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Let us work harder to ensure ‘no one is left behind,’ urges President of main UN economic and social body
Highlighting that persisting extreme poverty and inequality prevent the realization of the benefits of globalisation and have been major causes of disaffection across rich and poor societies, a senior United Nations official has called on everyone to work harder to ensure inclusion at all stages of development, so that no one is left behind.
“This is more important than ever given the challenges we face in the world today [that] we ensure that our efforts [to implement the Sustainable Development Goals (SDGs)] are focused, effective and mutually reinforcing,” Frederick Musiiwa Makamure Shava, the President of the UN Economic and Social Council, wrote in the Sustainable Development chapter in the publication Ministers Reference Book: Commonwealth 2017.
Making a particular reference to Africa and the African Union’s Agenda 2063, he said that framework “has given a voice to the continent on the future they want to realise for their own people and has positioned Africa as a dynamic force for sustainable development efforts globally.”
Noting that the African development agenda complemented the global SDGs, he argued that synergies between the two should be maximized to attain a timely realization of their promises. In particular, he called for integrating the three dimensions of sustainable development, encompassing the universal nature of the Goals, and recognizing that development and peace are mutually reinforcing and commits countries to work for peace, justice and strong institutions.
“Development is not possible without peace; and peace without development is fragile and at great risk,” said Mr. Shava, noting that intra-State wars and complex civil conflicts are becoming increasingly intractable and recurring.
“The international community must support countries affected by conflict in their efforts to build institutions and address root causes of poverty and inequality,” he urged, “We need development that is holistic, inclusive and beneficial to all for it to be sustainable and conducive to peace.”
Further in his writing, the President of the Economic and Social Council underlined the importance of the means of implementation of the 2030 Agenda for Sustainable Development, including the Addis Ababa Action Agenda, and said that international development cooperation should be prioritized where needs are greatest and capacities weakest.
“The growing diversity of needs and capacities of countries calls for a more specific and tailored approach to country priorities on the ground,” noted Mr. Shava.
“The United Nations will continue to be a global champion for action to galvanise both Governments and civil society to work towards poverty eradication, shared prosperity and a healthy planet,” he concluded.
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Female empowerment would unleash potential to chart new global future, Secretary-General tells Commission on Status of Women
Inclusive economies powerful way to break cycles of poverty, UN-Women chief says
From classrooms and boardrooms to military ranks and peace talks, the world was better off when the doors of opportunity were opened to women and girls in all aspects of productive life, Secretary-General António Guterres said on Monday as he opened the sixty-first session of the Commission on the Status of Women.
Organized under the priority theme “Women’s economic empowerment in the changing world of work”, the two-week session will feature a plenary debate alongside a ministerial segment, expert panels and interactive dialogues on the review theme on “Challenges and achievements in the implementation of the Millennium Development Goals for women and girls”.
In opening remarks, Mr. Guterres said his most important message was one of gratitude to participants for raising their voices on behalf of women’s equality and dignity around the world. “We need you more than ever,” he said, stressing that globally, women were suffering new assaults around their safety, with extremists building their ideologies around the subjugation of women and girls.
For the 830 women at risk of dying each day from childbirth-related causes, the 15 million girls forced to marry each year – and importantly, the nearly 1 billion women who would enter the global economy in the next decade – empowerment would unleash their potential to chart a new global future. The United Nations would support women every step of the way.
Announcing that he would join the International Gender Champions campaign, he advocated a cultural shift – in the world and the United Nations – that recognized women as equal and promoted them on that basis. In peacekeeping, he would ask Member States to move beyond current levels, where women comprised just 3 per cent of peacekeepers. “We stand for a powerful truth: women’s equality works for the world,” he said. “Hold us to our promises. Do not let us off the hook.”
Phumzile Mlambo-Ngcuka, Under-Secretary-General for Gender Equality and Executive Director of the United Nations Entity for Gender Equality and the Empowerment of Women (UN-Women), said the Commission was a barometer of progress being made towards a world free of gender inequality. “Inclusive economies and a positive world of work are powerful ways to break repeating cycles of poverty,” she said. “Yet, with the global pay gap at 23 per cent, women were consistently earning less than men,” she said, urging action to address that “daylight robbery”.
Antonio de Aguiar Patriota (Brazil), Commission Chair, called on participants to build on gains that had been made, including the 2016 road map for the gender-responsive implementation of the 2030 Agenda for Sustainable Development. The session must provide guidance on eliminating work-related structural barriers and ensuring that women took full advantage of new opportunities. Men and boys must engage as gender advocates for transforming social norms, he said, which required challenging “rigid” notions of masculinity.
Manuela Tomei, Director of the International Labour Organization’s (ILO) Conditions of Work and Equality Department, said that, in many ways, the quest for women’s economic empowerment would be lost or won depending on how well women gained entry into the labour market. A striking feature of today’s world was the lack of progress made on global women’s economic empowerment and gender equality.
On that point, Dubravka Šimonovic, Special Rapporteur on violence against women, its causes and consequences, said the Commission’s priority theme for 2017 would look at violence against women in the workplace. States and international organizations were still not using all tools available to address the realities of women and girls living in conditions of normalized violence at home or in the workplace.
Dalia Leinarte, Chair of the Committee on the Elimination of Discrimination against Women, provided a snapshot of ongoing efforts, saying women’s economic empowerment had been a focus in its dialogues with States parties, calling on them to eliminate sex-based discrimination, gender pay gaps and sexual harassment.
In the afternoon, four ministerial round tables were held on “Gender pay gaps in the public and private sectors”; “Technology changing the world of work”; “Informal and non-standard work” and “Full and productive employment and decent work for all”, with participants examining how to achieve equal pay for equal work, harness technology to accelerate women’s economic empowerment and develop policies that ensured women were at the centre of the 2030 Agenda.
Opening Remarks
ANTONIO DE AGUIAR DE PATRIOTA (Brazil), Chair of the Commission on the Status of Women, welcomed ministers, senior officials, experts and civil society representatives from around the world, saying their participation was an expression of a strong commitment to gender equality and women’s human rights, as well as the belief that “together we can and will accelerate progress for women and girls everywhere”. During the session, participants would be called upon to build on recent gains, including the road map laid out in 2016 for gender-responsive implementation of the 2030 Agenda for Sustainable Development. The session, under the priority theme “Women’s economic empowerment in the changing world of work”, must provide clear guidance on eliminating work-related structural barriers within and across countries in which women faced discrimination, he emphasized. Indeed, women were paid less than men, carried an undue burden of unpaid domestic work and were concentrated in the informal economy, where they lacked protection and opportunities for advancement. The Commission should give clear guidance as to how Governments could ensure that women took full advantage of new opportunities.
Describing women’s voices and leadership at all levels of economic decision-making – whether in Government, the private sector or trade unions – as a driver for change, he stressed the need to put legislative frameworks in place to ensure compliance, strengthen institutions and gather stronger evidence to guide such actions. The session would also focus on identifying policy options and opportunities to empower indigenous women and girls, while assessing progress on the review theme “Evaluating implementation of the Agreed Conclusions from the fifty-eighth session”, on challenges and achievements in the implementation of the Millennium Development Goals for women and girls. Noting the role of non-governmental organizations in delivering services to women, and their collaboration across borders to advance gender equality, he emphasized that civil society and youth groups must enjoy a safe environment in which to speak on behalf of women and girls everywhere. Gender equality could only be realized if men and boys took full responsibility, engaging as gender advocates and speaking out as agents who could transform social norms and stereotypes. The crucial task of engaging men and boys must involve challenging rigid notions of both masculinity and traditional perceptions of manhood, he stressed.
ANTÓNIO GUTERRES, Secretary-General of the United Nations, said his most important message today was one of gratitude to participants for raising their voices on behalf of women’s equality and dignity around the world. “Every day you are on the front lines for fairness and for a just and decent world,” serving as an inspiration as they championed equality, he said, stressing that women’s empowerment must be a priority in a male-dominated world. Empowerment was about breaking structural barriers, he added, pointing out that all were better off when doors were opened to women and girls in schools, military ranks and peace talks. Such efforts were vital in addressing historic injustices, he said, adding that Governments and other institutions achieved better results when gender equality reflected the people they served.
He went on to cite the findings of a study to the effect that women’s equality could add $12 trillion to global growth over the next decade. Women enjoying better reproductive health earned more and invested more in their children’s health – investments that paid dividends for generations. Empowerment was also the best way to prevent challenges arising from violent extremism, human rights violations, xenophobia and other threats. “We need you more than ever,” he said, noting that globally women were suffering new assaults on their safety, with extremists building their ideologies around the subjugation of women. Sexual violence, forced marriage, human trafficking and virtual enslavement were forms of physical and psychological warfare in today’s world, he said. Some Governments were enacting laws that curtailed women’s freedom, while others were rolling back legal protections against domestic violence, a sign that common values were under threat.
“Attacks on women are attacks on all of us,” he emphasized. “This is why we have to respond together.” For the 830 million women at risk of dying each day from childbirth-related causes, the 225 million lacking access to modern contraceptives, the 15 million girls forced to marry each year, the 130 million women and girls who had suffered female genital mutilation, and the nearly 1 billion women who would enter the global economy in the next decade, empowerment would unleash their potential to lead the world to a new future, he pledged.
The United Nations would support women every step of the way. Announcing that he would join the international gender champions, he encouraged other senior leaders also to do so, emphasizing that a cultural shift was needed to recognize women as equal and to promote them on that basis, with the actions, targets and benchmarks required to measure progress. Since gender equality was a function of all United Nations efforts, the Organization had announced an ambitious attempt to combat sexual exploitation and abuse, which would require the employment of more women in uniform and the promotion of more female leaders, he said. “Hold us to our promises,” he urged. “Do not let us off the hook. Keep our feet in the fire.”
FREDERICK MUSIIWA MAKAMURE SHAVA (Zimbabwe), President of the Economic and Social Council, said the Commission was an indispensable arm of the Council system, addressing issues of vital interest to the well-being and progress of half of humanity. “When it succeeds in the execution of its mandate, we all succeed,” he said, noting that the current session was taking place at a pivotal moment when commitments under the 2030 Agenda must be turned into action. Practical contributions emanating from the current session would enrich efforts to realize the full empowerment of women and contribute significantly to the 2030 Agenda, he said, adding that the Commission had set the bar high in 2016 by providing a comprehensive road map for gender-responsive implementation of the Agenda.
“This road map should continue to guide and inspire Member States and all other stakeholders,” he continued, describing the Commission’s 2017 priority theme on women’s economic empowerment in the changing world of work as highly relevant to the Council’s own focus on the eradication of poverty. “The [2030 Agenda] envisages a world in which every country enjoys sustained, inclusive and sustainable economic growth and decent work for all,” he said, noting that women’s economic empowerment was a prerequisite to realization of that vision. Women and poverty – 1 of the 12 critical areas of the Beijing Platform for Action, adopted at the Fourth World Conference on Women in 1995 – as well as the feminization of poverty were the subjects of long-standing concern on the Commission’s part, he said, adding that it acknowledged the mutually reinforcing links between gender equality and empowerment of women and girls on the one hand, and the eradication of poverty on the other.
PETER THOMSON (Fiji), President of the General Assembly, recalled that gender equality had been enshrined in the United Nations Charter at the Organization’s founding, but despite some great strides on that front, progress remained slow and uneven to the present day. Noting that all his own grandchildren were girls, he expressed faith that the 2030 Agenda for Sustainable Development would enable them to grow up enjoying the same rights as their male peers. In particular, Sustainable Development Goal 5 committed all stakeholders to achieving gender equality and the empowerment of women, he noted. “I see the day when all forms of violence against women and girls are eliminated, when women’s full and effective participation and equal opportunities are ensured.”
Recalling that the Commission had called for the 2030 Agenda to take a “transformational and comprehensive approach” to gender equality, he said that, rather than resting on its laurels, it had instead pushed for key gender-equality actions within the framework of implementing the Sustainable Development Goals. It had also placed emphasis on women’s economic empowerment in the changing world of work, he said. Technology and innovation could be the key to unlocking the approximately $28 trillion that could be added to the global gross domestic product (GDP) annually if women and men were treated equally in the world of work. In addition, technology could help expand women’s access to the formal economy and markets, facilitate their employment through flexible work conditions, help monitor and enforce workplace and legal protections, and eliminate the global shame of violence against women.
PHUMZILE MLAMBO-NGCUKA, Under-Secretary-General and Executive Director of the United Nations Entity for Gender Equality and the Empowerment of Women (UN-Women), described the Commission as a “barometer of progress” towards a world free of gender discrimination and inequality – “a world that leaves no one behind”. “Inclusive economies and a positive world of work are powerful ways to break repeating cycles of poverty,” she said. Citing both progress in some areas and the erosion of gains already made, she emphasized that much-needed positive developments were not happening fast enough, calling for “constructive impatience” to help in reaching targets. The current session was renewing focus on the needs of those furthest behind, including young women, refugees and migrants, women affected by gender-based violence, those denied sexual and reproductive health rights, and those facing multiple or intersecting forms of discrimination.
Noting that virtually all economies relied on the unpaid care and domestic work of women and girls, she emphasized the need for positive changes to enable such work to be valued and shared by parents within the family unit. The relevant report of the Secretary-General – titled “Women’s economic empowerment in the changing world of work” (download below) – paid greater attention to women working where they were at highest risk of being left behind, she said. Calling on the Commission to focus on women’s participation in male-dominated sectors and in the informal sector, she said the latter – comprising low-wage farm workers, flower vendors, street-food vendors and others – offered a major opportunity, pointing out that there were 190 million informal-sector workers in India alone. With the global pay gap at an average of 23 per cent, women were also consistently earning less than men, she said, underlining the need for action to address such “daylight robbery”.
MANUELA TOMEI, Director of the Conditions of Work and Equality Department, International Labour Organization (ILO), said the Commission’s priority theme resonated with the ILO mandate. In many ways, the quest for women’s economic empowerment would be lost or won depending on how well they gained entry into the labour market. While the world of work was changing in profound ways, where those changes would lead in terms of supporting women’s economic empowerment was not preordained. To secure a better future for all, better policies must be put in place now. A striking feature of today’s landscape was the lack of progress made on global women’s economic empowerment and gender equality.
To address those issues, she said the ILO Women at Work Centenary Initiative had sought to understand the obstacles to progress and challenge assumptions of what they wanted in the working world. Launched on 8 March, an ILO report, titled “Towards a better future for women and work: Voices of women and men”, had included a poll interviewing 149,000 people in 142 countries and territories. It offered the first ever account of global attitudes about working women, finding that most preferred that they had paid jobs. Most participants had cited the work-family balance as among women’s top challenges, followed by unfair treatment, sexual harassment and unequal pay. The findings supported a policy agenda that included a focus on the care economy – a rich source of future jobs – and on the link between paid and unpaid work. Ensuring equal pay for work of equal value was also essential, as women earned 23 per cent less than men, mainly due to the way wages were structured. ILO was committed to making the future of work one where gender equality and women’s empowerment were drivers of a better world.
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Inaugural STC meeting on Energy, Transport and Tourism kicks off in Togo
The First Ordinary Session of the African Union (AU) 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.
Mr. Bedda intimated “we are expected to make concrete proposals on means of financing infrastructure projects including mobilisation of investments for the preparation, structuring, implementation and risk mitigation of climate resilient infrastructure projects.”
On his part, the Director of the Capacity Development Division of the Economic Commission for Africa (ECA), Dr. Stephen Karingi focused mainly on the issue of infrastructure development, and the role ECA plays in support of the African agenda, especially in partnership with the AUC and other continental and Sub-regional bodies.
Dr. Karingi echoed that over the years, the ECA has been in partnership with AUC and other continental and Sub-regional bodies in furthering the African infrastructure agenda. Citing one example of such partnership, Dr. Karingi highlighted “ECA at the request of African heads of state, undertook a comprehensive mapping of all policies, law and regulations pertaining to investment in infrastructure in Africa to facilitate private sector investment in transboundary infrastructure in Africa; A regional framework has been finalized and will soon be submitted to the AU Assembly for approval”.
The representative of the NEPAD Planning and Coordination Agency (NPCA), Mr. Amos Phiri also recognized the importance of raising domestic resources for investment in infrastructure and to find innovative ways to structure project financing so as to close the infrastructure funding gap.
The workshop was officially opened by His Excellency Prof. Robert Dussey, Minister of Foreign Affairs, Cooperation and African Integration of Togo, who concurred that infrastructure financing remains a major concern for Africa, which will be a united, prosperous and integrated by 2063, hence “investment in infrastructure and enhanced public-private partnerships in Africa will be needed to meet the major challenges facing the continent”.
The first STC-TIIIET is convened to implement the AU Assembly Decision (Assembly/AU/Dec.227 (XII)), which reconfigured the existing STCs and created one on Transport, Transcontinental and Interregional Infrastructures, Energy and Tourism.
The meeting convened over 350 experts from Ministries responsible for transport (i.e. Air, Road, Railway and Maritime Transport), energy and tourism sectors from all AU Member States, the Regional Economic Communities, the regional development banks and financial institutions, the continental specialized organizations, academia, private sector and civil society, and representatives from the development partners and international organizations involved in energy, transport and tourism.
Over three days, the Experts will consider and deliberate on a number of issues on their agenda including: innovative financing and domestic funds mobilization strategies of major transcontinental, interregional and national infrastructure projects in the energy, transport and tourism sectors, and strengthening and promoting national and regional capacities for projects preparation.
As part of the STC meeting, a Pan African Investment Forum, featuring high-level Ministerial panel discussions will be held to exchange views on the best ways of stimulating investments in infrastructure development in the continent.
The Experts will also consider the implementation of the PIDA/PAP, the implementation status of the Decisions and Declarations adopted at the previous ministerial conferences and AU Assembly sessions on transport, energy and tourism, strategies on making Africa the Preferred Destination for Tourism under the AU Agenda 2063, adoption of infrastructure programs and initiatives as well as action plans to be undertaken up to the next STC meeting at national, regional and continental levels.
The Experts Session will end on Thursday, and will present its conclusions and recommendations to the Ministerial Session which opens on Friday, 17th March 2017.
The outcomes of the First STC-TIIIET will be submitted to the forthcoming Summit of the AU Assembly to be held in Addis Ababa, Ethiopia in July 2017.
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Without a gender perspective, trade policy may undermine women’s empowerment
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 United Nations Commission on the Status of Women, taking place from 13 to 24 March 2017.
UNCTAD research has shown that, for example, trade liberalization affects men and women differently, and that women more than men stand to win or lose depending on which economic sectors are targeted.
This is because gender norms continue to segregate women into specific jobs and economic sectors, often denying them access to the education and training needed to upgrade their skills. And gender norms still require women to shoulder the brunt of unpaid household work and caregiving, allowing them less time to invest in productive activities outside the home. Women therefore find it more challenging than men to change jobs or sectors.
“When it comes to women’s empowerment, it matters which products are promoted for export, and which are left on their own to face stronger competition from abroad,” Dr. Kituyi said.
“Because women tend to work in fewer sectors than men, they may be disproportionately affected when a policy makes sectors like small-scale farming, or the clothing or hospitality industries, less competitive,” he added.
While lowering tariffs for certain crops may lower prices for consumers, including for women-headed households, it may also lower incomes for small-scale farmers, who in most countries are women, meaning they would win as consumers yet lose as producers.
And when policies lead to more and better jobs, UNCTAD studies have shown that the opportunities for women tend to be limited to low-skill, low paying jobs.
For example, while a shift in production from low-value staple crops like cassava to higher-value commodities like fruits and vegetables may help a country upgrade agriculture production and develop non-farm activities, the gender ramifications are not straightforward.
Agro-industries may bring new and better job opportunities, with higher wages and better working conditions than traditional farming, but UNCTAD research has shown that women workers in agro-processing are typically segregated into labour-intensive tasks like packaging with limited opportunities for skills development. And the new cash crops may also crowd out small farmers involved in subsistence agriculture, who are mostly women.
The same is true for the clothing industry. A focus on increasing exports tends to lead to more jobs, but it also tends to create new patterns of inequality and vulnerability, with men being assigned to the new managerial, higher-skill jobs.
This means that in the event of a sudden or drastic drop in production, which may result from a shift in trade policy, women will be the first to lose their jobs and will have the most difficulty finding work in another sector or starting a new activity, because of limited skills and savings.
“The only way to avoid these unintended negative gender ramifications is to assess a policy’s potential effects beforehand,” Dr. Kituyi said.
“Such analysis is difficult but necessary, and UNCTAD is developing a toolbox to help policymakers use data to predict the consequences of trade reforms on women,” he said, adding that the methodology may be applied to assess trade impacts on other vulnerable segments of the population, such as the rural population and the elderly.
The toolbox is being developed as part of UNCTAD’s program on trade, gender, and development, which was set up to help policymakers look at trade policy from a gender perspective, encourage researchers and professors to include gender issues in their research and teaching, and equip civil society advocates with sound data and analysis.
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.
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SADC Strategic Ministerial Retreat: updates
The SADC We Want (pdf): On the basis of the three broad topics, which Member States approved, the Secretariat commissioned research studies on the topics as a way of providing the basis of discussions during the retreat. The broad topics are: (i) SADC Vision, Progress, Challenges and Prospects; (ii) SADC Institutional Capacity to deliver on its Mandate; (iii) Sustainable financing for regional integration. The Secretariat further organised a meeting of the Senior Officials (20-21 February) in order to provide inputs into the research papers. Indeed, the meeting proved to be very useful and it provided an opportunity for further refinements of the research papers. This Retreat is therefore expected to review the status of implementation of the SADC integration agenda, and reflect on whether SADC is realising its objectives.
SADC Industrialisation Action Plan endorsed by SADC Ministerial Task Force on regional economic integration: The Ministerial Task Force endorsed the Industrialisation Strategy Action Plan for consideration by the Extraordinary Summit on the 18th March 2017. The Meeting further directed the Secretariat to collaborate with the Tripartite Task Force to expedite implementation of outstanding activities of the Tripartite Free Trade Area Agreement and report on the status of implementation of outstanding activities at its next meeting.
EALA Committee on Communications, Trade and Investment: oversight report, recommendations
The report (pdf), presented to the House by the Chair of the Committee on Communication, Trade and Investment, follows an oversight activity of the railway infrastructure in the Partner States undertaken (12-15 December) in the Partner States. The objectives of the workshop were to: understand the status of the Railways Master plan in the EAC; as well as that of EAC specific Partner States’ Railway Infrastructure development and thereafter come up with recommendations. The Committee further reviewed the EAC Railway Master Plan identifying a number of issues including high cost of transport making products expensive and international trade uncompetitive. At the same time, there are low freight volumes, reduced market share for railways. The Committee takes note of a weak business regulatory environment in the transport and rail sub-sector. It calls for strategic leadership and review of national policies and laws on the rail as well as enhanced public private partnerships. The Committee further emphasises the need for development of excellence in railway capacity building, ICT and technology development. [Kenya: Mandatory SGR use causes unease among importers (Business Daily)]
The Commonwealth Trade Summit: updates
Commonwealth Ministers commit to boosting trade (The Hindu): A two-day Commonwealth trade summit concluded on Friday as Ministers from across the bloc committed to boosting intra-Commonwealth trade in the face of the growing clamour for protectionism globally. India, meanwhile, announced a summit on trade amongst Commonwealth SMEs (Small and medium-sized enterprises) in May. The meeting of SMEs from across the Commonwealth, an initiative of the Commonwealth Secretariat, and the Ministry of Commerce, will take place in New Delhi, Commonwealth Secretary Rita A. Teotia told delegates at the summit. The meeting, it is hoped, will provide an opportunity for policy makers and businesses to continue discussions on boosting trade in this area.
SA’s Minister of Trade and Industry: Minister Davies said the priority of the Commonwealth should focus on the development aspects of digital trade so as to address the digital and technological divide between developed and developing countries, especially in Africa. He emphasised that the development of international trade rules on e-commerce at this stage will exacerbate the marginalisation of developing countries as the pace and scale of e-commerce development across the world is unevenly spread. On investment, Minister Davies highlighted that a project driven approach with dedicated facilitation initiatives has proven to be working in South Africa. He encouraged Commonwealth countries to share best practices on attracting and facilitating investments. UK is South Africa’s 2nd biggest trading partner in the European Union and 7th trading partner globally. South Africa’s positive trade balance with the UK has been increasing since 2014 to R14.6 billion in 2016.
Commentary by Dr Olu Fasan (BusinessDay): ‘Britain seeks new trade era with Africa: Nigeria must embrace it’. This is really an imperative for Nigeria. The country needs meaningful and ambitious FTAs to lock in trade and market reforms and reverse its lagging productivity and competitiveness. What’s more, Nigeria must prepare for a post-Brexit world in which trade and market openness shapes the external relations of the EU and the UK, its major trading partners! [Related: Speech delivered by UK’s International Trade Secretary, Liam Fox, Commentary by Geoff Raby, former Australian trade negotiator]
Morocco: Country Strategy Paper, 2017-2021 (pdf, AfDB)
Furthermore, the Bank will seek to support the development of relations between Morocco and Africa. This will start with the acceleration of trade and investment, the financing of private sector projects and specific trade infrastructure. It will also entail sharing of the experiences and expertise that Morocco has been able to develop. Hence, the new CSP 2017-2021 favours the principles of alignment on Government priorities, consolidation of the gains from previous operations, complementarity with other partners and the Bank’s strategic framework. The CSP is structured around two of the Bank’s High 5s: “Industrialize Africa” and “Improve the quality of life for the people of Africa” as its main intervention pillars. Nevertheless, the projects will also respond selectively to the other three priorities of the Bank (“Integrate Africa”, “Light up and Power Africa” and “Feed Africa”) by speeding up the attainment of objectives under the first two priorities. The Bank’s actions will facilitate the attainment of two objectives of the Ten-Year Strategy (2013-2022) - inclusive and green growth - and one objective of the regional integration strategy for North Africa. [Morocco: By the numbers (Analyse Africa, Financial Times)]
Enhancing African women’s participation in regional and global value chains: EOI for cassava and cotton sectors (pdf, AfDB)
Nigeria to lose crown as Africa’s largest economy (FT/BusinessDay)
Using the 366 rate, and feeding in the IMF’s assumptions for this year, Nigeria’s GDP will be $342bn, some $12bn behind South Africa’s. “It really will be very, very close [depending on the exchange rate used],” Mr Ashbourne says. “But Nigeria used to be hugely ahead of South Africa, so the fact that it’s down to being close is a pretty big shift.” Mr Robertson adds: “Unless oil goes up and therefore the exchange rate, I think it would be hard for [Nigeria] to argue they will be in first place this year”. He argues that South Africa has regained its mantle “partly because it did not interfere in the exchange rate,” when it was plummeting between 2011 and January 2016.
South Africa: profiled ANC National Policy Conference documentation
Economic Transformation (pdf). On improving integration into the African economy: All aspects of South Africa’s economic planning should include a regional focus - whether it means striking agreements with Mozambique on South Africa’s access to the country’s gas reserves, or with Lesotho on water reserves, or with Botswana, Zambia, Zimbabwe and the DRC on power, or whether it is about sourcing cheaper chicken feed from South Africa’s neighbours to improve the competitiveness of the country’s poultry industry, or increasing exports into the region of manufactured goods, food stuffs and services, including financial services.
International Relations (pdf): The advance of the agreed deeper economic integration initiatives ought to be ensured. The establishment of a SADC Free Trade Agreement in 2008 was meant to lead towards the establishment of a SADC Customs Union, which has not yet taken place. The ANC supports efforts to implement the FTA, as the basis for greater integration programmes. The regional body must be able to get the region ready for both a customs union, which is now two years behind its scheduled launch, and a common market. The SADC-East African Community and Common Market for Eastern and Southern Africa initiative should receive support from the ANC and the government. This initiative seeks to amalgamate the economies of the three regions with a combined market of 26 countries with a population of 625 million people and a total gross domestic product of $1.6 trillion. The ANC should contribute to public awareness about these developments. SADC Integration should be comprehensive and all-encompassing to include the formation of a SADC Parliament.
Zimbabwe: And now for Command Economy (Sunday Mail)
Government is introducing extensive economic reforms to replicate the massive production framework championed under Command Agriculture so that other key economic sectors like mining, infrastructure, industry and social services are also revitalised. It is envisaged that the success of Command Agriculture in engineering an instant turnaround in the agriculture sector and rejuvenating related sectors can be duplicated with similar success across the economy. The Sunday Mail has established that a team of experts from the Office of the President and Cabinet is drawing up a detailed work plan for the extensive economic recovery programme, with Cabinet ministers meeting regularly to make contributions. It is understood that the initiative involves galvanising the four Zim-Asset clusters; Food Security and Nutrition, Social Services and Poverty Eradication, Infrastructure and Utilities, and Value Addition and Beneficiation — into a command-driven system.
EAC states now act on overfishing to save stocks in Lake Victoria (The EastAfrican)
East Africa has 36 fish processing companies around Lake Victoria, but only 18 are operating – and below capacity. Data from Uganda’s Fisheries Department shows that the country’s fish fortunes have declined significantly over the past three decades.
The future is here: technology trends currently shaping the world of logistics (World Bank)
Emerging technologies are transforming global logistics. The evidence is everywhere: Logistics companies are exploring autonomous fleets and “lights-out” warehousing, and are looking to Big Data for transport management and predictive analytics. Crowd-sourcing start-ups are using a high-tech/asset-light business model. And e-brokerage platforms are providing real-time information from pickup to delivery. How will these emerging technologies and evolving business models be adapted for and used in developing countries? [The author: Karuna Ramakrishnan]
Trade Integration in Latin America and the Caribbean (IMF)
This cluster report takes stock of and explores opportunities for trade integration in Latin America and the Caribbean. Drawing on a set of 12 analytical studies that will be issued as working papers (see below), the report examines the determinants of trade, explores the potential to enhance LAC’s trade integration, and assesses the associated economic and social effects. To deepen understanding of the region’s policy options and trade strategies, the report also incorporates the views of LAC country authorities based on responses to a survey. This provides an opportunity to examine the alignment of recommendations based on the analytical findings with the region’s current trade policy priorities, with the caveat that the survey was conducted between late 2015 and mid-2016, prior to the most recent developments in the global trade landscape.
Companion IMF reports: Revisiting the link between trade, growth and inequality: lessons for Latin America and the Caribbean, The impact of trade agreements in Latin America using the Synthetic Control Method, Composition of trade in Latin America and the Caribbean, Launching export accelerations in Latin America and the World.
What is behind Latin America’s big efficiency gap? (World Bank)
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Leveling the playing field: A new atlas transforms access to legal data in Africa
A comprehensive legal framework is crucial for the proper governance of Africa’s mining sector. However, access to and knowledge of the evolving legislation of many African countries has not kept pace.
A number of African countries have worked to adopt or revise their mining codes, seeking comparative information and guidance on benchmark practices in the process, the void has become obvious: there is an absence of comparative data on mining laws and suitable templates for the African mining industry. These laws are already public documents, yet their accessibility is stalled largely due to a lack of institutional capacity as well as a shortage of ways to deliver that information and data.
In 2014 the World Bank Group, in partnership with the African Legal Support Facility and the African Union Commission, launched AMLA. The vision for AMLA is to catalyze discussion around the sustainable development of Africa’s mining sector through three avenues:
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The AMLA Platform, a free online one-stop resource for Africa's mining legal framework, including mining codes, regulations and related legislation;
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The AMLA Training Program, focused on strengthening the capacity of Africa’s next generation of lawyers; and
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The Guiding Template, an annotated document designed to assist countries in the preparation or revision of their mining laws.
To date, the AMLA project has trained 70 young African law students, 36 men and 34 women, from 18 countries. AMLA is available in English, French and Portuguese, and contains all 53 existing African mining codes in searchable format, as well as a comparison feature that allows users to compare the legislation provisions of 37 countries (and counting) across 98 commonly addressed topics in a mining law.
AMLA Guiding Template, a Tool for Decision Makers
Earlier this year a new knowledge product was launched, the AMLA Guiding Template, a free online reference tool that provides guidance on drafting or assessing a mining law based on Africa’s current realities. It covers over 200 topics, providing (i) a detailed description of the subject matter and (ii) a menu of legislation sample provisions with accompanying annotations to explain the context, issues and useful features of the presented language.
Response to AMLA and the Guiding Template has been overwhelmingly positive from all corners. A launch event was held at Mining Indaba, the world’s largest conference on mining investment in Africa. Senior government officials and Mining ministers from several African countries attended the event and hailed AMLA as a much needed initiative.
“I think this is the tool the African Continent has needed for quite some time,” said H.E. Lebohang Thotanyana, Lesotho’s Minister of Mines, who is currently leading the review process to revise Lesotho’s mining law.
The Minister stated that the process his team has just embarked upon will now be carried out in a more efficient and transparent manner thanks to the AMLA Platform and Guiding Template.
H.E. Fatima Haram Acyl, Commissioner for Trade and Industry with the African Union Commission said “Africa needs tools that respond to and are aligned with the principles of the Africa Mining Vision and aspirations of the Agenda 2063. The African Mining Legislation Atlas is […] is the only one of such tools […] that responds to the needs of having comprehensive mineral resources laws and regulatory frameworks.”
Others attending the launch event and speaking included Christopher Stevens, Partner at Werkmans LLC and head of LexAfrica, and Nicola Woodroffe, Legal Analyst with the Natural Resources Governance Institute (NRGI). Both expressed the many benefits AMLA offers law firms that represent both private and public sector clients.
A Future of African Ownership
During AMLA’s planning stages it was determined that ultimately it would be important and appropriate for an Africa-based entity to take over ownership of the project to ensure there was strong commitment to the co-generation of knowledge continues to occur grounded in the realities of Africa’s mining sector.
It is in this spirit that the World Bank began transferring the maintenance and regular updating of the AMLA platform and coordination of the Training Program to a secretariat at the African Legal Support Facility, which is hosted by the African Development Bank.
As this transition continues, the Bank, the African Legal Support Facility, and all partners will remain committed to expanding the capacity building of the project so that government officials, lawyers, and civil society receive training on how to use AMLA’s knowledge products.
Over the last three years the AMLA project has revealed opportunities to further increase access to information and cultivate the cross-continental expertise needed to positively shape the future management of Africa’s mining resources.
“AMLA is ultimately a project that epitomizes the Bank’s unique ability to leverage its knowledge-base, partnerships, convening power and legal creativity to facilitate our client’s ability to meet their development objectives. When we, simultaneously, empower governments, civil society, the private sector and other stakeholders to make better decisions and use a project to address short term challenges while investing in long term solutions, we do our best work. That is what AMLA does,” said Sandie Okoro, World Bank Group Senior Vice President and General Counsel.
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EAC states now act on overfishing to save stocks in Lake Victoria
Faced with dwindling fish stocks in Lake Victoria, East African states have moved to institute stringent measures to control fishing in the shared water body.
Uganda, which controls 45 per cent of Africa’s largest freshwater lake, has deployed the military to guard its territorial waters and keep foreigners away.
This is just one of the government’s efforts – including close-down seasons – to allow the fish to breed and grow, even as demand grows in the country and among its neighbours, Rwanda, South Sudan and the Democratic Republic of Congo.
Kenya is also considering control measures, which President Uhuru Kenyatta announced last September, upon assenting to the Fisheries Management and Development Act 2016.
Kenya controls only 6 per cent of Lake Victoria, with Tanzania holding the largest portion – 49 per cent. It also boasts the highest number of fishermen in the lake.
Uganda shares Lakes Albert and Edward with DRC on the western border. Lake Albert accounts about 15 per cent of the national fish landings. Government officials said that pressure for food and economic survival is pushing more people from the region and the neighbouring DRC into fishing, resulting in overfishing and capture of immature fish.
Diplomatic tensions
The measures Uganda has taken are a potential cause of diplomatic and security tensions, especially with the deployment of the Uganda People’s Defence Forces on the disputed Migingo island on the border with Kenya.
But officials say even inland water bodies such as Lake Kyoga in the northeastern region, Lake Albert in the west and other smaller lakes and rivers are also under pressure and need to be conserved.
“The decline in fisheries has led to a drop in incomes, and conflicts among fishing communities. Thirteen fish processing plants have been closed down, which calls for urgent intervention,” said Uganda’s Agriculture Minister Ssempijja Vincent Bamulangaki. “My ministry has contacted the Ministry of Internal Affairs to control the influx of non-citizens into our fishing areas.”
Anthony Taabu Munyaho, director at Uganda’s National Fisheries Resources Research Institute, said a six-month fishing ban would allow fish to mature.
“But that has to be done immediately, because our routine surveillance of fisheries resources has established that between 90 per cent and 95 per cent of the Nile perch in Lake Victoria are less than 50cm long,” he said.
Last June, the EAC launched the Lake Victoria Fisheries Management Plan III (FMP III) 2016-2020 in Arusha to facilitate the recovery of the Nile perch, and ensure that member states sustainably and equitably use the lake.
Commercially viable
Countries are expected to harmonise their positions on issues affecting fisheries and its sustainability. For instance, all countries agree that Nile perch, which is the most commercially viable, should not be harvested until it is 50cm long, or weighing 2kg, regardless of its sources.
Fish processors across the countries have enforced this requirement by rejecting undersize and underweight fish. That, however, has not stopped the undersize fishing, as the fish find markets elsewhere, especially in DRC. Often, the fish is smoked and smuggled across in trucks.
According to scientists, the Nile Perch has the capacity to produce a lot of eggs, so populations can be sustained well if they increase in body weight. The heavier the fish, the more eggs it produces. A 50kg Nile perch produces 7 million eggs at a go, and it is capable of going through the cycle at least thrice a year.
“Six months is a short time to fix the economy and, if fisheries offer the opportunity, then we must get the industry up and running to gain foreign exchange,” said the Deputy Secretary to the Treasury.
The other recommended measures are issuance of fishing vessel identification number plates, registration of all boats, identification and gazettement of fish breeding areas, review of fisheries policies and amendment of the Fish Act.
In addition, Uganda is providing fingerlings for tilapia and mirror carp and fish feed to farmers. Five private companies, Ugachic, Ferdsult, IG Invest, Sabraa and Sons and Jordar Services, have been licensed to process the fish feed.
Declining fish fortunes
East Africa has 36 fish processing companies around Lake Victoria, but only 18 are operating – and below capacity.
Data from Uganda’s Fisheries Department shows that the country’s fish fortunes have declined significantly over the past three decades.
In 2015, the country harvested 461,000 tonnes of fish, with about 24 per cent (111,000) coming from aquaculture. Much of the fish is exported to Rwanda, Burundi, DRC and South Sudan.
Exports to the European, US and other markets in 2015 stood at only 17,600 tonnes, valued at $135 million – a drop from 25,000 tonnes 10 years earlier. Uganda exports fish to the EU, Australia, the Middle East; the US, Egypt and Southeast Asia.
Now, an enforcement committee comprising people from the Fisheries Department, Uganda Revenue Authority, fish processors, police and UPDF is being deployed to control fishing.
In Kenya, President Uhuru Kenyatta last year said he would use the new fisheries law to protect marine resources. A committee headed by Chief of the Kenya Defence Forces was to enforce control of activities on the country’s waters.
“With this Act in place, we are able to protect our marine resources from exploitation by other nationals at the expense of our people,” said the president. “East Africa is not in competition with itself but with the rest of the world.”
The Act allows for the creation of an interagency team to monitor and control marine activities, said Robert Wanyama, officer in charge of the Kenya Fisheries Service in Kisumu.
Cage farming
Research by the Kenya Marine and Fisheries Research Institute (KMFRI) shows that Lake Victoria’s fish stocks on the Kenyan side have declined to 2,500 tonnes annually, from 5,000 tonnes, due to overfishing, illegal fishing gear, fishing in breeding grounds, the water hyacinth and pollution.
Dr Christopher Aura, KMFRI director in Kisumu, said to bridge the gap, fishermen are turning to cage farming.
“Cage farming, if done properly, will supplement fish supplies and reduce the pressure on the wild stocks,” he said.
Tanzania is has also instituted measures to curb fishing in the lake. Deputy Minister for Agriculture, Livestock and Fisheries William ole Nasha said the government has embarked on surveillance to ensure the right fishing gear.
Two years ago, Tanzania sought to impose a six-month annual fishing ban in Lake Victoria to raise Nile perch stocks, a move that would be a blow to about 200,000 fishermen. But Dar had to work in concert with Uganda and Kenya to effect the ban.
And now, Uganda has a joint force in place to curb trade in illegal, unregulated and unrecorded immature fish, which is estimated to cause economic losses of up to $430 million annually. The fish, normally smoked, have ready markets in Burundi DRC, Kenya, Rwanda and South Sudan. Even fish skeletons (mgogo wazi) find their way to these markets.
Additional reporting by Emmanuel Onyango and Angela Oketch.
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Policy options for Nigeria’s recovery, growth
Nigeria’s economy thought leaders bared the hard facts to rescue the economy from recession. Below are the key contents of their presentations at the Vanguard Economic Discourse, held in Lagos on Friday, 10 March 2017.
New economic plan needs review before implementation – Soludo
A former Governor of the Central Bank of Nigeria, Professor Chukwuma Charles Soludo, and the Keynote Speaker at the Discourse, led the thought leadership campaign. He called for a review of the Federal Government’s Economic Recovery and Growth Plan, ERGP, barely three days after it was announced. The details of his erudite speech are published here. So we present just the highlights which set the ball rolling as follows:
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In domestic currency terms, the economy is in a recession, but that in US dollar terms, the economy has suffered massive compression.
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The last PDP government was blaming “external shocks” while the current APC government blames not only the fall in oil price/output but also the past PDP government. No one admits of policy errors, and that is the problem.
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The current government is responding exactly like some did in the past: treating oil price/quantity fall as temporary while treating a rise as permanent/normal. It is merely embarking on short term demand management – just as “coping strategy” while waiting for oil price/quantity to return to “normal” and we get back to business as usual.
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The Plan (Economic Recovery and Growth Plan, ERGP, rolled out by the federal government last week) envisages to continue the practice of the last government of borrowing to finance recurrent expenditure. The deficit will continue to exceed the capital budget, meaning that every penny of capital expenditure will continue to be borrowed as done by the last government. So, what has changed?
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Every Plan however is a life document. Perhaps before it goes into full implementation, there is a need for Extended ERGP or ERGP Plus Plus!
Eight blind spots in national development – Mailafia
A former Deputy Governor, Central Bank of Nigeria, Dr. Obadiah Mailafia spoke on the blind spots.
“I don’t think the objective of the Plan [ERGP] is structural diversification of the economy. It was never really part of the plan. What they have is a fire fighting framework to get the country out of recession. So I don’t think we can accuse them for something that they really did not set out to do.
“But I will agree with you that they ought to have made it part of the Plan. But they have not. I will like to point out a few blind spots, that perhaps in a lot of our popular discussions and economy we hardly ever make mention to.
Broad national consensus: First, the absence of a national consensus. We have become a much divided country, more divided than ever. If you look at all the advanced emerging economy, the first thing that they had to get right was a broad national consensus with regard to national development. That was the case with in South Korea. That was the case in Indonesia; it was the same case in Singapore among others. We need to get that kind of broad national consensus if this country is to move forward.
Security and Rule of law: Secondly, I don’t care really much among economist especially, on the key issue of human security and crime. What is the economic cost of that to this country? It is very huge. As you know the flight to Abuja has been diverted now to Kaduna. Many of the international airlines say they are not going to Kaduna and this is mainly because of the fear and insecurity. If we are to become an industrial civilized nation we must get rid of this culture of nihilistic violence, rampant and unpredictable lawlessness. This must be stopped and of course added to that is the rule of law, respect to property rights and the rest of it.
Regional and Urban planning: Another blind spot if I may is the regional and urban planning. We have virtually forgotten that. Of course Lagos has made some huge improvement in terms of its mega city project, but many of our cities and towns no longer get involved in anything called regional and urban planning and yet this is very crucial to manage the massive increase in population, rapid rural-urban migration and the rest of them.
Youth development: I have read the EGRP and the reference to youth is very very minimal, yet they are the majority. The young people of this country are the vast majority and yet they don’t really have a voice. If we don’t plan for them, if we don’t build opportunities for them, definitely we will be sitting on a time bomb. And then linked to that of course is chaos. Many of these young people, many of them are graduates, with all respect, some of them barely literate, are in the job market and many are unemployable. They don’t have the requisite skills.
Women empowerment: And of course if I may also add the gender dimension of development. Women are slightly more than men in population. Ours is still a society that is very bias against women and I will say particularly the northern part of the country. We need to emancipate our women, empower them and re-engineer growth by integrating women into the development process.
Social Policy: And my last two points are social policy. The plan talks about inclusive development. I welcomed that. It is very important. My worry is that, like typical of many things in this country, it is done without clarity of policy, clarity of purpose. The way they did it in Brazil, they have to do very rigorous analysis to find out the geography and social strata of poverty in Brazil. It was much targeted, very rigorously administered and with zero tolerance to corrupt and rent-seeking behaviour in the process.
Industrialisation: And also the issue of industrialization, technology and innovation. Some of us are brought up in the western development classical paradigm but when it comes to Africa you never mention industrialization and you never mention technology. But I dare say we must industrialize or perish.
Civil Service: The government, the quality of government. Nobody talks about bureaucracy. I know that the Keynote speaker mentioned it in passing. But you see no matter how noble, no matter how visionary your policies are as a politician; you need the civil servants to implement them. And if they are not competent or if they are lazy or unwilling, they will simply sit there. That is really the big elephant in the room, the civil servants. The days where we have a high breed, well respected civil service, the days are long gone. We need to go back to that.”
More visioning needed in economic planning – Aremu
Vice President, Nigeria Labour Congress Frontline labour leader, Comrade Issa Aremu, said the following:
“I want to say that one hard fact on how to rescue Nigeria out of recession is a hard discussion.
“Maybe we need to be talking about not just economy but political economy. Why are we going up and down looking for hard facts when we have a good number of them written in the constitution of the country?
“With all its limitations, the 1999 constitution is clear about the direction and thrust of this Republic. Chapter two, Section 16, states that government will harness national resources to promote national prosperity. Government will ensure planned and balanced development and that is the key word. Government will promote the welfare of the people. I think we should relate the new growth plan to that. Politicians take the oath of office based on the constitution.
“I have always been saying that maybe we should not waste time to harass our politicians for non-performance, but we should charge them for what they refused to do to keep to the spirit and content of the constitution.
“One of the things we appreciate as labour about the Plan or growth is that there is an attempt to return to national planning because the bane of our development has been the absence of a road map. This government has done well in terms of security, anti-corruption to a large extent. But on the issue of the economy, we have not seen the real road map. But now we have plan and I am excited that we have a full blown ministry in charge of planning. The budget and planning are now put together.
“You cannot drive the agenda of the constitution of 180 million Nigerians based on lack of agenda for planning. But we must also do this within the context of a vision. There is no vision. A nation without a vision will definitely be operating blindly.
“What I am saying is that we need some visioning; we need to improve on this document to be within a broad contest with the vision to know where we are going within the next 10 years and thereabout.
“The second point I want to talk about is that we hear a lot about diversification, but I have not really seen the commitment to real practical diversification. As a matter of fact, this new Plan is still operating within the oil and gas paradigm. It is talking about 2.2 million barrels per day which I think is not really ambitious for the Federal Republic of Nigeria.
“I graduated in the 80s and we said Nigeria was the highest oil producer in Africa, but we have been beaten by Angola, and others are coming in. Saudi Arabia is talking about close to 6 million barrels per day. I think people like Nike Akande would like to know what do we want to achieve in terms of manufacturing value added and those indicators are not there.
“On job creation, I think we should take Soludo’s speech seriously. I am more optimistic that they will deliver and that is why we are here. I operate from the point of view that things can be done better. There are 10 critical sectors that I think we should look into.
“I think the one that concerns me is that we should look at textile and it is one quick win that we can achieve. It is capital intensive and it can absorb a lot of labour.
“Our current budget is N7.3 trillion. The question is, what do we use this money for? Is it for made in China or Nigerian goods? I think we can use this money to turn the economy around. I am happy that a factory in Umuahia is now producing booths for soldiers and that alone has provided over 3000 jobs for Nigerians. Our textile industry can produce uniforms for police, customs and children rather than going to China. Budget and public spending can be brought in to encourage local content.
“Yes we must fix exchange rate. I think the exchange rate policy must drive production, must be seen to be stable and should be such that will promote public welfare. The recent one we have on Naira was done by speculators and in the process we are suffering from it. CBN has done few things and I think they could do more. There is a lot of distortions that they must address. You see CBN-anchored borrowing for rice production. Today, we are more or less building food security in terms of rice production.
“We can target resources for productive sector of the economy. For the 41 items banned, I think it should be more than that, especially, where we have productive advantage at home. Why should we import textile materials from China? I think we should encourage Nigerian textile production and create jobs for the masses. That is the way to go.”
Present policies are anti-investment – Yusuf
The Director General of the Lagos Chamber of Commerce and Industry (LCCI), Mr. Muda Yusuf, listed the challenges.
“You know that the economy has challenges, recession and all of that, and to get the economy out of the recession, we need to bring investment on the table. There are a number of investments: we have domestic investments, we have foreign direct investments, and we have foreign portfolio investments; those are the key components of investments. So, if the private sector has to be part of the rescue mission, we need to see how we can activate the private sector to move along this direction.
“But the key driver, just as the Keynote speaker said, is confidence in the economy. If there is no confidence, there is no way to get these investments to come into the economy. And the policy environment is a major driver of confidence. I will just briefly highlight some of the confidence effects of policy.
“The Keynote speaker dwelt extensively on the significance of the exchange rate regime. That for me is very central because no economy can live in isolation of other economies. That is why getting it right with the foreign exchange policy is very critical and very central.
“Now, the foreign exchange policy regimes that we have experienced in the last two years or thereabout have had a number of effects.
“First, critical scarcity of foreign exchange for the manufacturing and other critical sectors of the economy has been affecting the capacity of a lot of investors to move on with their investments.
“Then there has been very serious transparency problem in the foreign exchange market across the entire chains. All manner of under-hands dealing have been taking place in the foreign exchange market across the entire chains. That has been a major problem in the market. Investors have suffered significantly, either dividends, profits, revenue; the airlines, for instances, are good example. There have been major disincentives to inflow of foreign direct investments either from exporters, from foreign portfolio investors. People have suffered very serious losses especially from transition of the former exchange rate regime to the current exchange policy particularly transactions we referred to as matured obligations.
“There is a huge incentive for round-tripping. If there is any business now that is very lucrative, it is round-tripping of foreign exchange because the gains are so huge that it will take an angel to resist round-tripping.
“Of course, we have the exclusion of 41 items. I agree with the Keynote speaker that we need to fix the liquidity issue in the foreign exchange market and the way to do that is to allow the market to play a much bigger role in the foreign exchange market. We should move away from allocation of dollars, pieces of intervention, and so on; the economy doesn’t work that way.
“So we need to give more room for the market to play the rule in the foreign exchange market. Then there should be full liberalisation of foreign exchange inflows into the economy.
“Right now, there are too many restrictions on investors who want to bring money into the economy. It’s an irony; you have a supply crisis, you have people who want to bring in money into the economy to support you on the supply side, but you are creating problem for them. I mean one can’t really understand the rationale behind that kind of policy. So, as a rescue options, I think these are things that we need to tackle concerning the forex.
“Also, we have monetary policy effects on business confidence. The monetary policy regime has not been supportive of efforts to rescue the economy.
“So, one thing is to talk about wanting to diversify the economy, and yet the policies are moving in a complete opposite direction.
“Also, we need to look at our trade policy. No economy exits in isolation of other economies. It is good to protect but we need to be strategic in the way we protect and in the way we make our trade policy choices. Many citizens today are complaining of high cost; if there is any major cause of poverty today, it is inflation and the key drivers of inflation, first, the foreign exchange challenge; second, the trade policy because trade policy determines what comes in and what doesn’t come in. You have cases where the domestic capacity is so weak and yet we slammed a trade policy that pose a lot of restrictions. This has been driving up cost and affecting income and poverty up to every person on the street particularly those on the bottom of the pyramid. The greatest challenge of this administration is the high cost of goods and services and you need the right kind of trade policy frame work to address that.”
Ideological differences stall clear direction – Rewane
Managing Director, Financial Derivatives Company, Bismarck Rewane, reeled out several stumbling blocks that need to be cleared for development to happen.
“So, hard facts to rescue the Nigerian economy! Where is the Nigerian economy today? First and foremost the Nigerian economy is on the site of an accident. You can stabilise the guy, put him in an ambulance, put him on life support, or you can discuss how you are going to treat him when you get to the hospital. We are not at the hospital, we are at the site of an accident and we need to rescue the patient. The Economic patient is Nigeria and what are the symptoms of this patient.
“First the economy is under performing. It is projected to grow at one per cent this year, and targeted to grow at 7 per cent in 2020. This year, the nine French speaking West African countries are estimated to grow at 7 per cent. This year, Ivory Coast, post-conflict economy, is projected to grow at 8 per cent. This year, Nigeria’s labour productivity growth is minus 4%. This year the magnitude and quantity of the stimulus package in Nigeria is 20 per cent less in dollar terms than what it was in 2016. In nominal Naira terms there seems to be an increase but in dollar terms, Professor Soludo referred to it, actually contracted.
“Now coming back to the issue of the Nigerian economy, the fact is that if you do not reform the foreign exchange market and you continue to tinker with it, nothing will happen. This economy will remain in the doldrums forever.
“Now I say this again with all sense of humility, subsidies are reverse taxes. You either have a government-led, export-led or consumer-led strategy for growth and that is not development, growth is not economic.
“Now for you to have that, you need to have government spend on development investment, not government spending on wasted resources. Now the exchange rate and petroleum subsidy are the biggest drain on government resources.
“When you talk of taxes, Dr. Fayemi talks about the tax base, one of the ways to address the tax base is to eliminate or reduce subsidy so that the government will have more to spend. We talk about sale of assets; government should use the proceeds on impactful investment. The Economic Growth and Recovery Plan actually addresses some of these issues but the time frame is short, because we have a short frame which is recovering from recession, then we have the medium term frame and then the long term plan.
“But more than anything else, the structural subsidies in the economy comes to about $20 billion to $25 billion, that is significant. We have a price discriminating monopoly which thrives on an imperfect market, creating barriers to entry, which people will call round-tripping, we call it financial osmosis because you are moving in different directions buying in one market selling in another using influence peddling and connections. It’s like a fibroid in a woman, which is taking all the resources from the baby in the womb and leading to a still birth. That is what this misaligned exchange rate, the dysfunctional relationship, which we have, is doing to this economy. And we continue to run around in circles.
“But fundamentally there are ideological differences and this country is divided into three clear ideological schools of thought.
“One, those who believe in the patronising and anachronistic system of the past, who hold on closely to it. We have those who are reform oriented and market driven, and there are those who want a mixed economy. If we don’t resolve this ideological differences and come up with facts which allows a clear direction, then nothing will happen.
Also, because we have the interest rate, the exchange rate, all of that is monetary policy, monetary policy is for short term, structural or fiscal policy is for long term, but there must be consistency between the long term and the short term. If that is not addressed and we have these vested interests who are benefiting from the exchange rate system…. So you must remove what is called structurally induced corruption. Corruption is not about missing money, it is about taking advantage of position to earn rent and selling patronage.
“We have always assumed the oil boom will always be here, $100 per barrel will be here, and there are those who have positioned themselves.
“That vicious cycle, that political cycle, where you scramble for power, squabble for spoils of office, and use the spoils to fight for the next election. That is the cause of the economic crises we have in Nigeria. So if we do not fix the electoral system, and I am not talking about verification of votes, I am talking about electronic voting, this economy will go nowhere.”
We need massive economic, polity restructuring – Otti
Dr. Alex Otti, a former Managing Director/CEO, Diamond Bank Plc, one of the panellists, stated:
“There are things you cannot control; if you ban 41 items somehow they will still find their way to come in. If you mention a 100 items, they will still find a way to come in. So when you talk about control and speculators, the speculator will only operate when you create incentive for them to operate. So when you have multiple foreign exchange rates people will go and buy things in foreign currency and find a way to bring them back. Therefore you must do things differently so that they don’t operate.
“Of course government spending is very important. Stimulus package have been talked about. But I think the major point that I want to make is that you can get out of recession if there is a positive GDP growth tomorrow and yet nothing has changed. Oil price for instance, could for some reason recover and we begin to see another $100 per barrel of oil tomorrow. What will happen, we will be out of recession but whatever that has been holding us down will continue to hold us down.
I thank Professor Soludo for talking about some of the things that I thought we should be addressing. One of them is the structure of the Nigerian economy. But, we have come into this defeat, I call it the big defeat, where we like to eulogise ourselves, we are a big oil economy, we rebase our economy and GDP in 2014 and our GDP became $520 billion and there is nothing wrong with that.
“We should rebase our GDP every five years; we have not done that in the last fifteen years or so. It was a good exercise but we started celebrating too early, we were the biggest economy in Africa and 26th in the World.
“That was one part of the story but the other part of the story that we were not told is that what is important is not absolute GDP but GDP per capita. So we have 183 million mouths to feed, when you divide your $520 billion as at 2015 into about 180 million people, what you get is about $2,800 per head.
“And when you now begin to look at yourself vis-a-vis other countries, at least IMF did that. As at that time, we were somewhere about 145th or 146th out of the 258 countries that were rated. As at the end of 2016, we had dropped to 188th out of the 258 countries and I think that is important. It is not the absolute number. I do not think that there is anything wrong with our population. Because some people may feel the best way to do it is to shift people out of Nigeria and lets share the dollar. It does not work that way.
“When you look at the oil economy that we claim we are, you find out that oil contributes just about 7.15 percent of the GDP.
“Meanwhile, it also contributes over 90 percent of our foreign exchange earnings that means something is wrong. The part of the economy that contributes about 93 or 95 percent contribute less than 10 per cent of our foreign exchange earnings and that is where I come to the issue of structure.
“Our current situation has presented an opportunity for us to re-examine ourselves and begin to think of what we can do differently and I think one thing we need to do differently is to look at the structure of this economy.
“So as we are re-structuring the economy, we should also be re-structuring the policy. I do not agree that we need the kind of presidential system of government that we are currently running today, we cannot afford it.
“So, I think it is time for us to sit down and ask ourselves questions. My support for re-structuring is not to divide Nigeria. My support for re-structuring is for us to say what we can afford and what we cannot afford.
“There are still a whole lot of things we can do and is not just the political structure. I also agree with Isa Aremu completely. Where we are today is because we refused to plan and it is not enough for somebody to say what we are experiencing now happened today but several decades ago.
“It is not too late; we can sit down and plan this economy. Yes, the Economic Recovery and Growth Plan is a good start but we need a more robust economic plan. When you fail to plan, you plan to fail.”
We’re linking planning to budget – Fayemi
In defence of the Federal Government’s positions on all the issues raised, the Minister of Solid Mineral Development, Dr. Kayode Fayemi, had this to say:
“[W]hat is important for me is to say two things – first that the bulk of what [Soludo] has said is actually what the ERGP seeks to do.
“If you look at all the issues he has raised on stabilizing the macro-economic environment, on achieving energy sufficiency, foreign exchange predictability, driving industrialization – these are all points that we have in the Economic Recovery and Growth Plan.
“And the Plan also does not pretend that there was nothing beforehand. As a matter of fact, it refers to a range of other Plans. In fact, if you look at the sectoral issues, these are products of the roadmaps of the different areas – agriculture, solid minerals, infrastructure, it refers to the industrial revolution plan, integrated infrastructure plan, it even refers to NEEDS (National Economic Empowerment and Development Strategy) in one or two places.
“So, this is not a plan that has just come out of the blues; it’s something that speaks to some of all the good things that we can identify and that Nigerians already agree with around how do we take this economy out of recession, but much more fundamentally, how do we restructure the economy for sustainable growth rather than just consumption-driven growth. And I think these are things that the plan seeks to achieve.
“You refer to improving on implementation, it’s simply because these are the banes of previous plans. It’s not lack of plans that we suffer from, it’s lack of implementation of the previous plans that has gotten us to where we are now. Yes I agree that we haven’t had long-term prospective planning and this is what this government is attempting to do, particularly in linking planning to budget because that has been disconnected for too long in our previous occasions.
“Over the last year, let us look at some specific areas of restructuring that we are either taking for granted or that we don’t pay enough attention to, like the Anchor Borrowers Programme in the Agric sector which is leading us to self-sufficiency in some areas, particularly rice and other staple produce. What this government has done, for example, with cash calls in the Oil and Gas sector is not often talked about and we need to be much more open than that because this a problem that this country has faced over the last two decades – refusal to settle cash calls to companies and that in turn affects productive capacity in the Oil and Gas sector.
“And no matter how much we diversify, which is an agenda of this government, we still need oil revenue to diversify because the money that we are going to use for building the infrastructure, for improving exploration in the solid mineral sector, for supporting the farmers will come from somewhere. And one of the main sources of our revenue remains oil, so I don’t think we should make a light commentary of it that we are not doing enough on diversification because we are still focusing on improving on oil and gas production, we will continue to improve on it. And talking about diversification is not tantamount to talking about ignoring oil and gas; it is about deepening whatever benefits that come from oil and gas in other sectors of the economy. That for me is one key point that we can make.
“There is no doubt Nigeria is underperforming and that we need fiscal stimulus. And Soludo said something about what we have in the Plan not being enough, almost peanuts as he referred to it in terms of the stimulus, and I do agree with him. But that same Plan talks about two things which we don’t also often acknowledge. One is the reference to some assets sales; the second is the widening of the tax base because our tax base is one of the lowest on the continent of Africa, not to even talk about the world. And there are people who have the capacity to actually meet their own obligations to the State but refuse to do so because our tax system has given them the freedom to continue to shy, if you like, from meeting their obligation to the Nigerian State.
“I think on foreign exchange, that we have been hit by a double whammy; oil prices have gone significantly down, militancy has affected what is happening to oil production but this government has also taken significant steps to improve on the situation.
“Today, the figure that I have is two million barrels; the plan talks about 2.5 million barrels by 2020. I believe that is realistic, we are even going beyond that and given the current arrangement with States and the host communities, militancy is also going to go down and production will increase. And if you look at the big wins that the Minister in-charge is also pursuing, I have no doubt that these resources, by way of foreign exchange, will come. The challenge is what we do when this money comes back. Do we use it for consumption or do we use it for investment? That is a challenge that all Nigerians must confront because we all like this goody-goody things that we don’t want to get rid of, even though we really don’t need them in order to live a decent life. So, it’s a question back to values, what are our values and what is the consensus that we have as Nigerians in order to move this system forward? Unless we address these things, I don’t see how we can ever get to the point where we ignore the good because we are searching for the perfect; I think we should continue to work on the good in order to get to the perfect.”
Read the full article on the Vanguard website.
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Trade ministers pledge to harness Commonwealth advantage at historic meeting
Commonwealth trade and investment ministers concluded their two-day meeting in London on 10 March 2017 with a commitment to make full use of the ‘Commonwealth advantage’ to boost trade within the 52-member bloc.
Ministers and representatives from more than 35 countries attended the meeting, jointly convened by the Commonwealth Secretariat and the Commonwealth Enterprise and Investment Council.
In her address to ministers, Commonwealth Secretary-General Patricia Scotland said: “On trade, our family has never been more needed that it is today. We all know that we’ve been living in troubled times and together we will have to look very carefully at what advantages there are within our family. Intra-Commonwealth trade has never been more important.
“There is a 19 per cent trade advantage within the Commonwealth. We must see how the global trade landscape can be changed in favour of that advantage and the particular factors that drive and differentiate intra-Commonwealth trade and investment be improved.”
At the meeting, ministers focused on opportunities for the Commonwealth to strengthen collaboration by promoting intra-Commonwealth trade and investment flows. They identified key challenges hindering trade competitiveness and discussed how to overcome them through mutual support.
Ministers underscored the importance of building a global economy that benefits all of the Commonwealth’s 2.4 billion citizens, noting that developing countries need an enabling global trading environment to achieve the Sustainable Development Goals.
Against a backdrop of global economic uncertainty and a slowdown in worldwide growth, the Commonwealth is currently assisting more than 30 countries on their effective integration into the global trading system. It is building their capacity to take advantage of opportunities, including improving trade competitiveness.
Ministers also noted the important role of the private sector in facilitating trade and investment. They welcomed Commonwealth initiatives to forge business to business links and pledged to continue to engage with the private sector in a pan-Commonwealth setting.
Lord Marland, Chairman, Commonwealth Enterprise and Investment Council said, “there is an opportunity for the Commonwealth to demonstrate global leadership on free and fair trade. Businesses want to see stability, transparency, predictability and the rule of law and the Commonwealth can work together to improve the ease of doing business in all member countries. This will allow companies, particularly Small and Medium Enterprises, to have the confidence to trade and invest across the Commonwealth. Creating a conducive business environment and helping businesses find a route to market is core to the enabling role of our organisation. It was essential to have the private sector fully engaged in the Trade Ministers Meeting.”
Discussions took place on the likely impact of the UK’s withdrawal from the European Union, which could disrupt market access into the UK and Europe.
The Secretary-General stressed that “no country should be left behind” in the post-Brexit trade landscape. Ministers acknowledged that Brexit provides opportunities for broader cooperation on trade and investment between Commonwealth countries and committed to examining specific recommendations for practical initiatives that can be recommended to the next Commonwealth Heads of Government meeting in 2018.
Towards a free trading future
Speech by Liam Fox at the first Commonwealth trade ministers’ meeting
I would like to begin by thanking the Commonwealth Secretariat and the Commonwealth Enterprise and Investment Council, chaired by Lord Marland, for their efforts in arranging this event, which I am sure will be a great success.
It comes at a time where we, in the UK, are at a truly historic moment. Following our referendum on EU membership, and the decision of the British people to forge a different future, our Prime Minister has set out a vision for a truly ‘Global Britain’.
This country has long been associated with both the concept and practice of free-trade. A small island perched on the edge of the European continent became a leader of world trade. For over a century the terms ‘Britain’ and ‘free trade’ were virtually synonymous. It was from here that those such as Adam Smith set out the intellectual case for free and open commerce, arguments that are just as valid today as they were in 1776 when he published The Wealth of Nations.
Those of us, represented here today, have, through our shared history and experience, witnessed the transformation that trade can bring and have a duty to ensure that the benefits that we enjoy today are made available to future generations.
There are 52 member states in the Commonwealth, boasting a combined population of over 2.4 billion people. Moreover, 1 billion of those Commonwealth citizens are under the age of 25, a vast pool of talent and resources that can help transform the world, if we ensure they have access to future trade and investment opportunities.
The case for free trade
It is easy for us to take for granted the system that created the modern global economy and set the conditions for globalisation itself. Yet, many of our citizens question the benefits of these free trading arrangements so we must constantly remind them of the advantages that it brings.
So much of what has become our accepted way of life are the products of a free trading system – every piece of clothing you wear, and every piece of technology you use, is the product of a supply chain that stretches across the world.
Citizens of all our countries will, perhaps unknowingly, be using products that originate from across the Commonwealth, their components and raw materials drawn together by the global economy into a finished item.
Every individual, too, is an actor in free trade. When a family from Canada holidays in Barbados, they are engaging in international trade.
When an Indian student in Australia withdraws money from their home bank account, they are part of the global economy.
When someone in South Africa uses their mobile phone, they are able to do so because of technology created here in the UK.
The explosion of research, innovation and manufacturing across the world has done away with the constraints of geography.
And while the world has shrunk, our ambitions have grown.
Liberation from poverty
Yet free trade is about more than the simple provision of goods and services – it has also been the means by which we have liberated millions of our fellow human beings from poverty.
According to the World Bank, in the 3 decades between 1981 and 2010, we witnessed the greatest single decrease in material human deprivation in all of history. At a time when the population of the developing world has increased by almost 60%, the number of those in extreme poverty has dropped from around 50% to around 20% – still too many, but a phenomenal achievement in which we should take great pride.
I have long believed that free trade is one of the most powerful tools we have to help those in greatest need around the world. As we establish our own position after we leave the European Union, Britain will proudly carry the standard of free and open trade as a badge of honour. As we, one of the world’s largest economies, take our independent seat at the World Trade Organisation we will seek to achieve continuity in our trade and investment relationships with developing countries.
The UK remains committed to pursuing free trade. That includes seeking to achieve continuity in our trade and investment relationships with third world countries, including those covered by EU FTAs or other EU preferential arrangements. Yet we understand that trade can never be an isolated policy objective. It is an unavoidable truth that prosperity, including an open and free trading environment, social stability, political stability and security are part of the same continuum.
By that I mean that you cannot disrupt one element without disrupting the whole.
That is why we recognise that trade and development form a fundamental and synergistic partnership. We know that free trade by itself will not be the only empowering and liberating tool that we will need to build that secure future. While trade does indeed reduce poverty, it does so most effectively with a number of pre-existing conditions. These include – high levels of education, developed financial sectors and, hugely importantly, sound governance and minimal corruption. The good news is that there are many more developing countries that satisfy the tests.
According to the IMF, the Commonwealth countries whose imports of goods and services are likely to grow fastest over the next 5 years are Mozambique, Bangladesh, India, Brunei, Ghana and Sierra Leone. Many more countries represented here today are also experiencing rapid economic development.
This represents not only a great opportunity for their citizens to share in the proceeds of global prosperity, but it represents tremendous opportunities to importers and exporters from across the whole Commonwealth, a genuinely win-win situation.
It is not the concept of globalisation, nor the liberalisation of free-trade, that should be the target of those who rightly want to see the elimination of the scourge of global poverty but the elimination of corruption and the improvement in governance in many developing countries. But at the same time we need to ensure that we have the tools in place to help and protect those who do not materially benefit from the global age.
The threat of protectionism
It is worth reminding ourselves of this positive economic narrative and the improvement of the human condition that it has brought about because in the world around us there is a rising chorus of protectionism which threatens to drown out the case for a free and open global trading system.
New barriers, often invisible, are emerging around the global economy providing new impediments to the open commerce that is the key to global prosperity.
What is worse, many of these impediments are being introduced by G7 and G20 countries, the very nations who have prospered most from free-trade itself.
Research by the OECD has shown that protectionist instincts have grown since the financial crisis of 2008. By 2010 G7 and G20 countries were estimated to be operating some 300 non-tariff barriers to trade – by 2015 this had mushroomed to over 1200.
Protectionism can be a seductive but a false friend. I have described it as the class A drug of the trading world – it can make you feel good at first but you will pay a terrible price in the long term.
It is economically destructive, preventing us from reallocating global resources effectively. It is also socially regressive because those on lower incomes spend a higher proportion of their money on goods than services so tariffs and barriers will hurt the poor more. And we will all pay the price if those denied the opportunity of global prosperity turn their backs on the partnerships and cooperation that underpin global security. We all must ensure that those who have most benefited from open and free trade do not pull up the drawbridge behind them and deny the same benefits to others.
The strength of the Commonwealth
And here lies the strength of the Commonwealth. Our 52 member states include some of the largest and richest countries on earth, as well as some of the smallest and least developed. While our diversities might make a single trading model difficult, if we work together to communicate the benefits of free trade, while addressing the challenges of globalisation, then we have the opportunity to build a global economy that works for everyone.
This Commonwealth of Nations has the opportunity to lead the defence of free trade, working together to shape new policies and approaches, showing the world a route to prosperity that lies through partnership, not protectionism.
Our trade ministers’ meeting is the first step in realising this vision. Our joint discussions and bilateral meetings will be a foundation upon which to build. Every agreement that we reach and every barrier that can subsequently be removed will materially improve the lives of our peoples across the globe.
Indeed the Secretariat has also organised a summit next month, designed to help developing Commonwealth nations benefit from India’s global value chains, tapping into the diversification of their export markets and improvements to their supply chain capacity.
There is not only an economic but a moral dimension to our mission. Liberation from poverty and the sharing of prosperity are both achieved by the same policy of free and open trade in a liberal, rules-based system.
At a time when there are renewed threats to the achievements of recent years, we – some of the world’s oldest and most resilient friendships and partnerships – can provide the leadership that will guarantee the opportunities that the next generation deserve to have and with them our own prosperity and security.
We have seen, in our own time, what can be achieved by a free and open global economy with the support of our international partners.
Our diversity is our strength – we have much to learn from one another, and a vast wealth of experience, knowledge and talent to draw upon. We must leave no stone unturned and no challenge avoided on our quest to ensure that those who come after us are given every opportunity that we can leave to them, a world rich in prosperity, security and opportunity.
I cannot conceive that there is a more worthy challenge for us to face and conquer together.
Related News
SADC Ministerial Task Force on Regional Economic Integration endorses the SADC Industrialisation Action Plan
The 18th Meeting of the SADC Ministerial Task Force on Regional Economic Integration was held in Ezulwini, Swaziland on the 11 March, 2017.
The meeting considered the Costed Action Plan and Proposed institutional arrangements for implementation of the SADC Industrialization Strategy and Roadmap. The meeting also reviewed the status of implementation of the Tripartite Free Trade Area Agreement and preparatory work on the commencement of the Continental Free Trade Area negotiations.
Honourable Martin Dlamini Minister for Finance of the Kingdom of Swaziland officially opened the meeting on behalf of the Prime Minster of the Kingdom of Swaziland, His Excellency Dr. Barnabas Sibusiso Dlamini.
On trade, the Minister explained that industrial Development was a cross-sectorial issue hence there was need for high levels of coordination and collaboration between all stakeholders.
In her opening remarks, the SADC Executive Secretary, Her Excellency Dr. Stergomena Lawrence Tax noted that the Action Plan recognises critical roles to be played by the private sector as a driver to industrialisation, and the importance of participation of women, the youth and persons with disability in industry development.
She emphasized the need for effective coordination in support of industrialisation, sound governance mechanism for implementation of the Industrialisation Strategy, regular monitoring of the implementation of the Strategy and Roadmap.
The Ministerial Task Force endorsed the Industrialisation Strategy Action Plan for consideration by the Extraordinary Summit on the 18th March 2017. The Meeting further directed the Secretariat to collaborate with the Tripartite Task Force to expedite implementation of outstanding activities of the Tripartite Free Trade Area Agreement and report on the status of implementation of outstanding activities at its next meeting.
Download: pdf Action Plan for SADC Industrialization Strategy and Roadmap, approved 18 March 2017 (1.51 MB)
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EALA nods report on rail infrastructure
Assembly calls for joint initiatives to ease transport, enhance business
The regional Assembly is recommending for the improvement of the extensive rail network and penetration in the region. With the construction of the Standard Gauge Railway underway, EALA wants the region to enhance information sharing on the upgrade of the rail network especially that concerning the timelines by Partner States given that the construction is at different levels. In the same regard, Partner States should continue with rehabilitation of the existing railway networks to complement the new ones.
A report of the Committee on Communication, Trade and Investments adopted by the House late on Thursday, 9 March 2017 recommends that Partner States should set aside annual budgets to sustainably fund the implementation of railway projects in the region.
The Committee further recommends that the East African Community should create an EAC infrastructure fund.
The report presented to the House by the Chair of the Committee on Communication, Trade and Investment, Hon Fred Mukasa Mbidde, follows an oversight activity of the railway infrastructure in the Partner States undertaken on December 12th-15th, 2016, in the Partner States. The objectives of the workshop were to: understand the status of the Railways Master plan in the EAC; as well as that of EAC specific Partner States’ Railway Infrastructure development and thereafter come up with recommendations.
The Committee further reviewed the EAC Railway Master Plan identifying a number of issues including high cost of transport making products expensive and international trade uncompetitive. At the same time, there are low freight volumes, reduced market share for railways. The Committee takes note of a weak business regulatory environment in the transport and rail sub-sector. It calls for strategic leadership and review of national policies and laws on the rail as well as enhanced public private partnerships. The Committee further emphasises the need for development of excellence in railway capacity building, ICT and technology development.
According to the report, a feasibility study for the Isaka-Kigali/Keza-Musonagati Railway Project, was done in March 2009 including the Upgrade of the Dar es salaam-Isaka Railway Line and this would ideally serve the Republic of Burundi.
The preliminary field studies on the Dar es Salaam-Isaka line were also undertaken to determine the requirements for converting the existing meter gauge track to an AREMA-based (North American) standard gauge track and offered suggestions.
Kenya is implementing the railway infrastructure as per the EAC Railway Master Plan. The country is constructing the Standard Gauge Railway (SGR) projects for Vision 2030, and these include the Mombasa-Malaba route in phase one while phase two includes the Nairobi-Malaba sector.
The use of local content is pegged at 40% of the Civil Works contract with an amount of KShs 81 Billion spent to facilitate supply of cement, sand, aggregates, transport equipment, earthmovers, hygiene and food items, general purpose steels and timber. Similarly included are small contracts such as drainage works, slopes protection, labour contracts as well as clearing and forwarding.
The report states that in order for SGR not to disrupt the operations of the National Park, a number of mitigations are in place. The SGR according to the report crosses the park on a single line bridge spanning the total width of the Park (6.0 Km) and its average height starts at 8 metres at the entrance into the northern side of the Park and 41 metres at the exit on the southern end of the Park.
In Tanzania, the SGR will traverse the Northern and Tanga development corridor as well as the Southern/Mtwara development corridor.
In Uganda, the report alludes to the fast tracking of the development of Standard Gauge Railway in order to significantly contribute to transforming the country in to a middle-income status. It is envisaged that a total of 1,724Km will be constructed countywide in phases.
As provided for under Article 91 of the Treaty for the establishment of East African Community, the Partner States agreed to establish and maintain co-ordinated railway services that would efficiently connect the Partner states within the Community and, where necessary, to construct additional railway connections.
During debate, Hon Ole Nkanae Saoli remarked that the modern train system was going to change the rail road sector in the Republic of Kenya. “The plan is ahead of schedule by 4 months and this should see the launch done soon. This is a positive move for the region,” Hon Ole Nkanae said.
Hon Susan Nakawuki on her part remarked that ‘good infrastructure was good’ for the region. He however said the cost of transportation was still high therefore hampering the costs of setting up of automotive industry. She further lamented that the SGR should duly be a regional project and not purely undertaken on singular or bilateral basis.
Hon Mumbi Ngaru called for strategic political leadership at the EAC saying it was necessary for the integration process to thrive. Hon Makongoro Nyerere said it was necessary for the transport sector to target both cargo and passengers in order to be sustainable. He hailed the EAC Heads of State for the initiatives taken to enhance the railway.
“I congratulate President Uhuru Kenyatta of Kenya and President John Pombe Magufuli for been steadfast in enhancing the rail network,” Hon Nyerere said.
Hon Valerie Nyirahabineza said the sub-optimal infrastructure in the region had led to increased cost of doing business and said the completion of the SGR would boost business.
Others who supported the debate were Hon Bernard Mulengani, Hon Dr James Ndahiro, Hon Mike Sebalu, Hon Taslima Twaha and Hon Dora Byamukama.
The 2nd Deputy Prime Minister and Minister for EAC Affairs, Rt Hon Dr Kirunda Kivenjija representing the Chair of the Council of Ministers said complementarity was the way to go as opposed to competition among the Partner States to develop the region.
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tralac’s Daily News Selection
tralac’s Weekly Newsletter is posted.
Starting on Monday:
African Alliance for E-Commerce meets in Nairobi (The Herald): Delegates from more than 18 African countries are due to meet in Nairobi from Monday to review Africa’s progress on implementation of Single Window System, an online cargo clearing system, organisers said yesterday. The Kenya Trade Network Agency (KenTrade), which is implementing an online cargo clearance system in the country, said the 14th Executive Committee and 8th General Assembly meeting of the African Alliance for E-Commerce (AAEC) will be held in Nairobi, 13-15 March.
STC on Transport, Transcontinental and Interregional Infrastructures, Energy and Tourism meets in Lomé (AU):
The theme of the meeting (Financing infrastructure in Africa) calls on African governments and the private sector to achieve concrete advances in the financing of major infrastructures, notably those in the Priority Action Plan of the Programme for Infrastructure Development in Africa in ways that foster inclusive growth and promote employment.
CFTA Negotiating Forum: update (UNECA)
Members States agreed in last week’s forum to liberalize between 85-95% of their tariff lines over a period of 5-10 years. They also agreed to allow for flexibilities through exclusion and sensitive lists to accommodate countries that may face challenges during liberalization. Reports of the technical working groups on technical barriers to trade and non-tariff barriers, sanitary and phytosanitary measures rules of origin, trade in services and customs procedures were tabled and discussed during the Negotiating Forum. The AUC presented the CFTA Template Agreement which was welcomed by Member States as a basis for text-based negotiations. A bottom-up approach was agreed for further technical work on the draft text through technical working groups which will report to the next meeting of the Negotiating Forum also in Addis Ababa in June. A meeting of African Ministers of Trade will be held soon after the 6th meeting of the CFTA Negotiating Forum.
Impact of Africa on South Africa’s economic performance ‘underestimated’ – IMF (Engineering News)
Sub-Saharan Africa (SSA) is currently the main destination for South African exports and its influence on the economic performance of South Africa is being “underestimated by many commentators”, IMF senior resident representative in South Africa Dr Montfort Mlachila avers. Speaking to students at the University of Johannesburg on Thursday, Mlachila pointed out that the rest of Africa accounted for 30% of South Africa’s total exports in 2015, which was significantly larger than China’s 12% contribution. In addition, South Africa’s foreign direct investment flows to SSA were rising, driven by high profit margins in the rest of the continent.
TFA implementation highlighted at High Level Roundtable held at UK Parliament
At the invitation of the All-Party Parliamentary Group for Trade Out of Poverty (APPG-TOP), WCO Secretary General Kunio Mikuriya spoke at the High Level Roundtable on the subject “Africa and the WTO Trade Facilitation Agreement (TFA): from Ratification to Implementation”, which took place in London on 8 March at the United Kingdom Parliament. The roundtable was attended by government ministers from the UK, Ghana, Nigeria and Rwanda, as well as senior representatives from relevant international organizations and donor institutions. The event was held on the occasion of the inaugural meeting of the Commonwealth Trade Ministers.
Prioritise Commonwealth trade post-Brexit: It’s what UK businesses want (City A.M.)
Other notable findings from the polling show that over 50% of British businesses prioritise Malaysia as a key market, over 40% do so for Kenya, and almost a third highlight the Caribbean. This means that the government focus should not solely be on usual highlighted nations such as Australia and Canada. Interestingly, there is a regional divide. Despite Scotland’s proud historical achievements in and imprint on Commonwealth nations, its current business leaders do not prioritise these nations as highly as their UK counterparts. Half the number of business leaders in Scotland highlight South Africa as their counterparts in London, while Canada is Scotland’s top priority. My local Midlands area shows the importance of India, with 93% prioritising closer ties, 20 points higher than the UK overall total. Meanwhile, London businesses prioritise Canada first and South Africa second. The capital’s positive diversity was also reflected in strong mentions for Kenya and Caribbean nations in post-Brexit trade deals. [The author, Digby Jones, is a former director general of the Confederation of British Industry]
First contours of a new American-African policy and a new era of trade with the North? (tralac)
Geopolitical and security interests in particular should prompt a closer look at the benefits of formalising ties with Africa, or specific African nations. Certain long-term calculations need to be made; while recalling the African legacy of Presidents Bush and Obama in terms of humanitarian aid, development assistance, and energy. African leaders too should start planning for new initiatives. African-American trade and American aid programmes are important, AGOA brings many benefits, and new investments are necessary for local development plans. [The analyst: Professor Gerhard Erasmus] [Plan to ban used clothes, shoes puts Agoa gains at risk]
Surge in international African FTKs in recent months (pdf, IATA)
International freight tonne kilometres (FTKs) flown by African carriers have surged in SA terms since the middle of 2016. FTKs grew by a whopping 25.0% year-on-year in January, helped by very strong growth on the trade lane to and from Asia; while a small route, FTKs between Asia and Africa jumped by 30% year-on-year in 2016 as a whole, and by 57% in January. This comes on the back of rapid long-haul expansion and increased direct services between the continents. The wider pick-up in demand has helped the region’s SA load factor to rise in recent months; after falling by five percentage points in 2016 compared to the previous year, the load factor jumped by 3.6 percentage points in January compared to the same month in 2016. [IATA’s air passenger market analysis, pdf]
Kenya to clear more hurdles before direct flights to US can begin (Business Daily)
Ivory Coast solicits Mauritian investors to develop a Biotechnology and ICT Free Zone project (GoM)
A high-level delegation from VITIB and the Ministry of Economy and Finance of Ivory Coast is currently in Mauritius to consolidate its relationship with the Mauritius-Africa Fund and the Board of Investment with regards to investment opportunities in viable projects within the VITIB zone. Mauritius and the Ivory Coast signed in April 2016, an Investment Protection and Promotion agreement to boost trade and investment as well as reinforce and deepen economic cooperation between the two countries.
Tanzania: Vehicle import policy review paves way for assembly plants (Daily News)
The Minister for Industries, Trade and Investment, Charles Mwijage, told the ‘Daily News’ yesterday that his office was currently reviewing vehicle import policy so as to create good environment for the automakers interested to invest in vehicle assembly plants. “The review of the policy aims at creating good and friendly environment for companies that are interested to invest in vehicle assembling businesses in the country. A suitable policy is likely to enable Tanzanians to purchase new vehicles at affordable prices within the country,” he said. According to statistics released by Tanzania Automobile Association in 2014, every month, Tanzanians import an average of 4,500 light second-hand vehicles—those with carrying capacity of below 12 passengers. Some big companies across the globe including the Germany car manufacturer ‘Volkswagen’ have already shown interest to invest in vehicle assembly plant in the country. [VW forms new sub-Saharan Africa region]
Tanzania: SAGCOT annual partnership forum 2017 starts today (IPPMedia)
The long awaited fourth annual Southern Agricultural Growth Corridor of Tanzania (SAGCOT) partnership forum 2017 starts today in Dar es Salaam with 300 local and international delegates having confirmed participation. The theme of the forum is ‘Unleashing Agricultural Potentials’.
Burundi: Country strategy and programme evaluation (IDEV)
In economic performance, the IDEV report finds that the main contribution of AfDB operations to growth was through infrastructure projects. Additionally, there was positive evolution in mobility, transport costs and access to electricity. However, their impacts on economic growth and poverty reduction remained limited in a context marked by severe internal and external constraints. The low diversification of the economy limited the country’s export capacity and hindered domestic and cross-border trade. Internal constraints, especially those related to fiscal, legal, economic and political instability, posed serious threats. At the outcome, the signs of a sustainable increase in economic activity and incomes in the long term are barely visible. The evaluation presents a series of recommendations for the future AfDB engagement strategy in Burundi. Focus, according to IDEV, should be on the development of economic activities which promote integrated markets within the East African Community.
Nigeria: Our brand new economic recovery and growth plan (Premium Times)
These are all very good words. They are similar to the good words in previous plans that were never implemented. This government has already built a solid reputation as the slowest government in Nigerian history. If it took 20 out of the available 48 months to develop the Plan, I wonder when the gear will shift to full implementation. Meanwhile, what is important is close monitoring by the National Assembly, and above all by citizens, to ensure real implementation benchmarks are developed and tracked. [The author: Professor Jibrin Ibrahim]
Sustainability in Madagascar (tralac)
Two background factors make the sustainability issue in Madagascar particularly critical. The first is that Madagascar was one of the last major landmasses on earth to be colonised by humans, while the second is that it is an island, and indeed the fourth largest island on the planet. Consequently, Madagascar has had distinct ecosystems and an extraordinary wildlife since it split from the African continent. Overall, an analysis of sustainability and the review of progress being made in Madagascar is limited in that the issues are usually addressed as separate from trade and broader economic issues. However, we will argue that these issues are tightly related, and Madagascar is an especially important case given that the biodiversity of both the island and the marine life found in the Exclusive Economic Zone around it is among the richest in the world. [The analysts: Ron Sandrey, James Wilson]
Zimbabwe: Government suspends maize imports
South Africa targets investing in Indonesia’s transport sector
Republic of Congo: IMF finalizes 2017 Article IV Consultation, discussions on possible IMF-supported financial arrangement
Mozambique forest investment project: project documentation
Regional support for the oversight of extractive industry in French-speaking countries: project documentation
A.P. Moller – Maersk Sustainability Report 2016
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Plan to ban used clothes, shoes puts Agoa gains at risk
East Africa’s eligibility to retain duty-free access to markets in the United States under the Africa Growth and Opportunity Act (Agoa) is at risk following concerns raised by Washington about the bloc’s decision to phase out the importation of second-hand clothes starting this year.
According to the US, the EAC presidents’ directive to ban importation of used clothing will not spur additional US textile and apparel investment in the region, which is largely export-oriented and based on Agoa tariff preferences.
In a senior trade officials’ meeting dabbed “US Beyond Agoa – Trade and Investment,” the American officials said that import substitution policies like the EAC’s ban on second-hand clothes may deter Washington from investing in the region.
The US government now says it will file a petition at the Office of the US Trade Representative (USTR) to initiate an out-of-cycle review of certain EAC partner states.
If East Africa is found not to be making progress in meeting the eligibility requirements, the US is likely to terminate the designation of the EAC as a beneficiary of duty-free market access under Agoa.
A report from the meeting between officials from the EAC and US shows that the regional bloc maintained its stand on the ban, saying that the heads of state prioritised industrialisation as the key pillar of its development strategy and this hinges on the textile, leather and automotive sectors. Phasing out imports of used clothing was part of the EAC’s industrialisation policy.
According to last year’s EAC heads of state directive, the phasing out of importation of used textiles and footwear will be undertaken gradually over three years.
“The EAC wants to promote integrated industries in the textile and leather sector and strategies are being developed to ensure procurement of textile and footwear requirements from within the region where quality and supply capacities are available competitively,” said the Community officials.
They added that the US should look at the EAC strategy as an opportunity for enhancing US investment in the textile and leather sector in the region. This, they said was a result of consultations held with key stakeholders on the matter, including manufacturers of new clothing, as well as importers, sellers and buyers of used clothing.
The EAC officials have, however, asked to meet with American officials before the next US review for Agoa eligibility.
Agoa provides for duty-free entry of goods into the US from designated sub-Saharan African countries, including the EAC partner states, and applies to both textiles and non-textile goods.
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ECA experts participate in 5th meeting of the CFTA negotiating forum
Experts from the Economic Commission for Africa (ECA) recently participated in the 5th meeting of the Continental Free Trade Area (CFTA) Negotiating Forum that was hosted by the African Union Commission in Addis Ababa.
The forum, held from March 1 to 4, was preceded by an orientation workshop meant to equip CFTA negotiators as they consider and finalize draft modalities for negotiations for tariffs and services that will be included in the CFTA.
Commissioner for Trade and Industry at the AU, Ms. Fatima Haram Acyl, said she was confident that by the end of 2017, national traditional borders will be less important following the establishment of the CFTA
She commended the ECA and United Nations Conference on Trade and Development (UNCTAD) for providing technical assistance to the CFTA negotiations and analytical studies which she said had contributed immensely to achievements of CFTA so far.
The CFTA, which is expected to be in place by October 2017, will bring together 54 African countries with a combined population of more than one billion people and a combined gross domestic product of more than US$3.4 trillion.
With the CFTA, African leaders aim to, among other things, create a single continental market for goods and services, free movement of business persons and investments and expand intra-African trade. The CFTA is also expected to enhance competitiveness at the industry and enterprise levels.
Members States agreed in last week’s forum to liberalize between 85-95% of their tariff lines over a period of 5-10 years. They also agreed to allow for flexibilities through exclusion and sensitive lists to accommodate countries that may face challenges during liberalization.
Reports of the technical working groups on technical barriers to trade and non-tariff barriers, sanitary and phytosanitary measures, rules of origin, trade in services and customs procedures were tabled and discussed during the Negotiating Forum.
The African Union Commission presented the CFTA Template Agreement which was welcomed by Member States as a basis for text-based negotiations. A bottom-up approach was agreed for further technical work on the draft text through technical working groups which will report to the next meeting of the Negotiating Forum also in Addis Ababa in June.
A meeting of African Ministers of Trade will be held soon after the 6th meeting of the Continental Free Trade Area (CFTA) Negotiating Forum.
The meeting was attended by senior trade officials from Member states, trade experts from the Regional Economic Communities (RECs), the African Trade Policy Centre of the ECA, UNCTAD and the African Development Bank (AfDB).
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TFA implementation highlighted at High Level Roundtable held at the UK Parliament
At the invitation of the All-Party Parliamentary Group for Trade Out of Poverty (APPG-TOP), WCO Secretary General Kunio Mikuriya spoke at the High Level Roundtable on the subject “Africa and the WTO Trade Facilitation Agreement (TFA): from Ratification to Implementation”, which took place in London on 8 March 2017 at the United Kingdom (UK) Parliament.
The High Level Roundtable was attended by Government Ministers from the UK, Ghana, Nigeria and Rwanda as well as senior representatives from relevant international organizations and donor institutions. The event was held on the occasion of the inaugural meeting of the Commonwealth Trade Ministers.
The Roundtable was opened by the APPG-TOP Co-Chairs: Mr. Peter Lilly, MP; and Lord Bayea, UK Minister of State for International Development (DFID). After a presentation on the state of play by Ms. Suja Rishikesh Mavroidis, WTO Director, Market Access Division, Secretary General Mikuriya spoke about the WCO’s contribution to the TFA implementation, which included an Implementation Guidance tool, a TFA Working Group and the Mercator Programme.
He also explained the lessons learned especially, the importance of political support for Customs reform in terms of organizational and people aspects and, in particular, in transversal areas such as the Single Window, the Time Release Study and border cooperation, which require coordination with other government agencies, which have often been identified as difficult areas in the categorization exercise by TFA acceding countries.
Donor collaboration was the topic most mentioned by participants and in this regard, the WCO took the opportunity to thank Her Majesty’s Revenue and Customs (HMRC) in the UK for its financial and human support.
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Kenya set to host key African conference on e-commerce
Delegates from more than 18 African countries are due to meet in Nairobi from Monday to review Africa’s progress on implementation of Single Window System, an online cargo clearing system, organizers said on Thursday.
The Kenya Trade Network Agency (KenTrade) which is implementing an online cargo clearance system in the country, said the 14th Executive Committee and 8th General Assembly meeting of the African Alliance for E-Commerce (AAEC) will be held in Nairobi from March 13-15.
KenTrade’s CEO Amos Wangora said the decision by the continental organization to hold the AAEC meetings in Nairobi for the first time was a big honour not only to Kenya but to the East African Community region as a whole, noting that other EAC member states had also been invited to attend.
“Successful implementation of the Single Window System in Kenya has positioned Kenya as a strong logistics platform in the East Africa region in addition to providing opportunity for sharing best practices on implementation of Single Window System among peers,” Wangora said.
Kenya TradeNet or single window system is a web based portal and is accessible 24/7 nationwide to stakeholders in trade logistics industry and will facilitate the flow of goods in and out of Kenya’s borders.
The initiative is also expected to facilitate international and domestic trade at the port of Mombasa, and has been touted as the solution to the persistent delays at the port.
It reduces the time it takes to process goods through customs at the port by half, from seven days to three days.
The AAEC is a grouping of countries implementing the Electronic Single Window System in Africa. Currently, the AAEC has 18 member countries and seeks to promote the Single Window (SW) concept, in compliance with recommendations of international institutions.
Kenya, through KenTrade is a member and Vice-President of the AAEC. The main objective of the AACE is to strengthen and promote the Single Window as a trade facilitation tool in Africa.
“This aims to intensify cooperation and bring common projects beneficial to each individual country, but further to all economic regions,” Wangora said.
AAEC which is headquartered in Dakar, Senegal brings together African economies keen on promoting the concept of national and regional single windows in compliance with recommendations of international institutions.
The continental body current membership is drawn from West, North, Central, East and Southern Africa.
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tralac’s Daily News Selection
ARSO conference: Pan-African quality standardisation policy update (The Chronicle)
Delegates at the just ended 2nd African Regional Standardisation conference have recommended the establishment of a pan-African quality standardisation policy to promote harmonisation of economic activity on the continent. Participants resolved last Friday that quality standards were key to economic growth and recommended governments to subsidise small companies especially at a time when most African economies are now driven by Small and Medium Enterprises. ARSO secretary general, Mr Hermogene Nsengimana, said the standardisation quality policy would be produced this year as process of documenting it has already started.
Revitalising world trade: issues and priorities for the Commonwealth
This issue of Commonwealth Trade Hot Topics highlights the impact of the global slowdown on the trade performance of Commonwealth countries. It then outlines several issues and priorities where Commonwealth members, working individually, collectively and with international partners, could contribute to rekindling world trade. Extract: There are several ways Commonwealth developing countries can take advantage of the emerging green economy. At the outset, they should assess their comparative and competitive advantages in this green space and the scope for a green industrial strategy. High-income countries have generally been the first-movers in frontier green innovation. However, some developing country members, such as India, Malaysia, Singapore and South Africa, may also be capable of generating the conditions for the growth of green technology champions. [The analyst: Brendan Vickers] [Peter Fabricius: Brexit Europe, not Brexit Africa (ISS)]
Namibia: Budget Statement 2017/18 (Ministry of Finance)
Regional economic integration provides trade and economic development opportunities for Namibia as a future logistics hub for the Southern African sub-region. Concerns on SACU institutional arrangements are being addressed by the Member States. The restoration of normalcy in the functioning of SACU institutional bodies would enable SACU to continue playing its envisaged role as the engine of regional integration and industrialization. Our stance remains that SACU should increasingly become a customs union, where all its members benefit equitably. [Medium Term Expenditure Framework 2017-2018 (pdf)]
Zambia: Choppies expansion update (Lusaka Times)
Choppies Enterprises Limited, one of the largest multinational supermarkets in the Sub-Sahara Africa, has invested more than K7 million to establish a mega store in Kitwe’s Chimwemwe Township. The company, which has been in the country for 13 months, has opened 11 stores dotted around Lusaka and the Copperbelt and plans to roll-out 10 more before the end of 2017. The supermarket which operates more than 200 stores in the Sub-Sahara African region also intends to open about 45 more in the country in the next four years.
Indonesia, South Africa discuss tariff reduction, trade cooperation (Antara)
Indonesia and South Africa have discussed efforts to increase trade cooperation and reduction of tariff and non-tariffs barriers for their prime products and commodities. Jokowi has proposed a wider trade cooperation to cover Indonesia-SACU cooperation and pledged to send a concerned minister to follow it up. “I just now conveyed to Zuma that in the next two months from today, we would send ministers and business leaders to South Africa,” he underlined. As a follow up to the Indian Ocean Rim Association summit, he called for an Indonesia-Africa Countries Dialogue on future maritime cooperation and said he would invite South Africa to participate in it. [Related: Statement by SA Presidency, Is Indonesia choosing the Indian Ocean Rim Association over ASEAN?]
Review of investment incentives must make SA’s carrots tastier (Business Day)
So as the Department of Trade and Industry and other government departments look at their incentive programmes, there are certain questions they should be asking. Are the programmes well co-ordinated, so that they present a comprehensive and logical whole? Is the application process speedy, transparent, fair and free from external influence? Are the incentives all regularly assessed for efficiency and can we be certain they are having the desired effects in terms of boosting economic growth, employment and exports? [The author, Duane Newman, is a partner in Cova Advisory]
A selection of postings on East African trade policy issues:
Exploring pros and cons of EAC-EU Economic Partnership Agreement (Tanzania Daily News): This article will try to shed light on some of the key issues of concern under the EAC-EU EPA and show how most of the elements included in the Agreement are not compatible with the World Trade Organisation (WTO). The EAC EPA has eroded flexibilities that were hardly negotiated by developing countries and least developed countries under the WTO. [The author, Lucas Saronga, is a former Tanzanian trade negotiator]
Will the EAC sign the European Union’s EPA? (IPPMedia): At the core of the debate, however, is the fact that as Least Developed Countries all EAC members other than Kenya (which is middle-income) are guaranteed free access to the EU irrespective of signing the EPA under the ‘Anything But Arms’ agreement. It’s worth noting that the World Bank expects Rwanda, Uganda and Tanzania to graduate from LDC status within a decade – the EPA would legally guarantee access at that stage. However the short-term incentive to sign the EPA is uncompelling, and this ‘short-term’ is seen as crucial in the EAC’s development narrative. Questions over the impact of Brexit, import tariff revenues and a Most Favoured Nation clause (ensuring the EU remains a priority partner) have also raised EAC eyebrows.
EAC legislators should do more to facilitate businesses, traders say (New Times): The East African Business Council has raised concerns over high cost of air transport that is attributed to the slow pace of liberalisation, and have challenged the East African Legislative Assembly to move fast to enact policies that would streamline aviation industry. During a dinner in Kigali, on Tuesday, EABC executive director Lilian Awinja highlighted challenges that the business community faces and called on the Assembly to exercise its oversight role to address the issues, particularly “where implementation of agreed commitments by EAC partner states is dragging endlessly.” [How use of identity cards has eased trade for border communities]
Abubakr Ogle: Deepening the EAC integration agenda (New Times): The outgoing Assembly has laid an important foundation for the incoming one to build on. Much more needs to be done, but they will definitely inherit an Assembly with an enhanced stature, willing and able to flex its muscle to attain the aspirations of the Community. These are certainly no mean achievements given the many challenges the Assembly has been faced with. But it is therefore incumbent upon the incoming Assembly to speak with the same voice across all levels, regional and partner states’ allegiances notwithstanding. EALA must continue to be strong and lead the integration process. Secondly, the implementation of the Protocols has been way below par. The Assembly needs to take its place, and perhaps enact relevant legislation that shall anchor the said protocols. [The writer is a member of the East Africa Legislative Assembly, representing Kenya]
EAC exchanges moot plan to ease SMEs’ access to funds (New Times): Regional capital markets regulators, under the umbrella of East African Securities Regulatory Authorities, have agreed to support the establishment of a Capital Markets Advisory Centre to enhance access to capital for small-and-medium enterprises.
Uganda’s electricity exports to Kenya hit historic high (Daily Monitor): Electricity imports from Uganda hit a historic high in January as Kenya sought more power to plug a shortfalls from drought-hit hydroelectric dams. Kenya imported 20.87 million kilowatt hours (kWh) from Uganda in the first month of the year, which is equivalent to four months of power that Nairobi has been importing from Kampala.
IGAD Special Summit of Heads of State: update (IGAD)
The Intergovernmental Authority on Development launched a technical experts’ meeting in Entebbe to discuss durable solutions for Somali refugees in preparation of the Special Summit of IGAD Heads of State (25 March, Nairobi). The purpose of the meeting is to discuss a draft Summit Working Paper, and to start preparing the core elements of the Summit Declaration and associated Action Plan. Director of the UNHCR Africa Bureau, Mr. Valentin Tapsoba, applauded “the decision by IGAD Member States to organize a Special Summit looking at a comprehensive regional approach to deliver solutions for Somali refugees.”
A new climate trilateralism? Opportunities for cooperation between the EU, China and African countries on addressing climate change (DIE)
Based on an analysis of INDCs and a review of existing partnerships and recent pan-African developments, this briefing paper proposes for EU-China-Africa trilateral cooperation to initially focus on renewable energy. The AU’s newly launched Africa Renewable Energy Initiative (AREI) provides a possible entry point at the regional and national levels. The EU and China should build on their existing pledges of support for AREI and jointly explore with African partners the development of pilot projects towards AREI’s goal of installing at least 10 GW of new and additional renewable energy generation capacity by 2020 and establishing the Africa Renewable Energy Institute. The single largest pledge in support of AREI by an EU member state has been made by Germany, which is well positioned to spearhead the proposed trilateral cooperation building on its technical expertise and its G20 Presidency objective to support Africa’s development, including in the area of renewable energy. [The analysts: Moritz Weigel, Alexander Demissie]
Foreign trade and international financial flows: implications for economic stability in ECOWAS countries (pdf, AfDB)
Three attributes of ECOWAS external trade stand out from the nature of commodities traded: the external trade profile is characterized with inter-industry trade, participation in the GVCs is at bottom (that is, trade is dominated by vertical intra-industry trade) and the production structure of ECOWAS differs from those of the key trading partners. These characteristics limit the extent to which business cycles could be transmitted.
Decisions, recommendations adopted by WTO’s Committee on Technical Barriers to Trade since 1 January 1995: a note by the Secretariat
Joint Declaration by the AU, UN, ECOWAS, EU: implementation of the Agreement on Peace and Reconciliation in Mali
COMESA: Misreporting of biotechnology blamed for indecisiveness in policy making
South Africa: Repositioning the Department of Home Affairs
Egypt: Foreign trade worth $21bn since currency flotation - CBE
Ethiopia: Climate change challenges, smallholder commercialization and progress out of poverty (pdf)
Capital flow surges and economic growth in sub-Saharan Africa: any role for capital controls? (pdf)
Exchange rate policies and FDI flow in WAMZ (pdf)
Cameroon: IMF discussions on an economic programme supported by the Fund
Japan: documentation for the Trade Policy Review
China Manufacturing 2025: putting industrial policy ahead of market forces
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Revitalising world trade: Issues and priorities for the Commonwealth
The world economy is continuing to experience an unprecedented slowdown in international trade. The rapid expansion of global trade witnessed before the financial crisis has now almost ground to a halt.
In 2016, world trade volume expanded by only 1.9 per cent; this is compared with average growth of about 6 per cent over the almost three decades (1980-2007) prior to the crisis. This trade slowdown has affected the export performance of most Commonwealth members, with implications for their growth and development prospects.
The global slowdown is unfolding at a time when international trade is intended to play a central role in achieving the Sustainable Development Goals (SDGs), and is likely to affect the trade-related targets included in the SDGs. Rising protectionism, coupled with lack of progress in World Trade Organization (WTO)-led multilateral trade liberalisation and discontent about globalisation in many countries, makes the potential advancement of trade-related development even more challenging.
For most developing countries, and especially for small states that are among the world’s most open and trade-dependent economies, international trade is a crucial driver of growth, poverty reduction and employment. If they are to achieve the SDGs, these countries need an enabling global trading environment that supports their participation in world trade. At this crucial time, we cannot overemphasise the need to revitalise global trade flows and strengthen the multilateral trading system.
This issue of Commonwealth Trade Hot Topics highlights the impact of the global slowdown on the trade performance of Commonwealth countries. It then outlines several issues and priorities where Commonwealth members, working individually, collectively and with international partners, could contribute to rekindling world trade.
Issues and priorities for revitalising world trade
Push for strengthened trade multilateralism
Trade multilateralism remains at a crossroads. After more than 15 years of negotiations, the delays in concluding the WTO’s Doha Round have diluted confidence in the organisation’s ability to open markets and govern twenty-first century world trade in goods, services and the digital economy. Limited multilateral progress has contributed to the proliferation of bilateral and regional trade deals, including so-called ‘mega-regional’ agreements like the Trans-Pacific Partnership (TPP), the Transatlantic Trade and Investment Partnership (TTIP) and the Regional Comprehensive Economic Partnership (RECP).
The deadlock in the Doha negotiations shifted attention to these mega-regionals as new fora for market-opening, rule-making and standard-setting in world trade. Some concerns were raised that they were a disruptive force with regard to the WTO-led multilateral trading system; compared with the inclusive and consensual nature of the latter regime, these regional negotiations excluded the majority of the world’s countries and people yet could affect them in various ways. The recent withdrawal of the USA from the TPP and uncertainties about TTIP post-Brexit may signal the end of this major trend in global trade governance.
Improve trade facilitation, logistics and connectivity
Improving trade facilitation and logistics at the national and regional levels can significantly reduce trade costs and boost both trade and output. Many Commonwealth members have already made important strides in simplifying customs procedures and upgrading systems to expedite the movement, release and clearance of goods. More than half of the Commonwealth members ranked on the World Bank’s Logistics Performance Index (LPI)5 improved their overall scores between 2014 and 2016. SSA countries such as Botswana, Kenya, Mozambique, Rwanda and Tanzania significantly raised their scores, with Botswana climbing from 120th place to 57th in the overall LPI ranking. Some Caribbean and Pacific SIDS regressed slightly, underlining their trade capacity challenges.
A quick win to revive world trade is to implement the WTO’s TFA, which entered into force on 22 February 2017. According to one estimate, the TFA has the potential to increase global merchandise exports by up to US$1 trillion per annum, while also reducing WTO members’ trade costs by an average of 14.3 per cent, with most of the gains to African countries and LDCs. Thus far, 34 of 48 Commonwealth WTO members have ratified the TFA. Since many Commonwealth African, Caribbean and Pacific countries are already engaged in trade facilitation negotiations at the bilateral and regional levels, in many cases the implementation of these regional deals will help anchor and achieve the WTO’s TFA.
Promote more effective regional integration
With world trade growth in the doldrums, promoting deeper and more effective regional integration may become important means for achieving SDG targets. However, the 2030 Agenda is silent on many of the potential role of regional integration in promoting inclusive growth and sustainable development. Regional integration is not only about promoting regional markets through tariff preferences. It is also a process whereby deeper and effective regional cooperation allows free movement of goods, services, investment and people to enable competitive production of exports, and participation and upgrading in regional and GVCs. Strengthened regional cooperation dealing with behind-the-border measures (e.g. technical regulations), ensuring improved connectivity (e.g. transport infrastructure) and triggering structural transformation (e.g. regional value chains) should be given the highest consideration.
Commonwealth members are all actively engaged in various regional trade initiatives. These range from sectoral agreements aimed at improving cooperation and connectivity, such as the Bangladesh-BhutanIndia-Nepal Motor Vehicles Agreement and the one-stop border posts between some SSA countries, to free trade agreements (FTAs) that liberalise goods, services and investment. The scope and coverage of the latter agreements differ widely, as reflected in recent landmark trade agreements involving Commonwealth countries: North-North trade deals (e.g. EU-Canada CETA), North-South trade arrangements (e.g. SADC-EU EPA, EU-Singapore FTA, PACER-Plus) and South-South integration schemes (e.g. CSME, PICTA, Tripartite FTA in Eastern and Southern Africa). Full and effective implementation of these agreements, coupled with investments in hard infrastructure, such as roads, energy and the physical networks required to support trade, and soft infrastructure, including institutions to facilitate and govern trade, may be prerequisites for the parties to reap the potential trade and development gains.
Leverage the ‘Commonwealth advantage’ to boost trade and investment
Although the Commonwealth is not a formal trading bloc, trade and investment links between its members are strong. Intra-Commonwealth trade in goods and services has almost tripled since 2000. The share of intra-Commonwealth trade in Commonwealth countries’ total global trade has also increased, from about 15.2 to about 18 per cent during the same period. Intra-Commonwealth trade is projected to surpass US$1 trillion over the next five years or so, and to reach close to US$2 trillion by 2030 even under a low growth scenario.
The Commonwealth provides an additional advantage to the 52 members’ existing bilateral economic relations. It has been found that, when both bilateral partners are Commonwealth members, they tend to trade 20 per cent more and generate 10 per cent more foreign direct investment inflows than otherwise. Historical ties, long-established trading relations, a familiar administrative and legal system, the use of largely one language, English, as the means of communicating with foreign partners and large and dynamic diasporas all seem to be contributing to an inherent Commonwealth factor that drives trade between members.
Brendan Vickers is Economic Adviser in the International Trade Policy Section of the Commonwealth Secretariat. Any views expressed in this article are those of the author and do not necessarily represent those of the Secretariat.
» Download: Revitalising world trade: Issues and priorities for the Commonwealth (PDF)
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EAC legislators should do more to facilitate businesses, traders say
The East African Business Council (EABC) has raised concerns over high cost of air transport that is attributed to the slow pace of liberalisation, and have challenged the East African Legislative Assembly (EALA) to move fast to enact policies that would streamline aviation industry.
During a dinner in Kigali, on Tuesday, EABC executive director Lilian Awinja highlighted challenges that the business community faces and called on the Assembly to exercise its oversight role to address the issues, particularly “where implementation of agreed commitments by EAC partner states is dragging endlessly.”
These issues, Awinja said, affect business growth and investment into the region.
“The private sector is concerned that despite the commitments of the EAC partner states at the international level, and the EAC integration efforts through the Common Market at the regional level involving liberalisation of services, the EAC domestic air transport sector remains over-protected, thus translating into less accessible and unaffordable air transport at the expense of potential users,” she said.
“Air transport in East Africa is still very expensive by international standards; as is exhibited in the current high passenger airfares and freight charges. Flight costs, both passengers and cargo flights, are high in the EAC region, thus contributing to a high cost of doing business.”
The time it takes to move around is also worrisome, she said, adding that during a validation workshop on a related study in April, they will provide specific details to the lawmakers.
It might take time to right the wrongs, but EALA Speaker Daniel Kidega promised that the Assembly will do whatever it takes to see to it that things are rectified.
Kidega was particularly disappointed when narrating how he endured an unnecessarily prolonged flight to Kigali, from Arusha, Tanzania last week.
Kidega said: “As I came here from my home in Arusha, I took a flight to Zanzibar, then to Nairobi, from there to Bujumbura and then on to Kigali. It took me close to 10 hours from Arusha to Kigali. That is unacceptable. We cannot continue to do business like that.”
He said they will bring to task the Council of Ministers to explain what the EAC Civil Aviation Safety and Security Oversight Agency is doing in terms of efforts to domesticate the airspace of the region.
Easing air transport
EABC is demanding adoption and operationalisation of the EAC air transport regulations by all partner states be expedited, harmonisation of regulatory fees and charges be done in the region in order to have a level playing field, and that partner states extend the same treatment to EAC national air operators, passengers and cargo in all member countries.
It was noted that the apex body of business associations of the private sector and corporates from the Community carried out a study on the costs and benefits of open skies, and will invite MPs to the study’s validation workshop in April so they can gain further insights into the issue.
On liberalisation of trade in services, under the Common Market Protocol, Awinja recalled that in 2010, all partner states committed to progressively open their market in seven service sectors – business, education, finance, communication, tourism and travel related, as well as transport – but that nearly eight years down the road, they have not fully liberalised the seven agreed sectors, and have not initiated negotiations to liberalise the remaining five sectors.
They further agreed that additional commitments would be undertaken in successive rounds for the remaining five service sectors: construction, environmental, health and social, culture and sporting services.
Awinja said: “The private sector is concerned about this slow liberalisation process. The services sector is a contributor of over 50 per cent of the region’s GDP, facilitates and supports businesses from across a range of sectors, from agriculture to mining to manufacturing, among others. Business-oriented professional services play an important part in the ability of all sectors to operate and grow.”
Cost of communication
The business community is also concerned about the “high cost of telecommunication” which they say has significant impacts on the cost of doing business.
The ‘One Network One Country Model’ – under which a call within East Africa, across all networks costs the same as a local call is their ideal scenario and they called on Tanzania and Burundi to join the One Network Area (ONA) being implemented by Kenya, Uganda, Rwanda and South Sudan under Northern Corridor Integrated Projects framework.
“Partner states should move with speed to remove taxes on roaming, as on other ICT services and equipment, harmonise VAT and excise taxes that impact on cost of telecommunication, progressively harmonise costs of spectrum, licence fees, universal access fund, numbering fees and cost of bandwidth,” Awinja said.
“I don’t understand why calling my mother in Gulu [northern Uganda] should be more expensive than calling a pen pal in America,” Kidega, who is based in Arusha, Tanzania, said, directly addressing Kirunda Kivejinja, Uganda’s minister for EAC affairs.
“Why can’t our sisters Burundi and Tanzania join the one network area? I think it is time we take a lead on this matter.”
EABC also emphasised the need to harmonise inter-operator tariff rates within partner states and across the border.
Further still, other concerns regarding non-tariff barriers, harmonisation of standards, and free movement of labour in the region, were also discussed.
The Assembly’s Committee on Communications, Trade and Investment will further examine the issues before the Assembly decides on the appropriate course of action.
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Namibia Budget Statement 2017: Govt tightens purse strings
A continuing dose of financial discipline aimed at lowering Namibia’s budget deficit and reducing growth in government debt is the medicine finance minister Calle Schlettwein has in mind for the country’s ailing finances.
Schlettwein singled out the deficit and increasing national debt as key issues to be addressed through government’s spending plans over the next year when he tabled the national budget for the 2017/2018 financial year in the National Assembly on Wednesday.
“The Namibian economy is emerging from a perfect storm,” Schlettwein said early in his budget speech, setting the scene for the words of caution about the state of Namibia’s public finances that were to follow.
Remarking that the 2017/2018 budget was being presented against the backdrop of a challenging fiscal and economic environment, Schlettwein noted that economic growth in 2016 slowed to 1,3%, but was expected to recover – although slowly – to an annual rate of 2,5% in 2017, and to average 3,5% over the next three years.
Following the budget cuts that marked the past financial year, the 2017/2018 budget would maintain the fiscal consolidation policy to reduce the deficit and slow down the growth of government debt, Schlettwein said.
“We are aware that the actions taken to rebalance public finances have caused short-term pains, but we are confident that the long-term benefits of sustainable fiscal policy outcomes far outweigh the short-term impacts,” he said.
While economic growth and government income have recovered over the past year of budget cuts, there was still no cause for complacency, Schlettwein cautioned.
A budget shortfall of N$6,1 billion is projected for 2017/2018. Such a deficit would amount to 3,6% of the country’s gross domestic product.
In the 2016/2017 financial year, government spending was projected to outstrip income by N$9,9 billion (6,3% of GDP).
The deficit is projected to be lowered to N$4,6 billion (2,5% of GDP) in 2018/2019 and N$1,9 billion (1% of GDP) in 2019/2020.
While the 2017/2018 budget should bring the deficit down, it should also stabilise the national debt at around 42% of GDP, and thus strengthen the country’s macroeconomic stability, Schlettwein said.
Government debt is projected to increase by 7,6% to N$71,6 billion in 2017/2018, and to N$75,2 billion by 2019/2020. The cost of servicing government debt is expected to be N$5 billion during the 2017/2018 financial year.
Public service
Government plans to spend about N$62,5 billion during 2017/2018 – an increase of 1,7% on the expenditure of N$61,5 billion that was provided for in the revised 2016/2017 budget. During 2017/2018, income of N$56,4 billion is expected to flow into state coffers.
The public sector wage bill has been a major cause of increased public spending, Schlettwein noted. The wage bill, to which close to half of government’s income would be devoted during 2017/2018, was unsustainably high, he warned.
In order to prevent further growth of the public sector wage bill, proposals were to freeze the size of the civil service, not to fill vacant positions identified as non-critical, to limit annual salary increases to no more than the inflation rate, to review public service medical aid coverage, and to reduce spending on travel costs, consultants and overtime, Schlettwein indicated.
Corruption
Schlettwein drew applause from fellow MPs when he turned to the topic of corruption.
The fight against corruption needed the country’s full attention, he said: “Whether it is the misuse of office, soliciting and receiving of bribes, inflating tender prices or whatever improper conduct of persons who further their personal gain to the detriment of the common good, [it] must be dealt with.”
It is well known that the poor suffer most from the impact of corruption, Schlettwein continued, saying that the private sector also has a role to play in the fight against corruption.
“No one should engage in this ’dance with the rattlesnake’, where the initial moves may be very pleasant, but in the end, when the snake has bitten, it becomes lethal. Let us jointly remove the snakes from the dance floor by reporting them instead of engaging them,” he said.