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UN agency urges support for small farmers to help them not just get by, but thrive and feed others
Highlighting growing challenges, such as climate change and natural resource scarcity, facing small farmers in developing countries, the head of the United Nations agricultural agency called for information technology tools that can help boost their resilience as well as feed a growing world population.
“Millions of small family farmers need technical and financial assistance to be more resilient and adapt to the impacts of climate change,” said José Graziano da Silva, the Director-General of the UN Food and Agriculture Organization (FAO).
“They must be able to stay on their land, produce their own food and also have access to markets,” he added.
In his remarks at the G20 agricultural ministers meeting in the German capital, Berlin, Director-General Graziano da Silva noted that rural areas around the world will also be key in the implementation of the 2030 Agenda for Sustainable Development given that this where poverty and hunger are most concentrated.
At the same time, increases in agricultural yields in these regions are required to feed a world population set to cross the 9-billion mark by 2050, and this will greatly depend on small family farmers, according to FAO studies.
Turning to the importance of information and communication technologies to build efficiency, resilience and inclusion of poor family farmers, the FAO Director-General spoke about the agency's digital strategy that aims to support them through knowledge sharing and bottom-up learning.
As part of the strategy, the UN agency is working with Google to make high-resolution satellite data an everyday tool to monitor and manage natural resources, promote sustainable agriculture and strengthen food security. It is also engaging with the World Meteorological Organization (WMO) – the UN system's weather agency – to improve weather forecasts for farmers, as well as exploring ways to provide small farmers with microclimate forecasts.
Mr. Graziano da Silva said that these efforts would be aimed at countries that do not have national meteorological services established and urged for support so that meteorological data, available at global level, can be translated at the local level to benefit farmers, pastoralists and fisherfolks.
Also in his remarks, the senior UN official hailed the G20 for its continuing focus on the issue of water scarcity and on antimicrobial resistance (AMR).
According to FAO estimates, almost 2.1 billion people live in the dry areas of the world and that some 260 million people, most of them in rural areas, lack access to safe drinking water.
Inviting G20 Members to participate in the Global Framework for Water Scarcity – launched by FAO and its partners at the recent UN Climate Conference in Marrakech, Morocco – that seeks to help countries and communities improve the efficiency of their water use and increase their resilience to drought.
On antimicrobial resistance, the head of FAO called on G20 support to the UN agency's efforts to promote responsible use of antibiotics in the agricultural sector to prevent the spread of resistance.
Antimicrobial resistance occurs when microorganisms (such as bacteria, fungi, viruses and parasites) change, developing resistance, as they are exposed to antimicrobial drugs (such as antibiotics, antifungals, antivirals, antimalarials and anthelmintics) used to treat the infections they cause. As a result, the medicines become ineffective and infections persist, become harder to treat and increase the risk of spreading.
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Agoa treaty facing possible repeal in Trump administration
Sub-Saharan Africa is concerned about the future of a trade pact with the United States after President Donald Trump said it only benefits the corrupt.
President Trump’s new policies may bring an end to the Africa Growth and Opportunity Act (Agoa).
“Most of Agoa imports are petroleum products with the benefits going to national oil companies. Why do we support that massive benefit to corrupt regimes?” he said.
There are now fears that his administration could repeal the Act.
“Agoa was extended for 10 years, and my conviction is that trade policy between the US and sub-Saharan Africa will remain despite the statement. But we need to observe how things develop,” said Richard Kamajugo, TradeMark East Africa senior director of trade and environment.
Enacted in 2000 by the Bill Clinton administration, Agoa allows 39 eligible sub-Saharan Africa countries to export certain goods to the US market duty-free. It was renewed in September 2015 by then president Barack Obama, and is slated to expire in 2025.
Repealing the treaty would be difficult considering that the US Congress must approve. The Act has been the cornerstone of US trade policy with Africa, and over 15 years it led to an increase in trade from about $20 billion to $100 billion in 2008. However, this figure declined to $36 billion in 2015.
Low trade
According to analysts, the fact that non-oil and gas exports into the US under Agoa stood at $4.1 billion in 2015, representing just two per cent of the United States’ total global trade, could have prompted President Trump to dismiss the Act as insignificant.
The non-oil Agoa trade increased marginally from $1.4 billion in 2001 to $4.1 billion in 2015. Apart from oil and gas, textiles, manufacturing, agriculture and artefacts have benefited from the treaty.
Utilisation of Agoa has been low, as just seven out of 39 African countries have taken advantage of the Act.
“Most countries have not benefited from Agoa because of supply constraints. It is for this reason that oil-producing countries have been the main beneficiaries, because it is a fairly mature product,” said Mr Kamajugo.
He added that scrapping the Act would not help, because it has benefited countries like Kenya, Botswana and Lesotho, which have seen the emergence of a vibrant textile sector.
“Scrapping Agoa is not the solution. The solution is identifying the bottlenecks so that other countries can benefit,” he said.
Export Processing Zones
In East Africa, Kenya has been the main beneficiary of the treaty, which has given rise to the Export Processing Zones and offers the country a growing coffee and artefacts market.
Repealing the Act would wipe out the EPZ sub-sector that employs about 40,000 Kenyans, and greatly reduce trade as textile and apparel products account for about 80 per cent of Kenya’s total exports to the US.
The 2015 Economic Survey shows that Kenya’s textile export to the US were worth $283.3 million in 2014. Other exports like coffee, titanium ore and artefacts accounted for $75.5 million.
In 2014, Tanzania’s exports to the US stood at $114 million. Statistics indicate that the value of exports has dropped from 18.8 per cent in 2000 to 4.1 per cent in 2015.
Uganda has not benefited significantly from Agoa as exports under the treaty dropped from $3.31 million in 2010 to $1.15 million in 2014.
Rwanda earned $187,000 in 2014 and $435,000 in 2015, mainly from apparel and macadamia exports to the US market.
The failure by many sub-Saharan countries to utilise the Act, which offers more than 6,500 products duty-free access to the US market, has meant that only a few countries, mainly oil exporting nations, have been the key beneficiaries.
Since enactment, Angola, South Africa and Nigeria have dominated exports to the US, accounting for almost 80 export. Angola and Nigeria have benefited by exporting oil and petroleum products, while South Africa has a more diversified product range of precious metals and stones, vehicles, iron and steel, machinery and agricultural products.
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WTO Trade Facilitation Agreement entry into force – What next?
The entry into force of the Trade Facilitation Agreement is imminent. Only two more ratifications are needed. For developing countries that have ratified or will ratify the Agreement the entry into force results in important obligations.
Trade Facilitation Agreement at a glance
The Trade Facilitation Agreement (TFA) of the World Trade Organization (WTO) sets forth measures to expediting the movement, release and clearance of goods across borders, as well as reducing the related costs.
Obligations on Entry into Force
As of 23 January 2017, 107 WTO members have deposited their instruments of acceptance with the WTO Secretariat. Only three additional ratifications are needed to bring the Trade Facilitation Agreement into imminent effect within the next month(s).Upon the entry into force of the Agreement, WTO Members that have ratified it, whether developed, developing countries or least developed countries, are supposed to have in place a national trade facilitation committee responsible for the coordination and implementation of the Trade Facilitation Agreement.With the imminent entry into force of the Trade Facilitation Agreement, developing countries that have ratified the Agreement are under obligation to undertake the following steps:
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Immediate notification of provisions designated under Category A
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Implementation of the measures designated under Category A
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Immediate notification of the provisions under Category B and C and their corresponding indicative dates for implementation
Impact of UNCTAD Trade Facilitation Assistance
UNCTAD has long-standing expertise and experience in trade facilitation and provides technical assistance and capacity-building support to its Members, including in the establishment of national trade and transport facilitation committees, gap analysis needs assessments, trade facilitation roadmaps, transit agreements and customs automation through its UNCTAD Automated System for Customs Data (ASYCUDA) programme as well as Trade Portals.
In 2016, UNCTAD launched the Empowerment Programme for National Trade Facilitation Committees, which provides an intensive professional training for the Secretariat and the members of national trade facilitation committees. The main objective is to help them implement, in a coordinated manner, trade facilitation reforms, including the provisions of the WTO Trade Facilitation Agreement. Fifteen developing countries and least developed countries are currently conducting the Empowerment Programme.
UNCTAD has to date assisted more than 45 developing countries and least developed countries to conduct gap analysis and to elaborate more than 135 project proposals for the implementation of specific Trade Facilitation Agreement's measures. In addition, UNCTAD has supported the successful establishment of over 15 national trade facilitation committees in the East African Community, Latin America, Western Africa and Asia. In particular, the programme for the five member countries and secretariat of the East African Community is a good example of sustainable technical assistance and capacity building.
International Forum for National Trade Facilitation Committees
UNCTAD is organizing the first International Forum for National Trade Facilitation Committees in cooperation with other international organizations. The objective is to empower the leaders of national trade facilitation committees and provide opportunities for them to access funding. The forum will be held on 23-27 January 2017 at UNCTAD headquarters in Geneva, Switzerland.
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Harnessing the demographic dividend through investments in the youth: 33rd Ordinary Session of the PRC of the African Union
The Chairperson of the African Union Commission Dr. Nkosazana Dlamini Zuma has called for the general adoption and upholding of the values of Pan Africanism, which include putting Africa first; the commitment to the African people, their dignity and aspirations; and our passion for democracy, peace, integration, development and building unity of purpose even in the face of difficult challenges, within ‘a single institution to which we all belong’.
H.E. Dr .Zuma was speaking on Sunday 22nd of January 2017, at the official opening ceremony of the 33rd Ordinary Session of the Permanent Representatives Committee (PRC) at the African Union Headquarters in Addis Ababa, Ethiopia, under the theme: “Harnessing the Demographic Dividend through Investment in Youth”.
The opening ceremony took place in the presence of the Deputy Chairperson of the AUC, H.E Mr Erastus Mwencha, AUC Commissioners, representatives from the diplomatic corps, the international community, civil society, private sector and invited guests among others.
H.E. Dr. Dlamini Zuma, in her opening address paid special tribute to the Gambian Ambassador to the AU, H.E Mr Mass AxiGye, for the resolute and decisive leadership of ECOWAS and the Peace and Security Council, who worked in close collaboration to avert the crisis in The Gambia by standing firm and acting as true Pan-Africanists.
She concluded by saying “It is important in the coming years as the world is changing, and we will be operating in a world that we are not familiar we should be resolute in working towards our Agenda 2063 so we can bequeath our future generation by having a peaceful, prosperous Africa.”
Ambassador of the Republic of Chad and Chairperson of the PRC, Mr. Cherif Mahamat Zene in his welcome remarks, thanked the PRC members for all the work they have been doing during the preparatory meeting and urged them to make clear recommendations to the Executive Council and subsequently to the Heads of State. He concluded his remarks by wishing all the members successful deliberations and declared the meeting officially open.
Opening Remarks of the Chairperson of the African Union Commission, HE Dr. Nkosazana Dlamini Zuma
A Happy and Prosperous New Year to all Members of the Permanent Representative Committee, officials from Capitals, Organs, RECs, Representative offices, the Commission and your beloved families and friends.
I hope 2017 will be a source of inspiration for our Union, to continue to tackle the challenges we face, through joint and sustained efforts.
The coming Summit will once again deal with matters that are of concern to citizens and to the future of Africa.
How we deal with them, from the work of Specialised Technical Committees and Organs, to the critical integration and development projects of Agenda 2063: peace, security, democracy and governance; the issues of financing and the reforms of our Union, will have implications for whether we make progress or let opportunities pass us by.
As we ponder these issues, we turn to the early Pan Africanists, the visionaries who helped to shape our Union today.
Emperor Haile Selassie, in his opening statement to the 1963 Conference that founded the Organisation of African Unity declared:
What we require is a single African organization through which Africa’s single voice may be heard, within which Africa’s problems may be studied and resolved.
We need a single institution, to which we all belong.
This organisation that the founders talked about fifty-three years ago, is today in our hands.
During the four years of our term, the African Union – the Assembly, Executive Council, PRC, Member States, RECs, Organs, the Commission and Citizens – grappled with the issues that also occupied our Founders.
Guided by our 50th anniversary pledge to silence the guns, we are determined to resolve the conflicts in Mali, South Sudan, Somalia, Burundi, Central African Republic; and to face the common threat of terrorism and extremism.
Acting together, we worked to avert a crisis in The Gambia. We pay tribute to the resolute and decisive leadership of ECOWAS, and the Peace and Security Council as they remain ceased with the matter.
I also want to pay a special tribute to the Gambian Ambassador to the AU, H.E Mr Mass AxiGye who during this difficult period stood firm and told the truth as a true patriot of his country and Pan-Africanist. We thank him for that.
Under the umbrella of Agenda 2063, we recorded progress in the modernization of agriculture and agro-processing; in tackling backlogs in energy, transport, water and sanitation and in making sure that Africa is not bypassed in the information highways and knowledge economy through investing in ICT.
The Agenda 2063 Ten Year Implementation Plan provides the goals we all work towards – to push the African skills revolution, to build vibrant cities, to empower women and youth, and to ensure access to health for all, including adequate nutrition, water, sanitation and food security.
This year, we have a major task to adopt the African Continental Free Trade Area. This, along with our industrialization programme, the Commodities Strategy, and work on the blue oceans economy, are critical to resolving the African paradox of a continent with virtually every natural resource at its disposal, and yet its people are poor and it is marginal to global production.
The work with Member states, RECs and organs to domesticate Agenda 2063, is proceeding very well. This ensures that our Agenda and the SDGs are reflected in national and regional development plans and budgets.
The Commission will present its Annual Report, which gives a detailed account of activities in the various domains, as we conclude the third year of the fifty-year journey towards the realization of our Agenda 2063.
All this is to ensure that the Africa we leave behind for future generations, is a better place than the one we found and lived in.
This is important as we celebrate 2017 as the year of investments in the youth. The crown and precondition of our success will be to place our young people at the centre of Africa’s Agenda 2063.
We must acknowledge that in spite of the achievements, a lot still needs to be done.
In all our work, we must espouse and uphold the values of Pan Africanism, which include putting Africa first; the commitment to the African people, their dignity and aspirations; and our passion for democracy, peace, integration and development. We must build unity of purpose even in the face of difficult challenges, within ‘a single institution to which we all belong’.
The AU Commission has an important role to play in this regard, to facilitate, coordinate and promote the implementation of our continental vision and frameworks, as set out in the Constitutive Act and Statutes. It therefore must be more efficient and effective, and its leadership and staff, diligent, prudent and Pan African in their outlook.
The Permanent Representative Committee also has to play its role.
As Permanent Representatives of Member States to the African Union, you have to find the balance between national interests and the Pan African agenda.
Just as the Commission and its members are expected to be Pan-African in the execution of their duties and not prioritise their countries at the expense of the African agenda, so should the PRC.
In this gathering, unfortunately, we sometimes see a nationalist position instead of a Pan-African one. Even as you advise your Ministers it should be done with the intention of furthering the continent’s agenda.
The Commission and PRC are therefore critical links of the same chain. If one of the links is weak, the entire chain is weak.
As you therefore prepare for the Executive Council and the Summit, let us continue to work together to build this great continental institution, to which we all belong. It is very important in the coming years, the world is changing and presenting unfamiliar terrain. Africa must therefore be resolute about implementing its agenda, so that we build a prosperous [continent].
Once again, I wish you a bright new year, fruitful deliberations and good working together.
Thank you.
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WTO IP rules amended to ease poor countries’ access to affordable medicines
An amendment to the agreement on intellectual property rights entered into force today, securing for developing countries a legal pathway to access affordable medicines under WTO rules.
The amendment to the WTO Trade Related Aspects of Intellectual Property Rights (TRIPS) Agreement marks the first time since the organization opened its doors in 1995 that WTO accords have been amended.
The WTO Secretariat has received in recent days notifications from five members that they have ratified the protocol amending the WTO TRIPS Agreement. These notifications – from Burkina Faso, Nigeria, Liechtenstein, the United Arab Emirates and Viet Nam – brought to two-thirds the number of WTO members which have now ratified the amendment. The two-thirds threshold was needed to formally bring the amendment into the TRIPS Agreement.
Members took the decision to amend the TRIPS Agreement specifically to adapt the rules of the global trading system to the public health needs of people in poor countries. This action follows repeated calls from the multilateral system for acceptance of the amendment, most recently by the United Nations General Assembly High-Level Meeting on Ending AIDS in June 2016.
“This is an extremely important amendment. It gives legal certainty that generic medicines can be exported at reasonable prices to satisfy the needs of countries with no pharmaceutical production capacity, or those with limited capacity. By doing so, it helps the most vulnerable access the drugs that meet their needs, helping to deal with diseases such as HIV/AIDS, tuberculosis or malaria, as well as other epidemics. I am delighted that WTO members have now followed through on their commitment and brought this important measure into force,” said WTO Director-General Roberto Azevêdo. In video statements available here, some of the key players share their thoughts on the TRIPS amendment.
Unanimously adopted by WTO members in 2005, the protocol amending the TRIPS Agreement makes permanent a mechanism to ease poorer WTO members’ access to affordable generic medicines produced in other countries. The amendment empowers importing developing and least-developed countries facing public health problems and lacking the capacity to produce drugs generically to seek such medicines from third country producers under "compulsory licensing" arrangements. Normally, most medicines produced under compulsory licences can only be provided to the domestic market in the country where they are produced. This amendment allows exporting countries to grant compulsory licences to generic suppliers exclusively for the purpose of manufacturing and exporting needed medicines to countries lacking production capacity.
“As important as trade policy is, health and well-being must take precedence,” said Amina Mohamed, Kenya’s Foreign Minister who chaired the WTO General Council at the time when the amendment was approved in December 2005. “WTO members recognise this and have proven how seriously they take health issues by ratifying and putting into force an amendment to WTO rules which will facilitate access to essential medicines in low income countries.”
The amendment provides a secure and sustained legal basis for both potential exporters and importers to adopt legislation and establish the means needed to allow countries with limited or no production capacity to import affordable generics from countries where pharmaceuticals are patented. More and more WTO members are taking practical steps to implement the system in their laws. The bulk of global medicine exports is covered by laws enabling exports under this system, opening up new options for potential beneficiaries to access a wider range of potential suppliers and enabling new, innovative procurement strategies.
Background
Flexibilities such as compulsory licensing are written into the TRIPS Agreement – governments can issue compulsory licences to allow companies to make a patented product or use a patented process under licence without the consent of the patent owner, but only under certain conditions aimed at safeguarding the legitimate interests of the patent holder.
Some governments were unsure of how these flexibilities would be interpreted, and how far their right to use them would be respected. At the Doha Ministerial Conference in November 2001, WTO members struck a deal which clarified the accords and provided governments in the developing world with greater clarity and certainty that protection of patents does not and should not prevent members from taking measures to protect public health.
But one more element was needed – how to guarantee that countries lacking the capacity to produce generic drugs could still procure them affordably. Paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public Health recognized that “WTO members with insufficient or no manufacturing capacities in the pharmaceutical sector could face difficulties in making effective use of compulsory licensing under the TRIPS Agreement”, and instructed the Council for TRIPS to find an expeditious solution to this problem.
In August 2003, WTO members decided to remove an important obstacle to affordable drug imports by waiving the limitation in the TRIPS Agreement to predominantly supply the local market. The decision says that if the importing country could not secure access to needed medicines at affordable prices, these medicines could be produced under compulsory licence by drug makers in third countries, and be imported to poorer countries unable to manufacture the medicines themselves.
Two years later, WTO members agreed on 6 December 2005 to permanently incorporate the 2003 waiver decision into the TRIPS Agreement subject to the acceptance of two-thirds of WTO members. Through the entry into force of the amendment, the flexibility to protect public health becomes an integral part of the TRIPS Agreement. Against concerns some have voiced that use of this option may be challenged politically, the amendment provides legal certainty that any member can export the entirety of pharmaceutical products made under a compulsory licence to countries confronted with limited domestic capacity.
The up-to-date list and map of members that have accepted the protocol amending the TRIPS Agreement are available here. The rate of acceptance has picked up significantly in recent years, as members familiarize themselves with the practical implications of the TRIPS amendment: some 37% of instruments of acceptance were deposited in the last two years alone, following a review in the WTO General Council of the benefits of entry into force. Members who are yet to accept the TRIPS amendment currently have until end December 2017 to do so. In the meantime, they can refer to the 2003 waiver decision to access affordable medicines from third country sources.
The WTO TRIPS Council recently discussed the TRIPS public health amendment. A range of delegations urged WTO members that are yet to accept the amendment to do so expeditiously and called for work to make it operational. During related discussions on the UN High Level Panel Report on Access to Medicines, one delegation also recalled the Panel’s recommendation to revise the system of compulsory licences for export.
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tralac’s Daily News Selection
tralac’s first newsletter of 2017 is posted: a message from the Executive Director, Trudi Hartzenberg (and more)
The 9th African Union gender pre-summit starts on Sunday: concept note (pdf)
Diarise: The Germany-Africa Business Forum (23 March, Frankfurt): official website. Two backgrounders: What you need to know about Africa-Germany business relations, African leaders give Germany’s Marshall Plan a ‘thumbs up’
China-Africa relations: political and economic engagement and media strategies (open access, African Studies Quarterly special issue)
Angola’s trade surplus increases in the 3rd quarter of 2016 (MacauHub)
Angola’s trade surplus in the third quarter of 2016 amounted to $5.451bn, a figure that compares with S$4.154bn recorded in the second quarter, reported the National Statistics Institute (INE). Data released by INE showed that between July and September Angola exported goods worth $8.468bn, a 14.5% increase over the amount determined in the previous quarter and imported goods worth $3.016bn. The main export partners in the third quarter were China (with 40%), India (7.7%), US (6.1%), Taiwan (4.8%) and France (4.2%). The main partners for imports were Portugal (14.8%), US (12.6%), China (12.4%), Norway (6%) and South Africa (5.8%).
Nigeria ratifies the Trade Facilitation Agreement (WTO)
Nigeria has ratified the Trade Facilitation Agreement, making it the 107th WTO member to do so. Only three more ratifications from members are needed to bring the TFA into force. “Nigeria’s ratification of the Trade Facilitation Agreement is a reflection of our commitment to the WTO and a rules-based economy. It is evidence of President Muhammadu Buhari’s commitment to rapidly implement his presidential initiative on the creation of an enabling environment for business,” Nigeria’s Minister for Industry, Trade and Investment Okechukwu Enelamah said.
MTN may delay Nigeria listing (Business Report)
“It’s a work in progress and hopefully within the 12 to 18 month period we will be able to do it,’’ MTN Chairman and Acting Chief Executive Officer Phuthuma Nhleko said at the annual meeting of the World Economic Forum in Davos, Switzerland. “Regulatory issues need to be resolved, and the macro conditions need to have improved.”
Madagascar launches export of litchis to South Africa (COMESA)
The first consignment of 512 kilograms of fresh litchis is part of a 500 ton import permit of litchis to be exported by Quality Mad of Madagascar to Fresh Mark of South Africa. The first shipment of litchis is a culmination of a project technically supported by the COMESA Secretariat with funding from the European Union and USAID. Initially the project was funded by DFID through Trade Mark Southern Africa. The Secretary General of COMESA in his brief remarks observed that innovative approaches were deployed to assist the exporters in Madagascar to meet the SPS export requirements by bringing together importers and exporters to work closely with the respective SPS regulatory authorities on meeting the requirements of the South African market.
Zimbabwe special permits: SA minister says don’t rush me (NewsDay)
South African Home Affairs minister Malusi Gigaba on Wednesday said, at the appropriate moment, he will announce the fate of almost 200 000 Zimbabweans residing and working in the country on the basis of the Zimbabwe Special Permit (ZSP), which expires this year.
Miners decry Kenya govt’s giving China mapping tender (The EastAfrican)
Miners in Kenya have put the government on the spot for withdrawing $28.5m in public funding for a survey to map the country’s mineral resources in favour of financing from China. The Kenya Chamber of Mines fears dusting off a controversial pact signed in 2013, which gives China’s Geological Exploration Technology Institute exclusive rights to do the geophysical survey with funding from Beijing, amounted to ceding control of the country’s resources. “China will end up controlling the mining sector if they fund and carry out the survey because they will have raw data on the country’s mineral wealth,” Kenya Chambers of Mines chief executive officer Moses Njeru told The EastAfrican.
IGAD, Gulf Cooperation Council to enhance cooperation (IGAD)
The two regional blocs explored opportunities through which they can develop cooperation and coordination in areas of common interests. These areas include and are not limited to security, economic ties and relations (investment and trade), food security and nutrition, agricultural sector development, blue economy, marine corridor, infrastructure and connectivity, education, research and technology, health as well as youth and cultural, social and media outreach.
At Davos: UN chief Guterres calls businesses ‘best allies’ to curb climate change, poverty (UN)
“Without the private sector we will not have the necessary innovation, we will not have the necessary capacity to discover new markets, new products, new services and to be able to develop new areas in the economy,” Mr. Guterres said, adding also that only the private sector can create enough jobs to stabilize societies.
WEF 2017: What is in it for EAC region? (New Times)
At WEF, Dangote canvasses tackling power deficit to improve economy
Ministers call on G20 to aim for inclusive growth from WEF
Trump-Africa: In trade with Africa, US playing catch-up (VOA)
Peru, India to start free trade talks this quarter (The Wire)
The cabinet of Indian Prime Minister Narendra Modi approved a feasibility study on the proposed deal on Wednesday, clearing the way for the start of formal talks, Peru’s trade ministry said in a statement. Peru said an initial technical meeting in the first quarter would mark the first time that India, one of the world’s biggest and fastest-growing economies, negotiated a comprehensive trade deal with a Latin American country. Peru is a leading producer of copper, gold and fishmeal and was one of 12 signatories of the US-proposed Trans-Pacific Partnership trade deal that US president-elect Donald Trump has vowed to scrap.
Deep integration and UK-EU trade relations (World Bank)
Because of its membership, the UK’s services trade more than doubled, and the country’s backward and forward participation in global value chains increased by more than 30% each. The paper uses these estimates to evaluate the future of United Kingdom-European Union trade under different scenarios. The findings show that United Kingdom-European Union trade declines under all scenarios, ranging between 6 and 28 percent for trade in value added.
Benefits of global and regional financial integration in Latin America (IMF)
The timing is ripe to pursue greater regional financial integration in Latin America given the withdrawal of some global banks from the region and the weakening of growth prospects. Important initiatives are ongoing to foster financial integration. Failure to capitalize on this would represent a significant missed opportunity. [Related: How is the slowdown affecting households in Latin America and the Caribbean? (World Bank)]
Maya Forstater: ‘Aid in reverse: facts or fantasy?’ (CGD)
A comment piece published in the Guardian earlier this week argued that for every $1 of aid that developing countries receive, they lose $24 in net outflows. The piece, by Jason Hickel, which draws on a report by Global Financial Integrity (GFI) concluded that “poor countries don’t need charity. They need justice.” Rich countries, he argues, should act to stopthe massive flow of capital that the writer believes is being drained from poor countries. The 1 to 24 figure is shocking and morally compelling. But it isn’t true. To understand why, first it is helpful to get a sense of scale.
Today’s Quick Links:
Standard & Poor’s reduces Mozambique’s credit rating to the lowest level
EABC endorses Ambassador Amina Mohamed to chair the African Union Commission
Uganda: Special interest groups to be represented in EALA
Regional MPs raise concern over procurement flaws at EAC Secretariat
Bank of Tanzania governor: Kagera Sugar is a role model for industrialisation
The Gambia: full text of UNSC resolution
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The real value of the Doing Business reports
The World Bank’s Doing Business (DB) project examines the ease with which companies are able to do business in 190 different countries. When it publishes a report, as it did on 25th October 2016, the world takes notice – the previous edition had over 1m page views within three weeks of going live.
There was good news for Africa. Twelve African countries were among the 29 across the world praised for the biggest improvements to their business environments. Kenya even made the top 10.
Sub-Saharan Africa received congratulations for enacting a quarter of the world’s business reforms this year, although the region continued to perform poorly on indicators such as getting electricity, trading across borders and dealing with construction permits. Mauritius took top place among African countries, at number 49 in the global ranking.
Writing in the Vanguard, Adnan Mohamed, Kenya’s cabinet secretary for industry, trade and cooperatives, claimed his country’s rise to 92nd place in the ranking was vindication of the government’s quest to create a “proficient and all-encompassing ethos for enterprise and business growth.”
In Nigeria, vice-presidential spokesman Laolu Akande said that being ranked 169th represented a halt to a falling trend and was a “positive indication” that the government’s economic policies were on course, but the Proshare website lamented: “While Nigeria dithers, 3 in 4 African countries improve business environment.”
Snapshot
However, opinion is divided on the true value of the reports. Some see their rich data as a valuable guide for policymakers and investors, providing a snapshot of the business environment in a country and easy comparison across economies. Others criticise them for having an unwarrented bias against regulation or being out of touch with the real world.
DB’s stated aim is to investigate “the regulations that enhance business activity and those that constrain it”, providing “objective measures of business regulations and their enforcement” across the world. To do so, it surveys governments, World Bank officials and thousands of experts, mainly lawyers and accountants – but not actual companies.
The experts are asked to estimate the times and costs that would be incurred by a standardised company located in the country’s main business city to accomplish a number of business goals.
Their replies are used to create scores for 11 indicators: getting electricity, dealing with construction permits, trading across borders, paying taxes, protecting minority investors, registering property, getting credit, resolving insolvency, enforcing contracts, labour market regulation and starting a busness.
The scores are based on what DB calls “distance to the frontier” (DTF), with the “frontier” being the best performance observed on each indicator across all economies over time. Scores for the indicators are aggregated into an overall DTF for the country.
These scores are used to rank countries (Rwanda’s DTF of 69.81 puts it behind Mauritius and above Morocco in the overall table). Because the score shows how far short the country falls from the “frontier”, set at 100 points, it also represents an absolute level of performance that can be tracked over time.
Built-in bias?
Writing in the Guardian in May 2013, Mark Weisbrot, co-director of the Centre for Economic and Policy Research in Washington, accused DB of having a “built-in bias against many regulations that people who care about the progress of humanity might see as important.” Governments anxious to secure investment or loans from the World Bank may be led to cut vital protections in areas such as employment, wages, health and safety and the environment.
In its 2017 report, DB denies promoting deregulation, claiming instead to support “smarter regulation”. It says that more regulation could lead to a higher score if it brings about a better business outcome.
The DB model is also condemned as out of touch with reality; by examining only the formal economy and assuming that all companies are aware of and complying with regulations, it is said to ignore the situation in countries where enforcement is weak, bribery is widespread, the playing field is unequal and the informal sector is enormous (and in Africa, the African Development Bank estimated that the informal sector accounted for 55% of GDP in 2013).
In contrast with DB’s estimates based on a theoretical company, the World Bank’s Enterprise Surveys obtain data from a wide range of real firms. In 2015 two economists compared DB’s findings with those of the Enterprise Surveys across 137 non-OECD countries. Mary Hallward-Driemeier and Lant Pritchett looked at three areas – the time taken to obtain a construction licence, start a business and import goods.
Hallward-Driemeier and Pritchett found that DB’s estimates of “legally required time” did not summarise “even modestly well” the experience of firms as reported by the Enterprise Surveys.
The Enterprise Surveys reported far lower median times than DB – around 30 days to obtain a construction permit in most countries, even in Zimbabwe, whose DB score was 566 days – but also highlighted huge variance within countries. A significant number of firms accomplished the tasks rapidly, with little variation across countries, while for the slowest firms times could be even longer than those reported by DB.
This is the product not of uniform non-compliance with legal requirements, say the authors, but of a “hugely tilted playing field”. Some firms are favoured and others “disfavoured” due to factors such as political connections, family ties, influence and corruption.
Such uneven appliance of the rules leads Hallward-Driemeier and Pritchett to question how far reforms that affect the DB indicators can make any difference to the investment climate firms actually experience.
No better alternative
In a blog on the institution’s website, World Bank economist Wolfgang Fengler defends DB’s resort to experts rather than real companies. Lawyers, he says, are a better source as firms do not go through the relevant transactions often and most of the relevant information is of a legal nature.
“While critics of the index make many valid points they are yet to come up with a better alternative,” he argues in the same post. “It takes a lot of effort and hard work to establish the right model, collect all the necessary data and then aggregate it into an index that everyone buys into. Doing Business has achieved it, despite some of its limitations.”
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In trade with Africa, US playing catch-up
The U.S. may be a global superpower, but when it comes to trade and investment in Africa, it lags far behind. China, with $200 billion in trade with the continent, more than doubles that of the U.S.
That means that while Africans paid attention to the U.S. presidential election, they were much more concerned by a slowdown in China’s economy.
“U.S. dynamics are far less important to us than what’s happening in China,” said Francois Conradie, head of research at NKC African Economics, a South African subsidiary of Oxford Economics based in Cape Town. “The biggest risk for us is Chinese demand slowing down sharply.”
During his presidency, Barack Obama made it a priority to try and narrow the trade gap between the U.S. and China.
In 2012, he launched the Doing Business in Africa Campaign to help make the U.S. Government’s trade resources more easily available to the U.S. private sector, and African public and private partners.
In September 2016, he hosted the U.S. Africa Business Forum in New York where he announced $9 billion in private trade and investment with Africa. He said U.S. foreign direct investment in African countries rose by 70 percent during his time in office.
“I think the key to his legacy is that he has brought trade and investment to the forefront of the U.S.-Africa policy agenda,” said Witney Schneidman, senior international adviser for Africa at Covington & Burling LLP and non-resident fellow at the Brookings Institution.
“When you look at the totality of this, not only does it say that the U.S. has interests in Africa with investing in the success,” he said, “but that the U.S. wants to be part of the emerging dynamic on the continent that is looking to business to create jobs, to generate opportunities, to generate growth, to generate skills and this is a really important dynamic.”
A number of U.S. companies are now developing long-term investment strategies on the continent, including the private equity firm Blackstone, General Electric and Johnson & Johnson. The change is apparent, although the American businesses are still considered the new kids on the block.
“U.S. corporations are testing the waters, assessing whether investing in Africa is profitable and looking at opportunities,” said Alex Vines, head of the Africa Program at U.K.-based Chatham House. “And that’s a good thing because the U.S. has been particularly weak corporately in Africa compared to other parts of the world. Very prominent in terms of humanitarianism, very prominent, the world leader, in terms of philanthropic giving, very much less so on the corporate side of things.”
Refocusing on trade
Another milestone during the Obama term was the ten-year extension of the African Growth and Opportunity Act (AGOA), which opened the U.S. market to African businesses by eliminating import levies on 7,000 products ranging from textiles to cut flowers.
“I think one of the great successes of the African Growth and Opportunity Act has been the expansion of textile manufacturing, particularly in Kenya and Ethiopia where, increasingly, multinational firms have shifted operations from South Asia to East Africa and to the Horn,” said Brett Carter, an assistant professor at the school of International Relations at the University of Southern California. “That’s, I think, really has been a triumph of the AGOA legislation. It wouldn’t surprise me that a Trump presidency would continue that.”
Looking toward the incoming administration, Schneidman sees AGOA as an opportunity for President-elect Donald Trump to negotiate a better deal.
In the 16 years since it was first signed, Schneidman said, much has changed. The continent is much more developed, and the European Union and China have since signed trade deals with African countries that are more mutually beneficial and put U.S. companies and products at a disadvantage.
“I think Trump could take a look at this and say, ‘You know, we need to do something different, and maybe we need to make AGOA a little tougher as it concerns the access of U.S. companies to the continent,’” Schneidman said.
Trump priorities
But Carter believes Trump’s main emphasis in economic partnerships with Africa will relate to oil and gas extraction.
He pointed to the fact that Trump’s nominee for Secretary of State, Rex Tillerson, the former head of ExxonMobil, has prior relationships with the leaders of the Republic of Congo, Equatorial Guinea and Angola.
“I would, I think, expect more of a focus on extractive industries than I would on supporting nascent manufacturing sectors, frankly,” Carter said. “I should say that those manufacturing sectors would be far more potentially lucrative for the continent’s economic growth.”
Carter also worried that the U.S. could lose its focus on good governance and democracy in a chase for lucrative deals.
He pointed to media reports that Trump planned to grant his first meeting after the election with an African head of state to Denis Sassou-Nguesso, the president of oil-rich Republic of Congo. Sassou-Nguesso has ruled the country for all but five years since 1979, and recently pushed for the constitution to be amended so he could have a third consecutive term in office.
“Many citizens from various parts of the continent want the United States to be less willing to sacrifice its humanitarian ideals for economic gain,” Carter said. “And I think that it’s quite clear that the Trump administration will privilege economic gain, the United States economic interests, over, frankly, the concerns for most African citizens.”
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African leaders give Germany’s Marshall Plan a ‘thumbs up’
Germany’s Marshall Plan, which calls for an equal partnership to industrialize Africa, has received positive feedback among African business leaders at the World Economic Forum in Davos. But some are a bit wary.
Germany’s Marshall Plan with Africa received a lot of praise but also criticism. Some call the economic plan to ambitious. Germany’s Development Minister Gerd Müller presented his long-awaited new Africa strategy on Tuesday in Berlin. He said his plan was aimed at developing joint solutions with African countries.
The so-called “Marshall Plan” – drawing a direct parallel to the huge United States program that kick-started the ravaged German economy after World War Two – talks about a new level of development cooperation. The plan foresees a complete restructuring of the German economic cooperation with Africa.
Africa as equal partner
“It is a wonderful development,” said Tony Elumelu, a Nigerian billionaire and one of Africa’s most influential entrepreneurs. He commended this initiative and wants to give it a “serious push” by collaborating with the German government through his foundation. The Tony Elumelu Foundation was founded in 2010 and is headquartered in Lagos, Nigeria. The philantropic organization supports entrepreneurship in Africa.
Elumelu layed out his plans of how Germany and Africa can collaborate. “Africa needs a Marshall Plan that addresses youth unemployment. Most importantly to alleviate poverty and include more women in main stream global affairs,” he told DW.
The Marshall Plan with Africa proposed by Germany, which includes programs focused on youth, education and bolstering economies and rule of law, explicitly targets the private sector. It has the potential to achieve a similar degree of mutual benefit for Africa and Europe, Elumelu said.
Self-reliance
According to businessman Elumelu, aid should be given without strings attached. “It needs to create independence and not a syndrome of dependency.” Also, as a continent in the 21st century, African leaders must be more responsive and take responsibility, he added. “Some African countries are showing good governance, but we still need to support other countries rather than condemning them. We need to help them build capacity and see how they can improve their governance systems.”
European traps
Many Africans took to social media to express their opinions on the initiative. Kenneth Ofori from Accra asked on Facebook: “To benefit who? The Germans at the end. We as Africans have to do better to counter the European traps.”
Matthew Ackerson is also not in favor of the new approach tabled by the German government. “Africans must have their own plans and they do not need any foreign plans to prosper. Trade is trade, business is business. We do not need aid from anyone. We are not beggars,” he said.
Awais Bangash has given a warning and wrote: “Africa, stay away from this Marshall Plan. The foreign, finance, defence and even media policies will be dictated from elsewhere to make profit and all countries will lose their sovereignty. It’s a financial death trap.”
On the other hand there is quite a positive reaction on the social media platform as well. Manasses Kamau welcomes the initiative along with others: “It is a welcomed move, but it shouldn’t be about loans. Let the German government give us a market share for our manufactured goods without the restrictive conditions they impose. That way they will create jobs in Africa and nobody will require aid.”
According to Akinwumi Ayodeji Adesina, the President of the African Development Bank, there are a number of good reasons why Germany should invest in Africa. “The continent is the second fast growing region in terms of foreign direct investment. The population is very high. By 2050 the population will have the same population as India and China together.”
Solution to crises in Africa
Consumer demands will reach one trillion dollars, Adesina said. “So if you are looking for a place where the demand is high for infrastructure, energy, water and sanitation, it is definitely in Africa.” He looks forward to working with German Chancellor Angela Merkel on the Marshall Plan. But it has to go together with Africa’s own plans to transform the continent, he added.
The African development bank president highlights important topics for investment that the African bank has put in place. Energy power is most important thing in Africa, he said. “Help the continent to industrialize. That will create employment for a lot of young people and make Africa more competitive.”
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WEF 2017: What is in it for the EAC region?
For three days, this week, world leaders in business, governments, academia, civil society and international agencies have been braving the European winter at the 47th World Economic Forum.
This year’s forum was organised under the theme, “A Responsive and Responsible Leadership,” with a focus on improving global cooperation and collaboration.
Experts said the theme and deliberations were relevant in addressing some of the main concerns such as unemployment, education and skills gap.
Elsie Kanza, the head of Africa at the World Economic Forum, told The New Times that in an era of social media, more people can bring their views and opinions afore, hence the call for leaders to be responsive and responsible.
For the East African Community (EAC), she said, the forum presented a chance to look at economic growth trends and compare with other parts of the world to improve for the better.
Despite the economic growth experience on the continent and region, in particular, in recent years, it has not had much effect on job creation and has further widened inequality gaps.
This, Kanza said, opened up for conversation about measures and models of evaluating economic growth that measure growth beyond GDP.
Among the main focus of the deliberation is increased cooperation and partnerships to reinvigorate economic growth which has stagnated in the recent past.
For the EAC region, Kanza said, leveraging benefits of integration is important to maintain growth and spur more entrepreneurs.
She said by engaging investors and multinationals at the forum, the region was identifying models for a better improved business environment and ecosystem, which could see more firms enter the EAC market.
Although intra-regional trade is still significantly low compared to other parts across the world, Kanza said efforts across the bloc have significantly reduced non-tariff barriers.
“We can do better as a region to improve intra-regional trade by eliminating trade barriers and making cross-border trade more effective,” she said.
Diversifying economy
Other conversations at the forum important to the region, Kanza said, was diversifying the economy beyond the current sectors to create more jobs, increase value of commodities and reduce vulnerabilities of global economic shocks.
“There is also need to improve the agriculture sector to improve production and value. Being one of the highest employing sector, we can do more to increase value of products and exports,” she said.
After the forum, which wraps up today, she added, the EAC bloc should consider stepping up economic integration, especially in financial markets, to deepen access to finance and inclusion.
“The region can do better in infrastructure for integration, education to deliver better skills, technological readiness and digital literacy,” Kanza said of areas the bloc should seek to learn from the forum.
Speaking at a session dubbed, “Leading in Divided Time,” Imbuto Foundation’s Michaella Rugwizangoga said, on a regional level, efforts and campaigns such as a visa-free Africa were being advanced to enable free movement of goods and services across the continent.
Local economists say the forum presents an opportunity for the bloc to advance in its development objectives, especially if it promotes itself as a united region as opposed to individual countries.
Philos Elisaphan Mujyanama, a lecturer at the University of Kigali, told The New Times that from the summit, EAC stood a chance to attract foreign direct investments as investors are attracted by large markets.
“Small and fragmented national markets are usually not sufficient to attract huge investments. Economic integration makes the region a huge market, which foreign investors find attractive,” Mujyanama said.
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tralac’s Daily News Selection
Profiled, forthcoming events: Regional trade in Africa: drivers, trends and opportunities (3 February, ACP Secretariat, Brussels); 2017 African Economic Platform (20-22 March, Mauritius)
Germany’s Federal Ministry for Economic Cooperation and Development invites comments on its new policy document: Africa and Europe – a new partnership for development and peace
In the last few months, we have defined the cornerstones of the Marshall Plan (pdf). Now we need your support. Our African partners, experts from the business sector, science and research, media and politics and all interested members of the public are invited to comment on our proposals and solutions and to develop them further. Because our plan is a living document. There is no ONE solution, ONE plan, ONE best way of responding to the challenges that Africa faces. Use this opportunity to contribute your ideas to the plan. We look forward to engaging in a constructive dialogue with you. [Note: send comment to This email address is being protected from spambots. You need JavaScript enabled to view it.] [Germany’s ‘Marshall Plan’ for Africa unveiled] [Table of contents: 10 starting points for a Marshall Plan with Africa, Chapter 1: Africa – Europe’s partner continent, Chapter 2: The essence of the Marshall Plan, Chapter 3: The pillars of the Marshall Plan, Chapter 4: The foundations of the Marshall Plan, Chapter 5: Outlook]
Paul Kagame: Time to solve intra-Africa trade challenges (New Times)
“For how long and how many times do we have to keep talking about the kinds of problems we have in Africa? There is little in terms of showing how fast we are moving out of the problems. We keep talking for years, and nothing changes,” he said. “There is a contradiction in our quest for prosperity and development and the things we know we have to do but don’t do,” he said. Noting that some of the investments required in the continent’s development process are quite heavy to be solely undertaken by governments, Kagame said there was need for governments to work with the private sector through partnerships.
ECOSOCC Cluster operationalisation: Trade and Industry cluster (pdf, AU)
On Mapping Partnerships: The meeting appreciated the attendance of the Department of Trade and Industry of the Africa Union and hence recognized the need for the Cluster to conduct a mapping of the relevant stakeholders and forge strategic partnerships with the identified stakeholders at national, regional, continental and project Africa’s positions at global level. The meeting further agreed to strengthen the collaboration between the Cluster and the Department of Trade and Industry of the Africa Union and endeavor to participate in relevant meetings of the Africa Union Commission, Organs and other institutions. On Annual ECOSOCC Stakeholder Platform on Trade and Industry: The meeting agreed to host and organize an annual meeting on Africa Trade and Industry involving civil society organizations across the five regions of the African continent and other key stakeholders. These platforms will discuss among other issues related to compliance of AU policy instruments on trade and industry. The outcome of these platforms will finally feed into the STC on Trade. [Note: Eight cluster reports are available for download]
China-Africa investment treaties: do they work? (pdf, IIED)
International treaties to promote foreign investment are one prominent tool that China and sub-Saharan African states use in contemporary economic diplomacy. Globally, these international agreements increasingly are comprehensive regional or bilateral economic treaties with a chapter on investment. But the China-Africa agreements involve more narrowly focused bilateral investment treaties (BITs) between China and one African counterpart. This report explores the content of the China-Africa BITs, and whether they achieve their stated goal of promoting foreign investment. It draws on a literature review; a legal analysis of the treaties; and 55 interviews with Chinese businesses operating in sub-Saharan Africa’s natural resource and infrastructure sectors, and with industry experts. Because of significant data limitations, this report is an exploratory study that aims to pave the way to further research.
ICC reveals record number of new arbitration cases filed in 2016 (ICC)
According to preliminary statistics, a total of 966 new cases administered by the Court were filed in 2016 - involving 3,099 parties from 137 countries. Looking to the year ahead, ICC Arbitration statistics also reveal an increasingly busy period ahead with a record 1,592 pending cases - up by 61 cases compared with figures recorded at the close of business the previous year. Meanwhile, ICC Arbitration continues to build on its foothold in North and Sub-Saharan Africa with each region securing an approximate 50% increase in the number of participating parties. Despite increased competition in the market, Nigeria and Turkey both achieved new statistical records, accounting for 30 and 76 parties respectively. [Related: New Year, New Rules: How Singapore and Stockholm are vying for a piece of the investment arbitration pie, Comparative chart of international investment arbitration rules: a quick reference guide for the rules of several key institutions (SIAC, SCC, ICSID, UNCITRAL, PCA)]
India: Industry seeks foreign partners for trade pact (The Hindu)
India’s top industry bodies are attempting to build a coalition with counterparts in other nations with similar interests to give a fillip to the country’s proposal for a Trade Facilitation in Services (TFS) Agreement at the WTO-level. The proposed TFS pact, among other things, aims to make it easier for professionals and skilled workers to move across borders for short-term work, as well as ensure portability of their social security contributions. Two leading industry bodies — CII and FICCI — will next month hold a global seminar in Delhi and Mumbai on the topic.
Afreximbank’s new strategic plan targets $90bn disbursement over five years (Afreximbank)
The plan, dubbed “IMPACT 2021: Africa Transformed”, was approved by the Afreximbank Board of Directors during its 111th meeting which took place in Cairo on 10 December 2016. The new plan envisages an aggregate disbursement of some $90bn during the five-year period, reflecting the revolving nature of trade finance business, with disbursements in support of intra-African trade expected to reach $25bn. “IMPACT 2021: Africa Transformed” sets out four strategic pillars for the Afreximbank, namely: Intra-African Trade; Industrialisation and Export Development; Trade Finance Leadership; and Financial Soundness and Performance. It also defines a set of macro and corporate objectives and targets.
Botswana: Transporter dejected by Competition Authority’s embargo (Mmegi)
Local transport company, 4MS Group Holdings yesterday expressed its disappointment at the Competition Authority’s decision to block its deal with Transport Holdings. The CA on Friday announced it had blocked a bid by South African company, Transport Holdings to buy 4MS citing competition and public interest concerns.
Zimbabwe: Govt works on framework to refine SI64 (The Herald)
Speaking at a Ministry of Industry and Commerce 2017 strategic planning workshop here on Tuesday, Industry and Commerce Minister Dr Mike Bimha said SI64 was serving its purpose, but needed to be refined. “We came up with SI64 as a measure to arrest a situation where the country had become a dumping ground for foreign products, of which were hopelessly sub-standard,” he said. “It was a precursor to resuscitation of the country’s industry. We want to follow that up with local content regulations, which will promote use of local products and raw materials to give impetus to our own industry.” He said SI64 was ad hoc in nature and that new regulations would reinforce and buttress its provisions. Borrowing from SI64, the regulations will also ring-fence a set of local products or those which the country has the capacity to produce, with the list being progressively expanded as capacity improves.
Boost for Kenyan farmers after KQ deal to export flowers to Australia (Business Daily)
Flower farmers have received a major boost after Kenya Airways agreed to a deal have an estimated 30 tonnes of freshly cut flowers exported monthly to Australia. “This is a major game changer for Kenya in terms of increasing trade exports of flowers to non-traditional markets. This partnership opens up the Australian market for exporters and is a business opportunity for us to generate revenue,” the national carrier’s Cargo Sales Manager Patricia Odida said on Thursday.
Zambia: Innovative solutions for resource mobilization (World Bank)
The Zambia mineral value chain, as in many resource-rich nations, is complex. From exploration to exports it involves a myriad of complex operations - from licensing, exploration, mining, beneficiation, sales, toll treating, taxation, royalties, issues of export permits and finally exports. The Zambian Government, however, believed that even complex systems can have simple solutions. It embarked on the Minerals Value Chain Monitoring Project (MVCMP) supported by the World Bank and funded by DFID, KfW, Finland, Norway and the GoZ. The successful completion of implementation of MVCMP, targeted in 2017, could be a game changer for Zambia. The benefits envisaged of the project are:
Nigeria: Plan to link mines to steel mill seen as Buhari test (Bloomberg)
Nigeria’s plan to build a railway to supply iron ore to its idle Ajaokuta steel plant could be the biggest sign yet that President Muhammadu Buhari is implementing his policy to diversify away from oil. The project began in 1979 with what the World Bank in 2002 called obsolete Soviet technology, and has never been finished. Ajaokuta cost more than $4.5bn from 1979 to 1993, according to the World Bank. The 275-kilometer (171-mile) railroad will link the plant to an iron-ore mine in the central Kogi state, the port city of Warri to the south and Kaduna state in the north before 2019, Transport Ministry Permanent Secretary Sabiu Zakari said in an interview this month. It will award the operating concession after that, he said. The project spans 24,000 hectares (59,305 acres), almost the size of the Maldives islands in the Indian Ocean.
Mozambique: Two new publications from the project ‘Inclusive growth in Mozambique - scaling-up research and capacity’ (UNU-WIDER)
Industries without smokestacks: Under the current international economic conditions, where Asian countries are strong competitors in the manufacturing commodities, low-income countries like Mozambique could attempt to compete in industries without smokestacks. Fruits and vegetables, agro-processing goods, and various tradable services are estimated to have contributed 1.9 per cent to annual average gross domestic product growth in 1993–2015, when the aggregate growth was 7.8 per cent. Around 80 per cent of the total labour force is dedicated to primary activities, producing 25 per cent of the aggregated value added in 2013–2015. The share of services in total exports was only 17 per cent in 2012–14. Although still relatively small, these industries have potential for growth, if Mozambique follows a diversified growth strategy.
Can integrated infrastructure investment plans contribute to more effective public spending?: Effective investment often requires coordination between different institutions and the management of political pressure to divert investment in support of private interests. It also requires the identification of appropriate sources of funds for different purposes. The preparation of an integrated infrastructure investment plan (IIIP) that uses structured approaches to review investment proposals has been suggested, and adopted in some cases, as an instrument to address these challenges and bridge the gap between national planning and sectoral budgeting.
Gender-differentiated impacts of tenure insecurity on agricultural performance in Malawi’s customary tenure systems (World Bank)
Many African countries rely on sporadic land transfers from customary to statutory domains to attract investment and improve agricultural performance. Data from 15,000 smallholders and 800 estates in Malawi allow exploring the long-term effects of such a strategy. The results suggest that (i) most estates are less productive than smallholders; (ii) fear of land loss, although not exclusively due to estates, is associated with a 12% productivity loss for females, which is large enough to finance a low-cost tenure regularization program; and (iii) failure to collect realistic land rents implies public revenue losses of up to $50m per year.
Adopted: The Cape Town Global Action Plan for Sustainable Development Data (UN)
The Global Action Plan (pdf) highlights the need for action in six strategic areas, including: innovation and modernization of national statistical systems; dissemination of data on sustainable development; building partnerships; and mobilizing resources. It also notes that all data producers – from civil society to private sector and academia – need to work together to fully address the needs of the 2030 Agenda, and calls for the application of new technologies and new data sources into mainstream statistical activities, as well as integration of geospatial data.
Kenyan traders asked to observe cross-border trade regulations
Rwanda’s Minister for Trade, Industry and EAC sworn in as Ex-Officio Member of EALA
Nigeria: Abuja Light Rail 84% complete
Uganda rolls out SGR line construction to Kenya border
Klaus Tilmes: ‘Searching for new, better data to measure GVCs’
Cairo to receive 2nd tranche of $12bn IMF loan in April
PWC’s 20th CEO Survey: What’s on the mind of 1,379 CEOs around the world?
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Africa and Europe – A new partnership for development and peace
Cornerstones of a Marshall Plan with Africa
More than ever before, our future – and that of our children and grandchildren – is linked to the future of our neighbouring continent, Africa. Africa’s population is set to double by 2050. This will cause global challenges that we need to address today. They include the key question of how to create 20 million jobs every year, ensure food security for the people in Africa and set up a sustainable energy supply system – and how to achieve all of this without impacting the climate or wasting natural resources.
When the African continent faces challenges, it affects Europe, too. Supporting Africa in mastering these challenges is both a question of humanity and also in Europe’s own interest. If there is no sustainable development in the countries of Africa, this will also have a negative impact on Germany and Europe in the decades to come.
Europe and Africa are in the same boat. That is why we need a Marshall Plan with Africa – a concerted effort of a new dimension and with more investment. With this Marshall Plan we want to send a signal of optimism and express our strong commitment to finding a path to peace and development in our cooperation between Europe and Africa.
In 2017, both Germany and the European Union are turning the spotlight on Africa. Germany is making the continent a focus of its presidency of the G20. And the EU is working on a new Africa strategy. The 28 member states want to redefine the basis for cooperation between the EU and Africa by replacing the Cotonou Agreement with a new partnership agreement.
It is time now to find new solutions to new challenges. This paper is a living document. It identifies where there is potential, where there are problems and what could be the solutions. It aims to spark discussion, stimulate ideas and get all political and social groups involved. It is an open invitation to everyone to get on board in analysing the situation and finding solutions. Then we can forge a new partnership for learning and development.
There is not ONE solution, ONE plan, ONE best way of responding to the challenges that Africa faces. They are, of course, not totally comparable with the challenges Europe faced after World War II. But they require the same mobilisation of effort.
This Marshall Plan is also an expression of our will and of our optimism that we can truly find a path to peace and development in our cooperation between Europe and Africa. It must be an overarching and integrated strategy of the European Union and its member states and the states of the African Union. The focus will be on fair trade, more private investment, more bottom-up economic development, more entrepreneurial spirit and, above all, more jobs and employment.
African ownership must be strengthened and the days of “aid” and of “donors and recipients” put behind us. The EU and its member states want to engage in a partnership between equals. That means reaching a new agreement on political, economic, social and cultural cooperation. Our starting point will be the African Union’s Agenda 2063.
Our aim is an Africa that is both prosperous and at peace, where development benefits all and is powered by the African people. We want African solutions to African challenges.
As we enter this key year for Africa, we call on all our African partners, all experts in civil society – from business, research and science, the media, churches, business associations – and all those engaged in the various policy fields that are vital to the success of the Marshall Plan. We invite you to join in the discussion on these suggestions and solutions. Help us move them forward. We plan to stage a number of special events and invite everyone to engage in an online dialogue.
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Kagame: Time to solve intra-Africa trade challenges
President Paul Kagame has challenged African countries to avoid contradictions in the quest for prosperity and progress by implementing progressive steps with a sense of urgency.
The President was speaking at the World Economic Forum in Davos, Switzerland, yesterday, at a CNBC televised session where panellists debated on building Africa.
Kagame was speaking alongside Phuthuma Nhleko, the executive chair of MTN Group; Oluyemi Oluleke Osinbajo, the vice-president of Nigeria; and Siyabonga Gama, the chief executive of Transnet.
Despite being aware of actions and investments that can propel the continent forward, Kagame noted that there is a tendency to only point out problems rather than fix them.
Giving the examples of low intra-Africa trade which economists say is between 15 and 17 per cent, the Head of State said that little has been done to address it beyond talking about it.
Other blocs across the world have comparatively higher trade levels with about 40 per cent in Northern America and around 60 per cent in Western Europe.
The continued analysis of the continent’s problems and possible solutions without actions, Kagame said, shows a contradiction.
“For how long and how many times do we have to keep talking about the kinds of problems we have in Africa? There is little in terms of showing how fast we are moving out of the problems. We keep talking for years, and nothing changes,” he said.
“There is a contradiction in our quest for prosperity and development and the things we know we have to do but don’t do,” he said.
The low levels across the continent, experts have said, is partly a result of difficulties of movement of people and goods across the continent.
The logistics challenges have made it difficult for producers to access new markets within the continent.
Working with private sector
Noting that some of the investments required in the continent’s development process are quite heavy to be solely undertaken by governments, Kagame said there was need for governments to work with the private sector through partnerships.
“It can never be done by governments alone, neither can it be left for private sector alone and expect it to succeed. We have to work together, we have to accept the fact that the private sector holds huge resources that can be deployed for the infrastructure,” he said.
In building partnership and attracting the private players, the president said that governments ought to put up policies and regulatory frameworks that encourage private players and create an accommodative environment.
“Government has to make sure that we put up policies and regulatory frameworks that work to encourage this kind of investments and partnerships. We have to begin by accepting the private sector that can contribute to that development and put in place friendly laws and regulations that will encourage that,” he said.
He cited examples of Rwanda’s partnership with multiple private players, saying that it had served in the implementation of multiple projects across the country.
He demystified the perception that there was scarcity of funds for investments, saying if the projects are clear and bankable, funds would always be available.
The president expressed optimism on the future of the continent in multiple aspects such as level of skills to carry out complex projects.
Giving insights into Rwanda’s recovery and economic development, he said that in rebuilding the nation, Rwandans had to be single-minded about doing the best for the nation to reverse the history of the country.
“There has to be a vision and a strategy to realise that vision and then it has to be carried through. There is no shortcut. Success is the result of a mindset across the country that we have to measure ourselves against results,” he said.
Phuthuma Nhleko, the executive chair, MTN Group, echoed the president’s sentiments on public-private partnerships, saying firms were ready to work with governments that make efforts to improve their business environments.
Nhleko cited Rwanda as an example of a country that had taken steps to improve its business environment by making adjustments in policy and regulatory framework making it attractive to investors.
The ongoing 47th World Economic Forum has attracted world leaders, from business and government, to international organisations, academia and civil society.
The three-day forum is running under the theme, “Responsive and Responsible Leadership,” with a focus on improving global cooperation and collaboration.
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Online produce-trading platform to connect farmers and buyers
Many small farmers usually sell their produce at give away prices due to lack of market information.
The middlemen often take advantage of this to buy produce at low prices even when the prevailing market prices are higher. This has affected farmers’ morale leading to low productivity and decline in household income. However, this could soon be history, thanks to a new online produce-trading platform that seeks to connect farmers and buyers.
Developed in Ghana, MFarms is an innovative mobile and web-based platform that will also link farmers and other players within the agricultural value chain, easing management and communication of market data, including prices. This platform will supplement gains by MFarms application launched in Rwanda in 2013 to help agro-dealers manage and streamline the farm input trade, especially fertilisers.
The Android mobile phone operated application was touted for its accuracy and data recording ability, improving agro-dealer operations. It also aimed at helping the traders to develop efficient and competitive fertiliser procurement and distribution systems across the country.
Boost market linkages
Bentil Kwame Adom, the Magead MFarms Ghana chief executive officer, said the new platform will improve operational efficiency, communication and viable linkages within the agricultural value chain thereby further unlocking the potential of the sector. In an interview with The New Times, Adom said smallholder farmers do not access better markets because they lack timely information.
“They say information is power and relevant information can go a long way in making the right decisions. However, agribusiness in Africa and Rwanda, in particular, still lags behind because farmers don’t access key information to support and drive their businesses in the right direction,” Adom, who is the brain behind the invention, said. He added that the platform will also link farmers with input and output market services.
“The platform consists of many applications built to solve challenges facing various players within the sector,” he noted.
Monitoring farmer activities
According to Jeanne Nyaruyongo, the MFarms country manager, the new platform provides tools that allow service providers and banks to track the services they offer farmers.
“It also allows organisations and absentee farmers to monitor extension services provided by field agents thus help enhance production.”
She added that the tool enables farmers communicate directly with agro-dealers, manage supply, orders and stock forecasts, as well as sales and returns.
“Rwanda and Africa needs a service that links buyers to sellers, enabling them to exchange market information or to find market for their produce in real time to grow its agriculture sector,” Geoffrey Nsanzamahoro, an agronomist in Nyagatare District, noted.
Farmers skeptical
Meanwhile, three years after the first initiative was launched some farmers still express concerns of delayed supply of farm inputs. Grace Uwamahirwe, a farmer in Rulindo District, said limited knowledge affects implementation and usage of such platforms.
“The people behind these innovations need to always carry out awareness drive to educate and explain to farmers on how to use the technology works. Otherwise, it won’t help and the old challenges will continue to affect rural farmers,” she said.
How it works
Any farmer with a smartphone can download the app free of charge. After it is installed, the farmer can access price information of the previous five days for 42 crops in the five markets. The mobile app also provides monthly analysis of crop prices in different markets to show price trends, enabling farmers to make informed decisions on what to plant when, how to price their produce and the available markets.
Adom said agents use the platform to give farmer groups financial advice, as well as work with agronomists on the ground to guide farmers on how to grow marketable and high-value crops.
“Our extensive network of agents collects and verifies prices to ensure its accuracy. The information is then sent to farmers instantly as an SMS or voice message on their phones. Clients using the web portal can view more detailed information and trends in prices in different locations,” said Nyaruyongo.
The service also provides weather information on farm lands to ascertain whether rainfall is adequate, crop health and forecasting of rainfall. This service is being provided in collaboration with NASA.
The Ministry of Agriculture and Animal Resources fertiliser programme is currently collaborating with the International Fertiliser Development Centre (IFDC) to incorporate the application with already existing systems to further boost competitiveness.
Government targets to achieve at least 8.5 per cent growth rate for the agriculture sector by 2018 from current 6.5 per cent.
Agriculture sector grew by one per cent and contributed 0.4 percentage points to the overall GDP growth, during the third quarter of 2016.
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UN World Data Forum wraps up with launch of Cape Town Global Action Plan for Sustainable Development Data
The inaugural United Nations (UN) World Data Forum concluded on Wednesday with the launch of a global plan for better data to improve people’s lives, and new ideas and solutions to boost the collaboration, resources and policies needed to put it into action.
The Cape Town Global Action Plan for Sustainable Development Data, which will be adopted by countries at the UN Statistical Commission when it meets in March of this year, was prepared with inputs from the global statistical community and data experts from a wider range of stakeholders.
“The UN World Data Forum is the perfect place to launch the Action Plan and get all the major players behind it,” said UN Under-Secretary-General Wu Hongbo at a press conference. “To implement the transformative 2030 Agenda for Sustainable Development and build a better future for people everywhere, it is essential to have accurate, reliable, timely and disaggregated data.”
The Plan, which sets out a global vision and “to do” list for better data, calls for a commitment by governments, policy leaders and the international community to undertake key actions in six strategic areas, including: innovation and modernization of national statistical systems; dissemination of data on sustainable development; building partnerships; and mobilizing resources.
Currently there are large data gaps that hinder policy makers from making informed decisions. Over 100 countries do not keep accurate birth and death records, and only 41 per cent of countries regularly produce data on violence against women. The unprecedented scope of the UN’s 2030 Agenda, with its 17 Sustainable Development Goals, has magnified the challenge to track progress and inform policies. “We cannot achieve what we cannot measure,” said Pali Lehohla, South Africa’s Statistician-General and head of Statistics South Africa.
Over 1,400 data experts from more than 100 countries have been holding discussions, data labs and interactive presentations at the Forum from 15-18 January, with participants from governments, national statistical offices, the private sector and academia, international organizations and civil society groups. The Forum was hosted by the South African government and Statistics South Africa in partnership with the UN Department of Economic and Social Affairs (DESA).
Commitments to Boosting Capacity
The Global Action Plan calls for policy leaders to achieve a global pact that recognizes that data are essential to the full implementation of Agenda 2030, that statistical systems need to be strengthened and better funded and that data producers – from civil society to private sector and academia – need to work together to fully address the needs of the sustainable development agenda. How to strengthen statistical systems was the subject of extensive discussion at the Forum, and a number of commitments were advanced or reaffirmed.
The African Development Bank committed to present a proposal to its Board to sustain and even scale up, over the next 3 years, its support for statistical development work across Africa. The World Bank added its voice of commitment to support 78 IDA countries to implement a multi-topic household survey every three years, as well as support capacity for gender statistics, among other areas. Norway reaffirmed its commitment to supporting statistics and data by providing partners with high-quality technical skills and expertise.
In addition to urging the strengthening of existing statistical mechanisms, the Global Action Plan calls for the application of new technologies and new data sources into mainstream statistical activities, and integration of geospatial data. It also calls for data on all groups of the population to be expanded so that no one is left behind, a key principle of the 2030 Agenda.
Innovative data solutions
A number of innovative data initiatives and tools were announced at the Forum, including the following. The United Kingdom Department for International Development (DFID) launched a Data Disaggregation Action Plan, to better measure vulnerable groups and ensure that everyone is counted and everyone counts. UN Global Pulse launched a new tool, hazegazer.org, that can improve crisis management. Telefonica and CEPEI (Centro de Pensamiento independiente) launched datarepublica.org, a digital platform to connect citizens and development actors in Latin America with data for the SDGs. In addition, the International Roadmap on Open Data, which summarizes the proceedings of the International Open Data Conference 2016 and includes an action plan, was launched.
United Arab Emirates to host 2nd Forum
It was announced on Wednesday that the United Arab Emirates will host the next UN World Data Forum in Dubai, in late 2018 or early 2019. The announcement was made at a press conference by Dr. Gabriella Vukovich, co-chair of the High-level Group for Partnership, Coordination and Capacity-Building for Statistics for the 2030 Agenda for Sustainable Development.
“We are looking forward to working with the colleagues from the United Arab Emirates to organize together an open and inclusive 2nd World Data Forum,” said Stefan Schweinfest, Director of the UN Statistics Division. “This will be a unique opportunity to strengthen data and statistical systems for development not only at the national, but also at the regional and global level.”
About the Forum
The Forum was agreed by the UN Statistical Commission based on a recommendation by the UN Secretary General’s Independent Expert and Advisory Group on a Data Revolution for Sustainable Development. Improved use of data and statistics will be crucial to achieving the transformational vision of a better future for people and the planet, set out in the 2030 Agenda agreed by world leaders at the UN in September 2015. Rapid expansion in new sources of data is creating large-scale opportunities for innovative solutions, which need to be integrated with strengthened official data mechanisms and structures.
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Inaugural African Economic Platform to be held in Mauritius
One of the lessons learnt after the celebrations of the 50th Anniversary of the OAU/AU was that Africa has to take charge of its development if it is to meet the expectation of ever becoming “An integrated, prosperous and peaceful Africa, driven by its own citizens and representing a dynamic force in the global arena.”
The continent needs to set its agenda and take responsibility for its development, to find African solutions to our challenges and mobilise domestic and other resources for its needs, based on a set of ideals and priorities that reflect the values and aspirations of Africans.
The African Economic Platform (AEP) will institutionalise a new annual platform for African leaders and create an avenue for dialogue amongst a range of sectors, including the African political leadership, business leaders in the private sector, universities and intellectuals. These sectors are critical to the economic transformation agenda:
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The private sector because of its role in investment, industrialisation and intra-African trade;
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The higher education sector for its role in skills development, research and innovation; and
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Governments to ensure the implementation of fiscal and macro-economic policies and other environments for economic transformation.
The AEP is an initiative driven by Africans to provide the policy space for Africans across sectors, to set their own agenda and explore realistic continental and global opportunities and options for implementing this agenda. It will operate within the framework of the implementation of the African Union (AU) Agenda 2063 and other progressive decisions and programs designed to promote African integration and development. Each Forum will set measurable short to medium term milestones and establish a clear road map for achieving them.
The forum will also act as a lobby and advocacy platform to influence the agenda of the AU summit and other world summits for the fast tracking of African integration and development.
The Inaugural African Economic Platform will be launched from 20-22 March, 2017 in Mauritius as per Decision EX.CL/Dec.924 (XXIX) adopted during the 29th Ordinary Session of the Executive Council, in Kigali, Rwanda, in July 2016. The outcomes of the AEP shall be endorsed through an AU Summit decision.
The Objectives of the Platform
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Undertake constructive multi stakeholder dialogues around common themes for Africa, led by Africans and to influence continental policy by engaging directly with African leaders on matters of mutual interest.
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Establish multi-country multi-sector priorities and plans for common action with clear mechanisms for follow up.
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Work with African leaders to remove policy obstacles for doing business in Africa, increasing the investment attractiveness of the continent, the implementation of strategies for economic diversification and industrialization, and domestic and other resource mobilization.
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To advocate for the removal of barriers that hamper communication and the flow of goods, people and services across the continent, create common platforms for articulating common African positions on global affairs and increase global awareness of Africa’s emerging role in world affairs.
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Leverage the potential of the African Diaspora to participate and advocate for Africa’s integration and development.
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Drive efforts to mobilize domestic resources by the African Union to support the priority actions as defined by the AEP under the auspices of Agenda 2063.
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Drive the implementation of policies for inclusive growth.
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tralac’s Daily News Selection
Europe readies its ‘Marshall Plan’ for Africa (Politico)
If Europe wants to tackle the root causes of the migration crisis, the head of the European Investment Bank says it must do more business in Africa. “We are talking nowadays about Africa in terms of economic perspectives and strategies, while in the past we talked about Africa as a recipient of donations,” Werner Hoyer, president of the European Investment Bank, said in an interview with POLITICO at the World Economic Forum in Davos. “What is needed is not global social policy but down-to-earth investment. [Africa] has fantastic potential, but we need to mobilize the private sector. The idea of doing everything with grants is over.”
The Cologne Memorandum: ‘No Marshall Plan for Africa, Please!’ (Dr Ibrahim Assane Mayaki’s Blog)
This is a guest post from a collective of scholars and practitioners of development aid as well as diplomats who have served in Africa. They met at a conference of the Bonn Appeal in Cologne, Germany, to discuss the state of development aid for Africa and the conclusions to draw from it. They agreed on a Cologne Memorandum that includes a list of demands plus explanations.
South Africa: Shoprite Holdings operational update (pdf, Shoprite)
The Group’s non-RSA supermarkets recorded sales growth of 32.3% [for the six months to December 2016] assisted by higher inflation and achieved in the face of low commodity prices and forex shortages in certain countries. Growth on a like-for-like basis was 14.2%. Taken at constant currencies, sales grew by 51.7%.
Tanzania: TRA feat as collection soars (Daily News)
Revenue collection soared in the second half of last year to 7.27 trillion/-, up from 6.44 trillion/- in the corresponding period of the previous year. Tanzania Revenue Authority Director of Taxpayers’ Education, Mr Richard Kayombo, told reporters in Dar es Salaam yesterday that the increase was equivalent to 12.74%. He said December posted a record high collection of 1.414 tri/-. “The increase in tax collection has been achieved through effective collection, emphasis on diligence, improvement of payment systems and covering of all corruption loopholes The boost was also precipitated by a mixture of factors such as mineral exploitation, manufacturing and general trade, which had fluctuated from time to time,” said Mr Kayombo. [This weekend: Executives of 50 foreign firms to discuss TZ industrialisation]
EAC gender equality Bill to address gaps in trade (New Times)
EAC partner states will be legally obliged to collectively promote participation of women and men in regional trade and sustainable economic growth, while considering gender dimensions to personal safety in cross border trade once a new Bill is passed this month. The East African Legislative Assembly is sitting in Kampala to, among others; consider the EAC Gender Equality and Development Bill, 2016, which makes provision for gender equality, protection and development in many aspects of the EAC’s integration agenda. The draft seen by The New Times partly indicates that in the process of engendering trade, countries shall: support national and regional associations of women in business; address gender and non-tariff trade barriers; and ensure gender analysis in diagnostic trade integration studies and other trade impact assessments.
EASSI: ‘Why EAC needs a gender barometer’ (New Times)
According to Elizabeth Ampairwe, the coordinator for women and girls’ empowerment at the Eastern African Sub-Regional Support Initiative for the Advancement of Women (EASSI), they are “in the final stages” and working towards having it published by end of February before a regional meeting is held to launch it in April.
Museveni urges EALA members: ‘Support, fast track East African integration process’ (Uganda Media Centre)
President Museveni asked all leaders in East Africa at different levels to make good use of the population of the region now standing at 162 million people which, he said, is the greatest resource the region has. He specifically asked the leaders to use the population as a bargaining tool to attract investments in the region saying that with 162 million producers and consumers of goods and services, the government through policy regulations should compel companies interested in selling to the region to produce from the region rather than from other countries and merely import to the region. [Museveni: ‘EAC drought is self inflicted’]
EAC bets on positive rating to unlock billions in donor funds (Business Daily)
The EAC is eyeing increased donor funding for its development projects after it passed the European Union’s financial risk test last year. In June, the EAC secretariat passed the EU’s fiduciary risk assessment , the first time in 10 years having failed the test in 2006 and 2008. The FRA was conducted by London-based consultancy firm, Moore Stephens LLP, which reviewed the bloc’s internal control, accounting records, external audits, procurement and sub-delegation. The bloc obtained an overall positive score after its accounting system, external audit and sub-delegation were found above board. It’s weak internal control system and poor procurement rules however failed the test.
Kenya, Mauritius set to be Africa’s financial hubs (Kenya Presidency)
President Uhuru Kenyatta said Kenya and Mauritius need to complement each other as the two nations have a similar approach in economic development. The President spoke when he met the Mauritius Foreign Affairs, Regional Integration and International Trade Minister, Mr Seetanah Lutchmeenaraidoo, who paid him a courtesy call at State House. The Head of State said the two countries will sign agreements that will ensure Kenya and Mauritius become Africa’s financial, maritime and aviation hubs. "Africa is a natural corridor linking Asia and Europe, and our two countries should benefit from this key geographical location," President Kenyatta said.
UNCTAD launches multilingual online repository for National Trade Facilitation Committees
An interactive map shows users which NTFCs have already been formally established and the legal instruments they used such as decrees, ministerial decisions, and terms of references, among others. The repository also covers a wide range of topics including the scope of the organization, motivations for its establishment, frequency of meetings, membership, lessons learned, etc. Most significantly, the repository also provides contact information for individual committees, allowing all interested parties to go further and acquire additional information straight from the source. Users can also retrieve particular national cases to allow comparison of their NTFCs with those in other countries. The website has also been expanded to include additional trade facilitation resources such as guides, recommendations and guidelines for developing National Trade Facilitation Committees.
International trade: extracted from World Economic Situation and Prospects 2017 (UNDESA)
Global trade flows weakened further in 2016. At the slowest pace since the Great Recession of 2009, the volume of world trade is estimated to have grown by a meagre 1.2%. The downward shift in world trade growth in recent years has been significant: in the two decades prior to the global financial crisis, the average growth of the volume of world trade was about 7%, but it slowed down to below 3% cent between 2012 and 2016 (figure II.1). More worrisome is the substantial decline in the ratio of global trade growth to world gross product (WGP) growth, dropping from an average of 2:1 in 1980-2008 to 1:1 recently, and even lower in 2016.
Growth prospects in five African subregions: The report notes large differences in growth prospects among the five African subregions. East Africa is positioned to remain the fastest-growing subregion, with aggregate GDP projected to expand by about 6% in 2017 and 2018, helped by the rapid expansion of domestic markets and strong spending on infrastructure. West Africa is expected to see growth rebound from 0.1% in 2016 to 3.1% in 2017, as the projected increase in oil prices eases severe fiscal and external pressures in Nigeria. For several other West African countries, such as Cote d’Ivoire, Ghana and Senegal, the growth outlook remains strong, underpinned by large infrastructure investments and an improved domestic business climate.
Meanwhile, growth in North Africa is projected to accelerate from 2.6% in 2016 to 3.5% in 2017, contingent on a gradual improvement in the security situation. The growth outlook for Southern Africa is relatively subdued, with economic activity projected to improve modestly to 1.8% in 2017 and 2.6% in 2018. While South Africa is expected to benefit from a moderate recovery in the agriculture and mining sector, political uncertainty may weigh on investor sentiments. Growth in Central Africa is projected to strengthen from 2.4% in 2016 to 3.4% in 2017, as higher oil prices support export revenues and growth, particularly in Congo, Equatorial Guinea and Gabon. However, ongoing domestic political unrest will restrain economic activity in the Central African Republic and Gabon.
WEF updates: African leaders want more private investment, President Xi’s speech: full text, Top 5 stories from the first day, Conference website, Digital Transformation Initiative: unlocking $100 trillion for business and society
At Cape Town Data Forum: UN Women and partners seek ways to close gender data gaps
“Gender statistics are critical for setting priorities, planning interventions and assessing their impacts,” Purna Sen, the Director of Policy Division at UN Women, told a panel discussion. “They can put a spotlight on inequality and women and girls who are left behind.” The panel, titled ‘Gender Data for Decision-making: Strengthening the Links,’ was among the nearly 100 sessions and parallel events scheduled throughout the 15-18 January gathering in Cape Town, South African, of more than 1,400 data experts around the world. Ms Sen also pointed out that gender specialists often do not understand statistics and statisticians do not always understand gender. Based on the latest data from OECD-DAC, only two per cent of funds for statistical capacity building are dedicated to projects whose principal objectives are to strengthen gender statistics, she said. [Download: presentations from Day 1 of the UNDataForum]
Kenya, Rwanda block chicken imports from Uganda after bird flu outbreak
How Mombasa port will look like in era of SGR, wider roads
Face-off over the Congo: the long rivalry between Kinshasa and Brazzaville
IGAD, FAO discuss their long term working relationship
Peter Penar: ‘The Gambia is testing West Africa’s resolve to protect democracy’
Theresa May commits to Brexit vote in UK Parliament (and text of speech)
Vilsack to take helm of US Dairy Export Council
Jim O’Neill: ‘Globalisation has made the world a better place’
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Theresa May commits to Brexit vote in UK Parliament
British Prime Minister Theresa May committed to placing a final Brexit deal to a vote in both houses of the UK parliament, as she outlined for the first time her plan for extracting Britain from the European Union.
In a much-anticipated speech in London, May said that once Britain had negotiated a final deal to leave the European Union, it would be placed before the House of Commons and the House of Lords for approval.
In language that indicated a “hard Brexit”, May confirmed that Britain would leave the EU single market, which guarantees the free movement of goods, services and people within the bloc. The Prime Minister made it clear that her fundamental aim was regain full control of immigration and lawmaking – and that leaving the single market was the inevitable consequence.
Britain could not be “half-in, half-out” of the EU, the Prime Minister said.
But she revealed that, in the forthcoming negotiations with the EU, Britain would seek an arrangement to replace the provisions of the EU customs union. Such a deal could amount to “associatere membership” of the customs union, she said.
May also warned other EU member states not to seek a “punitive” deal for Britain in order to send a message to Euroskeptics in other countries. Such a move would be a “calamitous act of self-harm,” she said.
“No deal for Britain is better than a bad deal for Britain,” May declared.
Parliament given vote
What May said: The Prime Minister revealed for the first time that the British government will put the final Brexit deal to a vote, meaning that members of the UK parliament could, in theory, block the deal. When asked by reporters what would happen in that scenario, May avoided a direct answer. “I am sure the British Parliament will want to deliver the views of the British people and respect the democratic decision that was taken,” she said.
But negotiations on a deal can’t even begin until the British government invokes Article 50 of the Lisbon Treaty, which sets the rules of EU membership. May has said she wants to trigger the mechanism by the end of March, and did not seek to alter that timetable in her speech.
The UK Supreme Court is due to rule in the next few weeks on whether there must be another vote in the UK parliament before that can happen. Negotiations must then be concluded within two years.
What it means: Two years is a long time in British politics, and it’s hard to predict the outcome of a parliamentary vote before talks have even started on a deal. But analysts expect that, if there is not a general election in the meantime, May would prevail.
“There are so many unknowns,” Quentin Peel, associate fellow of the Europe Program at the Chatham House think tank, told CNN. “Are we going to have an election before it gets to that stage? What will the make up of the House of Commons be?”
Peel noted that May refused to be drawn on whether a vote against the deal in Parliament would mean that Britain could remain a member of the EU – or a departure without a deal. “If the option is the deal you’ve negotiated or no deal at all but still leaving then I think that would put huge pressure on Parliament to agree to it.
“But if there were an option to go back in [to the EU] then it’s a little bit uncertain.”
Single market and customs union
What May said: May was clear on Britain leaving the single market in an effort to pursue what she called a “bold and ambitious free trade agreement.” But she said that the UK would attempt to negotiate as much access as possible to it, without having to sign up to obligations on the free movement of people.
May said the UK would try to keep some kind of relationship with the customs union, which allows for the tariff-free movement of goods in the EU, to ensure that cross-border trade is “as frictionless as possible.”
What it means: As an EU member, the UK trades freely with the other 27 EU countries. That two-way flow was worth about £513 billion in 2015, just over half the UK’s total. A new EU-UK deal will now have to be struck.
But it doesn’t end there. The EU manages preferential trade deals with nearly 60 other nations on behalf of its members. The UK will have to seek new ties with those countries.
On May’s plan to strike a new customs deal, Tom Raines, a research fellow at the Europe Program at Chatham House, said it would “require some creative thinking to reduce the regulatory burden.”
Immigration
What May said: The Prime Minister said she wanted to guarantee the rights of EU citizens already in Britain and British citizens in other EU states “as early as we can.” But she was unable to offer any more clarity than that.
Addressing future immigration from European countries, May said: “Brexit must mean control of the number of people who come to Britain from Europe. And that is what we will deliver.”
What it means: For EU citizens living in Britain, there was no comfort. The Prime Minister made it clear that their status was up for negotiation, and depended on the rights conferred on British citizens living in the European Union.
“For member states with a big diaspora in the UK, this is a big issue and eastern European states have been quite vocal about it,” said Stephen Booth, Acting Director and Director of Policy and Research at Open Europe.
“The issue has been that the EU has had the mantra of no negotiating before Article 50 is triggered which led to a stalemate.
“The government has said that it will be dealing with this straight away. It understands the individuals concerned want to know what is happening as well as the business community, who want to know about their workplace.”
Maintaining the unity of the UK
What May said: The Prime Minister said she would put preservation of “our precious union” at the heart of the negotiation with Europe – a reference to the constituent parts of the United Kingdom. Scotland and Northern Ireland voted overwhelmingly to stay in the EU.
May said she would seek input on the deal from the UK nations and regions. “We won’t agree on everything, but I look forward to working with the administrations in Scotland, Wales and Northern Ireland to deliver a Brexit that works for the whole of the United Kingdom,” May said.
What it means: Scotland’s First Minister, Nicola Sturgeon has made little secret of her desire to launch a second independence referendum should May seek to leave the single market.
Sturgeon issued a stout response on Tuesday. “Scotland did not vote for the direction set out in the Prime Minister’s speech today – and it is not in our national interests,” she said.
It seems likely that May is heading for a showdown with the Scottish government. But Peel said the Scottish First Minister was on the back foot. “She’s been told today, ‘get lost, we’re not staying in the single market,” he said.
The collapse of the power-sharing agreement in Northern Ireland last week raises an added complication for May, should Brexit become an issue in the elections that have been called for March.
Land border with European Union
What May said: Under the terms of the 1998 Good Friday Agreement that ended sectarian conflict in Northern Ireland, there is currently an open border between the UK and the Republic of Ireland. But critics have questioned whether an open border can be maintained after Britain leaves the EU, with Ireland staying in.
May said bringing about a solution would be an “important priority” adding that “nobody wants to return to the borders of the past, so we will make it a priority to deliver a practical solution as soon as we can.”
What it means: “The Achilles heel of the entire negotiation process is Ireland and Northern Ireland,” Peel told CNN.
“It’s a huge question as to whether some sort of border will have to be reinserted there. It is fundamental to the peace agreement that the population of Northern Ireland has the right to have Irish citizenship as well as British citizenship.
“Can that be maintained? I think it will be, but will the other members of the EU accept a situation where you have a land border of the EU with a non-member state that is open?”
Dave Gilbert and Alanna Petroff in London contributed to this report.
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Africa expected to see moderate growth recovery in 2017 and 2018 amid challenging global environment: UN report
Higher global commodity prices and stronger domestic demand will support Africa’s growth
A moderate economic growth recovery is projected in Africa for 2017-18, even as the global economy continues to be trapped in a prolonged period of slow growth, according to the United Nations World Economic Situation and Prospects (WESP) 2017 Report released today.
The report shows that world gross product grew by just 2.2 per cent in 2016, marking its slowest pace of expansion since the Great Recession of 2009. Global growth is projected to see a moderate improvement to 2.7 per cent in 2017 and 2.9 per cent in 2018, but this is more an indication of economic stabilization than a signal of a robust revival of global demand.
Against this backdrop, Africa is expected to see a recovery in growth, with GDP expanding by 3.2 per cent in 2017 and 3.8 per cent in 2018, up from 1.7 per cent in 2016. The projected increase in global commodity prices will ease fiscal and external pressures for commodity exporters, but a strong growth rebound in these countries appears unlikely. Several other countries, such as those in the East African Community and some Western African economies, enjoy a more favourable growth outlook.
Growth prospects in five African subregions
The report notes large differences in growth prospects among the five African subregions. East Africa is positioned to remain the fastest-growing subregion, with aggregate GDP projected to expand by about 6 per cent in 2017 and 2018, helped by the rapid expansion of domestic markets and strong spending on infrastructure.
West Africa is expected to see growth rebound from 0.1 per cent in 2016 to 3.1 per cent in 2017, as the projected increase in oil prices eases severe fiscal and external pressures in Nigeria. For several other West African countries, such as Cote d’Ivoire, Ghana and Senegal, the growth outlook remains strong, underpinned by large infrastructure investments and an improved domestic business climate.
Meanwhile, growth in North Africa is projected to accelerate from 2.6 per cent in 2016 to 3.5 per cent in 2017, contingent on a gradual improvement in the security situation.
The growth outlook for Southern Africa is relatively subdued, with economic activity projected to improve modestly to 1.8 per cent in 2017 and 2.6 per cent in 2018. While South Africa is expected to benefit from a moderate recovery in the agriculture and mining sector, political uncertainty may weigh on investor sentiments.
Growth in Central Africa is projected to strengthen from 2.4 per cent in 2016 to 3.4 per cent in 2017, as higher oil prices support export revenues and growth, particularly in Congo, Equatorial Guinea and Gabon. However, ongoing domestic political unrest will restrain economic activity in the Central African Republic and Gabon.
Inflation dynamics across the region
The report also takes note of marked differences in the inflation dynamics across the region. For the commodity-dependent economies, the weakening of domestic currencies fuelled imported inflation. The adverse impact of drought conditions and rising electricity tariffs added further upward pressure on inflation. In Angola, Mozambique and Nigeria, inflation reached multi-year highs. As high inflationary pressures are expected to persist in these economies, monetary policy stances will likely remain tight.
In contrast, inflation in the region’s net oil importers stabilised or slowed in 2016 and pressures are expected to remain subdued going forward. In several of these countries, including Botswana, Kenya and Morocco, central banks reduced policy rates in 2016 in a bid to stimulate growth.
Risks and policy challenges
The report cautions that there are significant risks to the global and the regional outlook. Among other issues, the report highlights the high degree of uncertainty in the international policy environment and elevated foreign currency-denominated debt levels as key downside risks that may derail global growth.
For Africa, the report identifies renewed weakness in commodity prices and a sharper-than-expected growth moderation in China as major risks. On the domestic side, an escalation of security concerns and political unrest could deter foreign investment and severely disrupt economic activity in some countries.
The report calls for a more balanced policy approach to not only restore robust growth in the medium term, but also to achieve greater progress on sustainable development. Given that commodity prices are projected to increase only modestly, the report also underscores the need for African economies to further strengthen policy measures to tackle domestic structural weaknesses, including measures to accelerate economic diversification, rebuild policy buffers and promote stronger job creation.
Modest global economic recovery expected, but return to robust and sustained growth remains elusive
Although a modest global recovery is projected for 2017-18, the world economy has not yet emerged from the period of slow growth, characterised by weak investment, dwindling trade and flagging productivity growth, according to the United Nations World Economic Situation and Prospects (WESP) 2017 report launched on Tuesday.
The report states that the world economy expanded by just 2.2 per cent in 2016, the slowest rate of growth since the Great Recession of 2009. World gross product is projected to grow by 2.7 per cent in 2017 and 2.9 per cent in 2018, a slight downward revision from the forecasts made last May.
Launching the report at the UN Headquarters in New York, Mr. Lenni Montiel, Assistant Secretary-General for Economic Development, United Nations Department of Economic and Social Affairs, underscored the “need to redouble the efforts to bring the global economy back on a stronger and more inclusive growth path and create an international economic environment that is conducive to sustainable development.”
According to the report, the moderate improvement expected for 2017/18 is more an indication of economic stabilization than a signal of a robust and sustained revival of global demand. As commodity prices trend higher, commodity-exporting economies are likely to see some recovery in growth.
Developing countries continue to be the main drivers of global growth, accounting for about 60 per cent of the world’s gross product growth in 2016-18. East and South Asia remain the world’s most dynamic regions, benefiting from robust domestic demand and supportive macroeconomic policies.
The report projects that growth in the developed economies will slightly improve in 2017, but headwinds arising from weak investment and policy uncertainty continue to constrain economic activity.
GDP growth in the least developed countries (LDCs) is projected to remain well below the Sustainable Development Goals (SDGs) target of at least 7 per cent. This represents a key issue to address if the SDGs overall are to be attained. The report notes, specifically, that under the current growth trajectory and assuming no decline in income inequality, nearly 35 per cent of the population in LDCs may remain in extreme poverty by 2030.
Weak investment and productivity growth
The report identifies prolonged weak investment as a major cause of the slowdown in global growth. Many economies have experienced a marked downturn in private and public investment in recent years, particularly in the oil and extractive industries. In commodity-exporting countries, Governments have curtailed much-needed public investment in infrastructure and social services, in response to sharp revenue losses. At the same time, labour productivity growth has slowed markedly in most developed economies and in many large developing and transition economies.
The report stresses the importance of investment in new capital as a driver of technological change and efficiency gains. In particular, it concludes that investment in key areas, such as research and development, education and infrastructure, can serve to promote social and environmental progress, while also supporting productivity growth.
Environmental sustainability
The report highlights some positive developments related to environmental sustainability. The level of global carbon emissions has stalled for two consecutive years. This reflects the declining energy intensity of economic activities and the rising share of renewables in the overall energy structure, but also slower economic growth in some major emitters.
The report found that renewable energy investment in the developing countries exceeded that of the developed countries in 2015. However, the report also warns that without concerted policy efforts from both the public and private sector, the recent improvements in emissions mitigation could easily reverse.
Risks and policy challenges
The report cautions that the global outlook faces significant uncertainties and risks. A high degree of uncertainty is identified in the international policy environment and elevated foreign currency-denominated debt levels as key downside risks that may derail the already modest global growth prospects.
Given the close linkages between demand, investment, trade and productivity, the extended episode of weak global growth may prove self-perpetuating in the absence of concerted policy efforts to revive investment and foster a recovery in productivity. The report notes that many countries continue to depend excessively on monetary policy to support growth.
In the context of a challenging economic and financial environment, a more balanced policy approach is required to not only restore a healthy medium-term growth trajectory, but also to achieve greater progress on sustainable development.
The global economy needs policy measures that move beyond demand management. These measures need to be fully integrated with structural reforms that target the various aspects of sustainable development, including poverty, inequality and climate change.
The report also calls for greater international policy cooperation and coordination, particularly in the areas of trade and investment. Deeper international cooperation is also needed to expedite clean technology transfer, raise climate finance, strengthen international tax cooperation and address the challenges posed by large movements of refugees and migrants.
About the report
The World Economic Situation and Prospects report is the UN’s flagship publication on expected trends in the global economy. The WESP is produced annually by the UN Department of Economic and Social Affairs (UN/DESA), the UN Conference on Trade and Development (UNCTAD), the five UN regional commissions and the World Tourism Organisation (UNWTO). For more information, please visit: http://bit.ly/WESP.
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Europe readies its ‘Marshall Plan’ for Africa
The head of the European Investment Bank wants the EU to treat African countries as closer economic partners.
If Europe wants to tackle the root causes of the migration crisis, the head of the European Investment Bank says it must do more business in Africa.
“We are talking nowadays about Africa in terms of economic perspectives and strategies, while in the past we talked about Africa as a recipient of donations,” Werner Hoyer, president of the EIB, said in an interview with POLITICO at the World Economic Forum in Davos.
“What is needed is not global social policy but down-to-earth investment. [Africa] has fantastic potential, but we need to mobilize the private sector. The idea of doing everything with grants is over.”
Such an approach, seeing Africa as a trade partner and an investment opportunity, is part of a European policy shift designed to strike agreements with African countries that create economic opportunities there and so help stem the tide of migrants north.
Europe needed the migration crisis as a wake-up call to remind itself that “we’ll soon have 2 billion Africans, and we better prepare for that,” Hoyer said.
Hoyer’s call hints at a shift in European budget policies from grants to loans. It also reflects a growing sense that Europe will need a lot of money to set up what German Finance Minister Wolfgang Schäuble last year called a “Marshall Plan” for the EU’s neighbors on the southern shore of the Mediterranean.
Through the Marshall Plan, the U.S. extended generous financial support for the rebuilding of Western European countries after the end of World War II.
In the same spirit, the EIB – the EU’s policy bank – will soon “extend activity beyond Europe,” Hoyer said. “That will get traction in 2017.” The EU has an external investment plan in the making, the details of which will be hammered out by May.
The scheme for Africa, put forward in September by European Commission President Jean-Claude Juncker, foresees a rerouting of around €2.5 billion from the EU budget to the new external investment plan, plus an additional €1.5 billion in fresh money. With the private sector pitching in, that would allow the EIB to provide up to €5 billion in direct lending, according to the EIB.
The fund for Africa is modeled after the so-called Juncker fund, which invests within the EU. A €315 billion public-private investment scheme, it leverages public seed money to enlist private capital participation by guaranteeing investors’ first losses.
Hoyer is a former secretary of state in the German foreign ministry and sat in the Bundestag for 24 years for the liberal Free Democratic Party. He wrote a standard textbook on microeconomics and ever since coming into office at the EIB in 2012 has spearheaded the effort to leverage public money to spur private investments.
The EIB is to present its 2016 results in Brussels next week. “Last year was very good,” Hoyer said, especially when it comes to financing small- and medium-sized enterprises, which he described as “Europe’s biggest weakness.” The bank handed out more than one-third of its lending to SMEs in 2016.
But the EIB is supposed to intervene only if there’s a market failure. “If a public bank like ours has to intervene so heavily in SME financing, some things with SME financing in Europe are not okay,” he said, adding that the EU’s “cleaning up of the landscape” in banking had led to a shortage of access to capital for the real economy.
In Europe, “we have done our job,” Hoyer said. In Africa, the EIB’s job is about to begin.
» Download: Migration, sustainability and a Marshall Plan with Africa: A memorandum for the federal government (German) (PDF, 2.8 MB)