
Rwanda/DRC informal trade: Rubavu cross-border traders decry unsolved challenges (New Times)
Rwanda signed a trade facilitation agreement with the DR Congo over a year ago that sought to improve trade between the two countries. The deal, signed by trade ministries of both countries was also geared at supporting people involved in cross-border trade around border areas in Rubavu District. Despite this deal, there are still many challenges faced by cross-border traders and customs officials. However, William Musoni, the deputy commissioner for custom services at Rwanda Revenue Authority, said some of the traders were abusing the trade facilitation agreement and engaging in smuggling. Trade data: Informal trade between Rwanda and the DRC took a lion’s share of informal cross-border exports last year at 74.7% of the total informal cross-border exports compared to that with other neighbouring countries Tanzania (6.24%), Uganda (19.1%), and Burundi (0.02%). Total informal cross-border exports were recorded at $121.93m over the year, up from $100.45m in 2015. However, informal cross-border imports rose 41.2% to $30.52m, from $21.62 million the previous year. The DR Congo represented 9% of the total informal imports.
Tanzania: Monthly Economic Review, February 2017 (pdf, BoT)
During the year ending January 2017, exports of goods and services increased by 5.1% from the corresponding period in 2016 to $9,342.1 million. The improvement occurred in exports of gold, traditional crops and travel receipts (Chart 4.1). Import of goods and services amounted to U$10,495.8 million in the year ending January 2017, being 15.3% lower than the import bill in the corresponding period in 2016. All the categories of goods import declined, except for industrial raw materials (Table 4.2 and Chart 4.5). A significant decline was marked in capital goods, oil, fertilizers, and food and food stuffs.
BRICS Contact Group on Economic and Trade Issues: Investment facilitation, e-commerce to top BRICS meet agenda (The Hindu)
BRICS nations will soon consider a proposal to frame ‘guiding principles’ for investment policymaking to boost investment flows into Brazil, Russia, India, China and South Africa as well as take steps to promote e-commerce among the five leading emerging economies. In addition, the BRICS Contact Group on Economic and Trade Issues (CGETI) meeting – slated for early next week in Beijing – will also discuss measures for closer cooperation among the BRICS countries for developing their respective national single window for trade facilitation, official sources told The Hindu. China, the current BRICS chair, wants to push ‘investment facilitation’ and ‘e-commerce’–related issues, the sources said. Beijing’s proposal for ‘Guiding Principles for BRICS Investment Policymaking’ is similar to ‘Guiding Principles’ agreed by the G20 Trade Ministers at Shanghai in July 2016 under the Chinese G20 Presidency, they said.
G20’s Compact with Africa: Germany, the G20, and Inclusive Globalization (Project Syndicate)
For these reasons, the G20 during the German presidency is working to intensify its partnership with Africa. A central pillar of this effort is the “Compact with Africa,” which provides a framework for supporting private investment, including in infrastructure. We propose that, with the G20’s political backing, African governments, international organizations, and bilateral partners prepare comprehensive, country-specific investment compacts to encourage private-sector investment. Each country is to implement a bespoke package of measures to decrease its investment risks. Essentially, the Compact with Africa is a contribution to implementing the African Union’s Agenda 2063 blueprint for economic development. That AU agenda provides guidance for improving macroeconomic, business, and financial frameworks across the continent. While the Compact with Africa is open to all African countries, five have already committed to pioneering this new approach: the finance ministers of Côte d’Ivoire, Morocco, Rwanda, Senegal, and Tunisia want to work on compacts and have expressed this in writing. I have invited them to attend the G20 Finance Ministers and Central Bank Governors meeting on March 17-18 in Baden-Baden. [The author, Wolfgang Schäuble, has been Germany’s Federal Minister of Finance since 2009]
WTO’s Committee on Anti-Dumping Practices: South Africa’s semi-annual report (1 July-31 December 2016) under Article 16.4
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Africa must trade itself out of poverty
Africa must grab this century... It’s ours for the taking
This century is Africa’s to own, or to lose. Economic transformation is occurring across the continent, from Mauritius to Ethiopia and Ghana, across East Africa, and for some, like Rwanda, the changes are coming breathtakingly fast.
New natural resources are being discovered. Investments in health and education have led to rising life expectancy, reductions in maternal and child mortality, and an increasingly educated young population.
In regions such as East Africa, massive investments in infrastructure – energy, roads, rail and IT – are being made, driving growth and providing employment.
Although the growth is still patchy, and there remain areas of political instability, insecurity and conflict, the continent has an agreed blueprint for dealing with her challenges and investing in her future – Agenda 2063.
Africa’s problems have been studied and analysed over and over. Plans and blueprints exist, in ministries across the continent, and for all the Regional Economic Communities. East Africa has Vision 2050, aiming to turn the region into an upper middle-income bloc by 2050.
The time for planning and analysis is over. Now is the time for execution. But to succeed, we need to move with dispatch, aware that we are in competition with the rest of the world, and that this competition will get tougher, not easier.
One of the critical game changers for Africa is the 26-member Free Trade Area between Comesa, EAC and SADC. The agreement, first mooted in 2008 in Kampala, and signed in 2015 at Sharm al Sheikh in Egypt, covers over half of Africa’s GDP (over $1 trillion) and will create a market of over 600 million people. Its pillars of market integration, infrastructure development and industrialisation provide a means of pulling millions of Africans out of poverty.
There is no shortcut to development. Africa’s businesses must become more competitive, and one way of ensuring this, in addition to reducing the many barriers that face them, is investment in a rules-based regional integration regime.
Africa must trade itself out of poverty. That is why it is critical to implement the Market Integration Pillar of the Tripartite Free Trade Area. Unless and until this is done, a continental free trade area will remain a mirage.
Important, but not insurmountable challenges to implementation remain. Tariff offers must be concluded, rules of origin agreed, and business persons must be allowed to move freely. It is unacceptable that some countries and regions would like to offer their African partners less than they have offered the rest of the world, or simply those tariff lines that are currently zero rated.
Rules of origin should not serve protectionist interests that frustrate intra-African trade. They should simply provide a framework to avoid to trade deflection. The focus should be on promoting cross national value chains that provide a basis for shared industrialisation.
The temptation to adopt SADC-type rules of origin, for example, should be resisted. These rules are protectionist, and have failed to advance the development of regional value chains.
Integration cannot simply be a question of politicking and sloganeering. It has to involve leadership determined to deal with beyond-border issues that make our economies uncompetitive, and our people balkanised.
Furthermore, Africans must be allowed to move freely across the continent. Movement of business persons creates wealth, and yet, it still is a nightmare for Africans to move and work on the continent. This is not a century that should be remembered for Africans desperately trying to flee their homes, losing their lives in the Sahara or the Mediterranean.
One of the challenges is for decision makers, at national and regional levels, to involve the people in the integration agenda. This is critical for a number of reasons.
First, the benefits of integration are mid- to long-term, while its challenges are immediate. Second, the mechanics of integration may be so technical as to produce parallel universes of technocrats and citizens, between whom dialogue and incomprehension reign. The Tripartite Free Trade Area project must go the extra mile, and promote dialogue beyond national leaders.
Africa has a choice. It can either become an agglomeration of Lilliputian economies basking in their sovereign poverty, open to manipulation and domination, or it can make the investments required for market integration, cross-border infrastructure development and shared industrialisation, and thus become a significant player in the emerging geopolitical order, whatever shape it may take. What it cannot do is to simply mark time, with its head hidden in the sand.
Dr Richard Sezibera is a Rwandan Senator and former secretary general of the East African Community.
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Investment facilitation, e-commerce to top BRICS meet agenda
Single window for trade facilitation to be taken up
BRICS nations will soon consider a proposal to frame ‘guiding principles’ for investment policymaking to boost investment flows into Brazil, Russia, India, China and South Africa as well as take steps to promote e-commerce among the five leading emerging economies.
In addition, the BRICS Contact Group on Economic and Trade Issues (CGETI) meeting – slated for early next week in Beijing – will also discuss measures for closer cooperation among the BRICS countries for developing their respective national single window for trade facilitation, official sources told The Hindu.
China, the current BRICS chair, wants to push ‘investment facilitation’ and ‘e-commerce’-related issues, the sources said. Beijing’s proposal for ‘Guiding Principles for BRICS Investment Policymaking’ is similar to ‘Guiding Principles’ agreed by the G20 (group of 20 major economies of the world) Trade Ministers at Shanghai in July 2016 under the Chinese G20 Presidency, they said. India was part of that meeting.
China has also been at the forefront of a proposal for a global pact on ‘investment facilitation and promotion’ at the World Trade Organisation (WTO)-level, and is making efforts to ensure that the proposal on a global investment pact gains traction before the WTO Ministerial Conference (MC) meeting in December 2017 in Buenos Aires (Argentina). The MC meeting is the WTO’s highest decision-taking body.
The ‘G20 Guiding Principles for Global Investment Policymaking’, among other things, states that, “Governments should avoid protectionism in relation to cross-border investment” and that “investment policies should establish open, non-discriminatory, transparent and predictable conditions for investment.”
It adds that, “dispute settlement procedures should be fair, open and transparent, with appropriate safeguards to prevent abuse.” China, driving this year’s BRICS agenda, now wants the BRICS nations to separately adopt these principles and enter into an ‘investment facilitation’ agreement.
India had recently rejected a proposal by the European Union and Canada at the WTO-level for a global investment pact that incorporates the contentious Investor-State Dispute Settlement (ISDS) mechanism. The ISDS mechanism allows firms to drag governments to international arbitration without waiting to exhaust the available local remedies and seek huge compensation citing ‘losses’ they incur due to reasons, including policy changes.
China has also been leading the discussions on e-commerce at the global level. In November 2016, the WTO said China had proposed that discussions at the global trade body should focus on the promotion and facilitation of cross-border trade in goods enabled by the Internet. The WTO further said stated that, “It (China) said discussions (on e-commerce) could also include services directly supporting this, such as payment and logistic services.”
Incidentally, there is a proposal for setting up a common payment gateway to promote e-commerce in BRICS. The BRICS Trade Ministers Communiqué, after their meeting in October 2016, had sought strong intra-BRICS cooperation in e-commerce.
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SADC has huge potential for funding own programmes
Southern Africa has the potential to mobilise more than US$1.2 billion from alternative and innovative sources as part of efforts to reduce the reliance on donor support.
According to a series of studies commissioned by the SADC Secretariat, the Southern African Development Community could access a huge pool of resources available in the region if it adopts some or all of the six options on alternative and innovative sources of funding being proposed.
The six options for innovative sources of financing regional integration in SADC are the introduction of an export and import tax; a tourism levy; a financial transaction tax; a lottery system; philanthropy; and regional events.
The study on the Export and Import Levy found that a regional tax on exports and/or imports was a common practice for raising revenues by national governments or Regional Economic Communities (RECs) worldwide.
It noted that the use of an import tax is the most commonly pursued form of raising funds for other African RECs such as the Economic Community of West African States (ECOWAS) and the Economic Community of Central African States (ECCAS).
A benchmarking with similar organizations on import levy revealed that ECOWAS has operationalised a 0.5 percent import levy on all goods and vehicles originating from outside its region. ECCAS has adopted; a 0.4 percent regional integration tax on all goods originating from outside the region.
The African Union (AU) is in the process of introducing a similar tax. The AU Summit in 2016 approved a 0.2 percent levy on eligible imports, with each AU region contributing about US$65 million per year.
The study said a simulation on a potential SADC import tax showed that, based on 2014 trade figures, imposition of a 0.2 percent levy on all SADC member states imports from outside the region could generate at least US$331.3 million revenue annually.
It said there is need for a dedicated legal instrument in the form of a protocol or agreement to strengthen the legal and policy framework provided by the SADC Treaty.
It will also be necessary that each member put in place national legislation to enable revenue authorities to collect the import tax. However the existing collection infrastructure makes it easy for national collection of the levy once adopted.
The study on the tourism revealed that a Regional Tourism Levy can be introduced in a number of ways but two options – tax on international travel tickets and a tourism levy – are most viable and recommended to start with.
The proposed Regional Tourism Levy is in line with continental and international best practices.
The AU Assembly has approved a tourism levy on tickets amounting to US$2 for short trips and US$5 for long trips. It also approved a 0.5 percent tourism tax on income from tourism activities by member states.
France and Germany implement similar levies and provide the current best practice.
Based on the study, it is recommended that SADC considers adopting a 5-10 percent levy on tourism activities by SADC member States.
It is estimated that US$123 million per annum could be raised through levies on air tickets alone.
No domestic legislation is envisaged, but further studies may be necessary for the tourism activities to be operationalised.
The main challenges with this option, however, are that it is only viable in countries with significant tourist and other travel activities, and that the sector is sensitive and unpredictable.
A study on Regional Financial Transaction Taxes showed that such taxes are and can be a viable source of resource mobilization. They have considerable potential for SADC to harness in order to fund its development programmes.
Similar taxes have been used in a number of African, Asian and Latin American countries as well as in the United Kingdom.
The study recommended that SADC focuses on remittances sent through money transfer agencies.
It is projected that a 0.1 percent levy on these transactions has a potential of raising US$691 million per annum, enough to fund the implementation of the Revised Regional Indicative Strategic Development Plan (RISDP).
Although a legal framework is required, it is largely provided for under the SADC Memorandum of Understanding on Cooperation in Taxation and Related Matters of 2002, and also appears in Annex 3 of the SADC Protocol on Finance and Investment.
Philanthropic initiatives are fast emerging as another innovative way of mobilizing resources for development.
These are in the rise in Africa as new sources of innovative financing. Several studies show that there are huge amounts of money from high net worth individuals, foundations and private sector that flows from and to Africa. It is estimated that Africa gets between US$1.25 billion and US$3 billion from philanthropic activities.
The United Nations and AU have taken advantage of this by forming the United Nations Foundation and the African Union Foundation, respectively, to mobilise resources in this regard.
The proposal is for SADC to also establish a SADC Foundation as a platform for mobilising resources from the private sector, philanthropic foundations and individuals.
The Foundation could be used as a fundraising instrument for the proposed SADC Regional Development Fund.
According to a Global Gambling and Consultants Report of 2002, SADC has the potential to raise over US$30 million per annum from lottery games.
A legal framework is required to provide for a lottery-based revenue sharing formula amongst member states.
The institutional arrangements for collections at national and regional levels as well as format of the lottery governance would need to be worked out.
A separate study on the possibility of raising resources through regional events showed that a number of events that can be undertaken at regional level to generate funding for regional integration development projects.
These include organisation of regional trade fairs, sports events, business summits, expositions and many others.
As in the cases of philanthropy and lottery, this option of funding requires a professional manager in the form of a foundation or a similar institution.
Other long run sources of funding that the SADC region can consider for funding its regional integration agenda are introduction of a carbon levy, blended finance, transport levy, venture capital and curbing illicit financial flows.
The need to look for alternative and innovative sources of financing SADC programmes was one of the major decisions of the 35th Summit of Heads of State and Government held in Botswana in August 2015.
This was in realization of the fact that the current situation – where most SADC activities, programmes and projects are supported by development partners – is not ideal and sustainable.
It is estimated that less than 10 percent of regional projects are presently funded by SADC member states while the balance comes from International Cooperating Partners, according to the SADC Secretariat.
This situation has compromised the ownership and sustainability of regional programmes.
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Botswana takes action to assess and prevent financial crimes
Botswana has just completed a National Anti-Money Laundering (AML) and Counter Financing of Terrorism (CFT) Risk Assessment. The National Risk Assessment (NRA) was supported by the World Bank which resulted in the adoption by officials of a National AML/CFT Risk Assessment Report and Action Plan presented at a three-day workshop. Botswana is the eleventh country in Africa to do so.
In 2012, an international obligation was adopted by the Financial Action Task Force (FATF) requiring all countries to undertake a National AML/CFT Risk Assessment. The goal behind this was to bring about stronger more effective AML/CFT systems by identifying the risks a country faces and targeting scarce resources in a way that mitigates the identified risks, threats, and vulnerabilities.
Prior to 2012, there was no precedent of a country that had undertaken a National AML/CFT Risk Assessment (NRA), and because such a task was regarded as complicated and daunting, the World Bank’s Financial Integrity Unit saw it fit to develop a National AML/CFT Risk Assessment Tool. The tool was developed to aid countries that needed assistance and guidance on how to commence such an assessment. Botswana was one of the countries that requested the World Bank Group’s help with conducting the assessment in 2014. To date, the World Bank’s NRA Tool has been used by more than 40 countries to complete NRAs, 30 more countries have commenced NRAs using the World Bank NRA Tool, and another 30+ countries have requested World Bank technical assistance and the NRA Tool to support the commencement of their NRAs.
“The World Bank’s National Risk Assessment tool helped to add value to this important work by providing a more thorough understanding of how to assess actual money laundering and terrorist financing risks using clear data,” said Elene Imnadze, World Bank Botswana Country Representative at the NRA workshop. “The World Bank stands ready to support Botswana’s work and help it become a leading African country in effectively meeting international obligations.”
The recently completed process involved more than 50 officials representing approximately 20 collaborating ministries and a number of agencies. Officials with AML/CFT expertise worked to collect and analyze large amounts of data, information and statistics to identify and prioritize the main money laundering and terrorist financing risks Botswana faces.
Risks are assessed by collecting data and information to measure “threats” and “vulnerabilities.” Threats are existing (internal or external) circumstances and systems that cannot be eliminated, so they must be mitigated, like illegal activities abroad that cross borders into Botswana, and even Botswana’s own financial system. Vulnerabilities are the internal mitigation systems, for example effectiveness of customs and border control systems, and controls in the financial sector. When the effectiveness of the vulnerabilities are measured (and rated) against the various threat levels, these comparisons produce an overall risk level which indicates to a country how well existing systems are mitigating the risks, and where improvements are needed. Such system of assessment also enables officials to prioritize risks so that resources can be more effectively targeted to mitigate them.
The money laundering risks identified at the workshop were based on data indicating higher levels of criminality linked to wildlife poaching, weak controls in the diamond sector, auto theft, and financial crimes like tax evasion and corruption. Weaknesses in national AML/CFT controls systems were identified in the legal frameworks and effectiveness of implementation. The completion of the National AML/CFT Risk Assessment indicates that Botswana has complied with an important international AML/CFT obligation which other countries in the world are in the process of undertaking.
“We appreciate the assistance we have received from the World Bank throughout the duration of the National Risk Assessment project. We are also grateful for the NRA working groups and the selflessness and enthusiasm they exhibited during the course of the project. Moving forward I hope we will be able to strengthen our legal framework, which is our first line of defense in the fight against money laundering and terrorist financing,” remarked Elaina Gonsalves, Deputy Secretary for economic and finance policy in the Ministry of Finance and Economic Development.
The identified risks and threats from the National AML/CFT Risk Assessment will assist the officials to strengthen country systems and apply appropriate control measures in order to fight money laundering, terrorist financing, and related underlying criminal activities including corruption, pursuant to international AML/CFT obligations*. This system, once fully operational, will stem illicit financing flows (IFFs) and contribute to stronger economic development, shared prosperity, and help reduce poverty.
* International AML/CFT obligations are based on various international treaties & conventions. These obligations are specified in the 40 Recommendations of the Financial Action Task Force Against Money Laundering/Terrorist Financing (FATF). These can be found here.
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Nigeria: New credit infrastructure to improve access to credit and financial inclusion
A lack of adequate collateral is preventing many of Nigeria’s small businesses from accessing the capital needed to grow, according to a new report The Credit Crunch, published by IFC and the Central Bank of Nigeria.
Nigeria is an entrepreneurial economy with an estimated 37 million micro, small and medium-sized companies, whose contribution to economic growth and job creation is significant.
However, less than a third of the country’s MSMEs have successfully obtained a loan from a financial institution, according to the report. Instead, most use personal savings or reinvested profits as a source of business financing.
The smaller the business, the less likely it is to have applied for, and received, a loan from a bank or microfinance institution.
Many of these businesses have the potential to become bigger and more prosperous, but their growth is restricted for a variety of reasons – chief among them, access to finance.
The Central Bank of Nigeria recently established the National Collateral Registry to improve access to finance and is supporting the development of a modern credit reporting system in Nigeria with support from the World Bank Group.
Increased use of moveable and reputational collateral will allow more MSMEs to access financing through the formal sector.
“There is a great need to deepen access to finance for Nigeria’s small-scale business sector,” said Ceyla Pazarbasioglu, Senior Director of the World Bank Group’s Finance and Markets Global Practice.
“The new collateral registry and credit reporting systems can help meet this need, and provide the opportunity for many small-scale businesses and entrepreneurs to grow through formal and more affordable financing.”
Nigeria is among the 25 priority countries that are part of the World Bank Group’s Universal Financial Access 2020 initiatives, whose goal is to extend access to financial services to all adults by 2020. In 2014, 66% of adults in Nigeria (55 million adults) didn’t have access to a transaction account, according to the World Bank’s Global Findex data.
While it is clear that access to finance in Nigeria remains a challenge, there is a strong optimism that the business environment will improve in the next five years. MSMEs believe financial institutions, with time, will become more willing to lend to smaller-scale businesses, the report found.
The report is based on research to understand the awareness, perceptions and behaviors of MSMEs with regard to access to finance and financial services, commissioned by the Central Bank of Nigeria and IFC. It is part of a large-scale campaign deployed across Nigeria over the past 18 months.
The campaign’s objectives are to raise awareness of the new tools available to gain access to credit through the collateral registry and the credit reporting system, and to promote responsible lending and borrowing.
The awareness campaign generated an estimated 100 million views in Nigeria through interactive forums, advertisements (on radio and in print), capacity-building workshops and trainings, roadshows, media outreach, and social media, according to data gathered from Twitter analytics, Media Fact Publication, Info Tools & Meltwater.
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Building trust and confidence for a successful digital economic era
With more than half the world expected to have Internet access in just three years, the rise of e-commerce poses challenges to countries where regulatory regimes do not provide robust consumer protection. World Consumer Rights Day on 15 March provides an excellent opportunity to set the agenda for consumer rights in the digital era.
On 15 March, UNCTAD joins the celebrations of World Consumer Rights Day, this year looking at the theme of “Building a digital world consumers can trust”, at the G20 Consumer Summit in Berlin, Germany.
The annual celebration is an opportunity to promote the basic rights of all consumers, demanding that those rights are respected and protected, and a chance to protest against the market abuses and social injustices which undermine those rights.
World Consumer Rights Day marks the anniversary of an address by President John F Kennedy’s address to the US congress on 15 March 1962, in which he formally addressed the issue of consumer rights. He was the first world leader to do so.
“As President Kennedy noted, two-thirds of all spending in the economy is by consumers,” said UNCTAD Secretary-General Mukhisa Kituyi. “But they are the only important group in the economy whose views are often not heard,” said John F Kennedy.
“It is our responsibility to ensure that all consumers are heard and protected, especially in the smallest developing and Least Developed Countries,” Dr. Kiyuti said. “Consumer protection is not only a best economic practice but also vital for the success of the digital revolution.”
Consumer protection helps all consumers by ensuring that they have the right of access to adequate information to enable them to make informed choices according to individual wishes and needs, and to effective redress.
“We must empower consumers,” Dr. Kituyi said. “Consumers who know their rights and enforce them, are subject to fewer abuses which directly improves their well-being.”
Today’s global interdependent markets have propelled consumers to the forefront of development policies, making them both beneficiaries and actors of change in the achievement of the Sustainable Development Goals.
Digital technology is having a dramatic impact on consumers around the world.
By 2020, 52 % of the world’s population will be online – this means the number of people accessing the internet will have grown by a third in just five years. Technology has given many consumers more choice, convenience and information, but important issues remain.
A concerted effort is needed to give those not yet connected a chance to do so, at an affordable cost, while ensuring everyone’s data is kept safe and secure and to help consumers know which services they can trust.
World Consumer Rights Day provides an excellent opportunity to set the agenda for a digital world that champions all that is good about Digital connectedness.
Having been mandated to serve as the focal point on consumer protection within the United Nations family by the General Assembly, UNCTAD spearheads the second session of the Intergovernmental Group of Experts (IGE) on Consumer Protection Law and Policy on 2-3 July 2017.
The IGE will be addressing the implementation of the UN Guidelines for Consumer Protection (UNGCP), the legal and institutional framework for consumer protection, the protection of vulnerable and disadvantaged consumers, the protection of consumers in e-commerce. Participants will also discuss capacity building programmes and voluntary peer reviews on consumer protection law and policy.
The UN guidelines are a valuable set of principles for setting out the main characteristics of effective consumer protection legislation, enforcement institutions and redress systems and for assisting interested member States in formulating and enforcing domestic and regional laws, rules and regulations that are suitable to their own economic and social and environmental circumstances, as well as promoting international enforcement cooperation among member States and encouraging the sharing of experiences in consumer protection.
UNCTAD continues to promote the guidelines and encourages interested member States to create awareness of the many ways in which they, business, and civil society can promote consumer protection in the provision of public and private goods and services.
UNCTAD provides technical assistance and capacity-building for consumer protection to Latin America countries, countries in the Middle East and North Africa and Asian countries.
About the G20 Consumer Summit
In 2017, Germany has the honour of holding the G20 Presidency. As a group of the world’s leading industrialised and emerging economies, the G20 epitomises globalisation as it is lived and breathed. Together, the group represents almost two thirds of the Earth’s population, over four fifths of global GDP and three quarters of world trade.
Germany has chosen “Shaping an interconnected world” as the slogan of its G20 Presidency. Its agenda is based on three pillars: Building resilience – improving sustainability – assuming responsibility. The aim of improving sustainability for the future includes making the most of the opportunities provided by digital technologies. Digitalisation is without a doubt one of the central drivers of economic growth and social development.
In aiming to unlock the full potential offered by the digital revolution, consumer confidence is key. At the same time, fundamental principles such as the free flow of information, privacy, data protection and data security are of paramount importance. This is why the G20 is dedicated to coordinating a global framework for the use of digital technologies.
For the first time ever, this year’s G20 Presidency will include a G20 Consumer Summit. The G20 Consumer Summit – entitled “Building a digital world consumers can trust” – is being held on 15 March 2017, World Consumer Rights Day, in Berlin. It will be jointly organised by the Federal Ministry of Justice and Consumer Protection (BMJV), the Federation of German Consumer Organisations (vzbv) and Consumers International (CI). The Summit will be attended by representatives of government, international organisations, consumer associations, industry and academia, bringing together around 300 participants – many of whom are leaders in their ministry, organisation or field.
The G20 Consumer Summit will focus on the following topics:
- Inclusion: Helping to unlock the opportunities provided by digital industries for consumers.
- Consumer data: Providing clarity to consumers and giving them control over the use of their data on the web.
- Online security: Protecting consumers’ identity, privacy and property.
- eCommerce and web-based services: Promoting fairness and building trust.
- Legal framework: Achieving effective governance of the global and interconnected digital landscape.
» View the live stream of the G20 Consumer Summit.
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Rubavu cross-border traders decry unsolved challenges
Rwanda signed a trade facilitation agreement with the DR Congo over a year ago that sought to improve trade between the two countries. The deal, signed by trade ministries of both countries was also geared at supporting people involved in cross-border trade around border areas in Rubavu District.
Despite this deal, there are still many challenges faced by cross-border traders and customs officials. Florance Nyiransaba, a Gisenyi trader who sells fruits and produce in the DRC, said small cross-border traders, especially women doing business between Rwanda and the DRC, were not benefitting from the trade deal.
Nyiransaba said many women cross-border traders with infants have, for instance, had to leave their children in the hands of temporary caretakers on the Rwandan side of the border because they lack travel documents, which they say are costly. One pays Rwf10,000 for a travel document, but the small women cross-border traders say that is a lot of money, adding that the process to acquire children’s travel documents is also lengthy.
“Therefore, women traders with small children have no other option but to hire temporary baby-sitters near Petite Barriere border in Gisenyi when they go to the market in the DR Congo, which affects businesses. We cannot concentrate because we are thinking about the children we left behind,” the trader, who has a two-year child, said in an interview with Business Times last week.
Hundreds of people from Rubavu and neighouring districts, who are involved in informal cross-border trade between Rwanda and the DRC, use Petite Barriere border post every day, according to officials. About 90 per cent of these are women, and 74 per cent of the Rwandan women sell produce and fruits in Goma, from where they buy goods for sale back home.
Gorrette Uwimana, another cross-border trader, said customs officials still confiscate small items like foodstuffs and clothes they buy in Goma despite a trade facilitation agreement in place. Under the deal, goods worth less than $2,000 (about Rwf1.7 million) are exempted from taxes. She claimed the deal is yet to be implemented on the side of Rwanda, while DRC traders are benefiting from it.
Traders abusing the agreement, officials say
However, William Musoni, the deputy commissioner for custom services at Rwanda Revenue Authority, said some of the traders were abusing the trade facilitation agreement and engaging in smuggling.
“The agreement was put in place to ease trade between the two countries. However, some traders try to smuggle items from the DR Congo that are not covered by the agreement into Rwanda to avoid taxes,” says Musoni.
Musoni said customs officials confiscate such goods whenever they discover them. He explained that only goods made in DRC are tax exempt under the deal.
“Therefore, if the products are not made in the DRC, traders must pay taxes or else we confiscate the goods.”
Gerald Mahoro, a customs officer at Petite Barriere border post, said incidences of smuggling have gone up over the period the trade facilitation agreement has been in place.
“It’s unfortunate that instead of the agreement encouraging and easing trade between Rwanda and the DR Congo, it has ironically created more problems at the border,” said Mahoro.
Mahoro also said they confiscate over 400kg of wine, 500 cartons of tomato sauce and kitenge fabrics, among others, on a daily basis.
He added that smugglers use different tactics to avoid detection, but noted that the agency has tightened surveillance to identify and apprehend traders involved in smuggling between the two countries.
The officials also said it is advisable for traders with infants to leave them behind when going to the market in the DRC.
Join co-ops
Musa Babonampoze, the head of Turwany’inzara Co-operative in Gisenyi, advised small women traders and other business people to join co-operatives to avoid some of the challenges they face.
“Many of the small women cross-border traders in Gisenyi have a wrong perception about co-operatives because the few groups in the areas have not done a good job. So, some traders shun them, thinking there is nothing to gain from working in groups,” he said.
Babonampoze, however, added that traders working with the existing co-operatives, like Unama Ukore, Ejoheza, and Cyizanya, are helped to overcome problems that affect their operations. “The leaders work with those in DR Congo to solve traders’ problems, including theft, and the victims get immediate support which traders that don’t belong to any co-operative might not get,” he said.
He urged traders to always get information to help them differentiate between goods that are taxable and those not taxable, as well as the amount of taxes to be paid.
He said most of the time traders make losses because they do not understand the tax regime of different categories of goods and neither are they conversant with the trade facilitation agreement. So, people buying goods from DR Congo barely make any profits after paying taxes.
Informal trade between Rwanda and the DRC took a lion’s share of informal cross-border exports last year at 74.7 per cent of the total informal cross-border exports compared to that with other neighbouring countries Tanzania (6.24 per cent), Uganda (19.1 per cent), and Burundi (0.02 per cent). Total informal cross-border exports were recorded at $121.93 million over the year, up from $100.45 million in 2015. However, informal cross-border imports rose 41.2 per cent to $30.52 million from $21.62 million the previous year. The DR Congo represented 9 per cent of the total informal imports.
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Kenya to go ahead of its EAC neighbours, read budget before June
With its Parliament set to be in recess in June, Kenya will have to read its budget for 2017/2018 ahead of the other East African Community partner states, to free funds for the August general election.
The EAC states agreed in 2007 to harmonise their budget reading as part of efforts towards harmonising their taxation regimes. When the budgets are not read together there is the risk of policy leaks and unfair business practices.
The EastAfrican has learnt that Kenya’s National Treasury is consulting the other EAC member states over the matter.
“Our aim is to finalise everything that is done in June by March this year, because of the coming elections, and this is actually taking a toll on us,” a Treasury official told The EastAfrican.
According to the parliamentary timetable, the legislators are expected to take a break in April to participate in party nominations, and return in May for one month before parliament is dissolved 60 days ahead of the elections as per the law.
National Treasury Cabinet Secretary Henry Rotich submitted to the National Budget estimates for the 2017/2018 fiscal year in February 2017, and the Budget and Appropriation committee of parliament is expected to discuss and review the estimates and make recommendations to the National Assembly before the budget is read.
Once approved by the National Assembly, the estimates of the national government, judiciary and parliament expenditures are included in the Appropriations Bill.
The chairman of the Budget and Appropriation Committee Mutava Musyimi said that the budget estimates for the 2017/2018 fiscal year would be adopted and the Appropriations Bill passed before the parliament goes for recess from April 6 to May 8.
“We want to be done with this business before we go for recess. We will be meeting from March 20-22 to review and adopt the report,” said Mr Musyimi, adding that the approval of the Finance Bill 2017 could be done by the next parliament after June 30.
He said the Cabinet Secretary of the National Treasury would decide when to read the budget in collaboration with the other EAC member states after parliament has approved it and passed the Appropriations Bill.
Geoffrey Mwau, the director-general at the Budget, Fiscal and Economic Affairs Department in Kenya’s National Treasury said the Treasury’s plan is to complete the budget process by March 31, but would not disclose the date set for the reading.
“Reading is a ceremonial event to be decided by the Cabinet Secretary,” said Dr Mwau.
It is, however, unlikely that the other countries will be ready to read their budgets before June. In Uganda, the budget scrutiny process is still ongoing and the reading date is still scheduled for June 2017. In Rwanda, Finance Minister Claver Gatete said it was not possible for Rwanda to present the budget this month.
In Tanzania, MPs’ budget sessions are expected to start in April and the Speaker of the National Assembly Job Ndugai said he has not yet received communication from the finance minister on the proposed budget reading dates.
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tralac’s Daily News Selection
The AERC Senior Policy Seminar XIX, on the theme of Industrialization in Africa (pdf), ends today in Abidjan. Today’s sessions cover regional industrialisation in Africa, financing industrial development and the AfDB’s industrial strategy. For twitter updates: @AERCAFRICA
Inaugural STC meeting on Energy, Transport and Tourism kicks off in Togo (AU)
The First Ordinary Session of the African Union Specialized Technical Committee (STC) on Transport, Transcontinental and Interregional Infrastructures, Energy and Tourism (TIIIET) kicked-off on Monday in Lomé (Togo) amidst reiterated calls for mobilizing sustainable means of adequate financing for infrastructure development in the continent. Mr. Cheikh Bedda, Director of Infrastructure and Energy, in his welcoming remarks said the theme for the first STC meeting “Financing Infrastructure in Africa,” has been selected in consideration of the huge challenge of mobilising colossal financial resources required to improve infrastructure in Africa to the level expected to support Africa’s development aspirations under the AU Agenda 2063.
Lights, Power, Action: Electrifying Africa (Africa Progress Panel)
This new paper seeks to build on the political momentum that has been created over the past year to increase energy access in Africa. Its main aim is to provide additional policy-relevant information and insights to support the implementation of ambitious new public and private initiatives now underway that aim to increase energy access swiftly across Africa, especially the New Deal on Energy for Africa, spearheaded by the African Development Bank. In light of the continent’s dynamic links with the rest of the world, the paper also highlights critical steps that must be taken by leaders in the international public and private sectors. [Table of contents: Part I: Off-grid solar – climbing the power ladder, Part II: Mini-grids – serving “the missing middle”, Part III: Mending and extending the grid, Part IV: Policy insights], [AfDB launch resources]
12th CII-EXIM Bank Conclave on India Africa Project Partnership (9-10 March): updates, programme
India’s investments in select East African countries: prospects and opportunities (Export-Import Bank of India): This study focuses on select East African countries, given their respective strategic importance, which include Burundi, Ethiopia, Kenya, Rwanda, Tanzania, and Uganda. During 2015-16, FDI outflows to these countries stood at $34.6m. During 2015-16, outflows to Ethiopia were the highest, accounting for 49% of the total FDI outflows to the region, followed by Tanzania (32.9%), and Kenya (11%). FDI outflows from India to Burundi are negligible. Institutional linkages: Exim India has been consciously forging a network of alliances and institutional linkages to help further economic co-operation with the African Region. Towards this end, Exim India has taken up equity in Afreximbank, West African Development Bank, and Development Bank of Zambia. These endeavours are supplemented by the various Memoranda of Cooperation /Memoranda of Understanding, the Bank has in place, with key institutions in the African region. They include: [Table of contents: Background, Recent trends investments in select East African countries, India’s investments in select East African countries, Prospects and opportunities for investments in select East African countries, Export-Import Bank of India in Africa]. [Note: to download Working Paper No 60 go to the Working Papers tab]
Commerce Minister sees scope for ties with Africa in pharma, food security (DNA India): Tapping the potential in renewable energy, pharma and healthcare can boost economic ties between India and Africa, Union Minister Nirmala Sitharaman said. She said the two-way trade between India and Africa increased to $56.69bn in 2015-16 from $51.67bn in 2010-11. There was a “good increase in trade but opportunities do exist. The newer sectors in which we can have greater interaction, engagement and productive relationship are renewable energy, pharmaceuticals and healthcare,” the Commerce and Industry Minister said.
Valedictory address by M J Akbar, Minister of State for External Affairs: African, not just Africa, is our policy, which is geared towards addressing human priorities. This partnership is also based on a consultative model of cooperation. There has been a significant intensification of our engagement, for instance, particularly aimed at improving the skills, opportunities and lives of the deprived. Since October 2015, we had as many as 14 outgoing visits to Africa by the troika - The President, Vice-president and the Prime Minister. This was complemented by Ministerial visits that went into the specifics of the engagement, and gave scope and content to good intentions. To cite a personal example, I have just returned from Africa after a successful trip to Tunisia, Mali and Republic of Congo, where we have elevate our bilateral partnership to the next level. Prime Minister Narendra Modi had made a commitment to provide $10bn worth of LoCs to Africa between 2015-2020. We have already approved $ 1.1bn of LoC projects in the last year, which we would like to implement as soon as possible. We look forward to receiving more LoC proposals from countries across Africa. India is perhaps the go-to partner in bridging Africa’s quest for efficient governance through adoption of digital technologies - an effort that is bearing fruit in India through the ‘Digital India’ movement. [Related: Nigeria tops India’s Africa export chart, Zambia’s exports to India hit $475m]
Dubai Chamber highlights Dubai’s strong trade links with Africa (GoD)
H.E. Al Ghurair said: “Dubai’s trade relationship with Africa has gone from strength to strength in recent years, supported by the trade missions led by the Chamber and the expansion of our international offices in promising markets on the continent. The number of African companies registered with Dubai Chamber has now exceeded 12,000, which is a testament to the increased cooperation between both sides.” Gulf entities have invested around $30bn in Africa’s infrastructure projects over the last decade, while Sub-Saharan Africa has attracted an additional $2.7bn in foreign direct investment from the GCC in the first half of 2015. Nigeria, South Africa, Kenya and Uganda, have seen the largest inflows of Gulf investments. [UAE wants closer trade ties with Asia, Africa]
India, China team up against West’s pressure on drug patent norms (The Hindu)
India, China, Brazil and South Africa are attempting to counter a push by the US and EU for more stringent global intellectual property rules. The four countries have called for intensive discussions at the WTO on a UN report recommending rigorous definition of invention and criteria for granting of pharmaceutical patents. [India may mandate using local steel in government infrastructure projects]
Transparency in beneficial ownership: how the G20 can support African countries (Stiftung Entwicklung und Frieden)
The fight against illicit financial flows and efforts for more transparency in the global financial architecture are among the priorities of the G20 under German presidency. At the same time, the G20 is seeking to deepen its partnership with Africa. But this partnership can only have a positive impact on development, if tax evasion, money laundering and corruption are pushed back at the same time. In our Global Governance Spotlight 1, 2017, Dr Mzukisi Qobo shows how the G20 can support this process, taking the example of transparency in beneficial ownership. [The analyst: Dr Mzukisi Qobo]
The African Alliance for e-Commerce opened today in Nairobi: Opening address by Gen. Joseh Kibwana (ret), Chairman of KENTRADE
The full implementation of Kenya TradeNet System modules and functionalities was achieved after deployment of the Declaration Transmission module and the Duty Remissions module late last month. In this connection we have continued to experience an increase in the number of users of the Single Window System currently standing at over 7,800 registered system users and 41 stakeholder organizations including 30 Partner Government Agencies using the TradeNet System. We believe that with this milestone we will shortly be able to demonstrate how that Single Window System has continued to transform the way we carry out cross border trade in this country. We should also be able to witness increased improvement in the “trading across borders” index.
Policy dialogue on Combating corruption along ECOWAS border routes: updates
ECOWAS traders want reviews of border documentation (Daily Trust): The National Association of Nigerian Traders and other merchants across West Africa have call for a review of cross-border trade and documentation policies to reduce corruption and other hindrances affecting ECOWAS trade protocols. This is contained in the communique of a regional conference tagged: “Policy Dialogue at Combating Corruption along ECOWAS Border Routes” held in Abuja organised by NANTS and the German International Development Agency under the SEDIN programme. The communique signed by the Secretariat President of the association Barrister Kenneth Ukaoha said that participants complained that extortion, bribery, intimidation and harassment by trade/product regulators and law enforcement officials cut across the land, sea and air borders.
“A study by the AfDB asserts that the average customs transactions involve 20-30 parties, 40 documents, 200 data points and re-keying of 60-70% of all data at least once and many of these are critical requirements at the border routes. Participants agreed that the bogus and complex nature of these requirements breed opportunities for corrupt practices. Similarly, participants agreed on the need to reduce the number of security and law enforcement agencies operating along the border routes as this would go a long way to reducing the rate of corrupt practices along the border. Participants equally called on NANTS and other professional interests to raise their efforts towards improving Nigeria’s position in World Ease of doing Business Index where the country presently ranks 169th out of 190,” the communique said.
Burdensome rules fuels corruption along the borders - Ukaoha (MaritimeFirst): Mr Ekpo Nta, the Chairman, Independent Corrupt Practices and Other Related Offences Commission (ICPC), said aside from poor infrastructure and corruption, abuse of procedure was often identified as most formidable cog in the nation’s desire to maximise benefits from trade. Nta complained about corrupt practices such as extortion, bribery, intimidation and harassment by trade and product regulators and enforcement officials across the land, sea and air borders. He said “Federal Government and relevant agencies are aware of the importance of smooth trade facilitation that contributes to job creation and economic wellbeing of the people. This informed the commission to conduct Corruption Risk Assessment exercises in Nigerian seaports of Apapa, Tincan Island, Warri, Onne and Calabar. Others are international airports Lagos and Abuja, with the objective of assessing the nature of corrupt practices among officials and operational practices and procedures that dispose them to corruption.”
Nigeria: Smuggling, import decline threaten customs’ N1.1 trillion revenue target (Nigeria Today)
The Nigeria Customs Service may not meet its N1.1trillion revenue target for 2017 as smuggling continues at the nation’s points of entry. The Guardian learnt that the customs failed to meet its 2016 revenue target due to a high level of smuggling and reduction in the volume of import. The agency had set a target of N1 trillion, but generated N898bn as revenue (including Value Added Tax) last year. The failure of the customs, one of the crucial revenue-generating agencies for government, to meet its target will mean less money for government to execute its projects and programmes to develop the country and take it out of the current recession. More than this, it underscores the depth of inefficiency that has come to define port operations in Nigeria, a situation that has forced many importers to migrate their businesses to neighbouring ports of Benin Republic and Togo.
TAZARA board told to justify required funding (IPPMedia)
This follows a meeting held between Zambia’s Transport and Communications Minister, Brian Mushimba, and his Tanzanian counterpart, Makame Mbarawa, which revealed that TAZARA was in need of additional funding. “We noted that there was still a need for injection of investment funds in the authority, and the two Governments remained fully committed to sourcing re-capitalisation funds. However, we urged the board of directors to make a proper business case to justify shareholder funding,” the communiqué read. The council also directed the TAZARA board of directors to discipline erring company managers to restore integrity in the institution. The communiqué further noted that progress had been made towards a review of the TAZARA Act to transform the institution to make it more business-oriented, and urged the board to expedite the process and conclude the review within one month.
Zimbabwe: RBZ engages DBSA for infrastructure finance (The Standard)
The Development Bank of Southern Africa held a closed door meeting with the Reserve Bank of Zimbabwe recently to discuss how it could partner local development finance institutions. DBSA CEO Patrick Dlamini told Standardbusiness on the sidelines of the 12th edition of the Confederation of Industries of India- Exim Bank of India Conclave on India-Africa Project Partnership held last week in India that the meeting was held with RBZ governor John Mangudya and Thomas Sakala, Infrastructure Development Bank of Zimbabwe CEO. He said DBSA could support Zimbabwe’s infrastructure projects up to $2,5bn annually.
Zimbabwe: Govt sets up tourism border posts inter-ministerial committee (The Chronicle)
The Government has set up an inter-ministerial committee to spearhead the construction of two tourism border posts with South Africa as part of measures to enhance regional tourism. Home Affairs Deputy Minister Obedingwa Mguni said sites have already been identified in Beitbridge and Vice President Phelekezela Mphoko will chair the committee. He said one port will be constructed at Chituripasi area, some 156km east of Beitbridge town and the other at Shashe some 120km west of the main border post. Under the new order, Chituripasi border post will create a passage for those accessing the Greater Limpopo Trans-frontier Conservation area, which is made up of Mozambique, South Africa and Zimbabwe. The Shashe port will cater for tourists visiting the Greater Mapungubwe Trans-frontier Conservation Area to the west of Beitbridge town.
Without a gender perspective, trade policy may undermine women’s empowerment (UNCTAD)
Trade policies that are “gender-blind” can inadvertently undermine women’s economic empowerment, UNCTAD Secretary-General Mukhisa Kituyi said ahead of the opening in New York of the 61st UN Commission on the Status of Women, taking place from 13-24 March. To examine further how trade policies, export policies in particular, have affected women’s work opportunities, UNCTAD is holding a panel discussion on 17 March, during the 61st UN Commission on the Status of Women. The event, organized with Finland and Sweden, and titled “The Impact of the Trade Environment on Women’s Employment“, will draw on UNCTAD’s extensive work and research in countries such as Lesotho, Bhutan, Uruguay and several members of the Common Market for Eastern and Southern Africa. [Women’s economic empowerment in the changing world of work: report of the Secretary-General]
The role of gender in the extractives industries (UNU-WIDER)
This paper reviews recent literature on gender and the extractives industries and then considers the following questions that emerged from the scholarship. How is gender understood in the extractives sector and has this changed over time? What are the gendered impacts of the extractives industries? Are women passive victims of the sector rather than active participants or even resisters to industrial expansion? What is the nature of extractives-associated sex-work and gender-based violence in various settings? In addition, the paper presents available information on women’s participation in the extractives industry, both formal and informal, and how these differ, and evaluates industry efforts towards achieving improved gender balance and equity in the sector. [The analyst: Catherine Macdonald]
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Increased off-grid and mini-grid investments could solve Africa’s electricity crisis, says Annan report
African governments and their partners need to move faster to bridge the continent’s huge energy gap. That means adopting every available solution, on and off the grid, according to a new report from Kofi Annan’s Africa Progress Panel.
The report, Lights, Power, Action: Electrifying Africa, was launched on Monday at the African Development Bank headquarters in Abidjan. It calls for a significant boost in investment in a range of solutions that can solve Africa’s energy crisis as quickly as possible.
Lights, Power, Action underlines that the 620 million Africans without access to electricity cannot wait for grid expansion. Grid-connected megaprojects such as large dams and power pools are essential to scale up national and regional energy generation and transmission, but they are slow and expensive. Governments must also increase investment in off-grid and mini-grid solutions, which are cheaper and quicker to install.
“What we are advocating is for African governments to harness every available option, in as cost-effective and technologically efficient a manner as possible, so that everyone is included and no one is left behind,” said Kofi Annan, chair of the Africa Progress Panel.
Of the 315 million people who will gain access to electricity in Africa’s rural areas by 2040, it is estimated that only 30 per cent will be connected to national grids. Most will be powered by off-grid household or mini-grid systems.
Lights, Power, Action is an in-depth follow up to the influential 2015 Africa Progress Report, Power, People, Planet: Seizing Africa’s Energy and Climate Opportunities. It urges governments to put in place the incentives needed to encourage greater investment in off-grid and mini-grid systems, protect consumers, and facilitate demand among disadvantaged groups.
More than that, governments need to foster an environment in which companies can enter energy generation, transmission and distribution markets, climb the value chain, and build the investment partnerships that can drive growth and create jobs.
“Traditional approaches to extending the grid are no longer viable as the main option for African countries,” Mr. Annan said. “They will take too long and will not meet the needs of our growing economies and societies. Instead, governments and their partners need to seize the opportunity to re-imagine their energy futures”.
The report describes the kinds of policies and investments needed to support the ambitious new public and private initiatives now under way that aim to increase energy access swiftly across Africa, especially the New Deal on Energy for Africa, spearheaded by the African Development Bank.
“As our new report shows, where there is good leadership, there are excellent prospects for energy transition,” Mr. Annan said. “We know what is needed to reduce and ultimately eliminate Africa’s energy deficit. Now we must focus on implementation. The time for excuses is over. It’s time for action.”
» Download the full policy paper: Lights, Power, Action: Electrifying Africa (PDF, 6.2 MB)