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tralac’s Daily News Selection
SA’s trade and industry minister Rob Davies: ‘Implications of changing international trade: the view from South Africa’ (8 March, Chatham House, London)
Africa and the WTO Trade Facilitation Agreement: the All-Party Parliamentary Group for Trade Out of Poverty, in collaboration with the UK Government’s Trade Policy Group, will host an invitation-only event (8 March, in London)
South Africa will host the Global Entrepreneurship Congress (13-16 March, Johannesburg)
SADC Extraordinary Summit (18 March, Swaziland): the Summit will deliberate on the state of peace and security in the region (Lesotho, DRC) and the implementation of the Revised Regional Indicative Strategic Plan.
An update from the WTO: South Africa’s Ambassador, Xavier Carrim, assumed office as Chair of the General Council of the WTO on 28 February. This is the first time a South African has been elected to this position and the fourth time this office has been held by an African.
ARSO forum begins in Falls (The Chronicle)
The second African Organisation for Standardisation (ARSO) forum began yesterday with a call on African governments to come up with strategies to support local industry and increase export production capacity. Opening the event, Industry and Commerce Minister Dr Mike Bimha said the continent’s international trade remains low at 20% when compared to 61% in EU countries. “It’s imperative that we adopt strategies that boost the productive capacity of our industries and build our capacity so as to have manufactured products to export as we continue to negotiate market access bilaterally, regionally and at multilateral level,” he said. Representatives from about 36 countries are attending the conference, which seeks to promote the ‘‘Made in Africa” concept. [Southern Africa Power Pool conference: update]
Mixed fortunes for African retail (African Business)
The revenues of the biggest retail companies in Africa and the Middle East grew by 19.1% in financial year 2015–16, with an average 5.8% net profit, according to Deloitte’s Global Powers of Retailing survey. The Deloitte report stated: “The rising middle class in Africa has contributed to the modernisation of the retailing sector, and many African economies are transitioning toward consumption-driven markets.” Only five retailers in sub-Saharan Africa make it into the world’s 250 biggest by retail revenue and all are South African.
Ethiopia: Fastest-growing African economy has banks lined up for entry (Bloomberg)
Over the past two years, Standard Bank Group Ltd., Africa’s biggest lender by assets, and KCB Group Ltd., Kenya’s largest lender, have joined the likes of Citigroup Inc., Commerzbank AG and Ecobank Transnational Inc. in setting up representative offices in sub-Saharan Africa’s second-most populous country. The lenders are hoping the government will eventually start granting licenses for fully fledged branches. They’re wagering that the country’s ambitions to join the WTO, coupled with increasing demand for capital to support the economy, will lead the government to open up an industry that’s been closed to investors since a Marxist junta nationalized banks four decades ago. “It has the potential to become one of the most exciting banking markets in the region,” said Robert Besseling, Johannesburg-based director at Exx Africa, which advises companies on business risks on the continent. “Government has hinted at liberalization and even privatization of state-protected sectors.”
Rwanda: Cross-border truckers upbeat over electronic cargo tracking system (New Times)
Rwandan cross-border truck drivers have expressed optimism that the soon-to-be launched electronic cargo tracking system will not only improve the safety of Rwanda-bound consignments from the east African coast but also avert possible conflicts between drivers and traders. TradeMark East Africa country director Patience Mutesi said national cargo tracking systems were a barrier to international and cross-border trade due to multiple arming, disarming and at times verification at all borders along the corridor; it involves a high cost of cross-border trade in terms of time and money; and is inconsistent with the regional integration agenda of trade facilitation and ease of doing business. [Related: Kenya and RECTS: Kenya began piloting the system with 1,500 gadgets so far. Uganda and Rwanda, which have both launched the system have the same number of devices although it requires at least 7,000 such gadgets to fully monitor cross-border business. There are also plans to roll out the system in South Sudan, Tanzania and ultimately to destinations outside the EAC bloc, including DRC in a bid to eliminate customs border checks and deal with cargo diversion that existed due to border changeover processes. [Tanzania: Ports get Sh20bn scanners to combat illicit drug trade]
What are development corridor strategies, and do they work? (IGC)
The Government of Liberia has also prioritised the creation of three new development corridors near population centres and existing markets (see Figure 2). Its goal in developing these corridors has been to maximise the economic multiplier effects that can be generated by infrastructure financed and supplied by mining concessionaires. But has this strategy actually worked? We recently completed a geospatial impact evaluation that rigorously estimates the impact of natural resource concessions in Liberia on local economic growth outcomes, in the years since the Johnson-Sirleaf administration assumed power. Here’s what we found: [The author: Bradley Parks]
SA-Nigeria trade dynamics: selected postings. Xenophobic attacks threaten Africa’s recovery: SA-Nigeria chamber warns (Business Day); Benedict Peters (CEO of Aiteo Group): Forget about being Africa’s biggest economy, we are better together (HuffPost); Linus Unah: ‘Who is South Africa to humiliate Nigeria?’; Peter Fabricius: ‘Xenophobia again jeopardises South Africa’s interests in Africa’ (ISS)
Zimbabwe: Capital flight and trade misinvoicing (Zeparu)
This paper estimates trade misinvoicing in Zimbabwe from major trading partners using the Morgenstern methodology. It uses trade data from 1980 to 2014 from the United Nations Commodity Trade Statistics Database. The results show that unrecorded capital outflows occur through trade with different countries including Italy, United States, Germany, and China, while unrecorded capital inflows into Zimbabwe are mainly from South Africa, Belgium, and Australia. Trade misinvoicing occurs mostly in exports of diamonds, gold, and nickel. Misinvoicing through imports is not rampant and occurs mostly through Germany, South Africa, and Zambia. The results show that capital flight increased during the period of macroeconomic and political instability. This indicates the need to ensure political and macroeconomic stability to reduce capital flight.
Home-grown technology firms help drive eGovernment expansion in East Africa (World Bank)
A vibrant and innovative software industry is developing in East Africa, with the help of the WBG and other donors. The cost-effective commercial technology solutions being developed for both the public and private sectors are helping the region’s economies move quickly into the digital world: Many African jurisdictions now offer online G2B services which are comparable to those in middle- and upper-income countries in other regions.
KRA insists clearing agents must be vetted before licences are renewed (New Times)
The Kenya Revenue Authority has dug its heels in on rules it introduced this year governing business licence applications for clearing agents. While the agents want the revenue agency to release their licences unconditionally, KRA has insisted they must undergo vetting by April 1. The process entails filing bio-data forms where the agents will disclose crucial information about their business operations and clients. This, KRA said, would curb the rampant corruption witnessed at the ports and help fight drug trafficking.
Nigeria: Import adjustment tax and rising cost of essential drugs (Nigeria Today)
The Pharmaceutical Society of Nigeria (PSN) has raised an alarm over rising cost of essential medicines in the country following the implementation of the 20 percent Import Adjustment Tax on imported drugs in the country and the high exchange rate of N500 to $1. Arising from these factors, the PSN explained, the prices of essential medicines, such as anti-malarial drugs and antibiotics have risen by over 150 percent in less than two years.
Auditors find flaws in EU donor aid to sub-Saharan Africa
Attempts by the EU to help sub-Saharan African nations increase their rate of tax collection are flawed by a string of weaknesses in implementation, an in-depth study by auditors has found. But the survey of 15 such projects across sub-Saharan Africa found a variety of deficiencies, both in implementation of the schemes and the initial conditions set on the recipients. Some 20% of EU development money is channelled through such schemes, with sub-Saharan Africa being the largest recipient. Between 2012 and 2016, some €1.7bn went to sub-Saharan Africa on these projects. [Court of Auditors: The use of budget support to improve domestic revenue mobilisation in sub-Saharan Africa]
Review of recent trends in decentralised cooperation: mapping and analysing financial flows, actors and mechanisms in EU countries (pdf, OECD)
The central objective of the project is to take stock of recent trends and evolutions in development co-operation provided by regional, state and local governments, also known as decentralised co-operation (D.C.). The work seeks in particular to understand how D.C. can help strengthen local efforts to achieve the global commitments taken by governments as part of the 2030 Agenda for Sustainable Development, COP 22 or the New Urban Agenda (Habitat III). The project will include data collection on flows extended by local and state governments, an assessment of recent trends and persistent governance gaps, 4-5 pilot case studies, and recommendations on effective D.C. policymaking.
Cecile Fruman: ‘Economic diversification: a priority for action, now more than ever’ (World Bank)
The challenge of economic diversification was discussed extensively during the recent T&C Learning Week, where Bank Group staff, academics, and public- and private-sector representatives shared their experiences pursuing diversification strategies. The discussions made clear that there is no magic recipe for diversification. But they identified a number of elements that provide the foundation for private-sector-driven diversification. These include:
USTR: 2017 Trade Policy Agenda and 2016 Annual Report (pdf)
The overarching purpose of our trade policy – the guiding principle behind all of our actions in this key area – will be to expand trade in a way that is freer and fairer for all Americans. Every action we take with respect to trade will be designed to increase our economic growth, promote job creation in the US, promote reciprocity with our trading partners, strengthen our manufacturing base and our ability to defend ourselves, and expand our agricultural and services industry exports. As a general matter, we believe that these goals can be best accomplished by focusing on bilateral negotiations rather than multilateral negotiations – and by renegotiating and revising trade agreements when our goals are not being met. Finally, we reject the notion that the US should, for putative geopolitical advantage, turn a blind eye to unfair trade practices that disadvantage American workers, farmers, ranchers, and businesses in global markets. In addition to these basic principles, we will focus on the following key objectives: [For AGOA pointers: Section 6 deals with Sub-Saharan Africa, Section 8 deals with United States Preference Programs]
The OECD-WTO Balanced trade in services database (OECD)
The first edition of the Balanced Trade in Services (BaTIS) dataset covers the 1995-2012 period, 191 countries and partners, and all main EBOPS2002 categories. The dataset is being made available for comment and review by WPTGS members and other interested parties and stakeholders prior to public release. This paper describes the compilation methodology used in constructing the dataset in detail, while also providing background to its broader context and future plans. [Towards a handbook on linking trade and business statistics (pdf, OECD)]
Today’s Quick Links: Latest edition of the IMF’s Finance & Development magazine (pdf), latest WIDERAngle newsletter, GSMA Humanitarian Connectivity Charter: Annual Report 2016 King vows to make of Rabat-Abuja alliance a framework for consultation on all African issues Thierry Vircoulon: ‘L’Afrique à l’heure du nouveau régionalisme sécuritaire’ Nigeria’s Senate lauds enhancement of powers of ECOWAS Parliament 7th ASEAN Competition Conference 2017: Managing change in a competitive ASEAN (8-9 March, Kuala Lumpur) |
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tralac’s Daily News Selection
Today’s featured tweets:
G7 Italy 2017: Today meeting of the #G7 Africa Directors in Rome. Fruitful exchange of views on the situation and the way forward in Sub-Saharan Africa.
AU Political Affairs: Experts Meeting happening now to discuss the Draft Protocol on #FreeMovement in Africa - an essential component of Africa’s aspirations
Full text of the AU PSC decision on Free Movement of People and Goods and its Implications on Peace and Security in Africa: the PSC meeting was chaired by Louise Mushikiwabo, Rwanda’s foreign minister. [Related: Tanzania’s Foreign Affairs minister, Augustine Mahiga, has challenged regional blocs in Africa to devise ways to regulate movement of people and labour so as to avert xenophobic violence and forceful eviction of foreigners from some countries. “What happened in Mozambique should serve as a lesson for both SADC and the EAC,” said Mahiga here yesterday.]
Nepad posts the 2015 report, Strengthening the institutional capacity of the Community of Sahel-Saharan States (CEN-SAD)
Continental Free Trade Area Negotiating Forum: update (AU)
The AUC is hosting the 5th Meeting of the CFTA-NF (27 February - 04 March, in Addis Ababa). The meeting was preceded by an orientation workshop to provide CFTA negotiators with the results of the requested studies on the modalities in previous deliberations. The Commissioner for Trade and Industry, Mrs Fatima Haram Acyl, recalled that in the last four meetings of the CFTA Negotiating Forum, negotiators have been able to adopt the Rules of Procedure as well as Definitions of the CFTA negotiations guiding principles that were subsequently approved by the African Union Ministers for Trade in May 2016. She also recalled the establishment of the 7 Technical Working Groups and the first meeting of all the Technical Working Groups that took place in Kigali, from 6-17 February.
Commissioner Acyl reminded participants that the Commission has developed a preliminary draft of CFTA Model Text on both trade in goods and trade in services as directed by the Heads of State in July 2016. According to her, the draft text has been validated by the RECs and members of the Continental Task Force on the CFTA in January 2017 and sent to Member States and RECs for national and regional consultations. “For the CFTA to be successful, it is very important to recall that ownership is very critical. We are trying our best to engage stakeholders in this process including the Private Sector and other Non-State Actors where possible. However, we always encourage and urge Member States and Regional Economic Communities to undertake regional and national consultations of those stakeholders as regularly as possible”.
Paul Banoba: ‘The task that await the new AU chair’ (New Times)
As he [Moussa Faki Mahamat] begins his tenure, the race ahead of him appears steeper than the one he just won. Mahamat inherits a “bleeding” continent in two respects. Beyond the spilling of blood in conflict-ridden African countries, the continent is also suffering massive illicit outflows of its resources to well-known destinations. The problems have been discussed, the solutions have been debated and agreed, but action has not always been swift. Mahamat knows this only too well. [The author is Africa Regional Advisor at Transparency International]
The European Union and the African Union: a statistical portrait — 2016 edition (Eurostat)
This ‘statistical portrait’ presents, in roughly 100 pages (pdf), a broad comparison between the situation of the European Union, including EFTA members and Candidate Countries, and the African Union and its member states. The publication is jointly produced by Eurostat and the Statistics Division of the African Union Commission. [Table of contents include: National accounts, Economy & finance, Industry & services, External economic relations]
EAC-EPA updates:
Uganda struggles to deliver EPA to success (Daily Monitor): When interviewed for this article last week, the Permanent Secretary, ministry of Trade, Amb. Julius Onen, said: “We are not going to allow EPA to disfranchise EAC. What is happening now is that this issue (EPA) is being blown out of proportion by a group of people.” He continued: “Even with all that is happening (such as Tanzanian’s objection), it is not the end of the world for the EAC region. As we speak now, we are negotiating with USA. China and Iran are also interested in doing business with us and so are a host of many other countries.” Mr Onen whose understanding of trade dynamics is highly commendable, let alone his astute appreciation of global trade interplays, says that it is too early, and for that matter, unreasonable for the critics to declare EPA as dead.
EPA and diplomatic chess games in EAC (The Citizen): The East African Community is once again facing a delicate diplomatic situation as it seems now more than ever that, after protracted negotiations, member states may have to just agree to disagree on the Economic Partnership Agreement. More than the back and forth talks over the possibility of a common ground among the EAC countries, what may have finally sealed the EPA fate is President John Magufuli’s description Sunday of the trade deal as a neo-colonial tool.
Rwanda to source poultry imports from Mauritius, Belgium (New Times)
Over one month has elapsed since a ban was imposed on imports of poultry products from bird flu affected countries such as Uganda and some European countries, including Hungary, Germany, France, Denmark and The Netherlands. The Head of Animal Resources at Rwanda Agriculture Board, Dr Christine Kanyandekwe, told The New Times that an alternative had to be found. Since the end of January, 49,000 day-old chicks were imported from Mauritius, 29,000 from Belgium and 11.6 tonnes of fertilised eggs from South Africa, some of the countries whose poultry has been free from bird flu, according to Kanyandekwe.
Standards harmonisation updates from EAC, ECOWAS:
EAC staple food standards harmonization conference: Rwanda is hosting the EAC member states meeting on EAC staple food standards harmonization. The forum (27 February - 3 March) focuses on considering of public review feedback on the draft EAC staple foods standards in order to promote and increase cross border trade. In 2013, the EAC countries agreed on the recommended moisture content for cereals and grains in the region in a bid deliver improved food security to its citizens through increased regional trade. “Harmonized staples food standards in Africa will play a major role in promoting intra-African trade through removing technical barriers to trade hence ensuring food security on the continent,” said, Dr Hermogene Nsengimana, secretary general, African Organization for Standardization at the meeting.
Standards harmonisation in ECOWAS: The Public Survey opened here focuses on the following three draft standards of the Technical Committee 4 Construction Materials: (i) Specification for groundnut, (ii) Code of practice for the prevention and reduction of Aflatoxin contamination in groundnuts, (iii) Code of practice for processing cassava products
EAC Regional Authorized Economic Operator Programme: update (WCO)
The WCO conducted a workshop (20-24 February, Arusha) to develop a Communication Visibility Plan for the roll-out of the EAC Regional Authorized Economic Operator Programme (AEO). The Workshop was also an opportunity to discuss a change in approach whereby the trade community is seen as partners and customs administrations as facilitators and trade enablers. Participants learned from each other’s’ best practices and proposed SMART (Specific, Measurable, Achievable, Realistic and Time-Bound) actions that will be monitored by the EAC Secretariat to ensure a proper coordination in accordance with the set objectives.
Online tool to ease cross-border trade in Namibia (NewsGhana)
Namibia moved a step closer to implementing a National Single Window, an online tool to ease cross-border trade that has been supported by technical assistance from USAID. The Namibia Inter-Ministerial Workshop on establishing an operating authority for the country’s National Single Window for Trade was opened on Monday. US Embassy Charge d’Affaires John Kowalski said USAID has supported the implementation of Namibia’s National Single Window for several years and the idea has already been successfully implemented in many other countries. “When Ghana introduced a National Single Window, customs revenue increased by 50% in the first year while, simultaneously, the time and cost of exporting shrank by 65%,” he said.
Lapsett project: South African state-owned lender to fund Sh60bn Isiolo-Lamu road (Business Daily)
The construction of the 580km road to bitumen standards is part of the Lamu Port South Sudan Ethiopia Transport project. Transport PS Irungu Nyakera said in Mombasa that detailed designs of the road had been completed. “We are glad that the Development Bank of Southern Africa is going to finance the construction of the Lamu-Garissa-Isiolo road to the tune of Sh60 billion. Sh5 billion has already been earmarked for the initial stages of the road construction,” he said. “The funding is already available, and we expect bush clearing to begin in May to pave the way for the major works.” The road construction, he said, would take between three and four years to be completed.
Illicit financial flows, tax evasion: Nigeria, ECOWAS updates (ThisDay)
In a bid to combat tax evasion and illicit financial flows out of the country by multinationals and other companies operating in Nigeria, the Federal Inland Revenue Service (FIRS) has created a new department to focus on transfer pricing. Asked if the culprits were Nigerian-owned companies, the Executive Chairman of FIRS, Mr. Babatunde Fowler, said: ‘Unfortunately, multinationals. This happens mainly with multinational where they have more than one corporate organisations in different countries.” The President of the ECOWAS Commission, Marcel Alain De Souza, said the harmonisation of tax legislations of ECOWAS’ member states was a necessity for the attainment of the objectives of the ECOWAS Treaty as well as the realisation of the common market.
Competition agencies must work together to create a healthy business environment (Polity)
The safeguarding of competition amongst businesses operating in the African market is key to inclusive growth on the continent. A lack of competition will reduce growth and increase poverty and so it is essential that competition agencies work together to ensure healthy business practices. This is according to Claire Reidy, a partner in the Competition Practice at pan-African law firm Bowmans. She was speaking at an African competition law conference held at the law firm at the end of February 2017. Reidy said that the necessary regional integration in Africa was a huge challenge, requiring the alignment of various regulations, legislation and incentives across countries and regions in Africa. [COMESA Competition Commission begins probe on CAF football deal, Michelle le Roux: Why the Competition Act is not the right tool for solving economic exclusion]
Chad P. Brown: ‘Is the WTO one of Trump’s ‘big quagmire deals’? Here’s what’s at stake’ (Washington Post)
In a speech Friday, President Trump reaffirmed his abhorrence of US trade agreements, especially “these big quagmire deals that are a disaster.” And the Financial Times reported Monday that his administration was debating a new strategy — leveling unilateral U.S. trade sanctions against China and other trading partners, and bypassing the World Trade Organization (WTO) dispute settlement process. A separate sign of Trump’s ultimate WTO strategy will become evident in how his administration deals with ongoing trade disputes that President Barack Obama initiated on behalf of U.S. farmers, workers and companies. The anecdotal evidence is that prior presidents have continued to pursue their predecessors’ cases. But will President Trump? [Related: FT’s Shawn Donnan: Trump has WTO rulings in sights, leaked report shows, Trump Administration: National Trade Policy Agenda for 2017 (pdf)]
Today’s Quick Links: Kenya: Bill targets foreign shippers with more jobs for locals plan Tanzania: 200 experts to discuss agriculture policies Twaweza survey: Food (in)security in Tanzania (pdf) EALA: Chaos as NRM stamps its authority Gabon: IMF initiates discussions toward a possible financial arrangement |
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African Union Commission hosts the 5th Meeting of the Continental Free Trade Area Negotiating Forum (CFTA-NF)
The African Union Commission (AUC) is hosting the 5th Meeting of the Continental Free Trade Area Negotiating Forum (CFTA-NF) from 27 February to 4 March 2017.
The meeting is preceded by an Orientation workshop (27-28 February 2017) to provide the CFTA negotiators with the results of the requested studies on the modalities in previous deliberations. This will accordingly equip the negotiators to consider and finalize the draft modalities for Negotiations on both Tariff and Services. The workshop will lead to the CFTA-NF whose agenda includes considerations of the Modalities.
The meeting is being attended by Senior Trade Officials from Member States and Trade Experts from the Regional Economic Communities (RECs) and other members of the Continental Task Force such as UNECA, UNCTAD and AfDB.
To meet the Agenda 2063’s aspirations such as: “A prosperous Africa based on inclusive growth and sustainable development” and “An Africa, whose development is people-driven, relying on the potential of African people, especially its women and youth, and caring for children”, the establishment of CFTA by the indicative date of 2017 is imperative.
In her opening remarks, the Commissioner for Trade and Industry, H.E. Mrs. Fatima Haram Acyl expressed her appreciation for the commitment and dedication that Member States have demonstrated for the process of establishing the Continental Free Trade Area. She indicated that the CFTA presents significant welfare gains, output and employment expansion, and intra-African trade growth in the long-run. She highlighted the fact that substantive progress has been made to ensure that the CFTA is made a reality by end of 2017.
“I am very confident that the end of 2017 will usher Africa into a new era where our traditional borders will become less important as a result of establishment of the Continental Free Trade Area,” she emphasized.
The Commissioner recalled that in the last four meetings of the CFTA Negotiating Forum, negotiators have been able to adopt the Rules of Procedure (RoP) as well as Definitions of the CFTA negotiations guiding principles that were subsequently approved by the African Union Ministers for Trade in May 2016.
She also recalled the establishment of the Seven (7) Technical Working Groups (TWGs) and the first meeting of all the Technical Working Groups (TWGs) that took place in Kigali, from 6th to 17th February 2017.
Commissioner Acyl reminded participants that the Commission has developed a preliminary draft of CFTA Model Text on both trade in goods and trade in services as directed by the Heads of State in July 2016. According to her, the draft text has been validated by the RECs and members of the Continental Task Force on the CFTA in January 2017 and sent to Member States and RECs for national and regional consultations.
“For the CFTA to be successful, it is very important to recall that ownership is very critical. We are trying our best to engage stakeholders in this process including the Private Sector and other Non-State Actors where possible. However, we always encourage and urge Member States and Regional Economic Communities to undertake regional and national consultations of those stakeholders as regularly as possible,” she underscored.
She concluded by recognizing the critical role that Regional Economic Communities and Technical Partners as well as members of the Continental Task Force have played in providing technical assistance to the CFTA process. She appreciated the role played by UNECA (United Nations Economic Commission for Africa) and UNCTAD (United Nations Conference on Trade and Development) in providing technical and analytical studies that have contributed to achievements registered so far.
Mr. Sayed El Bous, Egypt’s Chief Trade Negotiator and Chairperson of the Meeting, expressed his gratitude and congratulations to the Commissioner as she is now leaving the Commission after years of commitment and dedication to the CFTA. He appreciated the Department of Trade and Industry for convening the 5th CFTA Negotiating Forum and by providing working documents ahead of schedule. He recalled the objectives of the meeting and urged participants to come up with concrete proposals and outcomes in order to move the agenda forward and meet the deadline of the CFTA completion by the indicative date of 2017.
The 5th Meeting of the Continental Free Trade Area Negotiating Forum will kick off from 1-4 March 2017 and will be adopting the modalities that will guide the negotiations in Tariff liberalization and Trade in Services liberalization following a two-day Capacity Building Workshop for Negotiators.
Related links
CFTA legal texts and resources
Willemien Viljoen - 22 Feb 2017
Ron Sandrey - 22 Feb 2017
Gerhard Erasmus - 25 Jan 2017
Hans Grinsted Jensen and Ron Sandrey - 23 Nov 2016
JB Cronjé - 23 Nov 2016
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Tanzania left out as Kenya, Uganda, Rwanda launch joint tourism portal
Tanzania appears to have been isolated further in efforts to market East Africa a single tourism destination, after Kenya, Uganda and Rwanda launched a portal to jointly market their tourism products online.
At the same time, Kenya is looking to Uganda to boost intra-regional travel for pleasure, building on statistics that an expanding middle class is becoming more amenable to travel.
“The fact that Tanzania has made it clear that regional tourism is not a priority for them is affecting efforts to sell East Africa as a whole. If we are to compete with other regions and destinations, we need unity of purpose,” said Carmen Nibigira, the co-ordinator of the East Africa Tourism Platform.
She added that the region must break down the barriers to the growth of the tourism sector in order to compete in the continental and global arena.
The portal will be a shared platform for tourist trade operators to place their multi-country packages targeting regional and international tourists. It follows the launch of the East African multi-entry Single Tourists Visa, which has largely failed to take off as member states have failed to streamline their national visa policies. Since its launch in February 2014, the visa has attracted only 4,000 tourists.
“With the year 2017 being the year of sustainable tourism, it is important for East Africa to implement sustainable tourism practices to ensure that countries remain choice destinations in Africa,” said Kenya Tourism Board CEO, Betty Radier at the launch of the portal.
No significant success yet
An analysis of tourist arrivals shows that despite countries on the Northern Transport Corridor isolating Tanzania, their efforts to attract more tourists have not translated into significant success, with preferences still being driven by individual country attractions.
The number of visitors to Kenya was 1.8 million in 2011, and dropped to 1.2 million in 2015, according to the Kenya National Bureau of statistics. In Tanzania, the Tourism Sector Survey puts the figures at 1.1 million visitors in 2015, up from 867,994 tourists in 2011.
Total tourist arrivals to Uganda have grown from 1.15 million in 2011 to 1.7 million in 2015 according to Uganda Tourism Board.
In Rwanda tourists numbers rose from 900,000 visitors in 2011 to 1.3 million in 2015, according to the Rwanda Development Board.
Stiff African competition
“As a region we need to understand competition is stiff and that is why at the policy level we need political goodwill to sell the destination together,” said Mr Nibigira.
Despite being home to some of the most breathtaking tourist attractions like the annual wildebeest migration, East Africa is facing stiff competition not only from other African regions but also from the Middle East, the Caribbean and South America.
While East Africa as a whole is struggling to surpass the five million mark in terms of international tourists arrivals, individual countries in Southern and Northern Africa are attracting large numbers.
Morocco, which is currently the leading destination in Africa, attracted over 10.2 million international tourists in 2014, followed by Egypt at 9.6 million and South Africa at 9.5 million.
According to a report by the Africa Development Bank, Africa welcomed a total of 65.3 million tourist arrivals in 2014, representing 5.8 per cent of the total international arrivals. The continent attracted $43.6 billion in revenue from the tourism sector, accounting for only 3.5 per cent of the global market share.
Pearl of Africa Tourism Expo
Meanwhile, figures provided by the Kenya Tourism Board indicate that formal arrivals from Uganda to Kenya rose from 29,038 in 2015 to 51,023 last year. The figure is exclusive of ground travel and cross-border movements of local communities.
Dr Radier told the recently concluded Pearl of Africa Tourism Expo in Kampala that a consumer campaign in Uganda from March to June last year was a major boost to intra-regional travel generating 15 million.
Assistant regional manager for KTB, Fiona Ngesa said Ugandans travel to Kenya for holiday followed by business and conferences, mainly in Nairobi. Ms Ngesa also listed medical tourism as another sector that is growing, with Uganda making up 28 per cent of total medical tourists travelling to Kenya.
Trends show that Ugandans visiting Kenya has been gradually growing in the past decade except for the period between 2013 and 2015 when the sector in Kenya and the region suffered terror attacks.
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Sustainable Development Goals critical for better future for all – deputy UN chief Amina Mohammed
Delivering her first address as the United Nations Deputy Secretary-General, Amina Mohammed underlined that Sustainable Development Goals (SDGs) are essential for a safe and secure future that brings prosperity, opportunity and human rights for all.
“Around the world, success in achieving the SDGs will ease global anxieties, provide a better life for women and men and build a firm foundation for stability and peace in all societies, everywhere,” said Ms. Mohammed at the opening of the 2017 UN Economic and Social Council (ECOSOC) segment on Operational Activities for Development.
Ms. Mohammed, earlier on Tuesday, was administered the oath of office by Secretary-General António Guterres at a ceremony at the UN Headquarters in New York.
“Success will require a bolder approach to financing and partnerships. Nothing will be achieved without engaging all actors,” she added, urging all countries to rethink systems, approaches, redefine traditional planning, delivery and monitoring.
She also said that the UN too needed to be “fit for purpose” to help its Member States implement 2030 Agenda for Sustainable Development.
“We must innovate, and revamp our approach to partnership and financing, with a focus on the long haul. We must empower youth to participate in and shape the political and economic lives of their countries and communities; to be the agents of peace and development,” she noted.
Further in her remarks, the deputy UN chief also highlighted that despite much progress, Africa continued to remain vulnerable, and therefore needs to be a UN priority.
Noting that efforts should be stepped to support the least developed, landlocked and small island developing states to reduce vulnerability and build resilience, she added that “It is critical that, across the world, we focus on those furthest behind first. Because in all regions, the rising tide of optimism and empowerment, has not yet reached everyone.”
She also underlined the need to address growing inequalities around the globe as well as combat gender discrimination which continues to limit the opportunities and potential of women and girls in all countries.
Looking ahead, Ms. Mohammed said that focus would be based on broadly three principles: strengthening impartial leadership of the UN development system for coherence and integration at all levels; addressing the trust deficit to entail accountability and transparency at all levels; and being responsive to national priorities.
“Solutions from the past will not, alone, meet the challenges of the future,” she underlined.
The UN Deputy Secretary-General also spoke of the Quadrennial Comprehensive Policy Review (QCPR) process that established a sequenced approach to the review of the UN development system as well as on the empowerment of Resident Coordinators and implementation of standard operating procedures for UN Country Teams.
Noting that the world has a unique, once-in-a-generation opportunity to deliver a better future for all humanity, she stressed: “The task ahead is challenging, but nothing is impossible when we work together.”
Opening the segment, ECOSOC Vice-President Cristián Barros said the Council would contribute to the implementation of the QCPR in three ways: by laying the foundation for its work after the receipt of comprehensive proposals requested from the Secretary-General in the QCPR; by discussing concrete steps that the UN development system can initiate immediately to enhance system-wide coherence and efficiency; by reflecting on adjustments needed to improve impact of support provided to different groups of countries to deliver on the 2030 Agenda.
As a result of the deliberations in the general Assembly on the QCPR, Mr. Barros said there is now growing recognition among Member States that the UN development system is at a “critical juncture” where important decisions will need to be made for the Organization to effectively support delivery of the 2030 Agenda.
This is why the new QCPR resolution of the General Assembly requested the Secretary-General to prepare proposals for their consideration in the course of this year on the system's functions and capacities.
“These options will enable Member States to make decisions on the changes required at different levels for the kind of transformation we need to bring the UN development system up to speed with the level of ambition of the 2030 Agenda,” he said.
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Uganda struggles to deliver EPA to success
Despite the lack of consensus among the East African Community (EAC) partner states over the signing of the Economic Partnership Agreement (EPA) with the European Union (EU), Uganda still believes that all is not yet lost.
Already Rwanda and Kenya have gone ahead to sign the deal, with the former’s Parliament even ratifying it.
As for Tanzania, she has refused to append her signature on the dotted lines after raising several objections which ultimately resulted in the Tanzanian Parliament voting against the deal.
Meanwhile, Daily Monitor understands that Uganda and Burundi who are yet to sign the pact, are reading from the same script, with the latter playing a leading role to broker consensus among the split member states.
In a meeting last week at the ministry of Trade in Kampala with Mr James Wharton, the U.K Undersecretary of State for Trade/DFID, Ms Amelia Kyambadde, the Trade minister, said Uganda is ready to sign the agreement, although it will prefer to sign it as a block.
She, however, said a meeting of the regional heads of state will happen soon and a decision regarding the pact will be arrived at, stressing that as a country, Uganda is committed to signing the deal.
On his part, Mr Wharton, said even as they are negotiating their way out of Brexit, something that could take not less than 24 months, he urged that the deal be concluded amicably.
When interviewed for this article last week, the Permanent Secretary, ministry of Trade, Amb. Julius Onen, said: “We are not going to allow EPA to disfranchise EAC. What is happening now is that this issue (EPA) is being blown out of proportion by a group of people.”
He continued: “Even with all that is happening (such as Tanzanian’s objection), it is not the end of the world for the EAC region. As we speak now, we are negotiating with USA. China and Iran are also interested in doing business with us and so are a host of many other countries.”
Mr Onen whose understanding of trade dynamics is highly commendable, let alone his astute appreciation of global trade interplays, says that it is too early, and for that matter, unreasonable for the critics to declare EPA as dead.
In fact, he disclosed that a summit (meeting of the EAC heads of state due in March) will meet and pronounce themselves on whether the community should sign the EPA collectively or as individual partner states.
The heads of state were supposed to make a pronouncement in October last year, but postponed it to January before cancelling it again to February. Reliable sources have intimated to this newspaper that the heads of state will meet next month.
In-roads
Mr Onen said: “Uganda does not want to see a weakened EAC, this is why as a country we are trying to see that we are all pulling from the same direction. And Burundi has since agreed with us on this. We want to sign EPA collectively and from a very high-level we are trying to see that happens. If that fails (signing collectively) then that will not be the end of EAC.
It is the regional partner states that introduced the aspect of collective signing under the article 132 (2). And if need be we can go back to that article and simply remove the word collective so that a country that is ready goes ahead with the deal – sign, ratify and enforce it.”
According to Mr Onen, about 60 per cent of the trade in the region happens among the member states. However, he stressed that it is important for the region to make inroad into the EU market. And that is why it is important to commit to the market access that has been negotiated under the EPA.
Sticky issues
According to the EAC Sectoral Council on Trade, Industry, Finance and Investment (SCTIFI) Meeting held in Arusha, Tanzania in early February, Kenya and Rwanda had no concern in relation to the signing of the EPA. But despite being on the same page with Kenya and Rwanda, Uganda wants the partner states to sign the agreement as a bloc. She also wants available options explored in the event that some EAC members, as it is the case already, go ahead and sign the EPA without others doing so.
As for Burundi, her main concern was the decision of EU to unilaterally suspend direct partnership with her government.
And for Tanzania, the issues of contention are several, including being wary of the effects of EPA on EAC industrial development. Tanzania is also concerned about how the revenue losses resulting from substantial trade liberalisation will be bridged.
The effect of Brexit is also among the things causing the largest EAC country sleepless nights, considering that UK is one of the major EAC trading partners.
Other concerns raised in the meeting include queries regarding how the EAC partner states will operationalise Article 13 (2) on movement of goods while there is no free circulation of goods in the region and no refund mechanism for customs duty paid to another partner state.
Some members are also concerned about how the bilateral and multilateral safeguards will protect the EAC domestic industries against any economic injury.
Members are also wary about how an individual EAC member can denounce the EPA if she feels that her interests are interfered with. Another concern is how the EAC will bridge the gap in their balance of trade with EU while continuing trading with raw materials.
EU’s views
The press and information officer, EU Delegation to Uganda, Mr Emmanuel Gyezaho, responding to the developments, said: “I fully share the idea that EAC regional market needs to be consolidated but this does not mean that the EAC should drop the Economic Partnership Agreement with the EU.”
“It is our expectation that those discussions will be constructive. Already, Europe as a block has signed. Now we wait for the EAC,” he added.
On the issue of EU’s suspension of partnership with Burundi, Mr Gyezaho said Burundi is not suffering from any trade sanctions from the EU.
He said Burundi can sign the deal, adding: “What is true is that the EU has imposed restrictive measures against (only) four persons.”
Private sector speaks
Mr Gideon Badagawa, the Private Sector Foundation Uganda (PSFU) executive director, urges that when Uganda signs the EPA, she agrees to open up her market.
“Whatever we do, this is where the world is now moving to. Open access to markets as long as one meets the market requirements. We will have duty-free and quota-free access to European markets,” Mr Badagawa shared. He added: “The advantage with the EPA is that the EU will have arrangements to help us build our capacities over the time and the requisite infrastructure. So it is in our interest to sign the agreement.”
Mr Badagawa, thinks that the benefits of signing EPA are much more to Uganda and the block. “We shall open to raw materials to enter EAC at zero duty and after seven years, we shall open to intermediate goods and after 25 years, to final goods. By that time, Uganda is expected to have developed its capacity to compete with final goods coming from the EU,” he said.
EAC trade with EU
The total value of trade of the EAC with the EU has never been so high, standing now at slightly more than Shs25 trillion. Even after Brexit, the EU still remains the biggest single market in the world. The EPA further prohibits them to EAC countries.
Other provisions stimulating regional processing, eliminating customs red tape and protecting EAC infant industries, would help Uganda and the rest of the EAC to add value to their exports to Europe.
EAC-EU EPA
Economic Partnership Agreements (EPAs) are trade and development agreements negotiated between the EU and African, Caribbean and Pacific partners engaged in regional economic integration processes.
In other words, EPA is an initiative by the EU to secure free market access in the region and reciprocate in equal measure.
The EU-EAC EPA covers trade in goods and fisheries as well as development cooperation that aims to reinforce cooperation on the sustainable use of resources.
Further negotiations are ongoing to include services and trade-related rules in the future.
The deal is balanced and fully in line with the EAC Common External Tariff.
It bans unjustified or discriminatory restrictions on imports and exports, which contributes to the EAC’s efforts to eradicate non-tariff barriers in intra-EAC trade.
It supports the EAC’s regional integration agenda and has what it takes to foster development.
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The European Union and the African Union: A statistical portrait – 2016 edition
Introduction
Africa-EU Strategic Partnership
Africa’s continental integration is a key priority for the strategic partnership between the African Union and the European Union. The new Pan-African Programme will provide a major contribution to the Africa-EU Partnership, established by the two continents in 2007 with the Joint Africa-EU Strategy (JAES), in order to put their relations on a new footing. The programme is a key instrument for the European Union to implement, in close cooperation with African partners, the political priorities of the Joint roadmap 2014-17, which was adopted by African and European Union Heads of State and Government during the 4th EU-Africa summit in April 2014.
The eighth College to College (C2C) meeting took place between the African Union Commission and the European Commission on 7 April 2016 in Addis Ababa and reaffirmed the aims of the Joint Africa-EU Strategy and of its five priority areas of the Joint Roadmap:
- Peace and Security
- Democracy, Good Governance and Human Rights
- Human development
- Sustainable and inclusive development and growth and continental integration
- Global and emerging issues
Support for statistical capacity building is essential to underpin all strategic objectives. Africa’s Agenda 2063 gives a long-term vision for Africa over the next fifty years. Globally, the Agenda 2030 represents a global commitment to work together towards the achievement of the Sustainable Development Goals.
The Pan-African Statistics (PAS) programme, as part of the overall Pan-African Programme, aims to support African integration by improving the availability and quality of statistical information required for informed decision-making and policy monitoring. To this end it will provide technical assistance to enhance harmonisation and coordination of statistics on the continent and to foster institutional capacity building. It also supports preparations towards a statistical institute at African Union level, the creation of which was decided by the African Heads of States and Governments in January 2013.
The publication
This statistical book presents a range of statistics on African and European countries.
The first chapter gives an overview of demography, key economic indicators and external trade in Africa, Europe and some selected countries or world regions.
Following this, seven thematic chapters present balanced sets of key indicators: demography, health, education, national accounts, economy and finance, industry and services and external economic relations. Two tables are available for each indicator, one presenting data for the African countries and the other one for the European countries.
The data presented in this publication cover the period up to 2015, or until the last year for which data are available.
Overview
International trade
Africa accounted for around 8% of imports to the EU-28 and 9% of exports from the EU-28 in 2015, measured by value (Figure 1.10). This was far behind Asia, which stood for 45% of imports to the EU-28 and 36% of exports. As comparison, Northern America accounted for 16% of EU-28 imports but was the destination for 23% of EU-28 exports.
The EU-28 trade balance with Africa for goods was negative in all years between 2003 and 2014, but turned to a surplus in 2015 (Figure 1.11). The European Union’s trade deficit with Africa fell sharply from 41.2 billion EUR in 2008 to 3.8 billion EUR in 2009, clearly reflecting the worldwide economic crisis, with both import and export values dropping.
This fall in both exports and imports broke the steady increase in trade between EU-28 and Africa between 2003 and 2008, which had seen EU-28 exports to Africa raise by 71% and imports by 94% over this period. From 2009 to 2012, EU-28 exports to Africa returned to growth, before stabilising at around 153 billion EUR from 2013 to 2015. Also the imports from Africa resumed its strong growth in 2009, exceeding the pre-crisis value by 16% in 2012. However, from 2013 onwards the value of EU-28 imports from Africa has fallen each year. By 2015, the imports from Africa, at 132.0 billion EUR, had fallen by 29% compared to the peak of 186.7 billion EUR in 2012. By far the main cause for this was the fall in value of crude oil and natural gas imports from Africa, due in large part to falling world market prices for these products.
In 2015, the three main African partners for imports of goods to the EU-28 were Algeria (16% of total import value from Africa), South Africa (15%) and Nigeria (14%) (Figure 1.12). Together, these three countries accounted for 45% of EU-28 imports from Africa. For both Algeria and Nigeria, the main product group imported to the EU-28 was petroleum products, more specifically crude oil and natural gas. Due to the fall in petroleum prices, the value of this trade has fallen and both have seen their share in EU-28 imports from Africa falling in recent years. Libya has seen an even stronger fall in its share of EU-28 imports, due partly to the fall in petroleum prices and partly to the continued instability following the Civil War of 2011. In 2013, Libya ranked third among African importers to EU-28 with 14% of the import value. By 2015, Libya was ranked seventh with only 6% of the import value from Africa. The main African destination for EU-28 exports in 2015 was South Africa, taking 17% of these exports. Thereafter followed Algeria (14%), Egypt (13%) and Morocco (12%) (Figure 1.13).
Considering the products traded, the EU-28’s major imports from Africa were above all energy products (Table 1.3). For these products (in particular crude oil), Africa is second only to Russia as an EU-28 import source. In 2015, despite falling by half since 2012, the value of energy product imports from Africa still amounted to EUR 61.6 billion. This made up 46.6% of EU-28 imports from Africa that year. Other important groups of goods imported from Africa were food and live animals (12.3% of total EU-28 imports from Africa), machinery and vehicles (10.9%) as well as manufactured products classified by material (9.4%).
In 2015, EU-28 exports to Africa mainly consisted of processed products. The main product group was machinery and vehicles, in particular road vehicles; with 57.4 billion EUR, this product group accounted for 37.3% of EU-28 export value to Africa (Table 1.4). Other important product groups were manufactured products classified by material (22.2 billion EUR) and chemicals (20.8 billion EUR), accounting for 14.4% and 13.5% of the value of EU-28 exports to Africa in 2015 respectively (Figure 1.14). For EU-28 exports of energy products to Africa, there was a significant reverse flow of refined oil products, amounting to some 17.9 billion EUR (11.6%) in 2015.
From 2014 to 2015, the value of exports to Africa of machinery and vehicles, the largest product group by far, grew by 4%. Amongst the other main product groups, the export value from EU-28 to Africa fell by 1% for manufactured products classified by material, rose by 8% for chemicals, but fell by almost 15% for energy products.
On the import side, the value of imports of energy products from Africa fell by a third from 2014 to 2015, following drops of 15% in 2014 and 12% in 2013. This downturn was partly due to the falling world market prices for petroleum products and partly due to falls in the quantities imported from a number of important countries from 2014 to 2015. Notable amongst these was a strong fall in the volumes of energy products imported from Libya (-19%), South Africa (-18%), Equatorial Guinea (-14%) and Algeria (-5%). In addition to energy products, there were also slight declines in the values of crude materials and chemicals imported from Africa to EU-28 (both -3%), as well as for manufactured products classified by material (-1%). For all other main groups of commodities, the value of imports increased from 2014 to 2015.
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The Economic Impact of the EU-East African Community Economic Partnership Agreement
An analysis prepared by the European Commission’s Directorate-General for Trade
On 3 April 2014, Heads of State and Governments of Africa and of the European Union gathered at the Fourth EU Africa Summit declared: “Our economies remain closely linked, and we will work to ensure that the growth of the one will help the other. We are also convinced that trade and investment and closer economic integration on each of our continents will accelerate that growth.” While acknowledging the “valuable role” of development assistance, they called for “a fundamental shift from aid to trade and investment as agents of growth, jobs and poverty reduction.”
That priority is reflected in the Economic Partnership Agreements (EPAs) between the EU and African, Caribbean and Pacific (ACP) countries, which are the main pillar of ACP-EU trade cooperation, and aim at creating the right conditions for trade and investment. Highlighting the positive outcomes of the conclusions of three regional agreements in 2014 (West Africa, SADC EPA group and EAC), the Trade for All Communication of October 20152 considered that those agreements “established a new dynamic partnership between the two continents and paved the way to closer cooperation in the future.” In this context, the EU-EAC EPA establishes a long-term and stable trade relationship between both parties, in compliance with international trade rules.
The East African Community (EAC) and the EU share strong trade links. The EU is the EAC’s first trade partner for exports (25.3% of EAC exports go to the EU) and third partner for imports (12.5% of EAC imports). All in all, trade between both regions amounts to €6.8 bn. and has increased steadily in the last ten years (by more than 75%) both for exports and imports. EAC countries experimented steady growth rates in recent years, above 6% annually, sustained in particular by foreign direct investment in the region. A large share of the EAC's foreign direct investment stock comes from the EU.
The present report is part of the “Economic analyses of negotiated outcome” undertaken by DG TRADE at the end of negotiations. Contrary to earlier reports, it does not rely on hypothetical scenarios but on the actual outcome of the negotiation between the parties, with a view to provide information to all stakeholders involved in the adoption process of the agreement, as well as to the wider public.
The rationale and content of the EAC-EU EPA
The EU’s trade relations with the ACP countries were historically framed by a series of conventions, which granted unilateral preferences to the ACP countries on the EU market. By the end of the 1990s, it was found that these conventions did not promote trade competitiveness, diversification and growth as intended. They were also found to be in breach of the World Trade Organisation’s (WTO) principles, as they established unfair discrimination between developing countries. A change was therefore required. EPAs were the response defined jointly by the ACP countries and the EU in the Cotonou Agreement. EPAs build a new bilateral reciprocal partnership for trade and development, asymmetric in favour of ACP countries.
In keeping with the objectives set out in the Cotonou Agreement, sustainable development is a key objective of the EPA, which is explicitly based on the “essential and fundamental” elements set out in the Cotonou Agreement (human rights, democratic principles, the rule of law, and good governance). The joint EPA institutions are tasked with the function of monitoring and assessing the impact of the implementation of EPAs on the sustainable development of the parties, also carving out a clear role for civil society.
In view of these objectives, the EPA differs from most Free Trade Agreements (FTAs) currently in place or negotiated by the EU with other trading partners: while it remains a reciprocal agreement (as a factor favouring trade and investment, and as a condition for its compatibility with WTO principles), it weighs in favour of the EAC through specific provisions:
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trade rules that constitute a key contribution to the reform agenda and better business environment in the EAC Partner States,
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an "asymmetry" in the commitments to take into account the different level of development, which covers market access, rules of origin and the use of safeguard measures by the EAC,
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the development assistance which revolves around the needs for the partner countries to respond to the first two pillars.
The institutional provisions of the EPA set up a specific forum for the East African Community and the EU to discuss and resolve trade issues: in that manner, the EPA creates a genuine bi-regional partnership, which is also extended to civil society through a consultative committee.
The conclusion of the EPA negotiations should also be seen in the context of the EAC's efforts to improve regional integration. The EAC established a Customs Union in 2005 and ratified a more far-reaching common market protocol in 2010. The EPA would contribute to foster those efforts, especially through the flexible rules of origin provisions that are part of the agreement and the development assistance channelled in the EPA context for instance to support regulatory convergence and trade facilitation within the region.
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tralac’s Daily News Selection
CFTA negotiations update, @CK_Knebel: H.E. Acyl @AUTradeIndustry opens CFTA workshop on tariff modalities & thanks @UNCTAD for support & highlights proposed joint work on NTMs
Free Movement of People and Goods and its Implications on Peace and Security in Africa: PSC communique (AU)
The Peace and Security Council of the AU, at its 661st meeting held on 23 February 2017, at the ministerial level, adopted the following decision on Free Movement of People and Goods and its Implications on Peace and Security in Africa: Also acknowledges that besides facilitating regional and continental integration, the benefits of free movement of people, goods and services, far outweigh the real and potential security and economic challenges that may be perceived or generated; Commends all Member States which have already signed and ratified all relevant AU instruments on free movement of people and goods, and encourages those Member States which have not yet done so, to also do the same. In the same context, Council urges Member States to address all institutional and regulatory capacity gaps, in order to have a common policy on free movement of people and goods;
Further commends Member States that have already started to issue visas on arrival to fellow African citizens, namely: Benin, Ghana, Mauritius, Rwanda and Seychelles and urges other Member States to also put in place necessary measures to ensure the issuance of visas on arrival for African citizens while at the same time taking the necessary security precautions; Appeals to Member States, within the spirit of promoting free movement of people and goods in the African continent, to refrain from imposing harsh penalties to fellow African citizens who would have over-stayed in their countries beyond the period stipulated in the visas and to facilitate their exit to destinations of their choice; [IGAD to hold a Special Summit on Somali Refugees (25 March, Nairobi)]
South Africa: January trade balance swings into deficit (SARS)
The R10.81bn trade balance deficit for January 2017 is attributable to exports of R80.59 billion and imports of R91.40bn. Exports decreased from December 2016 to January 2017 by R13.09bn (14.0%) and imports increased from December 2016 to January 2017 by R10.13bn (12.5%). December 2016’s trade balance surplus was revised upwards by R0.37bn from the previous month’s preliminary surplus of R12.04bn to a revised surplus of R12.41bn as a result of ongoing Vouchers of Correction. [Ahead of the release: From Standard Bank – Bloomberg consensus is for it to have swung into deficit, to -R3.4bn, from R12.0bn in December. Our economics team expects the trade balance to follow its seasonal pattern and to have moved into deficit in January, to -R8.4bn.]
What will it take to improve Rwanda’s trade imbalance? (New Times)
Government’s “Made in Rwanda” initiative seems to be paying off and according to experts, the campaign is key in correcting and balancing Rwanda’s trade books. There is potential to produce most of the imported commodities locally which could have a huge potential and positive impact on Rwanda’s trade balance, according to experts. The Central Bank governor, John Rwangombwa, says Rwanda’s trade balance improved with export cover of imports improving to 32% in 2016 compared to 28% in 2015.
Nigeria: Q4 2016 GDP Report (Bureau of Statistics)
In real terms, trade recorded negative year on year growth, of -1.44%. This was a larger decline than that recorded in the previous quarter of -1.38%, as well as a fall in growth compared to the rate of 4.69% recorded in the fourth quarter of 2015. Quarter on quarter growth stood at 5.79% in the fourth quarter of 2016. Full year 2016 Real GDP contracted by -0.24%, which was 5.38% points lower than the growth of 5.14% in 2015. In real terms, Trade’s contribution to GDP was 16.65% in the fourth quarter of 2016, slightly lower than the 16.68% it represented in the previous year, but higher than the 16.39% recorded in 2016 third quarter. [Download (pdf)]
How the naira can aid Nigeria’s economic transformation (SET/ODI)
The real effective exchange rate (REER) is an important metric for a country’s competitiveness. It can determine the degree to which a resource-dependent economy can use its resource rents to achieve transformation through growth in non-extractive sectors. Here, we look at the recent REER experience of Nigeria and compare it with that of Indonesia. Where Indonesia’s currency policy was an important precursor to its transformation, Nigeria has remained largely resource dependent. [The analyst: Phyllis Papadavid]
SADC Investment Subcommittee Forum: update (Swazi Observer)
Jabulani Mabuza (Swaziland’s Minister of Commerce, Industry and Trade) called upon the forum to find feasible ways of promoting regional investment inflows as they seek to reach a harmonised investment policy framework. “The ease of doing business remains fundamental to making SADC a compelling investment destination,” he said. Mabuza also warned the forum to be mindful of external factors that may undermine the region’s good efforts, especially climate change. “Therefore, the development of a policy framework should woven within the ambit of sustainable development. We cannot forget the effects of the recent drought, which sought to reverse some of the gains that our economies have realised in the past decade,” said Mabuza.
Zambia mining, bio-fuels investment policy reviews from UNU-WIDER:
Review of social issues for large-scale land investment: This working paper focuses on the social constraints to expanding biofuel production in Zambia through large-scale investment models. This is done by reviewing the literatures on the experiences of large-scale land acquisition in Zambia and the social impacts of these and on the legal mechanisms that shape outcomes. [The analyst: Giles Henley]
Approaches to supporting local and community development: This paper examines the modalities and results of mining community development programmes in Zambia as part of the broader discussion on how large international mining companies can, and do, contribute to local and community development. It narrates the approaches adopted by five multinational mining corporates, two of which are Chinese-owned, and discusses the advantages and disadvantages of each approach. [The analyst: Angel Mondoloka]
Northern Corridor: Uganda, Kenya, Rwanda launch regional electronic cargo tracking system (URA)
The web-based cargo tracking system was first introduced by Uganda Revenue Authority three years ago. Thereafter, Kenya and Rwanda decided to adopt the system. Several challenges prompted the Kenya and Rwanda to adopt the system. Among them was the lack of monitoring mechanisms, dumping and diversion of goods. The challenges affected revenue collection. “Last year’s average clearing time countrywide was 2.07 days. We intend to reduce this by 60% after the RECTS implementation. We would like the exports to be cleared in a matter of hours. We have about 190,000 annual transit consignments along the northern corridor,” stated Customs Commissioner, Dicksons Kateshumbwa.
Botswana takes steps to implement an advance ruling system for tariff classification and origin (WCO)
Botswana Unified Revenue Service hosted a WCO Revenue Package national workshop (20-23 February, in Gaborone) with the aim of preparing the Administration for the implementation of an advance ruling system for classification and origin, as required under the WTO Trade Facilitation Agreement. During the discussions, the participants also considered other measures that could improve the classification and origin infrastructure. Being a member of SACU (the South African Customs Union) it was suggested that creating a consultation forum with other SACU countries would improve the work at regional level. The establishment of a customs laboratory at national level, a regional (SACU) laboratory, or using a private laboratory were also given attention. Finally, more capacity building was also sought.
Zimbabwe: AG’s office works on National Ports Authority Bill (The Chronicle)
A Bill to establish the National Ports Authority that will run the country’s border posts is now at the drafting stage. Minister of Transport and Infrastructure Development, Dr Joram Gumbo, said cabinet had approved the decision to set up the agency and that the Attorney General’s office was now busy drafting the Bill. Dr Gumbo said the authority will deal with operations, administrative, security and health issues at border posts, among others.”The authority will be an independent body dealing specifically with issues regarding the operations at our border and not bogged down by technical issues. It is very critical that we make our ports of entry user-friendly for regional and international trade. “We want a situation where operations are coordinated from a central point to avoid discord,” he said. Some of the stakeholders at border posts include: Department of Immigration, Zimbabwe Revenue Authority, Police, Ministry of Health, Environmental Management Authority, Forestry Commission, Veterinary Services and a private security company among other security agents.
AfDB debt mission heads for Zimbabwe (NewsDay)
A team from the African Development will tomorrow hold a meeting with civil society organisations and development partners on Zimbabwe’s debt and arrears clearance strategy and options. The meeting will be held at the National Association of Non-Governmental Organisation offices in Harare. Nango said the joint multi-sector mission would be led by Sibry Tapsoba, the bank’s director for the Transition Support department.
African citrus sales concern RSA (Fruitnet)
South Africa’s citrus industry says it is concerned about the low level of exports into Africa and has launched a new strategy to develop sales in countries on the rest of the continent. “Exports of citrus from South Africa, Swaziland and Zimbabwe into the African continent are extremely low,” explains the CGA’s Justin Chadwick. “In 2014, 766,000 cartons were exported into Africa, by 2016 this had doubled to 1.5m cartons, but this represents only 1% of total exports.” Chadwick says this is in stark contrast to the apple industry, where 28% of the 2016 crop was destined for Africa. [Kenya: China to purchase Kenyan mangoes amid bumper harvest]
Fragility and development in the Democratic Republic of Congo (pdf, International Development Committee)
Private sector and business environment reform: We believe that there is a more fundamental issue surrounding support for economic development. We believe that we should see much tighter return on investment criteria. Either the majority of the funding should be in the form of returnable capital which can then be re-invested by DFID at a later date or—if it is given in the form of grants — we should see returns of up to 10 times the investment. So in future economic development projects costing £1 million should yield £10 million over the course of 4–5 years in either a) increased incomes; b) additional non-DFID investment; or c) very carefully calculated non-cash benefits, such as improvements to health and education.
How should the UK trade with developing countries after Brexit? (Traidcraft)
Traidcraft have put together a paper (pdf) that looks at the options for the UK’s trading relationship with developing countries and offers a clear recommendation for how we can ensure that Brexit does not undermine global development. In this blog, we will deal what on the surface looks like the most politically attractive option (continuing existing EU treaties) and present our suggested alternative – a non-reciprocal market access scheme.
Better Business, Better World: sustainable business opportunities in Africa (Business and Sustainable Development Commission)
African business leaders and entrepreneurs can unlock significant economic opportunities worth US$1 trillion in the region and US$12 trillion globally if they pursue sustainable business models. These opportunities and how to achieve them take centre stage at two events, hosted by Safaricom and Intellecap in Nairobi, to launch the African Better Business, Better World report from the Business and Sustainable Development Commission.
Sino-African e-commerce takes off (African Business)
According to Fu, transactions in 2016 were worth nearly $200m. The briskest business is in Kenya, aided by Amanbo’s bilingual site in Swahili and Chinese, a showroom in Nairobi displaying over 5,000 products and its cooperation agreement with the Kenya National Chamber of Commerce. Amanbo follows an “online + social + offline” business model. It boosts its business with offline offices in 10 countries – Kenya, Uganda, Egypt, Cameroon, Togo, Niger, Côte d’Ivoire, Sierra Leone, Burkina Faso and Mali.
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South Africa Merchandise Trade Statistics for January 2017
South Africa trade balance swings to deficit in January
South Africa posted a trade deficit of ZAR 10.81 billion in January of 2017 compared to an upwardly revised ZAR 12.41 billion surplus in December and below market forecasts of a ZAR 16 billion deficit. Imports jumped 12.5 percent, mainly due to higher purchases of equipment components and machinery & electronics. Exports went down at a faster 14 percent, due to lower sales of vehicles & transport equipment and mineral products.
The balance of trade in South Africa averaged -18.60 ZAR Million from 1957 until 2017, reaching an all time high of 18730.94 ZAR Million in May of 2016 and a record low of -23426.17 ZAR Million in January of 2015.
Excluding trade with neighboring Botswana, Lesotho, Namibia and Swaziland (BLNS), the country posted a trade gap of ZAR 17.6 billion in January.
The South African Revenue Service (SARS) today released trade statistics for January 2017 recording a trade balance deficit of R10.81 billion. These statistics include trade data with Botswana, Lesotho, Namibia and Swaziland (BLNS).
Including trade data with Botswana, Lesotho, Namibia and Swaziland (BLNS)
The R10.81 billion trade balance deficit for January 2017 is attributable to exports of R80.59 billion and imports of R91.40 billion. Exports decreased from December 2016 to January 2017 by R13.09 billion (14.0%) and imports increased from December 2016 to January 2017 by R10.13 billion (12.5%).
On a year-on-year basis, January 2017’s R10.81 billion trade balance deficit is an improvement from the deficit recorded in January 2016 of R19.55 billion. Exports of R80.59 billion are 15.8% more than the exports recorded in January 2016 of R69.62 billion. Imports of R91.40 billion are 2.5% more than the imports recorded in January 2016 of R89.17 billion.
December 2016’s trade balance surplus was revised upwards by R0.37 billion from the previous month’s preliminary surplus of R12.04 billion to a revised surplus of R12.41 billion as a result of ongoing Vouchers of Correction (VOC’s).
Trade highlights by category
The main month-on-month export movements (R’ million) |
||
Section: |
Including BLNS: |
|
Vehicles & Transport Equipment |
- R 2 795 |
- 32% |
Mineral Products |
- R 2 710 |
- 10% |
Machinery & Electronics |
- R 1 831 |
- 25% |
Precious Metals & Stones |
- R 1 063 |
- 7% |
Prepared Foodstuff |
- R 1 040 |
- 27% |
Chemical Products |
- R 685 |
- 12% |
Base Metals |
- R 599 |
- 6% |
The main month-on-month import movements (R’ million) |
||
Section: |
Including BLNS: |
|
Equipment Components |
+ R 4 287 |
+ 149% |
Machinery & Electronics |
+ R 2 311 |
+ 12% |
Base Metals |
+ R 1 763 |
+ 48% |
Chemical Products |
+ R 1 707 |
+ 21% |
Plastics & Rubber |
+ R 1 294 |
+ 41% |
Textiles |
+ R 1 226 |
+ 53% |
Vegetable Products |
+ R 764 |
+ 39% |
Prepared Foodstuff |
+ R 550 |
+ 20% |
Footwear & Accessories |
+ R 408 |
+ 54% |
Vehicles & Transport Equipment |
- R 4 047 |
- 34% |
Mineral Products |
- R 1 865 |
- 12% |
Trade highlights by world zone
The world zone results from December 2016 (Revised) to January 2017 are given below.
Africa:
Trade Balance surplus: R10 350 million – this is a 38.5% decrease in comparison to the R16 816 million surplus recorded in December 2016.
America:
Trade Balance deficit: R2 451 million – this is a 30.6% increase in comparison to the R1 876 million deficit recorded in December 2016.
Asia:
Trade Balance deficit: R14 434 million – this is a 353.8% increase in comparison to the R3 181 million deficit recorded in December 2016.
Europe:
Trade Balance deficit: R10 121 million – this is a 243.6% deterioration in comparison to the R2 945 million deficit recorded in December 2016.
Oceania:
Trade Balance deficit: R 136 million – this is an 81.1% decrease in comparison to the R 719 million deficit recorded in December 2016.
Excluding trade data with Botswana, Lesotho, Namibia and Swaziland (BLNS)
The trade data excluding BLNS for January 2017 recorded a trade balance deficit of R17.57 billion. This was a result of exports of R71.30 billion and imports of R88.87 billion.
Exports decreased from December 2016 to January 2017 by R11.70 billion (14.1%) and imports increased from December 2016 to January 2017 by R9.90 billion (12.5%).
The cumulative deficit for 2017 is R17.57 billion compared to R26.73 billion deficit in 2016.
Trade highlights by category
The main month-on-month export movements (R’ million) |
||
Section: |
Excluding BLNS: |
|
Mineral Products |
- R 2 872 |
- 11% |
Vehicles & Transport Equipment |
- R 2 765 |
- 35% |
Machinery & Electronics |
- R 1 745 |
- 29% |
Precious Metals & Stones |
- R 817 |
- 6% |
Prepared Foodstuff |
- R 707 |
- 27% |
Base Metals |
- R 550 |
- 5% |
Chemical Products |
- R 513 |
- 11% |
The main month-on-month import movements (R’ million) |
||
Section: |
Excluding BLNS: |
|
Equipment Components |
+ R 4 287 |
+ 149% |
Machinery & Electronics |
+ R 2 216 |
+ 12% |
Chemical Products |
+ R 1 793 |
+ 24% |
Base Metals |
+ R 1 734 |
+ 47% |
Plastics & Rubber |
+ R 1 285 |
+ 41% |
Textiles |
+ R 1 187 |
+ 61% |
Vegetable Products |
+ R 774 |
+ 40% |
Prepared Foodstuff |
+ R 616 |
+ 27% |
Vehicles & Transport Equipment |
- R 4 047 |
- 34% |
Mineral Products |
- R 1 856 |
- 12% |
Trade highlights by world zone
The world zone results for Africa excluding BLNS from December 2016 (Revised) to January 2017 are given below.
Africa:
Trade Balance surplus: R3 596 million – this is a 57.4% decrease in comparison to the R8 437 million surplus recorded in December 2016.
Botswana, Lesotho, Namibia and Swaziland (Only)
Trade statistics with the BLNS for January 2017 recorded a trade balance surplus of R6.75 billion. This was a result of exports of R9.29 billion and imports of R2.53 billion.
Exports decreased from December 2016 to January 2017 by R1.39 billion (13.0%) and imports increased from December 2016 to January 2017 by R0.24 billion (10.2%).
The cumulative surplus for 2017 is R6.75 billion compared to R7.18 billion in 2016.
Trade Highlights by Category
The main month-on-month export movements (R’ million) |
||
Section: |
BLNS: |
|
Prepared Foodstuff |
- R 333 |
- 25% |
Precious Metals & Stones |
- R 246 |
- 32% |
Chemical Products |
- R 172 |
- 18% |
Textiles |
- R 109 |
- 23% |
Plastics & Rubber |
- R 89 |
- 20% |
Base Metals |
- R 89 |
- 15% |
Vegetable Products |
- R 86 |
- 13% |
Machinery & Electronics |
- R 85 |
- 6% |
Misc. Manufactured Articles |
- R 84 |
- 30% |
Mineral Products |
+ R 162 |
+ 10% |
The main month-on-month import movements (R’ million) |
||
Section: |
BLNS: |
|
Precious Metals & Stones |
+ R 252 |
+ 766% |
Machinery & Electronics |
+ R 94 |
+ 74% |
Textiles |
+ R 39 |
+ 11% |
Chemical Products |
- R 85 |
- 11% |
Prepared Foodstuff |
- R 67 |
- 15% |
Live Animals |
- R 21 |
- 11% |
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AU on free movement of people and goods and its implications on peace and security in Africa
The Peace and Security Council (PSC) of the African Union (AU), at its 661st meeting held on 23 February 2017, at the ministerial level, adopted the following decision on Free Movement of People and Goods and its Implications on Peace and Security in Africa:
Council:
-
Takes note of the statements made by the Minister of Foreign Affairs and International Cooperation of the Republic of Rwanda, Honourable Louise Mushikiwabo, in her capacity as the Chairperson of the PSC for the month of February 2017 and by the Acting Director for Peace and Security, on behalf of the AU Commissioner for Peace and Security. Council also takes note of the presentations made by AU Commissioner for Political Affairs, Dr. Aisha Abdullahi and by Brigadier-General Joseph Nzabamwita, of the Republic of Rwanda, in his capacity as the Chairperson of the Committee of Intelligence and Security Services of Africa (CISSA). Council further takes note of the statements made by representatives of Member States, representatives of the African Members of the United Nations Security Council (A3), the Regional Economic Communities and Regional Mechanisms for Conflict Prevention, Management and Resolution (RECs/RMs), as well as by the representative of the United Nations;
-
Acknowledges that the AU Heads of State and Government have adopted important policy decisions on free movement of people and goods, including Agenda 2063. In this context, Council recalls decision [Assembly/AU/Dec.607 (XXVII))] on the Free Movement of Persons and the African Passport adopted by the AU Assembly of Heads of State and Government at its 27th ordinary session held in Kigali, Rwanda, in July 2016 in which the Assembly urged all Member States to adopt the African Passport and to work closely with the AU Commission to facilitate the process towards the issuance at national level based on international, continental and national policy provisions and continental design and specifications;
-
Also Acknowledges that besides facilitating regional and continental integration, the benefits of free movement of people, goods and services, far outweigh the real and potential security and economic challenges that may be perceived or generated;
-
Commends all Member States which have already signed and ratified all relevant AU instruments on free movement of people and goods, and encourages those Member States which have not yet done so, to also do the same. In the same context, Council urges Member States to address all institutional and regulatory capacity gaps, in order to have a common policy on free movement of people and goods;
-
Stresses the need for AU Member States to further enhance mutual trust, cooperation and collaboration in addressing security challenges that are related to free movement of people and goods, in order to prevent terrorist and criminal groups from taking advantages and exploiting such facilities;
-
Also commends the Economic Community of West African States (ECOWAS) and the East African Community (EAC) for the significant progress recorded to date in the promotion of free movement of people, goods and services and urges other RECs/RMs to emulate the ECOWAS example;
-
Further commends Member States that have already started to issue visas on arrival to fellow African citizens, namely: Benin, Ghana, Mauritius, Rwanda and Seychelles and urges other Member States to also put in place necessary measures to ensure the issuance of visas on arrival for African citizens while at the same time taking the necessary security precautions;
-
Appeals to Member States, within the spirit of promoting free movement of people and goods in the African continent, to refrain from imposing harsh penalties to fellow African citizens who would have over-stayed in their countries beyond the period stipulated in the visas and to facilitate their exit to destinations of their choice;
-
Underscores the importance of expediting the process of issuing an African Passport to all AU Heads of States and Government, Ministers of Foreign Affairs, Members of Permanent Representatives Committee, Heads of AU Organs, senior leadership of the Regional Economic Communities and Regional Mechanisms for Conflict Prevention, Management and Resolution (RECs/RMs) and their respective staff. In the same context, Council requests the AU Commission to provide necessary technical support to Member States, in order to enable them to produce and issue the African passport to their own citizens;
-
Also underscores the importance of further enhancing collaboration between and among Member States, particularly their immigration, defence, security and intelligence services, and working in close collaboration with the relevant African and international institutions, in order to ensure timely sharing of intelligence and build mutual confidence and trust, with a view to dispelling any fears that may be generated by the promotion of free movement of people, goods and services;
-
Stresses the urgent need for all national intelligence and security services of the Member States to be innovative and adapt to the contemporary security threats, among others, by using advanced information and communication technologies (ICTs) and highly skilled personnel, in order to prevent terrorist and criminal groups from abusing the free movement of people, goods and services, which is also in line with the provisions of UN Security Council Resolution 2178 of 2014 which requires Member States to prevent the movement of terrorist groups by ensuring effective border management and control;
-
Encourages Member States to sensitize their citizens on all AU decisions relating to free movement of people, goods and services, with a view to forestalling any resentment to foreigners from other African countries and preventing xenophobia;
-
Underlines the need to ensure a phased approach in implementing AU policy decisions on free movement of people and goods, mindful of the variances in the legitimate security concerns of Member States. Council also underlines the need to ensure that effective measures are put in place in order to prevent situations whereby upholding the freedom of movement of people will not lead to situations whereby the arrival and settlement of migrants in a given country will create/ exacerbate inequalities or will constitute challenges to peace and security;
-
Requests the AU Commission to expedite the finalization of the Protocol on Free Movement of Persons in Africa, pursuant to Assembly decision [Assembly/AU/Dec.607 (XXVII)];
-
Also requests CISSA to provide necessary support to the Member States and the RECs/RMs, with a view to expediting the implementation of all AU policy decisions relating to free movement of people and goods;
-
Further stresses the need for the African Members of the UN Security Council to work closely with the PSC in ensuring that Africa’s determination to facilitate free movement of people and goods is not impeded by external influences, given the emerging trends in some parts of the world whereby some countries are moving in the direction of closing their borders and imposing restrictions on the free movement of people;
-
Decides to remain actively seized of the matter.
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Kagame meets govt officials, AU experts to review progress
Senior government officials, leaders of civil society and the private sector in Rwanda are meeting to discuss government performance.
At the National Leadership Retreat known as Umwiherero, leaders will appear before President Paul Kagame to give an update on his key promises, mainly on the economy, governance, justice, infrastructure, health and education.
Minister in the Office of the President Venantia Tugireyezu said the retreat would dwell on the progress of the country’s Vision 2020, improving service delivery, enhancing citizen’s satisfaction, settlement and urbanisation as well as human capital development.
Unlike the past retreats that lasted only two days, this year’s retreat runs from February 24 to March 2.
“Increasing the days will give us ample time for in-depth discussions and audience participation, because in the past retreats we would go there for two days and before you know it, the days are gone,” said Stella Ford Mugabo, the Minister for Cabinet Affairs.
It is anticipated that the focus will be on evaluating the campaign of promoting locally made products, dubbed “Made in Rwanda” at a time the country is suffering from a depreciating currency and a persistent trade deficit.
A large number of Rwandans rely on agriculture for their survival, but this is one of the sectors that has for the past few years experienced slow development, despite the government’s determination to modernise it.
AU reform team
Meanwhile, on the sidelines of Umwiherero, President Kagame met with his team of experts tasked with driving reforms in the African Union on Sunday.
The experts proposed an end to duplication of roles by various AU organs; the ceding of some roles to regional economic communities; efficient and effective management of the business of the continental body at both the political and operational level; and ensuring that they can be sustainably financed by member states.
The proposals were collated from views gathered from various experts and regional blocs, and contained in a report presented at the 28th AU summit in Addis Ababa, Ethiopia by President Kagame last month.
“The 28th Summit of the African Union subsequently adopted the amended reform recommendations and mandated President Kagame to supervise the implementation process,” a statement from the Rwandan leader’s office read.
President Kagame is expected to table a report on the implementation progress at the next AU summit in July this year.
Those working with President Kagame on the reforms were Donald Kaberuka, former president of the African Development Bank; Carlos Lopes, former executive secretary of United Nations Economic Commission for Africa and Cristina Duarte, former minister for finance and planning of Cape Verde.
Other members were Strive Masiyiwa, executive chair of Econet Wireless; Tito Mboweni, former governor of the South African Reserve Bank; Amina J. Mohammed, Minister for Environment of Nigeria; Mariam Mahamat Nour, Minister for Economy, Planning and International Co-operation of Chad and Vera Songwe, regional director for West and Central Africa at the International Finance Corporation.
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Sustainable African businesses can help unlock US$12 trillion in new market value
Launch of African Better Business, Better World report in Kenya puts African CEOs and entrepreneurs in spotlight as drivers of a sustainable future
African business leaders and entrepreneurs can unlock significant economic opportunities worth US$1 trillion in the region and US$12 trillion globally if they pursue sustainable business models. These opportunities and how to achieve them take centre stage at two events, hosted by Safaricom and Intellecap in Nairobi, to launch the African Better Business, Better World report from the Business and Sustainable Development Commission.
The Business Commission’s global report, first launched in January 2017 ahead of the World Economic Forum in Davos, shows how sustainable business models could open economic opportunities across 60 “hot spots” worth up to US$12 trillion and increase employment by up to 380 million jobs by 2030. More than half of the total value of the opportunities are in developing countries. In Africa alone, sustainable business models could open up an economic prize of at least US$1.1 trillion and create over 85 million new jobs by 2030.
“The world is seeing increasingly that African companies are models for what can be achieved with ingenuity and innovation as they solve difficult social challenges. They are not wedded to old solutions, so here in Kenya we see digital innovators delivering banking, energy and health solutions. The speed of innovation and adoption is astonishing,” said Mark Malloch-Brown, chair of the Business and Sustainable Development Commission.
“The Better Business, Better World report launch in Nairobi puts the African private sector squarely in the drivers’ seat on the road to achieving sustainable development, and we welcome more African business leaders to join the Business Commission.”
Hosted by Safaricom, the Better Business, Better World conference, held on 23 February, brings together business leaders to build support for the Sustainable Development Goals (or Global Goals) – 17 objectives to eliminate poverty, improve education and health outcomes, create better jobs and tackle our key environmental challenges by 2030.
The purpose of the conference is to show how the Global Goals provide the private sector with a new growth strategy that opens valuable market opportunities while creating a world that is both sustainable and inclusive. And the potential rewards for doing so are significant.
Kenya’s top mobile network operator, Safaricom has also been a leader in creating innovations that remove obstacles to financial inclusion through its mobile banking platform M-PESA, and increases sustainable energy access through M-KOPA.
“Africa has a real opportunity to lead the way in doing better business for a better world. As a commission we have found that across the continent, there is potential for inclusive, green growth and development which remains untapped,” said Bob Collymore, CEO of Safaricom and member of the Business Commission.
“We stand on the cusp of possibilities and we must seize the opportunity now. As the report shows, there have been in the last few years a demonstration of the possibility of leapfrogging development through new technologies and the Internet to bring development in transformative ways that also promote purpose.”
On 23-24 February, the Sankalp Africa Summit, hosted by Intellecap, highlights the important role African entrepreneurs play in advancing sustainable development on the continent. The Sankalp Forum brings together an audience of more than 1,000 people, including entrepreneurs, investors, corporations, governments and funders to facilitate connections, collective learning and a collaborative approach around sustainable development and inclusive investment.
A key message of the report is that digital solutions and entrepreneurs will be critical to unlocking many of these new opportunities. Research from the report has identified 32 ‘development’ unicorns with market caps of more than US$1 billion. In Africa entrepreneurs are bringing new solutions to social and environmental problems in remarkable ways, and the opportunities to do so are compelling. One market hot spot, affordable housing, could create over 13 million of these jobs, while risk pooling, the single largest monetary opportunity in Africa, is valued at US$150 billion.
“We need young entrepreneurs to reimagine solutions that would allow business to participate in joining government to solve issues of poverty and hunger that the SDGs seek to address,” said Vineet Rai, founder, Aavishkaar-Intellecap Group and a member of the Business Commission.
“Sankalp Forum and Intellecap are bringing together the best young entrepreneurs from Africa and Asia to find new ideas and solutions that aim to deliver on the ambitious opportunity that the Better Business Better World report outlines as US$12 trillion.”
At the same time, the Commission believes a “new social contract” between business, government and society is essential to defining the role of business in a new, fairer economy. The 2017 Edelman Trust Barometer reinforces this idea. It shows that while CEO credibility is sharply down, 75% of general population respondents agree that “a company can take specific actions that both increase profits and improve the economic and social conditions in the community where it operates.”
And they can do so in ways that align with recommendations and actions outlined in Better Business, Better World: rebuilding trust by creating decent jobs, rewarding workers fairly, investing in the local community and paying a fair share of taxes.
Throughout 2017, the Commission will focus on working with companies to strengthen corporate alignment with the Global Goals, including: mentoring the next generation of sustainable development leaders; creating sectorial roadmaps and league tables that rank corporate performance against the Global Goals; and supporting measures to unlock blended finance for sustainable infrastructure investment.
“We need to show these ideas work not just in a report but on the business frontline,” said Dr. Amy Jadesimi, CEO of LADOL, a Nigerian logistics and infrastructure development company, and a member of the Commission.
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What will it take to improve Rwanda’s trade imbalance?
Rwanda’s trade balance has been deteriorating over the years due to the continued higher import bill compared to export receipts.
The mismatch between imports and exports is mainly due to the continued reliance on low-value export products, whose prices depend on the international market dynamics and the continued excessive demand for foreign produced goods, especially capital and intermediate goods, to sustain the ongoing economic development.
However, increased production initiatives for some categories of imports such as rice, wheat and sugar whose domestic market is growing rapidly and whose contribution to the import bill is high should be reinforced.
This will be a game changer towards reducing the country’s import bill.
Formal imports decreased by 2.7 percent in value, to $2.2 million in 2016 down from $2.3 million in 2015.
The decline in formal imports value is due to a decrease in intermediary goods, which decreased by 16.6 percent and in energy and lubricants that registered a reduction of 15.7 percent.
Formal imports declined to 17.2 percent in volume due to decreasing volume of intermediary goods (unfinished products).
Government’s “Made in Rwanda” initiative seems to be paying off and according to experts, the campaign is key in correcting and balancing Rwanda’s trade books.
There is potential to produce most of the imported commodities locally which could have a huge potential and positive impact on Rwanda’s trade balance, according to experts.
For example, imports of cement, sugar, wheat, rice and second hand clothing exceed coffee and tea exports earnings. If produced locally they are expected to play a key role in narrowing down the country’s trade deficit.
Compared to 2015, Rwanda’s trade deficit narrowed by 5.9 percent in 2016, to $1.6 billion from $1.7 billion
This means the demand for imports decreased marginally driven by a drop in importation of consumer goods.
Many analysts believe the country’s economy will rebound fueled by the increasing commodity prices and increased local production.
The country’s total formal exports value, according to the National Bank of Rwanda (BNR) increased by almost 7.1 percent while total imports value recorded a modest decline of 2.7 percent during the same period.
Consequently, formal exports cover improved to 27 percent in 2016 against 24 percent which was recorded in 2015.
This is important for a country that is trying to grow its exports to an annual tune of more than 28 per cent on average.
Experts believe boosting local production while encouraging consumption of locally manufactured goods will boost exports and play a key role in trade balance, thus stabilizing the economy going forward.
The Central Bank governor, John Rwangombwa, says Rwanda’s trade balance improved with export cover of imports improving to 32 percent in 2016 compared to 28 percent in 2015.
This means that earnings from our exports in 2016 could only pay for 32% of all the goods we imported in the same period, compared to 28% in 2015.
More still, the improvement in the trade balance in 2016, does not take away the fact that Rwanda’s import bill continued to outstrip export receipts, exerting pressure on the economy.
“We have observed trade balance in the last three months of 2016 due to a slower decrease especially in traditional exports of almost 5 percent compared to the average decline of 21 percent registered same period in 2015,” Rwangombwa noted adding that the improvement was largely supported by good performance of the non-traditional exports category mainly driven by minerals and re-exports as well as the decline in imports.
Poor performance from formal exports
Meanwhile, the economy could have performed even much better had it not been the poor performance registered by the country’s traditional exports.
Rwanda’s traditional exports including coffee, tea, minerals, pyrethrum as well as hides and skins fetched $219 million in 2016 way below the target and less than $265 million earned in 2015.
The situation could have been much worse had it not been the boost Rwanda got from re-exports.
The country earned more than $224 million (about 37.5 percent of total exports) from re-exports in 2016 compared to $177 million earned in 2015.
Most of the re-exports were destined to Rwanda’s main trading partners including DRC, Burundi and Tanzania.
There are plans to ensure value addition to most re-exported products to make them more worthy before they can be re-exported.
This according to Ministry of Trade and Industry will translate into more revenues which will keep the economy more resilient.
Overall performance
Meanwhile, from Central Bank numbers, one can easily say that total exports recorded good performance in 2016, increasing by 7.1 percent in value ($598 million up from $558 million) in 2015.
In-terms of volumes, the sector registered a commendable increase of almost 19.3 percent driven by positive performance of non- traditional exports.
However, the sector suffered a setback due to a decline in coffee, tea and mineral exports.
For instance, coffee exports decreased in value by almost 5.7 percent from $62 million in 2015 to $58 million in 2016.
The decrease was mainly attributed to decline in coffee unit price of 4.9 percent, from $3.30/kg to $3.14/kg.
The sector registered a decline in volumes with a slight decline of almost 0.8 percent, from 18,793 tons in 2015 to 18,638 tonnes in 2016.
Equally, tea exports decreased in value by more than 12.5 percent, from $72.46 million in 2015 to $63.42 million in 2016.
This decrease was due to the decline in both the unit price and volume, as the former decreased by 11.5 percent from 2.94 $/kg in 2015 to $2.60 /kg in 2016 and the latter decreased by 1.1 percent, from 24,677 tons in 2015 to 24,415 tons in 2016.
Farmers say this affected profitability and ultimately house hold incomes.
Theopista Nyiramahoro, the Rwanda Coffee Federation chairperson, said performance was bad but is hopeful things will get better in 2017.
The governor has already reassured the public about economic improvements this year.
Last week, the central bank projected improvements in commodity prices and positive agriculture and export performance which will give a boost to the country’s economic growth in 2017.
Counting on the mining industry
Despite registering poor performance due to the fall in international commodity prices, experts believe the industry will bounce back in 2017 with improvements that will boost export revenues going forward.
This is important because the exported value of the main minerals including Coltan, Cassiterite and Wolfram declined from $117.81 million recorded in 2015 to $86.42 million in 2016.
Despite this poor performance, miners like David Bensusan, the Chief Executive of Mineral Supply Africa (MSA), is optimistic the sector will bounce back on account of rising prices in global markets.
He is however worried on how the Trump presidency in the US and Brexit in Europe will affect the sector.
“We have various agreements with companies in the US, but from the rhetoric we are hearing from the United States, no one can exactly tell how things will turn out, he said.
Andre Musabyimana, the president of a mining cooperative in Cyato sector in Nyamasheke district, says, they are counting on bankers to increase credit to the sector to help make it profitable this year.
Last week, Dr Diane Karusisi, the Bank of Kigali, chief executive, tasked fellow bankers to support the sector on optimism that prices were set to bounce back.
Karusisi expects banks to double support for exporters, especially in the mining industry, to help keep the trend positive.
In 2015, government launched the export growth facility fund as part of the strategy to boost exports and narrow down the widening trade deficit gap.
The aim according to Alex Kanyankole, the Development Bank of Rwanda chief executive,was to channel more than Rwf1 billion, through the Development Bank of Rwanda (BRD), to facilitate exporters especially through SMEs .
With the fund in place, exporters are expected to access the funds at about 8 per cent interest per annum, covering at least 50 per cent of the cost exporters incur as they try to seek new markets abroad.
However Kanyankole says it will take more than the fund to address the challenges exporters face.
He says increasing access to finance alone will not help unless stakeholders worked together to address other challenges.
Export targets by NAEB
The National Agriculture Exports Board (NAEB) is projecting to fetch more revenues from tea exports, from $65 million (about Rwf44.2b) to $147 million (about Rwf100b) by 2017, while coffee export earnings are expected to more than double from $73 million to $157 million during the same period.
This will however require concerted efforts including facilities like the Export Fund.
Government also plans to enhance honey, handcrafts and horticulture production and exports as part of the new strategy. Lack of access to affordable credit is only part of the problem, according to business analysts. The country’s export industry is still struggling with challenges, including, limited market, high taxes, poor export infrastructure and lack of skilled manpower.
Monetary Policy and Financial Stability Statement – 22 February 2017
Executive Summary
The world economic growth decelerated from 3.2 percent in 2015 to 3.1 percent in 2016 but is projected to improve to 3.4 percent by end 2017. Advanced economies grew moderately by 1.6 percent from 2.1 percent in 2015, reflecting lower than expected US economic growth in the first semester, a slowdown in Japanese economic growth and the expected effect of the Brexit on European economy. They are expected to grow by 1.9 percent by end 2017 as both advanced, emerging and developing economies are anticipated to improve.
Overall, growth in emerging and developing economies stabilized at 4.1 percent in 2016, the same level as in 2015, supported by high growth in emerging Asia while economic activity was subdued in commodity exporting countries. Growth in emerging and developing countries is estimated to improve to 4.5 percent in 2017 reflecting a recovery in previously distressed large economies.
In Sub-Saharan Africa, economic growth dropped to 1.6 percent in 2016 from 3.4 percent in 2015, particularly affected by lower commodity prices, droughts in South East African countries and the EBOLA disease in Western African countries as well as political tensions in some other countries. Supported by recovering commodity prices, the Sub-Saharan African economy is projected to recover, growing by 2.8 percent by end 2017.
Although still lower compared to the levels of 2015, prices for most industrial commodities are recovering, helped by improving manufacturing activity worldwide, particularly in China. Oil prices are expected to increase, backed mainly by OPEC’s effort to squeeze oil production. Prices are expected to hike for metals and minerals due to supply constraints, including mines closures, while trends are seen to remain mixed for agricultural commodities depending on supply conditions.
Lower commodity prices, together with weaker global demand kept inflation persistently low in advanced economies. In 2016, inflation was 0.7 percent, slightly higher compared to 0.3 percent in 2015. In 2017, helped by recovering energy prices and improving economic activity, inflation is foreseen to increase to 1.7 percent, but still below central banks’ inflation targets, pointing to continuous accommodative monetary policy.
Despite the aforementioned global and regional economic headwinds, the Rwandan economy performed well in the first three quarters of 2016. Real GDP grew by 6.1 percent on average in the first three quarters of 2016, against 6.9 percent recorded in the corresponding period of the previous year. This good performance was mainly driven by the service sector (+7.7 percent from +7.0 percent), with an average contribution of 49.7 percent to the real GDP during the period under review.
Leading indicators of economic activities indicate that the economy will grow by around the initially projected growth of 6.0 percent, from 6.9 percent in 2015. The Composite Index of Economic Activities (CIEA), in real terms, increased by 10.7 percent in 2016 but lower than 13.5 percent registered in 2015, while the total turnovers of industry and services sectors rose by 10.1 percent in 2016, lower than 14.1 percent registered in 2015.
Regarding external sector performance, Rwanda’s trade deficit improved by 5.9 percent in 2016, to USD 1649.7 million from USD 1752.5 million in 2015. Total formal exports value increased by 7.1 percent while total imports value recorded a decline of 2.7 percent during the same period.
Consequently, formal exports cover of imports improved to 27 percent in 2016 against 24 percent recorded in 2015. Despite the observed improvement in the trade balance in 2016, the import bill continued to outstrip export receipts, exerting pressures on the Rwandan francs exchange rate as the FRW depreciated against the USD by 9.7 percent y-o-y in 2016 compared to a depreciation of 7.6 percent in 2015.
In 2016, BNR maintained the KRR at 6.5 percent to ensure that the banking sector continues to finance economic activities while limiting inflationary pressures from the monetary sector. In line with economic activities, total new authorized loans to the private sector increased by 6.3 percent in 2016 compared to 13.7 percent in 2015; total outstanding credit to the private sector expanded by 7.8 percent in 2016, while broad money increased by 7.5 percent.
Headline inflation increased from 4.5 percent in January 2016 to 7.3 percent in December 2016. It went up from an average of 2.5 percent in 2015 to 5.7 percent in 2016, mainly driven by rising food prices and transport costs.
In line with the recovery in commodity prices, export receipts are expected to continue improving. Conversely, the import bill is likely to reduce following the increased domestic production of some products and the government’s “Made in Rwanda” initiative. Consequently, exchange rate pressures are expected to ease, reducing the pass through to inflation, albeit subject to the developments in food inflation.
The improvement in export receipts and the expected performance of economic activities will help to prop up the banking system liquidity, thus increasing the capacity of banks to scale up their lending to the private sector.
The Rwandan financial sector remained sound and stable in the year to end December 2016, despite a challenging macroeconomic environment. Assets and profits of Banks, MFIs, and the pension continued to expand, albeit at a slower pace compared to last year. The slowdown of growth in some key sectors of the economy reduced the lending space for banks and MFIs and increased NPLs. Nevertheless, the sector remains resilient and sound, largely due to strong capital and liquidity buffers held by financial institutions. Capital and liquidity levels of banks, MFIs and several insurance companies remained above the prudential requirements in December 2016.
Improved performance is observed in some insurance companies which were stressed in the early months of 2016 mainly due to unhealthy competition tendencies (price under cutting) and higher management expenses. These companies started recapitalizing in the third quarter of 2016 and their solvency conditions have improved. A number of other insurance companies are expected to recapitalize in 2017, which will strengthen the sector further.
Going forward, the BNR expects that recent reforms established will bolster performance and resiliency of the financial sector. Key reforms like the DGF establishment, the new capital requirements, the Umurenge SACCO automation and consolidation and the new directive on insurance business operations are expected to strengthen performance of the sector.
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How should the UK trade with developing countries after Brexit?
In a previous blog, Traidcraft presented their views on how the UK should trade with the world post-Brexit. Now that it is clear that the UK is going to be leaving the Customs Union, it is important that the government makes a clear trade offer to the world’s poorest countries that supports their economic development.
In her big Brexit speech in January, Theresa May revealed her plans to take the UK out of the EU Customs Union, meaning that we will now be in control of our own trade policy and able to directly negotiate trade deals with other nations. In doing so, she used the language of fairness and respect: “a great, global trading nation that is respected around the world… we will take this opportunity to make Britain stronger, to make Britain fairer, and to build a more Global Britain too.”[1]
In pursuit of new trade deals, the government has been talking to Australia, China, India, the Gulf States, New Zealand and South Korea. However, it’s unclear what plans are in place for our developing country trading partners. If the government takes us out of the Customs Union without any alternative arrangements, our trading relationships with the world’s poorest nations will be governed by ‘WTO rules’. This will mean goods produced by farmers, workers and businesses in those countries will face new tariffs amounting to £1 billion. This would be disastrous for vulnerable groups around the world, and would expose the Prime Minister’s vision of a great and well-respected trading nation as empty rhetoric.
Traidcraft have put together a paper that looks at the options for the UK’s trading relationship with developing countries and offers a clear recommendation for how we can ensure that Brexit does not undermine global development.
In this blog, we will deal what on the surface looks like the most politically attractive option (continuing existing EU treaties) and present our suggested alternative – a non-reciprocal market access scheme.
Why not replicate or ‘roll over’ existing EU treaties?
Rather than negotiate new deals with developing countries, why not simply retain the arrangements that we had as a member of the EU? This sounds like it would be the simpler choice, and that it would be less disruptive for our trading partners. However, there are a couple of major problems with such an approach:
- It really wouldn’t be that simple
The current EU’s trade agreements with developing countries are far from simple, constituting Free Trade Agreements (FTAs), some of which are Economic Partnership Agreements (EPAs), and which are at varying stages of completion (many are not ratified, some are with individual countries pending wider regional agreement). Replicating these arrangements post-Brexit would require the agreement of all other parties. These negotiations could be difficult and in theory they couldn’t even start until we have officially left the EU, whilst adding the UK as a ‘party’ to existing EU agreements is probably not possible at all now that it is clear we will be leaving the Customs Union. Furthermore, the UK has less to offer than the EU – the world’s largest trading bloc – and so we must expect that other countries would try to improve the terms as they currently stand.
Far from being the easy option, attempting to ‘roll over’ some of these deals is likely to divert negotiating resource away from the UK’s priority countries and is fraught with legal and political complexity which could leave developing countries in a damaging trade limbo.
- We would miss a valuable opportunity to improve the status quo
The EU’s approach of seeking to strike reciprocal FTAs (including EPAs) with some of the world’s poorest countries has been controversial from the start. FTAs require developing countries to open their economies to an extent that many view as potentially very damaging, especially for the poorest. Other criticisms include the EU’s insistence on including a promise to negotiate to liberalise investment policy and public procurement rules in the future, and the effect the negotiation process has had on regional integration For the latest position on the EU-East African EPA see the work of SEATINI, or for more general critique of EPAs see the South Centre.
The EU’s approach was designed at the height of support for unfettered globalisation and has been strongly resisted – particularly in regions made up of predominantly of poorer countries. There is now widespread recognition, including from our Prime Minister, that “the forces of liberalism and globalisation which have held sway in Britain, America and across the Western world for years have left too many people behind”[2] and that there needs to be more active management to respond to the deeply felt concerns of individuals at home and abroad. With Brexit the UK can now take a lead in demonstrating that fairer approach.
The alternative: a non-reciprocal market access scheme
Most developed countries outside the EU offer preference schemes to developing economies, rather than seeking FTAs.
Traidcraft supports a non-reciprocal market access scheme, an arrangement that is simple to implement, provides stability for people in developing countries, and is being talked about by everyone from the ODI to the Commonwealth Secretariat and the African Union.
This means that the UK would allow goods from developing countries to enter the UK market without obliging trade partners to open up their markets to us in return. Canada, New Zealand, Japan, the United States and Norway all run similar schemes, which are compatible with WTO rules.
Offering such a scheme is simple and does not require time-consuming negotiation – crucial when the energies of David Davis and Liam Fox are focussed on striking deals with the EU, the USA, Australia and China. With a preference scheme, market access can be provided to many economically vulnerable countries in one streamlined arrangement.
The UN’s definition of ‘least developed country’ (LDC) includes 49 countries, but a UK scheme can and should go further, offering access to a wider group based on an objective assessment of genuine need and potential. There are different ways that such a group could be formulated. For example, we could build on the UN’s work which pulls landlocked and small island states together with the poorest countries and those with the least diversified economies. Or the scheme could support regional integration by including all the members of a customs union, where most of the members are classed as LDCs.
The point is to ensure a fair and defensible system that is simple to operate, provides generous market access to countries in need and respects ongoing regional integration processes.
The UK is at a historic crossroads in terms of trade policy, and decisions made now have the potential to have a profound effect on both the UK and our trading partners. A market access scheme offered to the most vulnerable countries would make a huge amount of sense for everyone, from exporters worried about the costs of trading with the UK post-Brexit to the UK’s team of trade negotiators anxious to get on with the priority issues of striking a trade deals with the EU and other developed nations.
Liz May is Head of Policy and Advocacy at Traidcraft Exchange, partner charity to fair trade organisation Traidcraft based in the United Kingdom. This article was originally published on the Traidcraft In Depth blog.
» To find out more about their proposal, please read the full ‘Post-Brexit trade’ paper (pdf).
[1] https://www.tralac.org/images/docs/11094/theresa-may-speech-on-brexit-london-17-january-2017.pdf
[2] https://www.gov.uk/government/speeches/pm-speech-to-the-lord-mayors-banquet-14-november-2016
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tralac’s Daily News Selection
Starting today, in Abidjan: ECOWAS, Partners review long-term election observation missions in West Africa
Mukhisa Kituyi: ‘Africa needs more mutual trade in these times of economic nationalism’ (MO)
Q: You nevertheless conclude that African economies are hardly integrated in the international markets. Doesn’t this new protectionism then pose a problem rather for the rich Northern countries and the emerging countries from Asia? Mukhisa Kituyi: If imports from other continents are more restricted by the North, this means in the first place that all the growth opportunities for African trade – which are enormous because of the low starting position nowadays – will also slow down. On the other hand, that negative outlook should incite us to further promote trade among African countries, as that is where its greatest potential can be found. The problem is that economic nationalism is dominant in Africa, too, notwithstanding the growth of regional trade blocks. For example, the Tanzanian government several times blocked the export of corn to Kenya as a shortage threatened in their own country. As such it is difficult to speak about a common market. Those political interferences disrupt the intention of regional integration. In addition, the bureaucratic burdens on border crossing trade probably constitute the main obstacle.
President Kagame meets experts on AU reform (New Times)
President Paul Kagame yesterday convened a meeting of the team of experts advising on African Union reform to discuss the implementation process. The statement from Presidency said additional consultations will continue with other stakeholders, in particular the incoming Chairperson of the Commission, with a view to putting the reform mechanism into operation without delay.
Update on Comoros, Burundi SADC membership application (Xinhua)
Briefing journalists at the end of a one-day meeting of SADC Inter-State Politics and Diplomacy Committee in Dar es Salaam, Augustine Mahiga said the meeting reviewed and agreed to give membership to the Comoros that became the 16th member of the SADC while giving recommendations to Burundi after it failed to reach some qualifications to be granted membership.
Morocco seeks to join ECOWAS (MWN)
The Ministry of Foreign Affairs and Cooperation says Morocco’s decision comes from the instructions of King Mohammed VI in the context of “the royal tour in Africa, and particularly in the states of West Africa.” The statement from the ministry points out that this request is “in line with the requirements of the Economic Community of West African States,” and Morocco meets all the criteria for membership. Also, the ministry argues that Morocco’s move is a culmination of the “strong political, humanitarian, historical, religious and economic ties” with the countries of West Africa. “Morocco’s ties with members of the Economic Community of West African States has been strengthened in recent decades, through the 23 royal visits to 11 countries in the region,” further asserts the statement, noting that the hundreds of agreements signed have given a strong impetus to the bilateral cooperation with the 15 member states of this group. [Update: President Ellen Johnson embraced Morocco’s decision to seek membership of ECOWAS, but noted that the approval, which must be consistent with the ECOWAS Treaty remains the prerogative the ECOWAS Authority of Heads and States and Government.]
IDB African member countries discuss economic integration (Arab News)
27 officials from 20 African member countries of the Jeddah-based Islamic Development Bank attended a workshop (20-22 February, in Dakar) to discuss intra-trade routes. The event also discussed capacity enhancement via better understanding of the significance of regional economic cooperation and integration, with a focus on the importance of trade and transport routes, and better identification of challenges and obstacles. It also dealt with the best ways to develop trade routes and activate initiatives by ECOWAS, as well as those of southern and eastern Africa. Coordination among the IDB’s African member countries to overcome challenges hindering intra-trade was also discussed. [Afreximbank, Arab Academy for Science, Technology and Maritime Transport discuss collaboration]
Failure of SADC regional parliament a betrayal of forefathers’ vision (New Era)
The continued failure to establish a Southern African Development Community regional parliament is a betrayal of the noble vision of the founding fathers and mothers of the SADC Parliamentary Forum. This was said by the vice-president of the SADC Parliamentary Forum, Monica Mutsvangwa, during the official opening of the workshop on women legislators as champions in advancing sexual and reproductive health and rights, which concluded yesterday in Swakopmund. She added that regional parliamentary consensus and action programmes are critical to ensure a people-centred regional integration. “Hence our call for a SADC regional parliament,” Mutsvangwa appealed.
EALA: New regional bill seeks to guarantee women reproductive health services (New Times)
A clear monitoring framework is a must have if aspirations of the newly proposed regionalSexual and Reproductive Health Bill are to be achieved, an expert has said. Members of the East African Legislative Assembly last week held public consultations in Kigali on the Sexual and Reproductive Health (SRH) Bill 2017. The Bill aims to promote women’s health and safe motherhood across the region in addition to making provisions for adolescent reproductive health rights. [ICGLR Goma conference: Women from region commit to end gender-based violence]
Tanzania-Uganda trade policy updates:
EPA trade deal with Europe is a form of colonialism, says Magufuli (Business Daily): Tanzanian President John Magufuli Sunday described the Economic Partnership Agreement as a “form of colonialism”, dampening the country’s possibility of signing the deal with the EU. “It is bad for our country,” Dr Magufuli affirmed. Addressing a joint press conference with visiting Ugandan President Yoweri Museveni at the State House, Dr Magufuli disfavoured EPAs, which are aimed at creating a free trade area between EU and the African, Caribbean and Pacific Group of States. His Ugandan counterpart warned African countries that EPA might break up their unity. “It’s better if the signing of the deal is shelved until further consultations are made.”
Tanzania, Uganda to consolidate trade ties (IPPMedia): Trade between the two countries at present stands at $190m, but it is estimated that the figure can be tripled if some barriers can be worked on. In 2016 alone Tanzanian exports to Uganda stood at 126.7 billion/- compared to 99.9bn/- in the corresponding period in 2015. Equally, imports from Uganda into Tanzania in 2016 stood at 66.8bn/- compared to 78.3bn/- in 2015. [Joint communique]
Anne Kiruku: ‘Let us seal the cracks...or bid integration goodbye’ (CitizenTV)
When EAC Secretary General Liberat Mfumukeko held a meeting with Tanzanian President John Joseph Magufuli last week, some rather unfortunate news was released: That the next summit of the regional organisation had once more been postponed. Initially slated for early January, the summit was pushed to the end of that month but failed to take place. It was then planned for February, but has now been rescheduled to 6 April after two member countries said they had other activities on the planned dates. Burying our heads in the sand and hoping all is well will not take the regional integration agenda anywhere. Rather, facing challenges head on and sealing the fissures and cracks that are threatening to derail the regional agenda is key to realising the EAC vision of eventual political confederation. A game of cards, in which partner states put some cards on the table and others beneath, won’t do the region any good.
Kenya: Value of China imports drops for the first time in 10 years (The Star)
Data from the Kenya National Bureau of Statistics indicate the value of imports from China dropped 4.49% to Sh306.47bn in 12 months ended December 2016 from Sh320.88bn a year earlier. Imports include mobile phones, household goods and steel materials for the ongoing construction of the standard gauge railway project that will connect the port city of Mombasa to capital Nairobi by mid-next year. The value of China’s imports have, however, remained above the Sh300bn mark for the second year in a row, maintaining its position as the largest source of Kenya’s imports. [Download: Leading Economic Indicator December 2016 (pdf)]
Confederation of Zimbabwe Industries – 2017 annual economic outlook: Ashok Chakravarti: Liquidity crisis: current situation and policy options, Building cost competitiveness: lean manufacturing, Tony Hawkins: Interim and long-term strategies to address Zimbabwe’s economic challenges
Nigeria Customs targets N1.1 trillion revenue in 2017 (Premium Times)
The Comptroller-General of the agency, Hameed Ali, made this known during a strategy meeting with Customs Area Controllers. A statement released on Friday by the agency said the customs boss gave this directive while charging all the area controllers to ensure strict compliance with extant laws to enable it achieve its 2017 revenue target. Mr Ali said the Area Controllers must either “shape in or ship out” as there is no place for complacency in a Service that plays the crucial role of revenue collection and border security.
Africa’s ports revolution: railway ports of the east (GCR)
This means the new generation of east Africa’s ports have been conceived to perform two jobs: first to serve their own locality, and second to provide Indian Ocean gateways for Africa’s landlocked interior. The proposition in the east, therefore, is not just for large, deep, automated ports, but also for multibillion-dollar rail links piercing deep inland and across national borders, supplemented in time by modern motorways and even pipelines. The size, expense and political complexity of such mega schemes have meant delays and reversals, while the plunging prices of oil and minerals have disrupted the calculations of mostly Chinese investors. Nevertheless, it is happening. [The analyst: David Rogers]
Aviation Africa conference brainstorm how airlines can keep afloat, in business (New Times)
For two days last week, Kigali hosted a continental aviation forum that brought together over 500 delegates from over 50 institutions and firms with multiple conversations about the industry’s growth on the continent. As participants noted the growth potential of the industry on the continent, most had concerns of multiple bottlenecks that need to be addressed. Dr Elijah Chingosho, secretary general of African Airlines Association, noted that the operationalisation of the continental free trade area would create demand for air travel as Africans do business with each other. “If we walk the talk by implementing the continental free trade area and create a larger trading bloc, there would be a necessity for people on the continent to travel, meaning more business for airlines,” he said. [African economies urged to form airline alliances]
Kenya: Direct US flights will bolster trade – state (The Star)
The decision by the US authorities to give Kenya security and safety clearance for non-stop flights will bolster investment flows from the world’s largest economy, state officials have said. Treasury CS Henry Rotich said the move will lead to increased tourists from the US in the coming years, subject to to the Kenya Airways getting codeshare deal with US airlines. “We have in the past used various airlines to deliver our goods to the US market but with the non-stop flights this will change,” he said in Naivasha, adding that sectors such horticulture will also be key beneficiaries. [Emirates eating our cake, says Airzim boss]
Agribusiness trade as a pillar of development: Measurement and patterns (World Bank)
Agribusiness is en vogue, fostered by a new understanding of the agricultural sector as a major contributor to overall growth and poverty reduction and through its linkages with the manufacturing and services sector. In order to efficiently link farmers and consumers across countries and regions, quantifying and analyzing agribusiness trade flows is key. But how can we measure international agribusiness trade flows in a systematic way to identify important patterns? [New evidence overturns traditional approaches to agriculture investment]
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Barriers hurting cross-border trade
Non-compliance of regional trade agreements by Rwanda’s neighbours is taking a heavy toll on the nation’s earnings from cross-border trade.
Legislators are concerned that informal trade with Burundi, Tanzania as well as the Democratic Republic of Congo, faces multiple barriers resulting in low export volumes to these strategic markets.
A report tabled last week by parliament’s Standing Committee on Trade and Economic Affairs shows that while trade with DR Congo suffered as a result of the instability in the Kivu Province, Burundi and Tanzania have imposed restrictions intended to block Rwandan traders from accessing their markets.
The highlighted practices are contrary to the provisions of the East African Community Customs Union as well as other trade agreements with regional trading blocs such as the Economic Community Great Lakes Region (CEPGL), which brings together Rwanda, Burundi and DR Congo.
“We want the concerned authorities to address the issues we found,” said MP Adolph Bazatoha, who leads the committee that carried out an assessment at different borders.
Mr Bazatoha said the issues had been forwarded to the Ministry of Trade, Industry and East African Community Affairs.
Burundi is Rwanda’s second largest cross-border trade market after DR Congo, with agricultural and livestock products being the major commodities traded in informal transactions.
However, trade with Burundi is carried out illegally after the government imposed trade restrictions with Rwanda.
Worsening diplomatic relations with Burundi led to the closure of the border with Rwanda in July last year. Ties between the two countries deteriorated in 2015 after Burundi accused Rwanda of having a hand in its internal instability, allegations Kigali denied.
The report also accuses Tanzania of imposing visa requirements for Rwandan traders and also requiring them to have businesses registered in Tanzania that also include local shareholders.
According to Central Bank data, Burundi and DR Congo accounted for more than half the total formal and informal cross-border exports, but those to Burundi accounted for only 7.8 per cent in the first half of 2016.
Data from the National Bank of Rwanda had showed that owing to the decline in exports to Burundi, Rwanda’s total cross-border exports within the EAC fell to $100.5 million in 2015, from $107.5 million in 2014. Cross-border exports to Burundi alone had declined by 27.2 per cent in 2014.
According to Trade Ministry officials, the rampant barriers in cross-border trade could derail the achievements of the five-year national cross-border strategy, which is ending this year.
The strategy was expected to help the country’s exports to the region grow by 31 per cent on an annual basis until 2018 owing to bilateral and regional trade pacts.
MPs said issues to do with non-compliance of trade agreements by some countries needs to be addressed at the EAC, Comesa and CEPGL levels.
“Can something be done about these countries that refuse to abide by the protocols they signed?” asked MP Jean Thierry Karemera.
MP Karemera said trade with Burundi and DR Congo has faced challenges even after the heads of state resumed CEPGL activities in August 2010, years after the bloc was dormant.
Beside complications in cross-border trade with individual countries, gaps were raised with regard to Rwanda’s capacity to meet the growing demand in neighbouring markets.
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EPA trade deal with Europe is a form of colonialism, says Magufuli
Tanzanian President John Magufuli Sunday described the Economic Partnership Agreement (EPA) as a “form of colonialism”, dampening the country’s possibility of signing the deal with the European Union (EU).
“It is bad for our country,” Dr Magufuli affirmed.
Addressing a joint press conference with visiting Ugandan President Yoweri Museveni at the State House, Dr Magufuli disfavoured EPAs, which are aimed at creating a free trade area between EU and the African, Caribbean and Pacific Group of States.
His Ugandan counterpart warned African countries that EPA might break up their unity. “It’s better if the signing of the deal is shelved until further consultations are made.”
President Museveni arrived in Dar es Salaam Saturday morning for a two-day state visit.
Dr Magufuli noted that after studying EPA he had realised that African countries would not benefit from it economically as its architects touted.
He noted that terms included in the agreement were not intended to help African countries to grow economically.
“I believe that our neighbour, Uganda, will second us for the betterment of our countries. We have discussed EPA for a long time but to me it seems like another form of colonialism… it is bad for our country,” he said.
There has been criticism in other quarters that the non-reciprocal and discriminating preferential trade agreements offered by EU are incompatible with World Trade Organisation rules.
President Museveni noted that the fact that many African countries had not signed EPA shows that the proposal was meant to create disunity among African countries.
Negotiating the deal
President Magufuli’s comments have come at a time when East African Community (EAC) countries are still negotiating the deal.
Late last year, Tanzanian lawmakers rejected EPA when the agreement was sent to Parliament for debate.
Mr Hussein Bashe (Nzega Urban-CCM) warned that EPA would kill EAC and that not all member states would enjoy the same benefits. “Some are going to earn a lot while others will see their productive sectors collapse.”
Mr Zitto Kabwe (Kigoma Urban-ACT Wazalendo) said: “We cannot allow the government to ratify the deal in its current form. It doesn’t mean that we have closed the chapter or we do not care about the welfare of EAC; all that we want is to make sure that our national interests are protected.”
Meanwhile, Presidents Magufuli and Museveni also agreed on the immediate execution of the standard gauge railway (SGR) line to link the two countries to facilitate trade and interaction of people.
“The project is good for our economies and will enhance the ties that we have been enjoying for many years,” President Magufuli said.
He also said negotiations were underway for Air Tanzania to launch its flights to Entebbe.
The two leaders spoke about the construction of the Murongo-Kikagati power project to light up the Tanzania-Uganda border and stimulate economic activities. President Magufuli also welcomed Ugandan investors to Tanzania.
President Museveni commended cordial bilateral relations which have facilitated the undertaking of economic projects. “We are brothers and sisters. It’s good to see the pillars left by founders of our countries are protected for the betterment of our people.”
President Museveni said the construction of the SGR line and the transborder power project as well as Air Tanzania’s launch of the Dar es Salaam-Entebbe flights would improve people’s living standards.
He also suggested that inland container depots in Mwanza be improved to ease cargo transportation from Uganda to the Dar es Salaam Port.
War on corruption
He commended Tanzania for waging a war against corruption, saying it would increase government efficiency. He also invited President Magufuli to Uganda.
On the construction of crude oil pipeline from Hoima, Uganda, to the Tanga Port, Dr Magufuli said the two countries have ironed out all the hurdles that impeded the start of the construction of the 1,447-km pipeline.
Total has been contracted to carry out the project.
“On the part of Tanzania, there were seven issues, which we have already resolved. They include VAT exemption. The contractor can now start the work,” he said.
He noted that there was an added advantage to pass the pipeline through Sekenke in Tanzania as oil will be pumped by gravitational force to Tanga.
He hailed Uganda for picking Tanzania as a route for the pipeline because the country has experience in long distance pipelines.
“We have the Tazama pipeline which transports oil from Dar es Salaam to Zambia. We have also built a natural gas pipeline from Mtwara to Dar es Salaam. This will be the third pipeline in our country,” he said.
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BRICS diplomats support China’s free-trade advocacy
Senior BRICS country diplomats voiced support on Friday for China’s call for boosting free trade and opposing protectionism as emerging markets work together to inject power into economic growth.
More than 100 diplomats, officials and bankers from BRICS countries – Brazil, Russia, India, China and South Africa – gathered on Thursday and Friday at the 2017 First BRICS Sherpa Meeting in Nanjing, Jiangsu province, to discuss preparations for this year’s summit in Xiamen, Fujian province.
State Councilor Yang Jiechi said at the opening ceremony that BRICS countries have to work together to maintain the openness of global economies.
Ary Norton De Murat Quintella, director of the Department of Central and South Asia and Oceania at Brazil’s Foreign Ministry, said there are trade problems that need to be addressed and the BRICS summit is a proper forum for the countries to discuss these issues.
Brazil opposes all forms of protectionism, he said.
Sergey A. Ryabkov, Russian deputy minister of foreign affairs, said that China, which holds the BRICS rotating presidency this year, is taking “the right approach” in working to “present BRICS as an association with a global reach”.
Russia advocates setting up an action plan “that would allow for better contacts between entrepreneurs without artificial obstacles, without attempts to divide the world’s trade system”, he said.
Alok A. Dimri, joint secretary of multilateral economic relations at India’s Ministry of External Affairs, said the BRICS members look forward to establishing their own mechanisms in areas such as finance, commerce, people-to-people exchanges and education.
“Commodities, products, markets and consumers – they must remain connected. If this connection is broken at any point, there will be reactions to it. So protectionism is a challenge to open global trade and open global order,” he said.
Anil Sooklal, director-general for Asia and the Middle East at South Africa’s Department of International Relations and Cooperation, predicted that BRICS countries’ economic growth this year would exceed 5 percent.
“Given the very poor economic environment we have, this is a positive message – the BRICS countries are an engine for growth,” he said.
Open global economy vital despite slowdown
China’s proposal for boosting openness of global economies is during a time when the engine for global growth is losing power, said two senior diplomats from BRICS countries.
Anil Sooklal, Director-General for Asia and the Middle East of South Africa’s Department of International Relations and Cooperation, said China has chosen a very appropriate theme – strengthening BRICS partnership for a brighter future – for this year’s meeting.
Sooklal made the remarks on Thursday while talking with reporters during a tea break of the ongoing the first BRICS Sherpa meeting for 2017, which is being held in Nanjing from Thursday to Friday.
“As President Xi said at the World Economic Forum, it’s important that we have inclusive economic growth,” said Sooklal, who is South Africa’s Sherpa for the meeting.
This year is one of the most difficult years the world is experiencing as a global community, he said, mentioning the uncertainties brought forward by America’s new administration and problems in the European Union.
“This provides a major vacuum on the global stage, and BRICS is the only coherent forum. The five countries are a powerful force for good in the world,” he said, adding that BRICS is well placed to show leadership in terms of global economies.
Sergey A. Ryabkov, deputy minister of Russia’s Ministry of Foreign Affairs, said that Russia supports free trade and global trade as China has proposed.
“We are great supporters of WTO system. It took long for Russia to become a member of WTO, so we cannot now sacrifice what we’ve done there,” he said.
“It’s perfectly fine that China tries to present BRICS as an association with global reach,” he said, adding Russia supports such moves.
“BRICS is not against anyone. We have an open mind. Countries from different continents will be invited, I understand, to the next summit in the beauty of Xiamen,” he said.
First BRICS Sherpa Meeting – Nanjing, 23 February 2017
Opening remarks by H.E. Yang Jiechi, State Councilor of the People’s Republic of China
Good afternoon. Welcome to Nanjing, Jiangsu for the First BRICS Sherpa Meeting. Known as the “land of fish and rice”, Jiangsu enjoys a long history and splendid culture, and has made great progress in its economic and social development through reform and opening-up. I wish to thank the Jiangsu provincial government and Nanjing municipal government for their thoughtful arrangements of this meeting. To quote a line from a Chinese poem, now is the season when “the vernal wind has greened the Southern shore again”. It’s also a season of sowing. I believe the efforts by the Sherpas, important aids to the leaders, will sow the seed of success for the summit. Thank you for your hard work and dedication.
The ninth BRICS Summit will be held in the Chinese city of Xiamen, Fujian Province from 3 to 5 September this year. It will be yet another opportunity for China to host BRICS leaders following the Sanya Summit in 2011. President Xi Jinping places high importance on the Xiamen Summit, and looks forward to working with other leaders to build on the fruitful outcomes of the Goa Summit and previous BRICS summits to ensure the success of the Xiamen Summit and inject fresh impetus to BRICS cooperation.
BRICS cooperation started in 2006. The 10 years that followed has been a decade of hard work and great achievements. Thanks to the commitment of all members, BRICS has grown into a big tree laden with fruits. We have stood together in face of challenges to perform a miracle of economic development and set a paradigm of South-South cooperation.
Ten years on, BRICS, once an investment term in some economic report, has gained global visibility and become a shining example of cooperation among emerging markets and developing countries. The BRICS mechanism did not come about by chance. Its inception conformed to the evolving international landscape and the shifting balance of power, echoed the strong aspiration of emerging markets and developing countries for a bigger role in international affairs, and answered the call of people across the world for a joint response to global challenges, thus serving the common interests of the international community. Today, BRICS has grown into an important force for promoting global growth, improving global governance and advancing democracy in international relations.
The reason why BRICS cooperation has come a long way to get where it is today in an ever-changing world is manifold. Guided by a philosophy of shared interests, we have assisted each other in our pursuit of development and delivered real benefits to our people. We have prioritized economic cooperation and established an all-dimensional, wide-ranging and multi-tiered partnership that covers political, economic and people-to-people exchange and cooperation. And with a commitment to equity, justice and development, we have made our voice heard in international and regional affairs and put forth BRICS proposals, thus making major contribution to world peace and prosperity. An important message from the decade-old BRICS cooperation is that whatever difficulties may lie ahead on our way toward common development, great trust in each other and abiding faith in our cooperation will sustain BRICS cooperation against all odds.
We live in an era of great change and adjustment, when both opportunities and challenges abound. Peace, development and mutually beneficial cooperation remain an aspiration widely shared by the international community. The world economy has resumed growth, a new round of technological revolution and industrial evolution are in the making and the trend of innovation and reform is gaining momentum. According to the IMF, BRICS countries and other emerging markets and developing countries contributed 80% of global growth in 2016.
On the other hand, the global recovery is not solidly based and growth remains weak. Quite a few emerging markets and developing countries have encountered headwind in their economic development, and to close the gap between the South and the North and that between the poor and the rich remains an arduous task. Economic globalization is suffering setbacks. Protectionism is coming back. Geopolitical conflicts keep emerging, terrorists forces are wreaking havoc, and traditional and non-traditional security risks get intertwined. There is a significant rise of uncertainties in the world’s political and economic situation.
In such a complex and fluid environment, we need to stay confident and jointly tackle challenges and seize opportunities for common development. Our journey over the past decade is the very source of our conviction that our endowment as well as our advantage as a latecomer remain unchanged and that our development is gaining momentum, not losing steam. The internal impetus and huge potential for BRICS cooperation remain unchanged and the space for such cooperation is expanding, not shrinking. The historical trend of BRICS playing a bigger role in international affairs remains unchanged and the international expectation on BRICS is growing, not declining. From this new starting point, we should and can usher in a still more brilliant decade of BRICS cooperation.
On 1 January, President Xi Jinping sent letters to President Vladimir Putin, President Jacob Zuma, President Michel Temer and Prime Minister Narendra Modi, initiating BRICS cooperation in 2017. In his letters, President Xi stressed China’s wish to discuss with fellow BRICS members on the theme of Stronger Partnership for a Brighter Future at the Xiamen Summit to review past experience, build consensus and work out a blueprint for future cooperation. This is what President Xi expects from the Xiamen Summit and the future of BRICS development. It is also what China will be working for during its BRICS chairmanship in 2017.
To be specific, China hopes that the following areas will be priorities in preparations for the Xiamen Summit.
- Enhance unity and coordination in improving global governance. With our role shifting from participants to pace-setters of global governance, we BRICS countries should and can contribute more BRICS wisdom in addressing global challenges. That, however, does not mean we will impose our will on others. Rather, we will run our own affairs well while trying to provide more public goods and working with other countries to build a community of shared future for mankind and find a new path of global governance featuring wide consultation, joint contribution, win-win cooperation and shared benefits.
We need to step up communication and coordination on major international and regional issues, champion multilateralism centered around the United Nations and promote political dialogue and negotiation as the means to settle disagreements in order to safeguard peace and stability in the world. We need to make full use of such platforms as the G20 and work with other major economies to find new sources of global recovery and deliver strong, sustainable, balanced and inclusive growth. It is important that we uphold and develop an open world economy, jointly oppose trade protectionism, facilitate healthy development of economic globalization, and foster an enabling external environment for the development of all countries. We need to advance the reform of global economic governance and increase the representation and voice of emerging markets and developing countries.
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Deepen practical cooperation for win-win results. Practical cooperation has featured prominently in BRICS cooperation. Thanks to ten years of unremitting efforts, BRICS cooperation in economic, financial, trade and some other areas has yielded rich fruits, including such pioneering and landmark achievements as the New Development Bank and the Contingent Reserve Arrangement. That said, resource complementarities of our five countries are yet to be fully tapped and cooperation channels in many fields fully explored. There is vast space for BRICS practical cooperation.
We need to facilitate inter-market linkages through trade and investment, strengthen financial integration and enhance infrastructure connectivity. It is important that we step up coordination on macroeconomic policies, advance structural reform and increase synergy of our development strategies. We must ensure the success of the New Development Bank and the Contingent Reserve Arrangement to bring real benefits to the people of not only our five countries but also other emerging markets and developing countries. We should further tap our cooperation potential, identify more converging interests in areas such as trade and investment liberalization and facilitation, e-commerce, financial market connectivity and innovation-driven development, and carry out more result-oriented cooperation programs that can deliver economic and social benefits, so that BRICS cooperation will be constantly renewed and reinvigorated to serve inter-connected growth.
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Increase people-to-people exchanges to win greater popular support for BRICS cooperation. We BRICS countries come from four continents, and each has its unique and profound cultural heritage. The vibrant and colorful people-to-people and cultural exchanges that we have had in recent years have significantly boosted the traditional friendship and mutual understanding among our people.
Amity among our people is crucial for the future of BRICS cooperation. It is important that we act upon the agreement of our leaders to support our business and academic communities, media, think tanks, cultural groups and people from all walks of life in carrying out multi-dimensional, friendly people-to-people and cultural exchanges. Events such as the BRICS Culture Festival, Film Festival, Sports Games and High-Level Meeting on Traditional Medicine are excellent opportunities for our people to learn more about each other and lend their support to BRICS cooperation. We should also introduce more enabling policies to encourage more substantive people-to-people and cultural cooperation, which will in turn help sustain BRICS overall cooperation.
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Strengthen institution building and improve cooperation platforms. Our cooperation system has been steadily enriched and improved in tandem with the progressive development of the BRICS mechanism. As our cooperation continues to grow in breadth and depth, the cooperation mechanisms should keep up with the developments and provide stronger support for our cooperation in the political, economic, cultural and other fields.
We need to harmonize the various cooperation mechanisms and make sure that our cooperation is well-coordinated and coherent and that the consensus of successive summits is truly followed through. The role of the Meeting of National Security Advisers, the Meeting of Foreign Ministers and the Sherpa Meetings should be better leveraged. While making good use of the existing mechanisms such as the Business Council and Think Tanks Council, we may also explore new mechanisms and platform in areas such as innovation and culture. We should carry out more outreach dialogue to benefit more parties with our cooperation, foster a “BRICS+” model of open cooperation, and set up a more broad-based South-South cooperation platform for the common development of emerging market economies and developing countries.
China hopes and believes that following the BRICS spirit of openness, inclusiveness and win-win cooperation, we BRICS countries can further enhance our cooperation and ensure a brighter future for the common development of our five countries. We will build a South-South cooperation platform of greater global influence and work for a brighter future for the economic and social development of emerging markets and developing countries. And we will promote a fairer and more equitable international order and usher in a brighter future for global peace and development.
Blessed with gorgeous mountains and rivers, Nanjing has been home to numerous legendary figures in Chinese history. I’m sure that by having the 2017 First BRICS Sherpa Meeting in the city of Nanjing, you will have deep, thorough exchanges, provide insights for BRICS cooperation, and help China to get its BRICS chairmanship and preparations for the Xiamen Summit to a good start. I’m confident that with the joint efforts of our five countries, the Xiamen Summit will deliver fruitful outcomes and bring about an even brighter future for BRICS countries.
Thank you.
Related News
Food insecurity and poverty pose major challenge to goal of ending hunger by 2030 in sub-Saharan Africa
FAO report stresses need to increase agricultural productivity
Some 153 million people, representing about 26 percent of the population above 15 years of age in sub-Saharan Africa, suffered from severe food insecurity in 2014-15, according to a new FAO report.
The second edition of the Regional Overview of Food Insecurity in sub-Saharan Africa 2016 underscores how severe food insecurity and poverty pose a major challenge to the region’s ability to achieve the Sustainable Development Goal of ending hunger by 2030.
“What it means is that, around one out of four individuals above 15 years of age in sub-Saharan Africa was hungry, meaning they did not eat or went without eating for a whole day for lack of money or other resources for food,” Bukar Tijani, FAO Assistant Director-General and Regional Representative for Africa, said commenting on the findings of the report.
“This assessment underlines the significance of the challenge facing the region in meeting SDGs’ target 2.1 and the relevance of sustainable and substantial support to food security and nutrition policies and programmes in the region,” he added.
At the aggregate level, sub-Saharan Africa achieved adequate food availability, in terms od dietary energy supply, over the 2014-2016 period. However, several countries in the region remain highly dependent on food imports to ensure adequate food supplies, with some sub-regions depending on imports for up to a third of their cereal needs.
This indicates that substantial demand for food exists for these countries, and there is a need to increase agricultural productivity, food production and value addition, among other things.
Speaking at the launch of the report, Sierra Leone’s Minister of Agriculture, Forestry and Food Security, Patrick Monty Jones, noted that the agriculture sector in sub-Saharan Africa is strongly based on household, small-scale farming, and that the majority of African farmers cultivate less than 10 per cent of their land, which could be attributed to many factors including poor governance of land tenure and shocks and stresses due to climate change resulting in food insecurity.
“To overcome these challenges, the agricultural sector’s strategic objectives and priority activities should include increased production and productivity of staple food crops through a value chain approach for food security, promote commercial agriculture; promote and increase value-adding activities for agricultural products, increase the production and export of cash crops, and improve access to finance for farmers”, he recommended.
The report recognizes the need to spur a broad-based economic transformation, particularly in the agricultural sector, which is the major source of income in sub-Saharan Africa, to generate a substantial reduction in poverty and improve food accessibility.
It cites unstable food markets and commodity prices and natural disasters – including severe droughts and floods leading to failed crops, insufficient pasture feed and water for livestock – as well as persistent political instability, conflicts and other forms of violence, as the main triggers of food insecurity and malnutrition in the region.
The report noted that on average per capita income, is three times lower in sub-Saharan Africa than in other regions of the world in 2014, although the region witnessed a 30 percent increase between 1990 and 2014.
Also, poverty levels declined in the region but remained the highest in the world, with the region being far from halving the proportion of people living in poverty.
Moreover, even though some progress is being made in reducing malnutrition, evidence shows that many countries in the region suffer from a triple burden of malnutrition, that is, undernutrition, micronutrient deficiencies, and overweight and obesity, the latter being responsible for rising levels of non-communicable diseases.
Key social intervention strategies
According to the report, a varied number of comprehensive social protection policy frameworks and institutional arrangements have been introduced in the region to integrate nutrition and agriculture.
In this regard, Bukar Tijani observed that “it is imperative for countries to adopt multisectoral and multidisciplinary approaches in integrating agriculture, nutrition, social protection and related measures by realigning, integrating and coordinating activities and accountability mechanisms to deliver evidence-based sustainable nutrition solutions and outcomes.”
The report also calls on countries to review and exert efforts in order to improve the translation of political commitments and declarations into effective programmes on the ground, particularly in the context of the ambitious targets set in the Malabo Declaration for 2025 and the Sustainable Development Agenda for 2030.
It laments that several documented policy commitments and strategies are yet to generate the expected results, but says that many country experiences illustrate the feasibility of eliminating hunger and malnutrition through the right combination of cross-sectoral policies and programmes.
Policy reforms
The report advocates for continued policy reforms to sharpen their focus, and the creation of an enabling environment for investment and participation by all relevant stakeholders, saying that this is critical to ending hunger, and achieving food security and improved nutrition.
It specifically calls for the development of innovative resource mobilization from a broad set of stakeholders from the public and private sector and financial instruments that would enable the implementation of actions in a sustained and widespread manner to scale up food security and nutrition programmes in sub-Saharan Africa.
“As the magnitude and impact of crises and disasters increase – aggravated by the overexploitation of natural resources and climate change – more and more households, communities and governments in the region are less able to absorb, recover and adapt, making them increasingly vulnerable to future shocks,” the report said.
The report urges governments to intensify their efforts to ensure that years of gradual agricultural development gains are not wiped out by recurrent shocks, adding that increasing the resilience of agricultural livelihoods and promoting and financing climate-smart agricultural practices would be a powerful lever to reach the pledge of the Sustainable Development Goals “to leave no one behind”.
Furthermore, immediate short, medium and long-term measures are needed to promote and scale up appropriate technologies to adapt and mitigate climate variability and change, to develop resilience monitoring and evaluation frameworks, and to minimize the impacts of El Niño on affected communities.
“Building resilience through peace-building efforts is critical to food security and nutrition. In armed conflict and protracted crises, protecting, saving and rebuilding agricultural livelihoods to save lives and create the conditions for longer-term resilience is a key step towards ensuring peace and stability. The critical role of the agriculture sector in crisis situations must not be overlooked and necessary investments need to be made,” the report recommends.