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Zimbabwe business urges use of rand as primary currency
The Confederation of Zimbabwe Industries, the country’s largest business lobby group, said the government should adopt the South African rand as its “reference currency” instead of the dollar.
While the country’s unique “multi-currency system” should be maintained, all financial reporting should be done in rand, the confederation said in a statement handed to reporters in the capital, Harare, on Nov. 4 before national budget negotiations this week. South Africa is Zimbabwe’s neighbor and biggest trading partner.
“We suggest the minister of finance starts presenting his budget in rand instead of dollars,” the group said, citing proposals it will present to the finance ministry.
Zimbabwe abandoned its own currency in 2009 to end hyperinflation and uses mainly dollars, with rands, euros, pounds and several other currencies also accepted as legal tender. A shortage of foreign exchange after a collapse in exports has caused a liquidity crisis that’s forced the government to delay worker payments. Last week, President Robert Mugabe authorized the introduction of dollar-backed bond notes to ease a shortage of the U.S. currency.
“With the acute liquidity crisis of cash dollars, the rand is becoming more attractive for business,” Alex Vines, head of the Africa Program at London-based Chatham House research group, said in an interview in Johannesburg on Nov. 4. “Business has already been asking for it and with the increased externalization of dollars, this will grow.”
Finance Minister Patrick Chinamasa will present the country’s 2017 budget in late November or early December, Finance Secretary Willard Manungo said last week.
In an interview with Zimbabwe’s state-controlled Sunday Mail, South African Trade and Industry Minister Rob Davies said his country is unlikely to lobby for Zimbabwe to join a rand monetary union.
“It’s not anything that we, particularly as the government of South Africa, are pushing for,” Davies said. “It’s a sovereign decision for the government of Zimbabwe.”
‘Joining the rand is a sovereign choice’
South Africa continues to be Zimbabwe’s biggest trading partner. Last year, Zimbabwe exported more than US$1,9 billion worth of goods and services to Pretoria, which is 71 percent of the country’s total shipments.
However, Harare, in turn, took in more than US$2,3 billion worth of products from SA, which is 38,4 percent of the country’s total imports. That is why cooperation between the two economies is considered important.
In the recent past, the South African government has voiced its concern over indigenisation and Statutory Instrument 64 of 2016, which materially impacts on Pretoria’s trade with Zimbabwe. Last week, The Sunday Mail Business reporter Africa Moyo (AM) caught up with SA Minister of Trade and Industry Rob Davies (RB), who was in the country for the Zim-SA Bi-National Commission.
He opened up on some of the crucial issues affecting the two economies.
AM: Rob, can you walk us through the areas of cooperation that Zimbabwe and South Africa have agreed on through the Bi-National Commission.
RD: Well, the last time that President Mugabe visited, we signed memoranda of cooperation, and I think what we have agreed now is to start the actual detailed work, to identify the areas of economic cooperation.
We understand of course that the Zimbabwean economy is facing challenges and that resulted in, among other things, Statutory Instrument 64 (of 2016).
We are in a process of trying to resolve a few issues between us and those issues, including the fact that we believe – and I think the Zimbabwean colleagues agree – that any measure which is a deviation from the Sadc Trade Protocol has to be taken to the Sadc Trade Ministers Council for Ministers for trade derogation.
That is what we agreed at the last meeting we had, and it was also agreed that Sadc will provide technical assistance to Zimbabwe.
We will be going for a further meeting round about March next year and I think we will be able to reach an understanding that will allow South African products that are not competing with products that are made in Zimbabwe, because our point of principle is that where capacity utilisation is at risk, we loosen, we don’t play hard ball, but we don’t want to see deviation of imports from us to extra-regional players at our expense, so we got a request to (the) Zimbabwe Government so that a number of lines of products that we want to supply here will be looked into.
So that is one of the issues.
We need to exchange more information about the investment climate in Zimbabwe (especially about) a number of the new measures that are being announced, including the Special Economic Zones and the rules around investment, so that we are able to convey accurate information to our investors in South Africa who may be interested in coming to Zimbabwe.
I think that is what we are looking at, as well as other things that we could assist Zimbabwe with, which we could discuss further with the Government.
There is cooperation in transport, which will be signed tomorrow (last Thursday) by the minister of transport. So, I think in general terms that’s where we are.
AM: Can you tell us more about the regional integration drive. How far has South Africa and Zimbabwe gone in this respect?
RD: I think we have similar views about what international trade issues are about or what they should be about and that kind of stuff. I think we also have similar views about the industrial pillar in regional integration, in particular the Sadc framework that was adopted at the special summit convened when Zimbabwe was chairperson of SADC.
We are looking forward to the next special meeting of Sadc, which is going to adopt the actual action plan. So we think that industrialisation is for all of us actually.
AM: But it is widely viewed that South Africa, because it is a regional giant in terms of industrialisation, is reluctant to promote the regional industrialisation initiative. What is your take on that?
RD: Well, let me just start by saying that our approach to regional integration is that we may look around the world and we see countries that are industrialised successfully. All of them – take China, take India (for example) – even if they started to produce industrial products and export them to the developed world, they found out that that is not a model that is going to work indefinitely, partly because the global market in the developed world is constrained because the developed world themselves are trying to re-industrialise.
So it’s not an unlimited access, unlimited quantum of manufacture of goods that creates those markets. What China is trying to do is a consumption-led growth path of their own, rather than an export of products.
Also, they are trying to move into the area of innovation, the Chinese model. As a result, we find ourselves getting lesser prices from commodities (and) they are affecting our income, foreign exchange and so on.
But as Africa, colonialism divided us into 54 different countries. We believe as South Africa, we cannot simply industrialise off the South African economy and consumption, we need to have a regional market that even reaches beyond our existing regional communities.
We should end up in the continent. The Tripartite (Free Trade Area) is very important. I think after a long debate, and we are part of the debate, the consensus that we have is that rather than focus on trying to deepen integration within our existing communities – in other words, we move Sadc into our customs union, our monetary union, something like that – the focus of our attention now ought to be on broadening integration across our regional communities.
The tripartite is the first crack at that. But when we do that, we need to do that with a developmental paradigm. That developmental paradigm says that the issues of small trade percentages of our total trade into regional (markets) is not all about tariffs, not even about trade facilitation, customs arrangements
AM: But, really, what progress has been registered in establishing a free trade area?
RD: There are two processes. One is what I have mentioned, which is the tripartite Sadc Community, the Common Market for Eastern and Southern Africa (Comesa) and the East African community (EAC) that is 26 countries; that’s about 600-to 700 million people and its US$1,2 trillion of GDP.
So, it’s everyone from Egypt, the East Coast, down to us.
So it includes EAC members, it includes members in Comesa and those who may not be in Comesa; it includes members who may be in Sadc and those who may not be in Sadc.
So it’s a group of countries. We have already agreed on the legal text that was adopted about a year ago in Sharm El Sheik in Egypt. They are in the process of negotiating the trade in goods arrangements. We are not trying to open the arrangements that are already in existence.
The focus is on negotiating with those in the big bloc who don’t have any preferential arrangements between themselves. In our case, as I said, we have to negotiate as Sacu. Our biggest negotiations in the bloc are with the EAC and with Egypt.
There are a few others – Ethiopia, Djibouti, Eritrea and Sudan – outstanding. We are very close to concluding those schedules and there is another round of negotiations in December. We will see if we conclude; if not, it won’t be long into the New Year before we conclude.
AM: Local businesspeople say in as much as South African companies are coming into Zimbabwe, they are not being afforded the same opportunity in South Africa. Is South Africa willing to help them?
RD: It’s actually fairly easy. If you want to be a foreign investor, you meet the requirements as a foreign investor, it’s very open. We have a one-stop-investment shop called Invest Africa, which offers one-stop services.
So Zimbabweans who want to establish businesses in South Africa are welcome. We also have a foreign economic representative based at our embassy here who can assist in Harare.
So, if they need any information about that, we have the Zimbabwean expatriate community in South Africa. I have been to a number of businesses operated by them. I think there are opportunities and it’s not closed by any means.
For example, in Seshego near Polokwane, there is an industrial park and there is a Zimbabwean company that makes fruit juices and things like that.
AM: There are interest groups that are pushing Zimbabwe to join the Rand Monetary Union (RMU), especially now that there are cash shortages. Would you think this would be a prudent decision?
RD: Well, the decision is a sovereign choice of Zimbabwe. I don’t think we want South Africa to lobby for Zimbabwe to join the RMU or anything like that.
I do know that authorities in Zimbabwe are very much aware of what is happening. If your currency is the strongest currency in the world – the US dollar – that does mean you become uncompetitive.
If the rand devalues against the dollar, that means your exports are more expensive in our market and our exports to you are much cheaper – that’s a fact of life.
But it’s not anything that we, particularly as a Government of South Africa, are pushing for. It’s a sovereign decision of the Government of Zimbabwe.
AM: There are some issues that have been raised by South African businessmen in the past, particularly the difficulties in penetrating the local market. Are South African businesses still finding it difficult to invest into Zimbabwe?
RD: I think the issue we are trying to get some clarity on is on indigenisation. The complaints we have are from people who come to invest and they find afterwards that the indigenisation has been done in a way they didn’t expect.
That is the issue we have got.Bribery, well, not so much. Indigenisation – I think we need some clarity on that. What are the rules that apply? We have our own Black (Economic) Empowerment (BEE). You come to South Africa, you want a license or you want access to a Government incentive, we expect you to achieve some level of Black Economic Empowerment.
Some investors may not like it but many actually do realise that it is important. So, we have it as well, but the rules must be consistent. We have a unit in our department that helps people, for example, to find a way of complying.
I think that is the sort of thing that we expect to find here – consistency, certainty. I know there are different arrangements for different sectors and also in Special Economic Zones, but we need to get the information consistently applied, you know, and with sufficient certainty that we can encourage investors to come to look for opportunities here.
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WTO issues new editions of Trade Profiles and World Tariff Profiles
The WTO issued on 2 November new expanded editions of two of its annual statistical publications, Trade Profiles and World Tariff Profiles. These new editions complement the WTO’s new flagship publication, World Trade Statistical Review, which was launched in July.
The revamped Trade Profiles provides a series of key indicators on trade in goods and services for 195 economies. For each economy, the data is presented in a handy two-page format, providing a concise overview of global trade. The profiles begin with a snapshot of the importance of trade for each economy – indicating its world ranking for trade in both goods and commercial services.
For trade in goods, data is provided by product category along with the major origins and destinations for these products. Also listed are the most exported and imported goods for each economy, broken down by agricultural and non-agricultural products. For trade in commercial services, data is broken down by services category, major origins and destinations, foreign affiliates statistics and foreign direct investment in services. The final part of the profile covers industrial property indicators, such as patent applications.
Pie charts and bar graphs make the data highly understandable, allowing for easy comparison between economies.
World Tariff Profiles, produced in cooperation with the United Nations Conference on Trade and Development (UNCTAD) and the International Trade Centre (ITC), has been expanded to provide information on tariffs and non-tariff measures imposed by over 170 economies. The publication starts with summary tables showing the average tariffs imposed by each economy. This is followed by individual one-page profiles, providing a more detailed breakdown of tariffs. The profiles display the tariffs each economy imposes on its imports (by product group) as well as the tariffs it faces for exports to major trading partners.
A new section covers the use of non-tariff measures, which are becoming increasingly important in international trade. The special topic for this edition is the 2017 version of the Harmonized System for classifying goods, which will enter into force on 1 January 2017. A section on data sources and frequently asked questions forms the final part of the publication.
Both publications can be downloaded from the WTO website. French and Spanish versions will be issued in mid-November. Printed copies will be available at the end of November. The profiles can also be found in the Statistics Database which also contains merchandise trade data for 2015 by commodity group, selected origin and destination, and by regional integration arrangements.
WTO short-term data in both merchandise trade and commercial services is published on a daily, monthly and quarterly basis on the WTO statistics webpage.
Downloads
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Trade Profiles 2016 (PDF, 11.23 MB)
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World Tariff Profiles 2016 (PDF, 1.95 MB)
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Magufuli visit to Kenya debunks myths of animosity and heralds new relations
For his no-holds barred war on inept and corrupt government officials, Tanzanian President John Magufuli earned the moniker “Bulldozer” soon after he was elected into office a year ago.
That heavy equipment, like an elephant, takes a while to turn and President Magufuli has kept diplomacy watchers waiting for some signal on the direction he was likely to take, foremost on mending the evident but often denied fractious relations between Dar es Salaam and other East Africa Community capitals with the exception of Bujumbura.
Until his first official visit to Rwanda 10 months into his regime, President Magufuli had focused on domestic matters, with reforms meant to rid bureaucracy, inefficiency and corruption top of his mind. Cargo clearance at the port of Dar es Salaam improved, Tanzania Revenue Authority collections increased and verification of invoices from government suppliers became stricter.
While at it, the president delegated attendance of key international events including the World Trade Organisation Ministerial and the Tokyo International Conference on Africa Development (TICAD) both held in Nairobi, adding to the feeling that all was not well between the two neighbours.
Not surprisingly, reports that President Magufuli would be on a three-day state visit to Kenya last week proved a big talking point on social media in the two countries. “The visit by President Magufuli has opened a new chapter in strengthening of the bilateral and brotherly relations between our two countries, something that will help in deepening regional integration,” said Kenya’s President Uhuru Kenyatta.
In a curtain-raiser to Magufuli’s arrival, Kenya’s State House spokesman Manoah Esipisu said the two presidents would address salient differences such as tour operators dropping tourists across the border, the regional single tourist visa, regional infrastructure projects and the revival of a joint co-operation council, the diplomacy body that directs bilateral relations between the two countries. While the latter two came to pass, the former was not mentioned in the communique at the end of the visit.
Also missing was whether Tanzania would review its stand on economic partnership with the European Union which is key to Kenya, Uganda and Rwanda accessing the European market without restrictions.
“My visit today is to cement the good relations between Tanzania and Kenya,” said Dr Magufuli. It is understood that the sticking points in relations between the two countries will be discussed at a joint ministerial meeting to be held in Dar es Salaam before the end of the year.
Other issues to be discussed include the EPA standoff, the EAC single tourist visa, free movement of goods and labour, the pipeline projects and the importation of goods from East Africa by Tanzania that can be sourced locally. The disputes over Tanzanian tour vans dropping passengers at the Jomo Kenyatta International Airport and frequency of flights by Kenya Airways to Tanzanian airspace are also pending.
Work permits
“I think the messaging around the visit was powerful but the proof will be in the pudding,” said Aly-Khan Satchu, the chief executive of Rich Management, an investment advisory firm. On return to Tanzania, however, President Magufuli made moves that suggested that the visit was not just an ice-breaker.
Tanzania announced on Thursday the reduction of work permit fees for East Africa nationals from $2,000 to $500. Permits for setting up businesses in Tanzania will also be reduced by half to $1,500 from $3,000, a move that will encourage professionals in research, law, architecture and real estate firms to set up shop in the country.
Although the drastic reduction fell short of the standards set by Kenya, Rwanda and Uganda – permits but no fees – it suggested that President Magufuli was backing with deed his invitation to “clean” Kenyans to do business with and work in Tanzania.
Not lost on observers was the fact that President Uhuru Kenyatta had last month asked Tanzania to do away with the work permit requirement. The same day, President Magufuli called a press conference at State House, Dar es Salaam, his first, where he fielded questions on his first year in office.
Integration
He said Tanzania had shortlisted 40 firms to construct its section of the standard gauge railway, part of the East African Railway Masterplan covering Burundi, Kenya, Tanzania and Uganda. Added to the two road deals – one linking Malindi in Kenya to Bagamoyo in Tanzania and the other linking the two countries through Isibania, a border town in southwestern Kenya. The two roads are part of EAC projects meant to boost trade across the region.
“We are keen on integration and security of the region not only in East Africa but also in SADC,” President Magufuli said, reiterating gains from his visit to Rwanda and the visit last month by Morocco’s King Mohammed IV to Dar es salaam. He said Morocco had promised to open its skies for direct flights from Dar es Salaam to Rabat where Tanzania hopes to get a slice of Morocco’s 14 million tourists.
On peace in Burundi and South Sudan, President Magufuli said a peaceful solution would be found because South Sudan was now part of the 165-million people EAC bloc. “Tanzanians must take advantage of the bloc’s strength as a mega market as well as SADC with its 400 million people,” he said.
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tralac’s Daily News Selection
The selection: Friday, 4 November 2016
Featured tweet, @WTODGAZEVEDO: Pleased to confirm my willingness to serve 2nd term as WTO DG. A lot done, much more to do. My letter to WTO members.
A series of postings on bilateral trade developments:
Zimbabwe – South Africa Bi-National Commission: joint communiqué (DIRCO)
The two Heads of State noted the growing economic cooperation between the two countries. In this regard, it was agreed to establish a Joint Trade and Investment Committee by the end of the first quarter of 2017. The Heads of State emphasised the importance of business to business interaction and the promotion of Public-Private Partnerships and joint ventures. The two Heads of State discussed the implementation of the SADC Protocol on Trade and the Bilateral Trade Agreement between Zimbabwe and South Africa, including various Statutory Instruments adopted by Zimbabwe related to import control management.
The Bi-National Commission highlighted the urgent need for the establishment of a One Stop Border Post at Beitbridge-Musina as decided by the Joint Permanent Commission at Victoria Falls in 2009. To that end, the Commission decided to finalise the modalities for its establishment by the time of the next Bi-National Commission in 2017. The two Heads of State called for further progress in the implementation of the SADC Industrialisation Strategy and Roadmap. In this context they looked forward to the adoption of the Costed Action Plan for the implementation of the Strategy and Roadmap at the forthcoming SADC Extraordinary Summit to be held in March 2017.
Invest in Zambia Business Forum, Sandton: Government refutes accusations of policy inconsistency (Lusaka Times)
Government has refuted accusations that it has been inconsistent with its economic policies saying all adjustments made previously were necessary as they were meant to protect the interests of Zambians. Minister of National Development Planning, Mr. Lucky Mulusa said that there has been cases of insincerity on the part of some investors and that Government has had to respond accordingly in order to safe guard the nation. “All the adjustments to policy should be seen as a way of trying to align things for the benefit of the people. These policy adjustments in the past were in response to the insincere conduct of some members of the business community. There is no way we can just wake up today and introduce a new law which we again change a few weeks down the line. All our actions are informed by how businesses in the country behave,” Mr. Mulusa said.
Chief Executive Officer for Trade Invest Africa, an initiative of South Africa’s Department of Trade and Industry, Ms. Lerato Mataboge, noted that total trade between the two countries grew from R19.9bn in 2011 to R31.9bn in 2015, making South Africa Zambia’s main trading partner in the SADC and Zambia, South Africa’s fourth largest trading partner in the region. Ms Mataboge said South Africa was conscious of the trade imbalance which supported her country and that this needed to be assessed and addressed. “Key to this will be identifying and establishing cooperative mechanisms for assisting Zambian businesses seeking opportunities to supply in the South African market.”
EU-Nigeria Business Forum: Harnessing Nigeria’s potential for economic growth (The Cable)
Akinwumi Adesina, president of the African Development Bank; Akinwunmi Ambode, Lagos state governor and his counterpart from Kaduna, Nasir el-Rufai, are to speak at the fifth EU-Nigeria business forum, set for 10-11 November in Lagos. This year’s event is themed Harnessing Nigeria’s Potential for Economic Growth will focus on creating opportunities for EU and Nigerian Small and Medium Enterprises to increase their businesses through the Enterprise Europe Network; identify opportunities in the textile value chain; and proffer options for accessing long term finance for the critical power sector in Nigeria. [EU’s grant to Nigeria may top €1.5b by 2020]
World Federation of Development Finance Institutions: CEO forum in Gaborone
The Citizen Entrepreneurial Development Agency is hosting the CEO Forum of the World Federation of Development Finance Institutions (WFDFI) in Gaborone, 2-4 November. In attendance will be the Chief Executive Officers and Senior Management Executives of Association of African Development Finance Institutions, the Association of Development Finance Institutions in member-countries of the Islamic Development Bank, the Association of Development Finance Institutions in Latin America and the Association of Development Financing Institutions in Asia and Pacific. Extract from the keynote speech by Mr Erastus Mwencha (Deputy Chairperson African Union Commission): There is an imperative need to revisit the role of African Development Finance Institutions with a view to reinforce their development potential and address their poor performance recorded over the last decade. In fact, over the last decade, African Development Finance Institutions have shown low levels of profitability, with an estimated 2.4% return on average assets, and a high level of loan impairment, with a 15.8% of impairment loans to gross loans. To avoid the repetition of this disappointing performance of African Development Banks, let me underline [five] policy actions that can help Development Finance Institutions remain relevant partners in achieving socio-economic transformation in Africa.
Former EAC secretary general, Nuwe Amanya Mushega, warns EAC against politicising East African Development Bank (IPPMedia)
Tanzania is the only EAC partner ‘without microfinance law’ (The Citizen)
Tanzania is the only country among EAC member states that has not enacted a law to regulate all microfinance activities, thus limiting their reinforcement and development. Tanzania Microfinance Association board chairman Joel Mwakitalu said this in Dar es Salaam yesterday during the second East Africa Microfinance summit. According to the deputy permanent secretary in the ministry of Finance and Planning, Ms Amina Hamisi, the cabinet has already approved the National Microfinance Policy and it is expected that in the near future, a Microfinance Bill will be submitted to the National Assembly.
Jamie MacLeod: The view from Geneva and implications for Africa (AgBiz)
E-commerce has evolved the global trade landscape, opening up trade to online platforms and extending the reach to a larger connected global market. On 26 October, GEG Africa hosted a study group, reaching out to key stakeholders involved in e-commerce trade and regulation. An extract from the presentation by Jamie MacLeod (pdf) (Trade Policy Fellow from the African Trade Policy Centre): E-commerce at the WTO now: (i) July 2016, seven new proposals submitted to WTO on e-commerce. Suggestions that new rules adopted by Dec 2017 (next Ministerial), (ii) But may detract from priority ‘remaining DDA issues’, (iii) Suggestions that e-commerce will be revolution that developing countries have been waiting for. Especially for MSMEs – therefore, should there be rules at WTO?, (iv) But what kind of rules? How would they help developing countries? What are the challenges facing developing countries with e-commerce? [What does 2017 hold for e-Commerce in Africa?: eCommerce MoneyAfrica 2017 (22-23 February 2017, Cape Town)]
Measuring broadband in SADC (CRASA)
In June 2015, SADC agreed to the key baseline conditions, especially the need for all SADC Member States to establish National Broadband Plans and related strategies by 2017. SADC also agreed to a definition and targets for broadband for sustainable socio-economic development. CRASA in conjunction with the International Telecommunications Union are convening a one-day workshop in Gaborone on 24 November. The workshop intends to bring greater awareness of SADC’s broadband targets as well as to identify the indicators to be used for the monitoring and reporting.
A hollowing out: Disjunctive policy in South Africa and implications for the trade agenda (tralac)
This working paper seeks to act as a discussion document on the dichotomous policy discourse in South Africa and the possible implications for trade strategies. Though the issues raised in this paper are applicable to South Africa’s trade strategy in general, particular focus will be placed on trade with Africa. [The analyst: Tania Gill]
Afreximbank to attract up to $1bn financing for trade and related infrastructure development in Togo
Speaking on Monday after meetings with Togolese President Faure Gnassingbé and several ministers, Dr. Oramah, who led a mission of business leaders to discuss trade and investment opportunities, said that Afreximbank saw opportunities to “participate in the financing of trade activities and logistics infrastructure, as well as industrial parks in Togo, for projects that are likely to span from $500m to $1bn”. The President said that following Togo’s joining as an Afreximbank participating state in May, the Bank was now able to fully deploy its programmes to support its growth sectors.
East African Community Competition Authority: new commissioners sworn in (EAC)
The appointed Commissioners were approved by the 33rd Meeting of the Council of Ministers held on 29 February, which considered nominees submitted by each Partner State and appointed them as Commissioners of the EACCA. The five Commissioners are: Mr Innocent Habarugira (Burundi), Mr Francis W. Kariuki (Kenya), Dr Frederick Ringo (Tanzania), Dr Didas M. Kayihura (Rwanda) and Mr Sam Watasa (Uganda). [Kenyan competition watchdog investigates Naspers]
IGAD advances implementation of AU declaration on land (IGAD)
The specific objectives of the workshop (2 November) were to validate commissioned reports on the mapping of the research and training institutions in the region and the country profiles of IGAD MS on respective status of land governance in order to agree on these as the overall guiding documents for work on land governance in the IGAD region. Participants were also expected to propose a roadmap 2017 for land governance work in the IGAD region, taking into account the findings of the consultancy reports submitted to them.
Rwanda: Govt considers plan to have 80% of coffee go through washing stations (New Times)
The NationaL Agricultural Exports Development Board plans to have 80% of coffee go through washing stations by 2018. Dr Celestin Gatarayiha, coffee division manager at NAEB, said this is part of the Government’s deliberate plan to promote specialty coffee. In 2002, Rwanda had no coffee going through coffee washing stations, which resulted into low quality coffee. But, from 2002 to-date, Gatarayiha said, about 50% of Rwanda’s coffee goes through the coffee washing stations.
Climate change and clean energy in the 2030 Agenda: what role for the trade system? (ICTSD)
This think piece covers six key policy challenges, namely reforming fossil fuel subsidies; creating room for subsidies to support scale-up of clean energy technologies; facilitating access, dissemination, and transfer of climate-friendly technologies; dealing with the political economy of local content requirements; pricing carbon nationally while tackling international competitiveness and carbon leakage concerns, particularly through border carbon adjustments; and designing “carrots” and “sticks” for more ambitious action under climate clubs. The think piece recommends prioritising policy actions in the short term mainly in three areas: fossil fuel subsidies; clean energy subsidies; and access, dissemination, and transfer of climate-friendly technologies. [The analysts: Kasturi Das, Kaushik Bandyopadhyay)
‘Dramatic’ action needed to cut emissions, slow rise in global temperature (UNEP)
A day before the landmark Paris Agreement on climate change comes into force, UNEP urged the world to ‘dramatically’ step up its efforts to cut greenhouse gas emissions – by some 25 more than those pledged in Paris last year – “to meet the stronger, and safer, target of 1.5 degrees Celsius” global temperature rise. UNEP made the announcement as it released its annual Emissions Gap report (pdf), which found that 2030 emissions are expected to reach 54 to 56 gigatonnes of carbon dioxide equivalent. The projected level needed to keep global warming from surpassing 2°C this century is 42 gigatonnes.
Enhancing transparency of climate finance under the Paris agreement: lessons from experience (pdf, OECD)
The Paris Agreement one year later: where are the Parties to Framework Convention on Climate Change? (tralac)
COP22 will take place in Marrakesh, 7-18 November
Can wind and solar fuel Africa’s future? (Nature)
Egypt, Ethiopia, Kenya, Morocco and South Africa are leading the charge to build up renewable power, but one of the biggest barriers is insufficient data. Most existing maps of wind and solar resources in Africa do not contain enough detailed information to allow companies to select sites for projects, says Grace Wu, an energy researcher at the University of California, Berkeley. She co-authored a report2 on planning renewable-energy zones in 21 African countries, a joint project by the Lawrence Berkeley National Laboratory in California and the International Renewable Energy Agency in Abu Dhabi. [The author: Erica Gies]
Today’s Quick Links:
Dar cuts work permit fee for Kenyans to Sh50,500 (Business Daily)
Six foreign investors to make drugs in Tanzania (Daily News)
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South Africa’s transition from TDCA to EPA: Agricultural market access
The European Union and the Republic of South Africa concluded a Trade, Development and Cooperation Agreement (TDCA) which came into effect on 1 January 2000.
The TDCA “Trade Chapter” will be replaced by the Southern African Development Community (SADC)-EU Economic Partnership Agreement (EPA)[1] when the latter enters into force. The SADC-EU EPA was signed by both parties on 10 June 2016 and began provisional application on 10th October 2016.
In the run up to the expiration of the TDCA Trade Chapter, the South African government published three notices in the Regulation Gazette to reflect the relevant legislative changes:
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A notice by the South African Revenue Service (SARS) on 12 October 2016 amending the rules on customs administration for the EPA, including the revised Rules of Origin, the EUR.1 procedure and the enabling of the new market access quotas;
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A Final Notice by the Department of Trade and Industry (dti) on 21 October 2016 prohibiting the use of certain EU agricultural product and beer names in accordance with the Rules of Use published as an annexure; and
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A notice by the Department of Agriculture, Forestry and Fisheries (DAFF) published on 28 October 2016 giving effect to the procedures for the application, administration and allocation of export quotas under the TDCA/EPA between the EU and South Africa for the year 2017. Given that the EPA has already taken effect as from 10 October 2016, the regulations will be applied on a retrospective basis [Download notice]
Both the TDCA and the EPA packages contain agricultural products to be exported by SA into the EU market under the Tariff Rate Quota (TRQ) regime. While some products are set to retain the same market access conditions as they had under the TDCA, there are a number of agricultural products that will enjoy new and/or expanded TRQs as part of the EPA package. South Africa stands to benefit from improved market access on wine, sugar and ethanol amongst others whereas some of the EU’s meat products will enter the South African Customs Union (SACU) region under new TRQs (see Table 1).
The new market access provisions of the SADC-EU EPA for agricultural products came into effect on 1st November 2016, signifying the fulfilment of two conditions required for the new concessions to become effective: 1) the ratification of the agreement by SACU States, and 2) the bilateral exchange of notifications for Geographic Indications (GI) protocols – both of which were met by the end of October 2016
The Department of Trade and Industry has confirmed that both the EU and South Africa have submitted the required notifications in regard to the protection of their respective GIs in accordance with Protocol 3 of the SADC-EU EPA. The protection covers some wine, spirit and beers names as well as a number of agricultural product names (i.e. the EU protects 105 SA GI names while SA protects 253 EU GIs).
The submitting of these notifications signifies that the new agricultural market access under the SADC-EU EPA became effective for both the EU and South Africa on 1 November 2016.
Table 1: SADC EPA Tariff Rate Quotas (TRQs)[2]
TDCA-TRQ | EPA-TRQ | Balance of EPA-TRQ for the remaining period | |
New TRQs | |||
Cane/Refined Sugar | - | 50 000 tons | 8 333 tons |
Sugar | - | 100 000 tons | 16 667 tons |
Ethanol | - | 80 000 tons | 13 333 tons |
Active Yeast | - | 350 tons | 58 tons |
White crystalline powder | - | 500 tons | 83 tons |
Citrus jams | - | 100 tons | 17 tons |
Skimmed Milk Powder | - | 500 tons | 83 tons |
Butter | - | 500 tons | 83 tons |
Unchanged TRQs | |||
Strawberry, frozen | 370 tons | 370 tons | - |
Canned mixtures of tropical fruit | 2 960 tons | 2 960 tons | - |
Expanded TRQs | |||
Canned Mixtures of fruit, other than tropical fruit | 27 102 tons | 57 156 tons | 55 202 tons |
Frozen orange juice | 1 036 tons | 3 602 tons | - |
Wine | 50 126 000 litres | 110 000 000 litres | 25 930 883 litres |
The third column to the right in Table 1 shows the reduced volumes that reflects the outstanding quotas proportional to the remaining number of days in the calendar year, starting from 1st November when the new market access for agriculture under EPA was provisionally implemented. For example, the TDCA quota for wine was 50.1 million litres, and exports under the quota were 32 million litres. The provisional implementation of the EPA as of 1st November 2016 – under which the annual quota has increased to 110 million litres – means that the outstanding balance for South African wine exports for the remainder of the calendar year increases to 26 million litres – calculated on a pro-rata basis.
From an import perspective, the EU will be able to export wheat under a TRQ of 300 000 tons into the Southern African Customs Union (SACU). Wheat from the EU will come to South Africa duty free under two conditions, which are: (1) if it comes between 1st February and 31st October, and (2) if it enters through the ports of Durban and Richards Bay. Meanwhile, the EU can also export barley into SACU free of duty under a TRQ of 10 000 tons. However, this will be reduced pro rata to the remaining number of days of this calendar year starting from 1st November when new market access for agriculture under the EPA was provisionally implemented.
For products that do not have TRQs, market access changes will remain the same for some products. For instance, “perry pears” and bulk “cider apple” exports, South Africa’s market access under the EPA remains the same as that under the TDCA. Bulk exports of South African “perry pears” will still enter the EU duty free between 1st August and 31st December of each year while South African “cider apples” will be duty-free between the 16th September and 15th December. Outside of these window periods, South African “perry pears” will enter the EU market at a duty of €164,50 per 100kg, while “cider apples” will enter the EU market at a duty of €134,90 per 100kg.
For other products, market access changes have taken effect from 1st November. For example, all other pears that are NOT “perry pears” (i.e. pears of variety Nashi, and others) as well as other apples have new concessions which came into effect on the 1st of November. South African “pears of variety Nashi”, as well as “other apples” that are NOT “perry pears” will now enter into the EU duty free between 1st May and 30th June of each year. Outside of this period, South African “pears of variety Nashi” as well as “others” will be subject to the entry price system. Meanwhile, any other apples that are not cider apples will now enter the EU at “entry prices”. This means that the duty of any other apples that are not cider apples can be increased at any time, at the determination of the EU.
For South African sweet oranges, they will still enter the EU market duty free from 1 st June to 15th October. However, the EPA will extend this period to 30th November over the next decade, during which tariffs will gradually phased down the MFN duties by 9% per annum over the period 16th October to 30th November of each year, until 2027. There are no concessions for all other oranges that are not sweet oranges, and therefore a duty of 12% will be maintained between 1st April and 15th October, which will be increased to 16% between 16th October to 31st March, each year, as was the case under the TDCA. For South African lemon exports (citrus limon, citrus limonum), duties will be eliminated between 1st May to 30th October, and lemon exports will enter the EU at entry prices outside this window period.
[1] The full EPA text is available to download on tralac’s website.
[2] Source: DAFF (2016). The discussion on TRQs is taken from an article by Tinashe Kapuya and Wandile Sihlobo’s in Agbiz eNewsletter 2016/38, 4 November 2016.
EU-South Africa End of Implementation Period (EIP) Report
Joint submission to the World Trade Organisation
On 31 October 2016, the Parties to the TDCA submitted a joint EU-South Africa End of Implementation Period (EIP) Report to the World Trade Organisation’s Committee on Regional Trade Agreements. The report covers amendments to the TDCA, provisions on trade in goods, other provisions in the Agreement, and statistical data on trade in goods between the Parties as well as some indications on Parties’ import coverage.
The achievements of the TDCA and those of the Cotonou Agreement, previous ACP-EC agreements in regional cooperation and integration, as well as economic and trade cooperation, form the basis for the now provisionally applied EU-SADC EPA. The latter will be implemented in a complementary and mutually reinforcing manner with respect to its predecessors, subject to its Articles 100 and 111.
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DFIs sustaining relevance in the age of disruption: Keynote speech by H.E. Erastus Mwencha
Keynote speech by H.E. Erastus Mwencha, Deputy Chairperson of the African Union Commission, at the CEO Forum of the World Federation of Development Finance Institutions (WFDFI) in Gaborone, Botswana, 2-4 November 2016
I am delighted to be here today to add my voice to this CEO Forum of the World Federation of the Development Finance Institutions, on behalf of the Chairperson of the African Union Commission, Dr. Nkosazana Dlamini-Zuma.
At the onset, I would like to thank the organizers of the Forum, the Citizen Entrepreneurial Development Agency (CEDA) and the government and people of Botswana for the invitation and warm welcome in this beautiful city of Gaborone. I would like to acknowledge the presence of the World Association of Development Finance Institutions, the African Association of Development Finance Institutions and all their affiliated members. Excellencies Ladies and Gentlemen,
This is an exciting time for Africa.
As you may be aware, since the beginning of the 2000’s, Africa’s growth rate has more than doubled from just above 2 per cent in 1980s and 1990’s to above 5 per cent between 2001 and 2014. This economic performance was favored by an increased domestic and international demand; high commodity prices, public investments on infrastructure; tighter trade and investment linkages with emerging economies such as China and improving global economic and continental business environment.
But today, the situation has dramatically changed. This Meeting is being held at a time when most of African countries are confronted to difficulties related to the sharp decline of commodity prices, particularly oil and metals with an impact on declining revenues. In addition, China’s growth slowdown to below 7% and its transition from investment and export of industrial goods towards consumption and service has also heavily impacted Africa’s economic performance. Further, climate change in the form of severe drought and floods has ravaged countries affecting electricity generation and food security.
Despite this economic headwinds, Africa is still the second fastest growing economic zone, with an economic growth rate estimated to above 5% in 2016. This estimation by the African Development Bank places the continent above the global average of 3.2% and the estimated 1.7% and 2% for the Euro Zone and the US respectively. The continent is also still posting good performance in terms of attractiveness of foreign direct investments inflows estimated to reach USD 55-60 billion in 2016. On a regional note, although intra-African cross-border investments have risen, they only accounts for 19% of total investment to Africa and just 12% of Africa total foreign investment compared to 33% in Asia.
On the social front, Africa has made steady progress in addressing some of the key socio-economic challenges. In many countries, the incidence of extreme poverty has declined. Attending primary school has become the norm, with most countries having achieved universal primary enrolment (above 90 per cent). Nearly one half of African countries have achieved gender parity in primary school. Health has also seen major gains: under-five mortality declined from 146 deaths per 1,000 live births in 1990 to 90 deaths in 2011, a 38 per cent decrease. Similarly, the maternal mortality ratio fell from 745 deaths per 100,000 live births in 1990 to 429 in 2010, a 42 per cent decrease.
But Africa’s growth episode has not been sufficiently inclusive and diverse because it is still mainly based on natural resources exploitation and export without added value, and therefore no opportunity to maximize the share of wealth drawn from its vast raw materials for Africans. It is in this context of seeking inclusive and sustainable growth that the African Union has responded by developing Agenda 2063 for the “Africa We Want”.
Agenda 2063 which embeds the global Sustainable Development Goals (SDGs) is a forward-looking vision that projects Africa over the next five decades considering it as "an integrated and prosperous continent, where growth is inclusive; a continent at peace with himself, playing an active role on the global scene".
Agenda 2063 reflects the aspirations of the entire African continent; a prosperous continent with high-quality growth that creates more employment opportunities for all, especially women and youth.
In this vision, sound policies, better infrastructure and energy will drive Africa’s transformation by improving the conditions for private sector development and by boosting investment, entrepreneurship and micro, small and medium enterprises.
In the context of Agenda 2063, transformation means diversifying the sources of economic growth and opportunity in a way that promotes higher productivity, resulting in sustained and inclusive economic growth. It also means supporting the development of industries that increase the impact of the existing sources of comparative advantage and enhance Africa’s global competitive position.
Achieving Agenda 2063 and its flagship programmes will require a collective effort by all African stakeholders and to that end, the role of African Development Finance Institutions cannot be overemphasized.
Under Agenda 2063, we see Development Finance Institutions (DFIs) as powerful institutions that can invest in sustainable private sector projects with the twofold objective of spurring socio-economic transformation and development in African countries while themselves remaining financially viable.
These financial institutions will be instrumental for the sustainable financing of continental projects in agriculture, agribusiness and industry, infrastructure and energy in the perspective of unleashing the development potential of the African private sector.
On the infrastructure side, of the US$ 93 billion per year the World Bank estimates that Africa needs to invest to close its infrastructure gap, just under half is currently financed, with major sources being African governments, multilateral and bilateral sources of finance, Official Development Assistance (ODA) and the private sector. According to the Africa Infrastructure Country Diagnostics (AICD), these sources together contribute approximately US$ 45 billion per annum, leaving a gap of about US$ 48 billion per annum to be financed.
With regard to energy, it is estimated that the lack of energy combined with lack of infrastructure holds back Africa’s growth by 2% each year and constitute a major constraints to doing business.
In that continental interplay, Development Finance Institutions has an important role to play to help reducing the infrastructure gap and solving the power problem. Addressing these two challenges will open great opportunities for agriculture development and industrialization through a shifting of labor from lower to higher productivity sectors. But how can DFI’s contribute to the achievement of these goals?
There is an imperative need to revisit the role of African Development Finance Institutions with a view to reinforce their development potential and address their poor performance recorded over the last decade. In fact, over the last decade, African Development Finance Institutions have shown low levels of profitability, with an estimated 2.4 percent return on average assets, and a high level of loan impairment, with a 15.8 percent of impairment loans to gross loans. Excellencies Ladies and Gentlemen,
To avoid the repetition of this disappointing performance of African Development Banks, let me underline policy actions that can help Development Finance Institutions remain relevant partners in achieving socio-economic transformation in Africa.
First, there is need to create an enabling business and regulatory environments for the attraction of both foreign direct investments and the scaling up of cross-border investments. Creating an enabling environment will significantly contribute to de-risking investments in critical sectors of infrastructure, energy and agribusiness for Africa transformation if the continent is to reach the level of 33 % of intra-regional foreign investments recorded by Asia. Achieving this will require policy interventions to strengthen macroeconomic stability and promote institutional, regulatory and legal reforms that favor good governance and accountability to avoid microeconomic distortions. DFIs should therefore be integrated into the financial system to deepen financial inclusion and operate along commercial lines with a flexible mandate to take advantage of the new dynamics.
Second, government intervention should support rather than distort incentives for the private sector. To that end, our efforts should unlock the transformative potential of the private sector through increased access to finance and deepening of financial inclusion. A particular attention should be placed on lengthening financial contracts by providing a trading platform for the expansion of African capital markets.
Third, government should also put in place arrangements for Development Financial Institutions to be assessed on a regular basis against an agreed set of financial and social development objectives. As governance in all its dimensions, ranging from political stability and accountability in the control assets to the rule of law, has been a continuous challenge over the last few decades, there is now an urgent need to strengthen financial stability and to fight against illicit financial flows to significantly reduce the risks perceived by investors. De-risking the African financial system will, I am convinced, attract more foreign investors and scale up regional cross-border investments for Africa’s transformation.
Fourth, government should capitalize development banks adequately to allow them to play a more proactive role in financing Africa’s socio-economic transformation.
Fifth, rather than concentrating on national priorities, Development Banks should operate in a regional base. This will be of great importance to find optimal solutions to regional challenges and fast-track Africa’s integration agenda as encapsulated in the Abuja Treaty. Co-financing, by forming consortia will significantly contribute to enhancing implementation of cross-border projects.
In conclusion, let me reemphasize that to achieve Agenda in 2063, Development Finance Institutions are relevant actors and investors in sustainable agricultural and industrial production if we are to meet the challenge of structural transformation. And through innovation and investment in infrastructure, energy and resource-efficient solutions, the Development Finance Institutions will have a major role in spurring inclusive economic growth.
To achieve this, the African Union Commission looks forwards to work with you. I am confident that this Forum will find a strong and compelling voice to identify the areas of our cooperation.
As a way forward, I would like to take this opportunity to cordially invite you all to attend the African Economic Platform, scheduled to be held in Mauritius in March 2017. The African Economic Platform is the African Union dedicated high-level Public-Private Business oriented platform that brings together the public and the private sector to discuss ways of boosting investments in Africa at this critical time. A one minute promotional video will be presented just after my intervention.
I thank you for your kind attention.
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‘Dramatic’ action needed to cut emissions, slow rise in global temperature – UN Environment report
A day before the landmark Paris Agreement on climate change comes into force [4 November 2016], the United Nations Environment Programme (UNEP) is urging the world to ‘dramatically’ step up its efforts to cut greenhouse gas emissions – by some 25 per cent more than those pledged in Paris last year – “to meet the stronger, and safer, target of 1.5 degrees Celsius” global temperature rise.
The world is still heading for temperature rise of 2.9 to 3.4? this century, even with the pledges made last December by States Parties to the UN Framework Convention on Climate Change (UNFCCC), according to UNEP, which explains, “this means we need to find another one degree from somewhere […] to have any chance of minimizing dangerous climate change.”
UNEP made the announcement today in London as it released its annual Emissions Gap report, which found that 2030 emissions are expected to reach 54 to 56 gigatonnes of carbon dioxide equivalent. The projected level needed to keep global warming from surpassing 2°C this century is 42 gigatonnes.
In early October, the Paris Agreement cleared the final threshold of 55 countries representing 55 per cent of global emissions required for the accord to enter into effect, now set for tomorrow. The next meeting of Parties to the UNFCCC, known by the shorthand COP 22, kicks off Monday in Marrakech.
Scientists around the world agree that limiting global warming to 2°C this century (compared to pre-industrial levels) would reduce the probability of severe storms, longer droughts, rising sea levels and other devastating climate-related events. However, they caution that even a lower target of 1.5°C will reduce rather than eliminate impacts.
Erik Solheim, Executive Director of UNEP, said in a new release that while the Paris Agreement and the recent Kigali Amendment to the Montreal Protocol to reduce hydrofluorocarbons (HFCs), are steps in the right direction, the strong commitments are nevertheless still not enough.
“If we don’t start taking additional action now, beginning with the upcoming climate meeting in Marrakech, we will grieve over the avoidable human tragedy. The growing numbers of climate refugees hit by hunger, poverty, illness and conflict will be a constant reminder of our failure to deliver,” he said.
That stark warning echoed his call from the report’s forward, where he said: “None of this will be the result of bad weather. It will be the result of bad choices by governments, private sector and individual citizens. Because there are choices […] The science shows that we need to move much faster.”
2015 was the hottest year ever recorded and the first six months of 2016 have thus far broken all prior records. Yet the report finds that emissions continue to increase.
Last month, the Kigali Amendment to the Montreal Protocol agreed to slash the use of HFCs. According to preliminary studies, this could lead to a cut in 0.5°C if fully implemented, although significant reductions will not be realized until 2025. Collectively, members of the G20 are on track to meet their Cancun Agreements for 2020, but these pledges fall short of a realistic starting point that would align targets with the Paris Agreement.
Fortunately, the report released today has found, through technology and opportunity assessments, a number of ways for States and non-State actors to implement further cuts that would make the goals achievable, including energy efficiency acceleration and crossover with the Sustainable Development Goals (SDGs).
For example, non-State actors, including those in the private sector, cities, and citizen groups, can help to reduce several gigatonnes by 2030 in areas such as agriculture and transport.
Energy efficiency is another opportunity; a 6 per cent increase in investments last year (a total of $221 billion) in the industry indicates that such action is already happening.
Moreover, studies have shown that an investment of $20 to $100 per tonne of carbon dioxide would lead to reductions (in tonnes) of 5.9 for buildings, 4.1 for industry, and 2.1 for transport by 2030.
The 1 Gigaton Coalition, created by UNEP with the support of the Government of Norway in 2014, recently found that implementing renewable energy and energy efficiency projects in developing countries from 2005 to 2015 will lead to a half gigatonne reduction in emissions by 2020. This includes actions taken by countries that have not made formal Cancun pledges.
Climate action is integral to the SDGs, as the impacts of severe climate-related events undermine our ability to deliver on the promises made by 2030. Failure to meet these challenges will, of course, have greater-yet implications beyond that date.
» Download: The Emissions Gap Report 2016 (PDF, 7.65 MB)
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Inaugural Session of the Zimbabwe – South Africa Bi-National Commission: Joint Communiqué
International Relations and Cooperation Minister Maite Nkoana-Mashabane co-chaired the Inaugural Ministerial Session of the Zimbabwe-South Africa Bi-National Commission (BNC) in Harare on Wednesday, 02 November 2016, together with her counterpart, H.E Mr Simbarashe Mumbengegwi, Minister of Foreign Affairs of Zimbabwe.
The Ministerial Session took place ahead of the Heads of State session on Thursday, 03 November 2016, where H.E President Jacob Zuma co-chaired the Inaugural Session of the Zimbabwe-South Africa BNC together with H.E President Robert Mugabe of Zimbabwe.
The Ministers considered and adopted the draft Agreed Minutes and Joint Communiqué negotiated by Senior Officials on 31 October-01 November 2016.
South Africa and Zimbabwe have good bilateral political, economic and social relations that are underpinned by strong historical ties dating back from the years of the liberation struggle.
As a result, the two countries decided to elevate their structured bilateral cooperation through an annual BNC, whose agreement was signed in 2015 during President Mugabe’s State Visit to South Africa.
The main objective of the Inaugural session of the BNC is to deepen bilateral relations and cooperation between the two countries and to strengthen and develop the potential that exists for closer ties in the fields of trade, investment, mining, water, energy, infrastructure development, transport, and ICT, among others.
To date, the two countries have signed more than 38 Memoranda of Understanding and Agreements, which cover a broad range of areas, which include among others, trade and investment, immigration and consular matters, defence, agriculture, the environment, energy, health, as well as arts and culture.
South Africa is one of the top investors in the Zimbabwean economy. The trade balance is positively in South Africa’s favour. In 2015, South African exports to Zimbabwe amounted to approximately R25.6 billion while imports amounted to approximately R4.3 billion, indicating an improvement compared to the preceding year.
At present, a number of South African companies continue to operate in Zimbabwe principally in the mining, manufacturing, tourism, and agriculture, banking and retail sectors. South African companies currently operating in Zimbabwe include Anglo American, Implats (Zimplats), PPC Cement, Old Mutual, ABSA, Stanbic, Tiger Brands, Bell Equipment Ltd and Murray & Roberts, among others.
Joint Communiqué
Agreed in Harare, Republic of Zimbabwe, 3 November 2016
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At the invitation of the President of the Republic of Zimbabwe, His Excellency Robert Gabriel Mugabe, the President of the Republic of South Africa, His Excellency Jacob Gedleyihlekisa Zuma, attended and co-chaired the Inaugural Session of the Bi-National Commission Summit which was held in Harare, Zimbabwe on 03 November 2016.
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The Bi-National Commission Summit (BNC) was immediately preceded by the Ministerial meeting on 02 November and the Senior Officials meeting from 31 October to 01 November 2016, respectively.
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The two Heads of State expressed satisfaction with the strong historical and fraternal relations existing between the two countries and reiterated their commitment to continue to enhance these relations. They also reviewed a wide range of regional and international issues.
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The Commission noted the progress made in strengthening bilateral cooperation in sectors such as trade, investment, finance, health, labour, education, training, women and gender, sport and recreation, mining, tourism, energy, transport, infrastructure development, information communication technology, science and technology, tourism, immigration, defence and security. They also called for enhanced cooperation in agriculture, food security, housing and SMEs/SMMEs development.
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The Commission also expressed satisfaction with the excellent cooperation in defence and security and encouraged the respective agencies to continue to collaborate on issues of mutual concern.
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The two Heads of State noted the growing economic cooperation between the two countries. In this regard, it was agreed to establish a Joint Trade and Investment Committee by the end of the first quarter of 2017.
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The Heads of State emphasised the importance of business to business interaction and the promotion of Public-Private Partnerships (PPPs) and joint ventures.
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The two Heads of State discussed the implementation of the SADC Protocol on Trade and the Bilateral Trade Agreement between Zimbabwe and South Africa, including various Statutory Instruments adopted by Zimbabwe related to import control management.
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The two Heads of State noted that 38 Agreements and Memoranda of Understanding have been signed between the two countries to date. The two Heads of State urged the various departments to implement as a matter of urgency the Agreements and Memoranda already concluded between the two countries. The Heads of State expressed concern over delays in concluding a number of Agreements and Memoranda and directed the relevant Ministries and Departments to conclude negotiations on all outstanding Agreements and Memoranda.
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The Bi-National Commission highlighted the urgent need for the establishment of a One Stop Border Post (OSBP) at Beitbridge-Musina as decided by the Joint Permanent Commission at Victoria Falls in 2009. To that end, the Commission decided to finalise the modalities for its establishment by the time of the next Bi-National Commission in 2017.
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The Commission noted that illegal trade in ivory and other wildlife products remains a concern for both countries. The two countries agreed to further collaborate in finding solutions to the illegal wildlife trade challenges including through joint law enforcement operations.
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The two Heads of State took note of the effects of the El Nino induced drought in their respective countries and the region. They stressed the importance of adopting appropriate mitigation measures. They further expressed their concern at the socio-economic impact of the drought.
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The two Heads of State called for further progress in the implementation of the SADC Industrialisation Strategy and Roadmap. In this context they looked forward to the adoption of the Costed Action Plan for the implementation of the Strategy and Roadmap at the forthcoming SADC Extraordinary Summit to be held in March 2017.
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The two Heads of State also exchanged views on the political and security developments in the region. In this regard, they reaffirmed the need to sustain peace and stability for the economic growth and integration of the region.
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The two Heads of State condemned the upsurge of terrorism and extremism in some regions of the continent and they called for enhanced cooperation by AU Member States and other stakeholders in combating the scourge.
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The two Heads of State expressed concern over the migration crisis affecting certain parts of the African continent and called for the humane treatment of migrants.
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The two Heads of State reaffirmed their support for the SADC candidate for the post of the AU Commission Chairperson, Dr. Pelonomi Venson-Moitoi, the Minister of Foreign Affairs of Botswana. They also noted that Zimbabwe had two candidates for the positions of Commissioner for Political Affairs and Commissioner for Social Affairs.
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With regards to the Saharawi Arab Democratic Republic, the Heads of State reiterated their support for the right to self-determination of the Saharawi people. They emphasized the need for Africa to speak with the same voice on this matter and highlight the plight of the Saharawi people.
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The two Heads of State noted Morocco’s application to join the AU and welcomed the statement by the AU Commission Chairperson highlighting the procedures for membership.
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Regarding the question of Palestine, the two Heads of State reaffirmed their support for a credible and comprehensive peace process, with a view to achieving a just and lasting solution.
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The two Heads of State reiterated their common view on the need to reform the multilateral institutions, particularly the United Nations Security Council. They reaffirmed the Ezulwini Consensus as the common African position.
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The two Heads congratulated Mr. Antonio Guterres, the newly appointed Secretary General of the United Nations.
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The two Heads of State welcomed the establishment of the BRICS bank and observed that His Excellency President Jacob Gedleyihlekisa Zuma will be launching the BRICS Africa Regional Centre in December 2016.
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His Excellency President Robert Gabriel Mugabe extended congratulations to President Zuma on his election as the next SADC Chairman in 2017.
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During the BNC, the two Heads of State witnessed the signing of the Bilateral Air Service Agreement.
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His Excellency President Robert Gabriel Mugabe thanked His Excellency President Jacob Gedleyihlekisa Zuma for attending the inaugural session of the Bi-National Commission and the brotherly and friendly spirit in which the interaction was conducted.
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His Excellency President Jacob Gedleyihlekisa Zuma expressed his appreciation to the Government and the People of the Republic of Zimbabwe for the warm welcome and hospitality which was accorded to him and his delegation.
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His Excellency President Jacob Gedleyihlekisa Zuma extended an invitation to His Excellency President Robert Gabriel Mugabe to the next Session of the Bi-National Commission (BNC) to be held in 2017 in South Africa, at a date to be mutually determined through diplomatic channels.
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Deliberating the future of e-commerce regulation: Implications for South Africa and Africa
South Africa has 18 export councils and 20% of its exports go to African countries. Since there are very few malls in Africa, the potential for e-commerce is considered to be huge. However, there are many pitfalls, least of all the fact that South Africa is the third most popular target in the world for cybercrime.
A one-day workshop to debate the future of e-commerce regulation and its implications for SA and Africa was recently held. The intervention was part of the Global Economic Governance Africa II programme funded by the United Kingdom’s Department for International Development and was attended by Mariana Purnell of Agbiz Grain. The programme aims to assist South Africa and African countries to understand the impact of evolving international regulations on e-commerce, calibrate domestic regulatory responses, and assist them to influence those regulations in international economic governance forums such as the World Trade Organization.
Vital to the success of e-commerce is the enabling environment – regulation, infrastructure and skills/knowledge. Some of the challenges are lack of e-customs, data privacy and tax on goods and services. The first step was to define e-commerce and scoping the evolving international regulatory terrain. Jamie MacLeod, Trade Policy Fellow from the African Trade Policy Centre (ATPC) at the United Nations Economic Commission for Africa gave feedback on the view from Geneva, and implications for Africa.
One exciting concept is a database of trade policies called Digital Trade Estimates which covers 65 countries world-wide. This database, which was developed by the European Centre for International Political Economy (ECIPE), provides a comparative analysis of the ease of e-commerce trade in the various countries.
The information resorts under 13 categories that are grouped under: i) Fiscal restrictions; ii) Establishment restrictions; iii) Restrictions on data and iv) Trading restrictions.
SA is quite average on the DTE scale, but our BRICS partners, especially India and China, are very restrictive in e-commerce.
Quick Facts:
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The UK is the biggest e-commerce country in the world with 18% of all trade taking place over the internet. In SA it is less than 1%.
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Africa is the only continent with a mobile internet penetration rate lower than 20% while fixed broadband penetration is lower than 1%.
The Future of e-Commerce Regulation: The View from Geneva and Implications for South Africa and Africa – Jamie MacLeod, ATPC
E-Commerce at the WTO Now
By July 2016, seven new proposals have been submitted to the WTO on e-Commerce, with suggestions that new rules adopted by December 2017 (next Ministerial). But this may detract from priority ‘remaining DDA issues’.
There are suggestions that e-commerce will be the revolution that developing countries have been waiting for. Especially for MSMEs – therefore, should there be rules at WTO? What kind of rules? How would they help developing countries? What are the challenges facing developing countries with e-commerce?
Could Africa take advantage of e-commerce rules?
E-commerce is hailed as an opportunity for developing countries and MSMEs – it reduces costs traditionally involved in cross-border trade (infrastructure, insurance, storage space, etc). Celebrated African success stories are found only in larger African countries, but still a Digital Divide exists:
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Africa only region with mobile internet penetrate <20%
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Fixed broadband subscriptions <1% (more expensive, and slower than elsewhere)
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Very limited cross-border e-commerce
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Logistics problems
Regional Integration and Intra-African Trade
Regional integration is hugely important to African industrialisation: 60% of EAC exports to other EAC countries consist of manufactured products (50% to other African countries). But only 6% of exports to the EU.
Will continuation of moratorium on e-commerce customs duties undermine regional integration? Is there a scenario whereby customers in Africa are able to access goods and services from outside the continent more quickly, easily and cheaply than from a local supplier?
Conclusions
Challenges?
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Care should be taken that new issues, incl. e-commerce, do not divert progress with DDA priorities
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E-commerce as avenue for strengthening TRIPS+ restrictions and reinforcing dominance of developed countries in e-commerce
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Provide a liberalised ‘back door’ into developing country markets, both for services and goods
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Digital Divide: Africa currently behind RoW
Opportunities?
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Easier for SMEs to access benefits of trade (higher SME concentration in Africa)
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Reduce barriers for trade (higher barriers in Africa)
Infant industry protection, industrial development, macro-economics, employment are reasons why developed and developing countries alike erect barriers for suppliers who may not be competitive on the world market. In the Doha negotiations, Membership has acknowledged the importance of tariffs for developmental reasons (hence why LDCs have not had to undertake tariff reductions).
But these concerns are not replicated with electronically transmitted trade – issue not huge today, but e-trade is expanding and decisions made today will be projected into the era 25 years from now.
The Internet is the trade route of the 21st century: how can we craft this so that developing countries can industrialise and catch up with technologies and development?
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Zambian government refutes accusations of policy inconsistency
Government has refuted accusations that it has been inconsistent with its economic policies saying all adjustments made previously were necessary as they were meant to protect the interests of Zambians.
According to a statement released to the Media by Nicky Shabolyo, the Press Secretary at the High Commission of Zambia in South Africa, Minister of National Development Planning, Mr. Lucky Mulusa said that there has been cases of insincerity on the part of some investors and that Government has had to respond accordingly in order to safe guard the nation.
“All the adjustments to policy should be seen as a way of trying to align things for the benefit of the people. These policy adjustments in the past were in response to the insincere conduct of some members of the business community. There is no way we can just wake up today and introduce a new law which we again change a few weeks down the line. All our actions are informed by how businesses in the country behave,” Mr. Mulusa said.
He gave an example of businesses which either closed shop or simply changed names when their tax holidays and other incentives were coming to an end so that they could avoid paying tax or being subjected to other measures.
“It is these same businesses that go out on a crusade to speak ill about Government and sponsor various individuals to attack us when they see that their evil plans have been curbed. Before we condemn government about what we see as policy inconsistencies, we need to ask what informed Government to take such action.”
Mr. Mulusa was speaking as guest of honour yesterday at the ‘Invest in Zambia Business Forum’ organised by the Zambian High Commission in Pretoria in conjunction with the Zambia-South Africa Business Council (ZSABC).
The well attended event held at Sandton Convention Centre in Johannesburg was sponsored by Liberty.
The Minister said Zambia was realigning it economy and noted that the country was ready for business but “it should be clear to all those interested that we are not, at the same time, open to abuse.”
He bemoaned the collapse of Zambia’s industrial base built over 27 years which he attributed to the privatisation exercise through which he said some unscrupulous investors came and stripped companies of their machinery and left them as warehouses to store imports from South Africa and elsewhere.
“I acknowledged the important role that South Africa plays as Zambia’s largest trade and investment partner, and at the same time, lament that for over 10 years, Zambia has only been able to capture less than 10% of total trade volumes between the two countries. What we have seen over the years is that this has not worked for us as some investors only rip, and do not plough back into the economy. What we are looking for are sustainable partnerships, and not relationships that leave our country worse off,” the Minister said.
He urged the ZSABC to promote Government’s agenda of fostering inclusive business models that ensured integrating local communities in the supply chains and support the growth of local industries in all sectors of the economy.
Mr. Mulusa urged South African investors to quickly get into Zambia before they lost opportunities to other countries such as China which were in a hurry to do business with Zambia.
He also appealed to investors entering Zambia not to engage in activities, such as casualisation and others, which exploited the country and its people.
He said Government has realised that it was more expensive to produce a particular product in Zambia as compared to other countries pointing out that this, and other issues that would help bring about a conducive environment for business, were being addressed.
“Our Government is keen at enhancing private sector led growth and has been working hard to create an enabling environment for business, as evidenced by the enactment of the Business Regulatory Act of 2014 that was meant to create a cost effective and business regulation framework in Zambia. As a result of our business environment reforms, Zambia is now ranked 8th in SADC and 4th in COMESA in terms of the Ease of Doing Business. Furthermore, Zambia is ranked the 8th most competitive country in Africa on the Global Competitiveness Index,” Mr. Mulusa said.
He said despite all the favourable business elements that Zambia had in place, the country had taken long to develop because of the poor policies which it previously pursued while other policies had been mishandled.
Zambia’s High Commissioner to South Africa, His Excellency Mr. Emmanuel Mwamba concurred with the Minister on the issue of privatisation saying the exercise failed to yield the targeted results because most of those who bought off companies were only interested in satisfying their selfish desires.
Mr. Mwamba said the High Commission devised the ZSABC as a platform from which to engage captains of industry so that amicable solutions for the two countries could be found.
He also pointed out that there was trade imbalance between Zambia and South Africa which favoured the latter. “There is no way that South African stores operating in Zambia should continue importing into Zambia, products that are readily available in the country.”
And South Africa has said that Zambia was a strategic market and partner for South Africa, and vice versa, because of the potential for enhanced economic cooperation that existed between the two countries.
Chief Executive Officer for Trade Invest Africa, an initiative of South Africa’s Department of Trade and Industry, Ms. Lerato Mataboge, has noted that total trade between the two countries has been showing positive growth from R19.9 billion in 2011 to R31.9 billion in 2015, making South Africa Zambia’s main trading partner in the SADC and Zambia, South Africa’s fourth largest trading partner in the region.
Ms. Mataboge said South Africa was conscious of the trade imbalance which supported her country and that this needed to be assessed and addressed. “Key to this will be identifying and establishing cooperative mechanisms for assisting Zambian businesses seeking opportunities to supply in the South African market.
Our aim as a government is to increase the levels of South African investments in the Zambian economy and the rest of the Continent through targeted support measures.”
Two such measures are the recent creation of Trade Invest Africa as well as the unveiling of the Guidelines to Good Business Practice for Doing Business in Africa, both of which were launched in July this year.
Trade Invest Africa supports South African businesses looking to invest in the rest of Africa as well as those looking for export opportunities on the continent.
She said Trade Invest Africa will work with partner countries to facilitate sourcing of goods from the rest of the continent into the South African economy as a way of contributing to increasing the levels of intra-Africa trade and intra-African investments.
Ms. Mataboge pointed out that Zambia today was one of the promising emerging markets in the world and “I strongly urge the South African business community to take advantage of the advanced economic and diplomatic relations and seriously consider investing in Zambia. We commend the Zambian government for ensuring that the conditions for foreign investments are continuously being improved upon.”
ZSABC chairperson, Mr. Charles Kalima urged businesses to join the Council so that they could be assisted with establishing themselves on the Zambian market.
Mr. Kalima said there was need to develop an African concept where countries on the continent traded among themselves in order to foster development.
South African Chamber of Commerce and Industry (SACCI) Chief Executive Officer Mr. Alan Mukoki said Africa should realise that agriculture, and not activities such as mining, was the major contributor to economic growth.
And during a panel discussion, Barclays Africa Region Chief Executive Officer, Ms. Mizinga Melu said Barclays Bank has been in Zambia for over 100 years because it had found Zambia to be good for business. Ms. Melu said Zambia had 19 reputable commercial banks operating in the country because they have found the environment conducive.
She said the freedom for investors to externalise profits was a big incentive that Zambia’s potential investors should seriously consider.
Massmart Holdings Chairperson, Mr. Kuseni Dlamini said Game Stores and the recently opened Builders Warehouse, which are subsidiaries, have performed exceptionally well because of the favourable business environment in Zambia.
Zambia Energy Forum Chairperson, Mr. Johnstone Chikwanda told the audience that with the energy deficit in Zambia, the country had a lot of opportunities for producing energy from various sources that the Government had identified.
Others who spoke on various panels were Ms. Zandile Shabalala, ZSABC Vice-chairperson; Mr. Michael Njapau, Head of Business Development for Liberty Life Insurance Zambia Limited; Mr. Brenden Alexander, Head of Business Development Support for STANLIB; Mr. Mduduzi Nene, Africa Divisional Director for Liberty Health; Mr. Kennett Sinclair, Partner from Exeo Capital; Mr. Ewout Van der Molen, FMO Southern African Regional Representative, and Mr. Ashley Petersen, Senior Business Development Manager from South Africa’s Industrial Development Corporation.
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tralac’s Daily News Selection
The selection: Thursday, 3 November 2016
This week’s tralac newsletter is posted: the lead commentary is by Gerhard Erasmus ‘How to forge a better SACU? Not by following the news headlines’
Concluding today, in Midrand: the 1st MOVEAFRICA stakeholders meeting
Underway in Arusha: East African Community - exchanging and trading with the Francophone world
Underway in Malabo: UNDP Africa Senior Managers Annual Meeting on the theme ‘SDGs implementation within the framework of the 2030 Agenda and Agenda 2063’
From the UNDP Africa Cluster Meeting: speech by Helen Clark (UNDP)
UNDP is also working with the Economic Commission for Africa, the International Development Research Centre, and the World Wide Web Foundation on a new initiative to “Strengthen the Evidence base for an African Data Revolution”. An Africa Data Report will be published in early 2017, which assesses data availability, quality, and analytical capacities, and provides a baseline against which to measure progress on achieving the data revolution needed to support sustainable development in Africa. The UNDP will seek to engage with national governments and legislators, municipal leaders and councils, civil society, NGOs, the private sector, and other stakeholders, and will work to create broad awareness of the SDGs, including through the SDG Action Campaign. A recent survey by GlobeScan, a market research firm, found the average level of public awareness of the SDGs across thirteen countries was 28%. I’m pleased to say that public awareness in the two African countries in the survey was above average – at 34% for Kenya and 30% for Nigeria.
African Continental Free Trade Area: developing and strengthening regional value chains in agricultural commodities and processed food products (UNCTAD)
The focus of this report is to: (i) provide a literature review on the many methodologies on value chain analysis and development, particularly in the sector of agri-food products and in the African region, recapping the definitions of the concepts used in the value chain paradigm (Chapter 1), (ii) give an overview of the regional agriculture value chains of specific commodities existing at the regional level, including mapping, presentation of actors and focus on special issues such as trade barriers (Chapter 2), (iii) suggest methods for prioritization of regional agricultural value chains to be further developed, and to test this approach with the analysis of two priority commodities, the potential development of regional value chains in these sectors, with a view on value addition (Chapter 3), (iv) draw conclusions and policy recommendations for fostering and establishing regional value chains in agricultural commodities and processed food products in Africa (Conclusion chapter).
Chinese online marketing giant Alibaba considering partnership with COMESA
The Chinese online marketing giant Alibaba and COMESA are exploring possibilities of a partnership to facilitate trade and investment within COMESA region and globally. The partnership is envisaged to utilize the platforms that Alibaba has developed. COMESA Secretary General Sindiso Ngwenya invited Alibaba, to consider partnering with COMESA in rolling out the COMESA Electronic Market Exchange System. CEMES was developed to facilitate online business exchanges within COMESA and between the regional bloc and the rest of the world system. “We explored the possibilities of integrating an online certificate of origin for trade between China and COMESA countries in the COMESA Electronic Exchange System and it was agreed that this something that should be done,” Mr Ngwenya said.
Zambia: Government signs $2.3bn deal with Chinese firm to construct Chipata-Serenje railway line (Lusaka Times)
Government has signed a $2.3bn contract with China Civil Engineering Construction Corporation for the construction of a 388.8 kilometre railway line from Chipata through Petauke in Eastern Province to Serenje in Central Province. Speaking during the signing ceremony in Lusaka yesterday, Minister of Transport and Communication Brian Mushimba said: “This project is meant to enhance regional and international trade through the Nacala Development Corridor with a direct economic stimulus in Zambia, Malawi and Mozambique.” [Zambia on track to host China’s next African railroad]
Abidjan-Lagos Highway Corridor Project: update (ECOWAS)
In her keynote address at a two-day workshop in Abuja, the ECOWAS Commissioner for Infrastructure, Dr Antoinette Weeks, expressed the hope that the review of the initial findings, refined approach and methodology as well as the revised work plan of the inception report will lead to a harmonized realization of the project. The Commissioner disclosed that the AfDB has now approved a total of $22.72m (to be mobilized from the African Development Fund) and the European Union African Investment Facility for the feasibility and detailed engineering studies for the project.
New rural access index: main determinants and correlation to poverty (World Bank)
Transport connectivity is essential to sustain inclusive growth in developing countries, where many rural populations and businesses are still considered to be unconnected to the domestic, regional, or global market. The Rural Access Index is among the most important global indicators for measuring people’s transport accessibility in rural areas where the majority of the poor live. A new method to calculate the Rural Access Index was recently developed using spatial data and techniques. The characteristics of subnational Rural Access Index estimates were investigated in eight countries: Bangladesh, Ethiopia, Kenya, Mozambique, Nepal, Tanzania, Uganda, and Zambia.
A sea change: the new migration from sub-Saharan Africa (IMF)
Two trends dominate the evolution of sub-Saharan migration. The number of refugees - people fleeing due to war or persecution - has decreased considerably since 1990, both within and outside the region. In 1990 about half of total migrants were refugees, and this share has declined to only about 10 percent by 2013. At the same time, the share of migrants that move outside the region for economic reasons has increased steadily, growing sixfold between 1990 and 2013 - from about 1 million to 6 million. In comparison, economic migrants within the region increased threefold - from 4 million to 12 million (see Chart 1).
There is an ongoing profound demographic transition in the region that will further shape migration from sub-Saharan Africa. The population of the region will not only continue to increase rapidly- from about 900 million in 2013 to 2 billion in 2050 - but also the working-age population, the group that typically feeds migration, is set to increase even more rapidly—from about 480 million in 2013 to 1.3 billion in 2050 (see Chart 2). [The analysts: Jesus Gonzalez-Garcia, Montfort Mlachila]
Nairobi is set to become a 10-million-person “megacity” in a few decades: What does this mean for Kenya’s economy?(Brookings)
AfDB supports Nigeria’s Economic Governance Programme
Executive Directors of the AfDB have approved a $600m loan, being the first tranche of a $1bn budget support loan to help finance Nigeria’s Economic Governance, Diversification and Competitiveness Support Programme. The final tranche of $400m will be approved in 2017. This operation is part of a two-fiscal-year (2016-2017) programmatic counter-cyclical fiscal support in a context where the Federal Government of Nigeria is implementing reforms to achieve efficiency in the business of government, combat corruption and promote diversification and competitiveness of the economy.
Rwanda: IMF staff conclude review visit (IMF)
IMF staff agreed with the government’s assessment that longer term policies should help restore external sustainability. These include accelerating policies to support larger and more diverse exports and promoting domestic production of certain products currently imported, through the recent “Made in Rwanda” campaign. Performance under the program has been strong, with almost all program targets set through end-June 2016 being achieved. Nascent signs suggest that adjustment policies are proving successful at reducing the trade deficit for goods and services, further abetted by the recent completion of several large public investment projects. Although these developments are likely to contain growth at a still-robust 6 percent through 2017, by reducing external imbalances they should help maintain official foreign exchange reserves coverage at adequate levels.
UN envoy calls for concerted efforts to avoid rolling-back of gains in Africa’s Great Lakes (UN)
Concerted efforts would be needed to avert any reversal of the commendable gains achieved in Africa’s Great Lakes region thus far, the Secretary-General’s Special Envoy told the Security Council yesterday. Special Envoy Said Djinnit was briefing the Council on the Peace, Security and Cooperation Framework for the Democratic Republic of the Congo and the Region (Framework Agreement), and on the high-level meeting of the Regional Oversight Mechanism, held in Luanda, Angola, on 26 October.
African govts urged to harmonise energy laws to attract investments (New Times)
Kipyego Cheluget, the Common Market for Eastern and Southern Africa (COMESA) assistant secretary general for programmes, said uniform laws could play a big role in attracting more energy investors to drive Africa’s generation and distribution capacity. Speaking during the opening of the 3rd iPAD Rwanda Energy Infrastructure summit in Kigali, yesterday, Cheluget cited the COMESA region, saying it lacks investments in the energy and infrastructure sectors, generally, despite the increasing demand for power in the bloc. “It is, therefore, imperative that we expedite policies that will attract investments into the energy sector to facilitate trade and development on the continent,” he said. [New report shows how Africa’s electricity providers can be profitable and still make electricity affordable]
AIIB opens first consultation for landmark energy strategy (Devex)
The Asian Infrastructure Investment Bank last week launched the initial stage of public consultations for its first energy strategy — a crucial piece of policy that will play a significant role in the Beijing-based institution’s pursuit of becoming a “green bank”. Part of the strategy launch is the release of an issues note meant to aid the discussion and inform relevant stakeholders planning to submit recommendations to the bank. Renewable energy (RE) investments (extract from the Issues Note, pdf): Renewable energy investments are essential to limit CO2 emissions. It is proposed that AIIB engage clients to develop intermittent RE [wind, solar photovoltaic (PV), run of the river hydropower] to reduce fossil fuel consumption and increase access to modern energy through decentralized generation. Moreover, data collected to date indicate that: (a) out of the 20 countries with the largest wind potential, only 4 are in Asia; (b) out of the 20 countries with the largest solar potential, 8 are in Asia; and (c) about two-thirds of the hydropower potential in Asia is untapped.
Turkey-Africa business forum vows to boost trade ties (AA)
Construction, food, healthcare and energy are some sectors where cooperation can be enhanced between Turkey and African countries, head of Turkey’s Foreign Economic Relations Board (DEIK) said Wednesday. Speaking at the Turkey-Africa Business and Economic Forum in Istanbul, Omer Cihad Vardan highlighted the wide range of opportunities available on both sides. There are 134 business councils from around the world linked to the DEIK, 34 of which operate with African nations to develop businesses there, he said.
India: Inaugural meeting of National Committee on Trade Facilitation (KNN)
Government has stressed the need to continuously move towards higher standards of excellence to make the trade ecosystem growth oriented and the need to do away with the multiplicity of committees looking at trade facilitation at various levels. The Cabinet Secretary and the Chairman of the National Committee on Trade Facilitation , P K Sinha emphasized that since the Trade Facilitation Agreement may become a binding Agreement shortly, India had to be in a state of readiness, especially for the Category ‘A’ commitments. He also directed that the Steering Committee, working under NCTF, will be co-chaired by the Revenue Secretary and the Commerce Secretary.
Senegal’s UNSC Presidency work programme (UN)
Open debates on “water, peace and security” and asymmetrical threats to peacekeeping would be highlighted by the Security Council this month, along with a range of items of ongoing concern, Fodé Seck (Senegal), Council President for November, told correspondents at Headquarters this afternoon. Wider cooperation with regional organizations would also be a prominent theme, Mr. Seck said at the monthly press conference on the Council’s programme of work. A more structured partnership with the African Union, including better ways to finance its peacekeeping operations, would be under consideration at an 18 November debate. Enhancing cooperation with the Organization of Islamic Cooperation would be discussed at a 17 November briefing, particularly in the area of fighting extremism and terrorism, along with ensuring that such ills were not associated with one religion. The 22 November open debate on water and its security implications would address the fact that water scarcity was generating conflicts around the world and States as well as non-State actors were using water as a weapon of war, he said.
Tanzania: MPs hit at govt over economy, Dar port slump (The Citizen)
SADC’s dependence on South Africa’s trade corridors slows (Engineering News)
G20 Data Gaps Initiative updates: Second phase objectives, action plans (pdf), German G20 Presidency in 2017 initiative
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African Continental Free Trade Area: Developing and strengthening regional value chains in agricultural commodities and processed food products
The African Union Assembly decided in 2012 during its 18th Ordinary Session to boost intra-African trade and to fast track the Continental Free Trade Area (CFTA). This CFTA is expected to boost intra-African trade expansion, stimulate sustained economic growth and foster inclusive development.
The CFTA is more than a free trade agreement. It is perceived as a platform that would facilitate a process of inclusive structural transformation of African countries, contributing to meeting Africa’s 2063 Vision. In this process, the CFTA would also help Africa to make progress in implementing the 2030 Agenda and Sustainable Development Goals.
The present study aims to enhance knowledge among policy-makers, experts and private sector on requisite policies and measures for fostering the development and strengthening of regional supply and value chains in agricultural commodities and processed food products. This would contribute to the development of intra-African trade in agricultural and food products including through the setting up and strengthening of regional agro-food supply chains.
Objectives and Methodology of the Report
The report aims at presenting key modalities for fostering or adding value in regional supply chains in agricultural commodities and processed food products, in relation to helping to establish the CFTA and boosting intra-African trade. The target audience is African policy-makers, experts of the African Union Commission, the regional economic communities and AU member States.
It is intended to propose guidelines on establishing regional value chains in agricultural commodities and processed food products.
The focus of this report is as follows:
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To provide a literature review on the many methodologies on value chain analysis and development, particularly in the sector of agri-food products and in the African region, recapping the definitions of the concepts used in the value chain paradigm (Chapter 1)
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To give an overview of the regional agriculture value chains of specific commodities existing at the regional level, including mapping, presentation of actors and focus on special issues such as trade barriers (Chapter 2)
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To suggest methods for prioritization of regional agricultural value chains to be further developed, and to test this approach with the analysis of two priority commodities, the potential development of regional value chains in these sectors, with a view on value addition (Chapter 3)
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To draw conclusions and policy recommendations for fostering and establishing regional value chains in agricultural commodities and processed food products in Africa (Conclusion chapter).
The report is based on analysis of existing documentation (including books, reports, best practices, etc.) and consultation of trade databases.
The study was made out of secondary data review. No “fresh” data – e.g. through interviews of stakeholders – was collected for this assignment. Furthermore, the fixed length of the report (forty pages plus annexes) contained the scope.
The study cannot be considered as an exhaustive value chain analysis of determined agricultural sectors in Africa. It is aimed at examining the concept of regional value chains, applied to agricultural commodities in Africa, for policy-makers willing to quickly grasp the issues at stake and to understand the main features of value chain prioritization.
Recommendations for fostering and establishing regional value chains in agricultural commodities and processed food for Africa
This study was intended to provide an overview of existing value chains in agricultural commodities in Africa and to select promising ones, with a particular focus on the incremental creation of value linked to the upcoming implementation of the CFTA. As nine commodities (selected by the AU in 2006 in Abuja) plus two (prioritized through a new methodology) have been scrutinized, it is logical that the conclusion of the study provides a digest of potential policy recommendations and guidelines in order to move forward with the “scaling up” and “moving up” exercises in value chains.
This compendium of general recommendations is targeted at policy-makers willing to address the challenges to agricultural development in Africa and is mostly focused on the regional and continental levels.
1. Interventions at the “macro” level
A VA optimization strategy in agricultural commodities and agri-food products would require interventions on a large bunch of categories and sub-categories of the VCs.
A first group of recommendations would concern productive capacities: while productivity and yield-enhancing techniques should be promoted, the protection of environment should not be ignored. The issues of degraded land, land property issues, water management and quality of fertilizers should be at the core of discussion on boosting productivity. A steady supply of inputs, in qualitative and quantitative terms, should be secured.
However this would be possible only if sector actors are strong, aware and capacitated. Therefore – and particularly in the context of enhanced integration with the establishment of the CFTA – the creation and strengthening of specialized structures should be developed. It is crucial to create multi stakeholders structures in sectors where none exist (like some roots and tubers), to strengthen farmers’ organisations and trade associations, but also to involve actors at the policy-making level. This can be done by fostering or setting up the national agriculture committees in national and regional Parliaments, and by organizing “value chains sessions” at important continental events a such as meetings of the AU or UNECA. As policy-makers are responsible for the implementation of cross-sector or sector-specific programmes, such as the AIDA, the programmes for infrastructure development or the Maputo commitments, it is crucial that they are aware of issues and evolutions, and that they are connected to professional groups. The lobbies in agriculture are often under-capacitated and in need of skills development; capacity-building activities exist but should be fostered, maybe at RECs level first, and extended then at the continental level. Exchange of best practices could be sought with other continents – Asia, and Latin America.
Capacitating professional associations will allow them to better understand policy-making decision processes, impact of the CFTA and will enhance their role in agricultural policy negotiations. Capacitating policy-makers will facilitate the comprehension of sector-specific problems and the resolution of blockages and protests at the national and regional levels.
2. Interventions impacting competitiveness
Competitiveness is the largest group of recommendations when the scope is on value chains. For instance, when asked about the most effective ways in helping developing countries to better participate in GVCs, business leaders talk about infrastructure development, which is an important sub-category of the competitiveness aspect of value chains. Trade facilitation, barriers to investment and access to information are other decisive issues in the competitiveness pool.
The costs of production could be monitored by the concerned institutions strengthened at the national, regional and continental level. By securing a steady access to inputs and encouraging the development of local inputs (by establishing a fertilizer factory, for instance), governments or professional groups will help mastering the costs. To control the costs, free movements of goods and workers is crucial. This is where the involvement at the political level is key, and governments and RECs need now to operationalize the existing policies or protocols on free movement of people and labour migration.
Skilled labour migration is relevant if skills are largely recognized. Thus agreements on mutual recognition of qualifications and competences, oriented towards agriculture, are needed.
3. Access to facilities and information
Infrastructures are one of the major blocking points in developing trade, whether regionally, continentally or internationally. Many actions plans and implementation strategies for Africa have been prepared and agreed on the issue. A Programme for Infrastructure Development in Africa (PIDA) exists. Its implementation should be prioritized and operationalized. Road infrastructure, energy and water supply are common constraints to producers and processors; tackling these issues at national, regional and continental level will incrementally help the addition of value in agricultural VCs.
Information is power. Almost all the actors of the agricultural VC in Africa lack adequate access to information – either farmers, with prices or weather information; the processors, with export information; the professional associations; or the policy-makers. It should be a priority to develop or strengthen and generalize information systems. Some Market Information Systems exist but should be given attention and adequate resources (funding, staff, etc.). Alternative systems (by mobile phone, radio, etc.) should be expanded. Considering these issues at the regional or continental levels could allow economies of scale and enhanced coherence.
Macro-information on value chains is also key. Often countries and RECs depend on donors to obtain information about the value chains to be prioritized, the good practices implemented and the ones to be avoided. An endogenous capacity on VC should be created and disseminated. Channels already exist, with networks and associations. They should be identified and fortified.
Access to information is also about access to research findings. Currently, funding on research is scarce and should be increased to 2% of agricultural GDP. Regional centres of excellence of agricultural research could be strengthened when existing, and created where there is none.
4. Investment and funding
Accessing to funding and investment is currently challenging, especially for smallholders. Investment should be boosted, but safeguards should be given to investors. Current initiatives on risk information and management are promising, but more needs to be done, for instance by encouraging investments through established frameworks for the strengthening of regional and continental complementarities.
Tax and investment incentives should be created, but foreign and national investors should be assured that no non-technical barriers, such as corruption, will interfere with their investment. Tax incentives and progress towards the transparency of the regulatory environment could be promoted. In fostering largescale investments, the promotion of public-private partnerships schemes is pertinent.
Access to credit is often denied to agricultural producers – especially smallholders. Policy-makers and professional associations should lobby for a better access to credit, to buy inputs or to modernize their production systems. RECs and governments could be instrumental in establishing finance institutions, including cross-border ones, to fund micro-credit for producers and exporters.
5. Market access
The main immediate gain of the CFTA implementation will be the abolition of tariffs, allowing for the effective creation of a continental market. However, special attention should be given to non-tariff barriers and quantitative restrictions in food products. The creation of an Africa marketplace is feasible, given that trading interests of countries are not necessarily confined to the borders of their RECs (this was evidenced by some results of the brief value chain analysis in this report) and that tariffs will soon be part of history.
However, the eradication of tariff is a fear for many economic actors on the continent. For some of them, it is true that the establishment of the CFTA will have short-term adverse impacts. This is the reason why adjustment mechanisms should be put in place, to address the adjustment costs such as revenue shortfalls and industry decline.
But market access is not only about tariffs. It is also about trade facilitation and customs procedures, that will not be automatically abolished by the establishment of the CFTA. Important efforts should be put at the continental level to harmonize procedures and to reduce delays, by standardizing the nature of the required documents, for instance, or promoting the use of ICT in this area with online hubs about trade procedures, transportation and custom documentation. The fight against illegal practices, such as road blockages or illegal fees at customs offices, could be strengthened.
Standards and certifications are part of market access issues. Regional standards, when existing, should be disseminated, explained and understood by chain stakeholders. New ones should be developed, to promote inclusiveness in productive processes and sustainability in consumption.
6. Business environment
The improvement of the business climate environment is also quoted by business leaders as one of the priorities to develop inclusive VCs. This can be done by several actions. First, securing contractual arrangements and business models, will automatically foster investment and improve levels of trust between different economic actors. But the dialogue between stakeholders, through forums, fairs, events or other mechanisms (Chambers of Commerce, Chambers of Agriculture) should be dramatically expanded.
Awareness actions among populations, on the importance of agriculture for local development and the respective roles of the VC actors, could globally contribute to a better business environment.
It is also through joint marketing that the business climate will improve, if it results in an increase of sales. And the regional and continental levels are particularly relevant for that. Sector marketing strategies could be developed first at the regional, than at the continental level. Electronic vectors of communication (Internet campaigns) and traditional means (TV or poster announcements) could serve.
7. The role of international organizations
International organizations, particularly continental ones or trade-oriented ones like UNCTAD, can play an important role in supporting the African continent for the development of viable and sustainable agricultural VCs. Many organizations, including UNCTAD, have been a long-standing development partner of African countries, RECs and the African Union.
The study opened with criticism towards the capacity of development partners, and particularly UN agencies, to design and promote a single concept of value chain. This is a concrete action that international organizations could take: organizing rapidly a task force or a committee in order to harmonize views and methodologies on the VC concept. This does not mean abolishing differences and expertise of each organization. Every organization has its scope, its experience and its competence. But the growing interesting for VC calls for an inter-organization standing mechanism to share knowledge, concepts and experience on the concept. It could also aimed at disseminating VC knowledge, and ensuring that VC knowledge created within the UN system is turned into concrete and efficient policy interventions. If adequately designed and equipped, it will eventually avoid overlaps and join the voices calling for an enhanced efficiency of the UN development system.
International organizations could also be instrumental in fostering and mandating research on relevant topics. As the emergence of regional chains is a relatively new trend, a better understanding of their mechanisms and benefits would require more statistical research and field investigations. This would eventually feed policy interventions and RVC development.
This list of possible policy interventions is not exhaustive, and should be customized and adapted to each commodity, each segment, or each level of focus (national, regional or continental). It however provides a basis, some food for thought. As the Economic Commission for Africa recently highlighted, developing regionally integrated VCs and markets is both feasible and important, and this study is an attempt to contribute to the process.
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New report shows how Africa’s electricity providers can be profitable and still make electricity affordable
Is it possible to make electricity more affordable for millions of people in Sub-Saharan Africa who need it most, and have the region’s cash-strapped power providers be profitable at the same time?
A new World Bank study, entitled “Making Power Affordable for Africa and Viable for Its Utilities,” analyzed data from 39 countries in Sub-Saharan Africa to understand what it would take to make power utilities financially viable and what factors influence the affordability of electricity for those who need it most in the region.
Currently, only one in three Africans has access to electricity and for those who do, power outages can be common as cash-strapped utilities struggle to maintain steady, reliable supply because of lack of investment in their aging infrastructure.
If nothing is done to change this, there will be more Africans without power by 2030 than there are now. But that does not have to be the case.
“We won’t be able to accelerate progress towards universal access without improving the performance of utilities in Sub-Saharan Africa. Making electricity connection and consumption more affordable while minimizing utilities’ financial losses is therefore a priority,” said Makhtar Diop, the World Bank’s Vice President for Africa.
The study looked at utility financial statements in 39 African countries, spending data in 22 household surveys, and power tariffs in another 39 countries. The study found that a series of steps can help power utilities recover the cost of supplying electricity and make it affordable for the poor at the same time. It suggests several ways of recovering the cost of supply and making electricity affordable, which include:
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Improving operational efficiency. If utilities could reduce combined transmission, distribution, and bill collection losses to 10 percent of transmitted electricity, deficits could disappear in one-third of the countries.
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Increasing tariffs in most cases. In the remaining two-thirds of the countries studied, the funding gap cannot be bridged solely by eliminating operational inefficiencies, and tariff increases are likely needed. Small and frequent tariff increases may find wider acceptance, as long as electricity access is reliable.
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Installing individual metering. Balking at the high, upfront cost of connection, poor households tend to share one electricity meter. That often makes them ineligible for subsidized rates. Individual meters in poor households can help utilities target subsidies better.
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Installing prepaid meters that would benefit both utilities and customers. For low-income households, the ability to pay in small increments helps align electricity payments with income flows, while utilities are guaranteed payments upfront.
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Sharing connection costs. The first priority in increasing access to electricity is to make the initial connection affordable to the poor. One option is to share the costs across all electricity users, including large- and medium-size firms.
Access to reliable, safe, and affordable electricity can improve lives in Sub-Saharan Africa – people can work longer and be more productive, children can study at night, women and young girls can walk home at night under the safety of working streetlights, and hospitals can provide reliable healthcare to those who need it.
While connecting to the grid is a solution for all urban Africans and many rural ones, the study also acknowledges that rural electrification is essential. Mini and off-grid electricity, especially from sources like solar, offers increasing potential to electrify homes in many rural areas of Sub-Saharan Africa.
The study makes extensive data available, and enables countries to compare themselves against their peers on basic performance indicators. It is available online.
This study was supported by the Africa Renewable Energy and Access Program (AFREA), with funding from the World Bank’s Energy Sector Management Assistance Program (ESMAP).
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UNDP Africa Cluster Meeting: SDGs implementation within the framework of the 2030 Agenda and Agenda 2063
Speech by Helen Clark at the Opening Session of the UNDP Africa Cluster Meeting, 2 November 2016
Welcome to the 2016 cluster meeting of UNDP’s Regional Bureau for Africa. Our thanks go to His Excellency President Teodoro Obiang Nguema Mbasogo for joining us today, and to the Government of Equatorial Guinea for its hospitality. Our thanks also go to the President and his Government for their support for agencies in the UN Country Team to deliver in line with the UN Development Assistance Framework, and in providing the UN House in which all UN agencies in Malabo are located.
Equatorial Guinea has drawn up an ambitious roadmap for economic diversification and improved human development for all by 2020. UNDP is pleased to be a partner in this country’s development journey, and in those of all other countries in Africa. Africa’s ambition for transformation is high, and all partners have a role to play in supporting it to succeed, building upon and learning from the many development successes witnessed in the region.
Since UNDP’s last African regional meeting in Madagascar in July 2015, many countries have begun the process of implementing the 2030 Agenda for Sustainable Development and the Sustainable Development Goals (SDGs). Supporting this agenda, national development agendas, and the African Union’s visionary Agenda 2063 is at the heart of UNDP’s work.
Yet these are challenging times for development. Among the factors which African nations must contend with are:
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the sluggish global economy. Those countries heavily dependent on extractive industries have been hit hard by low prices and low demand. Economic diversification and transformation are vital for building resilience to such shocks and to sustaining development momentum. Those African economies which are more diversified, and have stable macroeconomic and fiscal policies and better enabling environments for business, are faring better.
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the scale of natural disasters. The severe droughts in parts of Africa in recent times, exacerbated by the impact of El Nino, are the face of the foreseeable future as climate change intensifies. Much greater resilience to these shocks must be built too – they impose heavy human, economic, and environmental costs. Even if the ambition of the Paris Agreement is realised, we can expect worsening weather for decades to come. We must do everything we can to support countries to adapt to this, especially the poorest and most vulnerable.
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ongoing conflicts. On this continent as elsewhere, a number of countries are reeling from protracted conflicts. These set human development back many years. They also create fertile breeding grounds for illicit trade and organised crime. Radicalization and violent extremism are drivers of conflict in some settings from the Sahel and Lake Chad Basin to the Horn of Africa. As development actors, we must support countries to address the root causes of these conflicts and phenomena, including marginalisation, lack of livelihoods, and other grievances.
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pervasive inequalities and discrimination. Disadvantage comes in many forms, affecting the poor in general, women, and marginalized groups. Lack of access to opportunity and to basic services holds back human development, and those suffering these deprivations are the least able to influence the political process. The 2030 Agenda compels us to support development which is inclusive of all.
So what will it take to achieve the 2030 Agenda and Agenda 2063 in these circumstances?
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First, strong national ownership and leadership is needed – and it is being given. In Africa, as around the world, many governments are giving priority to mainstreaming the 2030 Agenda into national plans and policies. Some of the most inspiring actions on SDG implementation are coming from countries which do face many challenges, but see the 2030 Agenda and Agenda 2063 as opportunities to drive forward on transformation.
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Second, the pledge to ‘leave no one behind’ is the cornerstone of the 2030 Agenda and the SDGs. It calls on countries to reduce inequalities by tackling income disparities and discrimination in laws and social norms. In unleashing human potential, special attention must be paid to:
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Women: UNDP’s 2016 African Human Development Report estimates that gender inequality in Africa’s labour market costs the continent as much as $95 billion per year. Investing in women and girls is both the right thing to do and the smart thing to do.
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Youth. With more than sixty per cent of its population under the age of 25, Africa has the opportunity for an enormous demographic dividend – if the right investments are made. Youth empowerment and employment must be a priority for all countries.
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Urban populations. Many of Africa’s poorest and most marginalized people now live in cities, and by 2030 more than half the continent’s population will be urbanised. The New Urban Agenda adopted at Habitat III in Ecuador last month aims to ensure that cities can be inclusive, safe, resilient, and sustainable. But there is much to do to achieve that.
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Rural communities – particularly those living with little infrastructure and few services, and/or in remote borderlands. We can learn a lot from our engagement with cross-border initiatives like that backed by the Governments of Ethiopia and Kenya, and from our global experiences with devolution of governance and off-grid energy solutions.
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Refugees, internally displaced people, and migrants. Africa is the origin of, the transit land to, and the host of many millions of people on the move. Many of these need shelter, health care, protection, and livelihoods. Their children need education. As development actors, we must work with governments and with humanitarian partners on sustainable responses.
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Third, sustainable development requires whole of government and cross-sectoral approaches. Often the key obstacle to achieving an important goal will be outside the immediate sector targeted for attention. This became clear when obstacles to achieving the MDGs were analysed – results in one targeted area depended on progress in others. With the SDGs it will be critical to identify and act on key accelerators of progress from the outset – such as the empowerment of women and girls, sustainable energy for all, and inclusive growth which contributes to poverty eradication and reducing inequalities and marginalization. The 2030 Agenda must be approached holistically. The aim must surely be to achieve inclusive and sustainable growth which doesn’t worsen inequalities or harm the environment.
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Fourth, broad coalitions around the SDGs are needed. Achieving the SDGs is a multi-trillion dollar challenge. It requires domestic resource mobilisation, public and private investment, technology transfer, knowledge exchange, innovation, and capacity development around the world. Aid flows and concessional finance will remain critical for least developed, low income, and vulnerable countries. Let me also acknowledge the high priority Africa is giving to regional integration – ease of doing business and mobility of people and goods across borders will drive investment, trade flows, and work creation.
Parliaments and civil society have important roles to play in monitoring progress made on the 2030 Agenda and in ensuring accountability for commitments made. To be effective, they will need access to data, and the capacity to analyse it, and they must have voice.
As well, special efforts and sustained investments will be needed to make progress on the SDGs in fragile states. The 2030 Agenda acknowledges that sustainable development and peace are interlinked. The root causes of violence and fragility must be addressed, and not just the symptoms.
What is UNDP’s role in implementing the 2030 Agenda and SDGs?
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The expectations of UNDP on implementation of the 2030 Agenda are high. At UNDP’s 50th Anniversary Ministerial Meeting in February, the Minister present from Sierra Leone called UNDP the “SDG Accelerator”, and a number of other ministers said how much they valued UNDP’s role in facilitating countries’ access to knowledge, expertise, and resources to implement the SDGs.
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It is a top priority for UNDP to support SDG implementation from within well co-ordinated UN Country Teams dedicated to delivering integrated solutions for the 2030 Agenda.
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Guided by the UN Development Group’s common approach to SDG mainstreaming, acceleration, and policy support – known as MAPS – we are supporting countries to domesticate the 2030 Agenda; identify and address bottlenecks to progress; and access a wide range of policy expertise.
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In addition, over the past year UNDP has led or co-led a number of UNDG efforts in support of implementation, follow up, and review of the 2030 Agenda, including through:
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the production of a reference guide for UNCTs on mainstreaming the agenda;
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preparing guidelines for national reporting on SDG progress;
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supporting programme countries undertaking voluntary national reviews presented at the High Level Political Forum, including Madagascar, Sierra Leone, Togo, Uganda, Ethiopia, and Kenya which are covered by UNDP’s Regional Bureau for Africa
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establishing and hosting the UN SDG Action Campaign in Bonn with the support of the Government of Germany. This successor campaign to the Millennium Campaign encourages citizen engagement with the 2030 Agenda, including through innovative communications, campaigning and policy advocacy, and strengthening accountability mechanisms for monitoring SDG progress;
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setting up a pooled fund to support UNCTs working together on SDG implementation; and
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making tools which can accelerate SDG progress readily available on an online platform – this is due to be established by January next year.
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Some early lessons and experiences with the SDGs were collected in a UNDG publication, “The SDGs are Coming to Life”, which was launched on the margins of the HLPF in July. The report included four case studies from Africa – from Cabo Verde, Mauritania, Sierra Leone, and Uganda, and its insights are informing our on-going and future support for SDG implementation.
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UNDP is also deploying its full policy and programming capacity from HQs, regional hubs, and Country Offices, in support of SDG implementation. Cross-disciplinary MAPS support missions are being sent to support UNDP COs and UNCTs, based on country demand, and it is our desire to engage other parts of the development system in these. UNDESA has already joined one mission.
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UNDP will support countries to monitor, report on, and apply lessons learned from SDG implementation, as it did for the Millennium Development Goals. UNDP will help to strengthen statistical capacities and data disaggregation to monitor SDG progress, and support countries with multidimensional poverty assessments with the aim of ensuring that no-one is left behind.
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UNDP is also working with the Economic Commission for Africa, the International Development Research Centre, and the World Wide Web Foundation on a new initiative to “Strengthen the Evidence base for an African Data Revolution”. An Africa Data Report will be published in early 2017, which assesses data availability, quality, and analytical capacities, and provides a baseline against which to measure progress on achieving the data revolution needed to support sustainable development in Africa.
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Forging partnerships to back the SDGs: UNDP will seek to engage with national governments and legislators, municipal leaders and councils, civil society, NGOs, the private sector, and other stakeholders, and will work to create broad awareness of the SDGs, including through the SDG Action Campaign.
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A recent survey by GlobeScan, a market research firm, found the average level of public awareness of the SDGs across thirteen countries was 28 per cent. I’m pleased to say that public awareness in the two African countries in the survey was above average – at 34 per cent for Kenya and thirty per cent for Nigeria.
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Promoting South-South and Triangular Co-operation. This is a very high priority for UNDP. Fast growing South-South Co-operation, including through grants, knowledge exchange, technology transfer, and trade and investment flows has significant potential for driving SDG progress.
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UNDP will continue to support countries to mobilise financing for development, and to increase domestic resource mobilisation. We are already working with Liberia, Nigeria, Botswana, and Zambia through our Tax Inspectors Without Borders Initiative with the OECD to increase tax revenues by building greater tax audit capacity. We are able to deploy world class expertise from within Africa and elsewhere for this task.
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UNDP will also support countries to find synergies across the global agendas. The Paris Agreement on climate change goes hand in hand with the SDGs. UNDP is well placed to support countries to take ambitious climate action and to green their economies. We are supporting countries as they prepare to implement their Nationally Determined Contributions (NDCs), and to mobilise finance for adaptation and mitigation, including from the new Green Climate Fund (GCF). We will work hard to support African countries to access vital funding through this mechanism.
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Risk management is being integrated into all UNDP country support and programming. Building the resilience of people, communities, and countries to be able to withstand shocks is essential for sustaining momentum on the SDGs. We are contributing to disaster preparedness, risk reduction and prevention, and to ongoing support for human development during times of protracted crisis and recovery from crisis.
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UNDP has also developed and is rolling out a dedicated support package to help countries affected by crisis and fragility to incorporate the 2030 Agenda in their national and local development plans, in order to promote resilience building and accelerate progress on SDGs implementation in fragile contexts.
Conclusion
By the end of the 2030 Agenda period, African development can be transformed. Each country is unique and the challenges to emergence are considerable, but the direction is clear and the potential for progress is vast.
UNDP aims to be the very best it can be in supporting countries to achieve their national goals and the global goals. We must be proactive, responsive, and entrepreneurial in meeting the demands made of us, and in raising the funding and adapting our business models to ensure that we can do so. Across our Country Offices, we must be fit for purpose in a dynamic and continually challenging development environment.
Across UNDP, enormous efforts are being made to these ends as the organisation adapts to the reality that core funding has not been a major part of its overall funding flows for many years and is unlikely to be in the future. Now the organisation must make its luck, building on our strong reputation of development thought leadership and innovation, solid delivery, accountability, and transparency. In this Bureau and beyond, there are many examples of mobilising new sources of financing and of ways of working. At this cluster meeting, we can share those experiences so that all Country Offices and all units of the organisation can be inspired to do more and better.
Under the strong leadership of our Regional Director, Mar Dieye, and with the commitment of all our staff across Country Offices, the Regional Hub, and in New York, I am confident that UNDP will continue to be a partner of choice in Africa. I thank you all for your tireless efforts, and I thank all our staff throughout the region for their commitment to African development.
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Climate change and clean energy in the 2030 Agenda: What role for the trade system?
The United Nations 2030 Agenda for Sustainable Development (the 2030 Agenda) including 17 Sustainable Development Goals (SDGs) and supporting targets and the Addis Ababa Action Agenda, will form the substantive core of the new global development agenda. International trade is a direct or cross-cutting means of implementation for achieving many of the specific SDGs and related targets.
The objective of this think piece is to help policymakers understand the key contributions that trade policy could make to the 2030 Agenda objectives around addressing climate change and improving access to clean energy for all, particularly as set out in SDGs 7 and 13. It covers six key policy challenges, namely reforming fossil fuel subsidies; creating room for subsidies to support scale-up of clean energy technologies; facilitating access, dissemination, and transfer of climate-friendly technologies; dealing with the political economy of local content requirements (LCRs); pricing carbon nationally while tackling international competitiveness and carbon leakage concerns, particularly through border carbon adjustments; and designing “carrots” and “sticks” for more ambitious action under climate clubs. The think piece recommends prioritising policy actions in the short term mainly in three areas: fossil fuel subsidies; clean energy subsidies; and access, dissemination, and transfer of climate-friendly technologies.
Fossil fuel subsidies are huge and environmentally and socially harmful. SDG Target 12.c calls for fossil fuel subsidy reform. The World Trade Organization (WTO) Agreement on Subsidies and Countervailing Measures (SCM Agreement) has thus far failed to discipline fossil fuel subsidies owing to their political sensitivity, inadequate disclosure of these subsidies by members, coupled with challenges in demonstrating whether these subsidies are “actionable” (i.e. whether they confer “specific” benefits to an enterprise, industry, or region and have adverse effects on the interests of other WTO members). The key policy suggestions of the think piece towards addressing these concerns include: more comprehensive and transparent disclosure of fossil fuel subsidies under the SCM Agreement; clarifying their “actionable” status; and gradual phase-out and ultimate prohibition of these subsidies.
Virtually all countries that are promoting clean energy or producing clean energy products provide some kind of subsidies to this sector. SDG 7 calls, inter alia, for substantially increasing the share of renewable energy in the global energy mix, which is likely to require ongoing support from governments. However, clean energy subsidies have repeatedly been challenged under the WTO dispute settlement system. This think piece suggests removing some of the legal uncertainty around these subsidies by clarifying key concepts in the SCM Agreement in the context of clean energy subsidies as well as clarifying the applicability of the General Agreement on Tariffs and Trade (GATT) Article XX General Exceptions provisions to the SCM Agreement; agreeing on a time-limited and conditional “peace clause” preventing WTO disputes being taken against certain carefully selected categories of climate-related subsidies; and re-introduction of the category of “non-actionable subsidies” under Article 8 of the SCM Agreement to provide leeway to certain types of clean energy subsidies.
SDG Goal 17 includes three targets relating to technology and SDG Target 7.a calls for enhanced international cooperation to facilitate access to clean energy research and technology. Removing distortions in global markets for clean energy technologies could help improve access and their dissemination. In addition to tariff liberalisation in clean energy technologies, as is attempted under the plurilateral Environmental Goods Agreement (EGA), the role of intellectual property rights (IPRs) assumes significance for technology transfer. Under the EGA, the think piece recommends inclusion of adaptation-related goods; creating scope for updating the list of environmental goods; eventual multilateralisation of this plurilateral initiative; and a joint effort by the WTO and World Customs Organization to revise the Harmonized System (HS) classifications to better reflect climate-friendly goods. On IPRs, the think piece suggests establishment of an appropriate mechanism that could address, on a case-by-case basis, any intellectual property-related barriers confronting United Nations Framework Convention on Climate Change (UNFCCC) parties that are also WTO members. WTO members could also adopt a Declaration for climate-related mitigation and adaptation technologies re-affirming the flexibilities already available under the Trade-related Aspects of Intellectual Property Rights (TRIPS) Agreement. Finally, South-South cooperation is also suggested as an avenue worth exploring further, in particular for adaptation technologies.
Given the rampant use of LCRs by developing and developed countries alike in the clean energy space and the proliferation of WTO disputes on the issue over the recent past, addressing LCRs pertaining to clean energy is certainly worth exploring. However, LCRs are less of a priority for policy action, in view of the political economy issues around them. Similarly, policy options regarding border carbon adjustments are attached relatively less priority in the short term given the complexities around them such as political sensitivity, development implications, as well as WTO legality. As for climate clubs, sweeping policy actions to create policy space under WTO law to enable such clubs to apply discriminatory “carrots” and/or “sticks” do not seem to be realistic in the short term; governments could instead explore establishing clubs under regional trade agreements and prioritise the use of carrots rather than sticks!
This think piece is one of a series of papers developed by ICTSD that explore the contribution that trade and trade policy could make to key objectives of the 2030 Agenda for Sustainable Development adopted by members of the United Nations in September 2015. The series is designed to help policymakers, in particular, to think through the role of trade policy in the implementation of this ambitious global agenda.
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Southern Africa reaps EU trade benefits
Five southern African countries – Botswana, Lesotho, Namibia, South Africa and Swaziland – have opened a new chapter in their bilateral relations with the European Union (EU) following the coming into effect of the Economic Partnership Agreement (EPA) on October 10.
Meanwhile, an analysis by The Southern Times indicates that the region has been enjoying robust trade with the EU. The SADC EPA Group recorded a positive trade balance in 2015, according to the EU Embassy in Windhoek.
Botswana, aided by petroleum, mining products and ores, recorded the highest positive trade balance totalling R18.5 billion after it exported goods worth R22.6 billion while importing products worth only R4.1 billion.
Namibia, in second place, posted a positive trade balance totalling R9.5 billion, after exporting to the EU goods worth R15.5 billion and importing products worth R6 billion.
Mozambique exported goods worth R21.5 billion to the EU compared to imports worth R14.7 billion, resulting in a positive trade balance of R6.8 billion. Lesotho exported goods worth R3.8 billion and imported R180 million worth of goods. Its trade balance with the EU stood at R3.6 billion.
Swaziland, whose exports were mostly made up of food products, sold to the EU markets products goods worth R2 billion while importing goods worth only R526.5 million.
These figures are expected to increase now that the development-oriented agreement has taken effect.
Mozambique is in the process of ratifying the agreement and will join the EPA as soon as the ratification procedure is completed.
South Africa will also benefit from enhanced market access, going beyond its existing bilateral arrangement with the EU. South Africa recorded a trade deficit of R84.8 billion last year.
The EU is the largest trading partner of the SADC EPA Group. In 2015, the EU imported goods worth almost R480 billion from the region, mostly minerals and metals. The EU exported goods of nearly the same value, consisting mostly of engineering, automotive and chemical products. Total trade between the EU and the SADC EPA Group (including Angola) amounts to R945 billion.
EU Head of Cooperation in Namibia, Markus Theobald, said at the moment these statistics do not represent the true picture of SADC-EU trade because of South Africa. This is due to the fact that before the EPA, most of the products coming from Europe and destined for Namibia and most countries in the region go via South Africa.
Although these products are in transit from the EU to Namibia, for instance, Theobald said they are now considered as imports from South Africa. Many countries in the region opted for this arrangement because since 2005, South Africa has been enjoying a free trade agreement with the EU.
Under that agreement, all products that landed in South Africa attracted reduced tariffs compared to those coming straight from the EU to Namibia, Botswana, Lesotho, Mozambique or Swaziland.
“This will definitely change. Under the EPA that is now changing. Whether the products land in South Africa or in Walvis Bay, it’s on the same terms,” said Theobald.
At the moment, the EU parliament has provisionally accepted the Economic Partnership Agreement, although all the 28 member countries are yet to ratify the trade agreement. The SADC EPA countries, on the other hand, are yet to gazette their tariff books as per the EPA.
Anna Hybaskova, the EU Ambassador to Namibia said: “It’s important that this is gazetted because people at the customs unions don’t know what tariffs to use.”
Hybaskova said she expected the five countries to gazette the EU-SADC EPA documents after ratification, and pave the way for its smooth implementation.
Namibia ratified the EPA in August 2016, way before the October 1 deadline that was set by the European Union. But the EU says it has not been presented with evidence that this has been gazetted.
“What I should say is that the EU delegation in Namibia has not received any official information if this document has been gazetted in Namibia,” she said.
Namibia was using the Market Access Regulation (MAR) regime, which is no longer valid, and is now using the new SADC-EPA regime that appears on importing papers that go with cargo to the EU market.
Meanwhile, Hybaskova said the United Kingdom leaving the EU had not yet affected the operations of the EU-SADC EPA. “God knows. Of course, legally nothing has yet to happen. Not even a single round of negotiations has been carried out in the wake of the news. So we wait,” she said.
» Entry into force of the SADC-EU Economic Partnership Agreement (EPA)
» SADC-EU Economic Partnership Agreement texts and resources
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tralac’s Daily News Selection
The selection: Wednesday, 2 November 2016
Updated macro poverty outlook for selected sub-Saharan African countries (pdf, World Bank): Botswana, Lesotho, Namibia, South Africa, Swaziland, Zambia, Zimbabwe
An outline of the scope of African Development Report 2017: Feeding Africa through Agricultural Transformation (AfDB)
The African Development Report is the AfDB’s flagship publication, which focuses each year on a central theme that addresses development challenges in Africa. The theme of the 2017 edition of the Report is ‘Feeding Africa through Agricultural Transformation’, which is an area of central strategic importance to the Bank. The objective of the ADR 2017 is to promote agriculture transformation and the development of agro-allied industrialization in Africa. Expressions of interest are requested for a consultant for each of the chapters: Chapter 2: Accelerating agricultural production in Africa through research and development and innovation; Chapter 3: Financing the transformation of African agriculture; Chapter 4: Investing in an agro-allied industrialization: strengthening Africa’s agriculture value chains, trade and competitiveness; Chapter 5: Infrastructure and rural development; Chapter 6: Fostering inclusiveness and reducing inequality in Africa’s agriculture sector - emphasis on the youth and women; Chapter 7: Reducing environmental risks and building a resilient agriculture to climate change; Chapter 8: The role of the African Development Bank in transforming Africa’s agriculture. [Further details can be obtained here (see listings dated 28/10/2016)]
Kigali regional workshop on cassava value chain development (AU)
The African Union Commission organized a regional workshop (27-29 October, Kigali) on cassava value chain development, addressing problems of processing and access to market by small and medium industries. The main objective of the training was to improve the profitability and the competitiveness of SMEs through upgrading their capacity to effectively process and add value to cassava. Mr Hussein Hassan Hussein, Head of Industry Division at the African Union Commission indicated that despite enormous market potential and a favorable socio-economic advantage, cassava sub-sector is relatively underdeveloped in Africa. He deplored the fact that most countries have been unable to fully value Cassava sector in a way that would increase farmers’ income and foreign exchange earnings.
Support project for the cotton and textile subsector: project completion report (pdf, AfDB)
The multinational support project for the cotton-textile subsector in four cotton-sector-initiative countries (Benin, Burkina Faso, Mali, Chad) was designed with the support of the international community, including the Conference of Ministers of Agriculture of West and Central Africa, the West African Economic and Monetary Union Agenda for cotton-textile subsector competitiveness, with a view to addressing the challenges faced by African cotton farmers. It focused on the following major thrusts: [Roberto Azevedo: Ministerial meeting of Cotton-4 group of West African cotton-producing countries]
Highways to success or byways to waste: estimating the economic benefits of roads in Africa (pdf, Africa Development Forum series, World Bank)
A key element of a transition strategy, therefore, is to enhance living conditions in rural areas, and this report argues that - with caveats and qualifications - improved transport linkages can make a significant contribution, and demonstrates a methodology for determining the magnitude and location of those benefits. To set the stage for the rest of the report, this chapter first explains why there is good reason to believe that the prospects are bright for setting the agricultural sector in Africa on a high-growth trajectory, given proper conditions. It will show that one key element in achieving this shift will be improving farm-to-market connectivity, which is currently the worst of all regions in the world. However, given Sub-Saharan Africa’s enormous needs and limited resources, investing wisely, that is, prioritizing potential investments, will be critically important. Therefore, tools are needed to accurately evaluate the benefits and costs of alternatives. This report seeks to demonstrate that local conditions matter considerably, and the presence or absence of conflict, environmental externalities, and local production potential are the focus of this investigation.
Downloads from the conference, Regional integration in the EAC - making the most of the common market on the road to a monetary union: the presentations by Paul Mathieu (Financial sector integration: what are the key goals and challenges? Regulation and supervision aspects), Roger Nord (Macroeconomic convergence: what does it mean exactly, why is it needed, and what are the priorities?), Louis Marc Ducharme (Regional harmonization of macroeconomic statistics)
East African Business and Entrepreneurship Conference: summary of key outcomes (EABC)
As a tangible result, the conference (10-13 October, Nairobi) came up with a matrix of ten recommendations, which shall be followed up at the 2nd East African Business and Entrepreneurship Conference and Exhibition 2017 to be held in Dar es Salaam. Extracts (pdf): There is a need to promote the EAC as one market/one investment destination as this presents investors with a large consolidated market. The EAC Partner States, through the EAC Secretariat / EABC should in collaboration with IPAs, compile a list of regional projects which will be marketed by Investment Promotion Agencies along national projects. This should also be supported by a harmonised investment framework for the EAC. To internationalise SMEs and medium income companies, regional value chains, especially for imported inputs, should be developed in EAC and across Africa, as a first step to integrating companies into global value chains. The EAC Partner States should sign the EPA in order to safeguard the EU Market, especially considering that Tanzania and Uganda will soon reach low middle income country status given their current growth trajectories. However, the failure of all Partner States to sign the EPA together should not be seen to denote the collapse of the EAC integration. There is more to the EAC than the EU market.
Kenyan investors are welcome to Tanzania (Daily News)
President John Magufuli has assured Kenyans who wish to invest in Tanzania to come and establish businesses, dismissing claims that his administration has been frustrating Kenyan traders and ignoring issues concerning the EAC. President Magufuli, who was in Kenya for a two-day state visit, acknowledged the crucial role Kenyan investors play in the economy, with 529 Kenyan firms operating in the country, employing 56,260 people with their collective investment valued at $1.7bn dollars. Moreover, TIC statistics show that trade between Kenya and Tanzania has increased from 6.5bn/- in 2010 to 2tri/- this year. [EAC member states advised to focus on cross-border investments]
Turkey’s exports to African rise to $16.6bn (World Bulletin)
Exports to African nations increased by 20.5% between 2011 and 2015, while Turkey’s overall export volume to the whole world rose by only 7%. Exports to African countries soared to $12.5bn in 2015, from $10.33bn in 2011, while imports from the continent decreased by 25% to reach almost $5bn within the same period. Exports: Egypt was the first destination for Turkish goods worth $16.6bn in the last five years followed by Algeria ($9.2bn), Libya ($9.1bn), Morocco ($5.9bn) and Tunisia ($4.2bn). Imports: Egypt once again topped the list of Turkey’s importing countries with $7.3bn. South Africa came in second with $6.8bn followed by Algeria ($4.5bn), Morocco ($3.9bn) and Tunisia ($1bn). [Note: The Africa-Turkey Economic and Business Forum starts today in Istanbul]
IGF on Mining, Minerals and Sustainable Development: meeting summary (pdf, IGF)
The 12th Annual General Meeting of the Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development and four associated workshops took place in Geneva, 24-28 October 2016. Approximately 270 participants registered to attend the meetings, representing IGF member and observer governments, the private sector and civil society. [UNCTAD: More policy attention needed on artisanal mining]
International Global Trade Management Survey (pdf, Thomson Reuters)
The second edition of the annual 2016 Thomson Reuters and KPMG International Global Trade Management Survey pinpoints key process issues that detract from the overall success of the trade and supply chain function. The results show global trade processes around import and export activities continue to be predominantly manual and time-consuming. While respondents recognize that automation is a need, there are many challenges within the organization to garnering the required funds and support. Classification and transfer pricing continue to be top challenges and, while there has been much talk around ratification of newly negotiated trade agreements, the ones already in place are not fully utilized. The large sample size and geographic spread of the respondents [which included South Africa] allowed the discovery of some meaningful geographic differences for subjects like global trade management technology usage and FTA utilization. This report presents key findings on: manual processes, automation, FTA utilization, classification, process centralization, transfer pricing and customs valuation.
Infographic, @o_merk: Since Q1 of 2013 average container ship size on Asia-S. America East Coast route increased with 63% and weekly ship calls were cut in half
Case study on the role of services trade in global value chains: transport services in Chile (APEC)
This case study finds that Chile has undertaken substantial transport sector liberalization over recent years. On the basis of an econometric model, it is concluded that the combination of transport sector reform efforts in Chile perhaps contributed to increase GVC performance by around 7%. It also suggests that sectors like agribusiness, where GVCs are becoming more relevant for a number of APEC economies, also rely on services like transport, as well as wholesale and retail distribution. As a result, regulatory reform in key backbone services sectors, including transport, has the potential to help develop GVC activity across the APEC region.
India to talk tough at RCEP trade meet (LiveMint)
India is again set to play hardball on services negotiations at the upcoming RCEP ministerial at Cebu in the Philippines starting Thursday. “The Asean (Association of Southeast Asian Nations) grouping led by Singapore remains inflexible when it comes to services negotiations. We are going to tell the RCEP member countries that we will reveal details of our approach in goods negotiations once other members show progress in services negotiations,” a commerce ministry official said, speaking on condition of anonymity.
Support for eTIR as the future of global transit (IRU)
The digital eTIR system has been endorsed as the future of TIR – the only global cross-border transit system – with the first pilot project between Turkey and Iran hailed a resounding success. The benefits of eTIR have been recognised at recent high level United Nations meetings. Strong support came from both pilot countries, prompting further interest in the innovation from Moldova and Kazakhstan, while Ukraine’s decision to work on a new intermodal pilot with Turkey was confirmed.
IMF Staff conclude visits to Zambia, Seychelles
COMESA SG elected as honorary chairperson of coordinating committee of International Network on Small Hydro Power
SADC: update on El Niño-induced drought
Zimbabwe: Specific transactions for bond notes - Emmerson Mnangagwa (The Herald)
Nigeria: Oyo State government, China firm establish $2b free trade zone (The News)
South African companies cannot leave Nigeria – SA envoy (The Eagle)
André de Mello e Souza: Brick by Brics—building institutions (LiveMint)
Cyril Prinsloo: The New Development Bank - towards greater efficiency (GEGAfrica)
Standard Bank pushes Chinese link with African countries (China Daily)
China October factory activity expands at fastest pace in over two years (Reuters)
Clyde Russell: China’s coal imports surge again, but how long can the party last? (Reuters)
Global migration of talent and tax incentives: evidence from Malaysia’s returning expert program (World Bank)
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Arusha conference calls for further integration and reforms in EAC on the road to a monetary union
The East African Community (EAC) Secretariat, the European Union (EU), and the International Monetary Fund (IMF) jointly organized a high-level conference entitled “Regional Integration in the EAC: Making the Most of the Common Market on the Road to a Monetary Union” in Arusha, Tanzania on October 31-November 1, 2016.
Discussions focused on progress in establishing Customs Union and Common Market so far, steps for strengthening them, and the prerequisites for an effective transition to East African Monetary Union (EAMU). The Keynote address was delivered by Professor Maurice Obstfeld, Economic Counsellor and Director in the Research Department at the IMF, entitled “Navigating the low global growth environment and prospects for monetary integration in the EAC”.
The conference brought together Finance Ministers and Ministers in charge of regional cooperation, Central Bank Governors, other senior policymakers, regional capital markets regulators, academics, civil society, and private sector leaders from across EAC member countries, as well as senior representatives from international financial institutions and other monetary unions. Policymakers of the EAC region reaffirmed their commitment to build a strong economic and monetary union.
Participants assessed the current state and pace of economic integration since the inception of the Customs Union in 2005 and the Common Market in 2010. Participants noted considerable progress towards a single entry visa, processing times at ports, and removal of internal tariffs. As indicated in the second EAC Common Market Scorecard 2016 which evaluates Partner States’ compliance to the free movement of capital, services, and goods, private sector representatives in particular underlined the need for further progress in the areas of non-tariff barriers, rules of origin, tax administration and harmonization, automation of trade process, and labor mobility to facilitate trade of goods and services further. Given experiences in other regions, sequential harmonization could be pursued in implementing the single customs territory and tax harmonization. Accountability and ownership are critical to a successful integration process.
Considerable progress has been made in financial sector integration, including integration of the payment systems and financial markets. In this regard, participants noted still high compliance cost in light of different regulations in member countries. On the Fintech front, however, the EAC region is ahead of many other countries in the world. The importance of proper sequencing and pace of financial integration was stressed in light of risks involved.
Under the theme “The Road toward a Monetary Union,” the status of macroeconomic convergence in the EAC was discussed. Participants acknowledged that fiscal deficits need to be brought down to meet the convergence criterion and to ensure the stability of the future monetary union. Convergence goes beyond headline fiscal deficits and public debt, and fiscal risks need to be monitored closely. Moreover, further progress is needed in data harmonization and monetary policy frameworks and operations, and there is a need to establish the new institutions that will play a key role for the implementation and resilience of the union.
Following the conference, a forum on “Improvements in East African Statistics Through Capacity Development,” highlighted recent improvements in economic and financial statistics in EAC countries through capacity development initiatives supported by the EAC Secretariat and the IMF.
» Download: Navigating the low global growth environment and prospects for monetary integration in the EAC – Keynote Address by Maurice Obstfeld, IMF (PDF, 6.64 MB)
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African govts urged to harmonise energy laws to attract investments
African governments have been urged to harmonise regulatory and legal frameworks to attract more investors into the continent’s energy sector.
Kipyego Cheluget, the Common Market for Eastern and Southern Africa (COMESA) assistant secretary general for programmes, said uniform laws could play a big role in attracting more energy investors to drive Africa’s generation and distribution capacity.
Speaking during the opening of the 3rd iPAD Rwanda Energy Infrastructure summit in Kigali, yesterday, Cheluget cited the COMESA region, saying it lacks investments in the energy and infrastructure sectors, generally, despite the increasing demand for power in the bloc.
“It is, therefore, imperative that we expedite policies that will attract investments into the energy sector to facilitate trade and development on the continent,” he said.
He added that the region’s energy potential currently stands at more than 110,000MW, and yet the current installed capacity is still under 55,000MW.
The two-day iPAD summit has brought together over 500 energy experts, investors and policy-makers to deliberate on strategies to increase energy generation, distribution and supply in the most “efficient and effective” ways.
Jean-Bosco Mugiraneza, the Rwanda Energy Group chief executive officer, called for strengthening of public-private partnerships, saying this is critical to attract more funding to the energy sector to boost its capacity.
Rwanda’s installed power generation capacity stands at 190MW, against a target of 563MW by 2018. The country is also targeting to increase connectivity to more than 70 per cent of the population by the same time under the rural electrification strategy.
Of this, at least 48 per cent of the households will be either connected to the national grid to a large off-grid renewable energy source, while 22 per cent will be served by small off-grid power source.
Currently, the country’s hydro electricity generation capacity accounts for 97.37MW, thermal power is at 51.7MW, methane is 3.6MW, while 8.75MW is produced from solar energy. Other efforts to increase power supply include importing 30 megawatts from Kenya – expected by end of 2016 – and another 400 megawatts from Ethiopia by 2018.
However, experts believe, achieving the targets will require more financing and strategic policies and partnerships.
Speaking at the event, Lars Akerlind, from Sweden-based Eltel Network, called for clear strategies and transparent policies to attract new investors and funding into the sector and boosting power generation and, hence ensuring reliable power operations.
He noted that clear laws are key to improve the business environment for investors and energy developers.
The electricity access countrywide today stands at 25 per cent and the remaining 75 per cent use other sources of energy for lighting, most of which are unsafe and unhealthy such as kerosene.
Embracing off grid solutions
Meanwhile, energy experts called for more resources to be invested into off-grid and renewable energy solutions to boost access to energy.
The experts argue that more investments in renewable energy will increase Rwanda’s energy generation capacity and connectivity, which will, in turn, translate into a faster and more sustainable economic growth.
Rwanda joins global UN energy initiative
Rwanda has officially become part of a global universal energy initiative, dubbed “Sustainable Energy For All,” a United Nations-led initiative geared toward actions and commitments to positively transform the world’s energy systems. The decision was made, yesterday, during the iPAD Summit in Kigali.
The initiative was launched globally in 2012 by outgoing UN Secretary-General Ban Ki Moon in recognition of the growing importance of energy for economic development and climate change mitigation.
At the local level, the initiative aims at scaling up access to energy, promoting the use of clean cooking technologies, increasing use of renewable sources of energy for electricity production as well as efficient use of energy.
Giving highlights of the initiative’s implementation, Robert Nyamvumba, the energy division manager at the Ministry of Infrastructure, said, by implementing the global initiative, Rwanda would seek to address issues in gender, health and energy access.
He said its implementation is also in line with the national rural electrification strategy that was approved by Cabinet this year.
The initiative will attempt to address the high dependence on biomass fuels in the country and reduce from the current 85 per cent use to about 50 per cent by 2020 while the target is under 30 per cent by 2030, Nyamvumba added.
This will largely lead to the promotion of clean cooking technologies which are increasingly cheaper due to tax reliefs.
According to the Minister for Infrastructure, James Musoni, the Government will promote the use of liquefied petroleum gas, which is currently cheaper than charcoal.
“Gas use is already cheaper than use of charcoal though most people are unaware. Going forward, we will seek ways to have it in more different sizes and packages of cylinders to make it affordable for more people as well as improved cooking stoves,” the minister said.
On electricity generation and production, Nyamvumba reiterated that they aim at increasing production by 2018 as well as step up contribution of renewable energy such as geothermal and solar through off grid and mini grid.
The share that is non-renewable will be from peat and methane gas with the two constituting around 30 per cent.
“On energy efficiency, we want to reduce energy losses and step up efficient use through measures such as energy reduction lamps as well as address concern such as aspects of indoor pollution from cooking,” he said.
Rwanda has an electricity penetration rate of about 27 per cent with grid solutions contributing a majority of 25 per cent, while non-grid solutions contribute 2 per cent.
With the government targetting 563 megawatts by 2018, the country is currently generating about 190 megawatts.
Rwanda Energy Group chief executive Jean Bosco Mugiraneza said the agency targets to reach 70 per cent of the population and 100 per cent of government institutions by 2018.
This, he said, creates a huge room for private public partnership to boost local capacities and make necessary investments towards the ambitions.
Mugiraneza added that they plan to continue working with off-grid power solutions to continuously ensure access to power.
Already, there are more than 10 players in the off-grid power solutions provision operating in the country.
Kipyego Cheluget said Rwanda is likely to achieve the targets given the huge resource allocations by the government to the sector, the existing policies to attract investments as well as participation in regional integration initiatives.
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More policy attention needed on artisanal mining: IGF
Artisanal and small-scale mining offers opportunities to generate jobs, reduce poverty, and provide livelihoods, but this sector has been largely ignored by policy-makers and donors, an UNCTAD official said. In addition, poor management of this sector contributes to serious health and environmental risks, said Yanchun Zhang from UNCTAD’s Special Unit on Commodities.
“Artisanal gold mining, which accounts for more than 10% of the global gold supply, releases an estimated 1,000 tons of toxic mercury per year,” she said at a three-day meeting on mining and the Sustainable Development Goals (SDGs) in Geneva from 24 to 28 October. Some 15 million gold miners, including 4.5 million women and 600,000 children, are exposed to mercury.
Hosted by UNCTAD, the Annual General Meeting of the Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development (IGF) welcomed 250 participants from 39 member and 14 non-member countries, plus representatives from international organizations, industry associations, companies and civil society.
The 56-member IGF discusses practical issues relating to the sustainable management and development of the mining sector. Its overarching objective is to enhance capacity for governance at all stages of the mining life cycle.
Mining continues to play a key role in the economic growth of several resource-rich developing countries, but this growth has often failed to generate any meaningful benefits for the countries’ populations. Artisanal mining may offer opportunities in this respect.
“As a labour-intensive mining process widely conducted on an informal basis, artisanal and small-scale mining is known to generate jobs, reduce poverty, and provide livelihoods for millions of people,” Ms. Zhang said.
“To a large extent, artisanal and small-scale miners remain ignored and marginalized by policy makers, donors, and the general public,” she added.
New reports
The meeting saw the launch of a new report on the Role of Mining in National Economies (Romine), authored by Aidan Davy, Chief Operating Officer of the International Council on Mining and Metals (ICMM).
Past editions have drawn attention to the significant contribution of mining and metals to the global economy and to the economies of an increasing number of low- and middle-income countries. This third edition, produced at a time of considerable turbulence in international commodity markets, shows that despite the metals prices downturn a great many low and middle-income economies remain dependent on the mineral sector. A dependence jolted only slightly by the commodity markets downturn.
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Role of Mining in National Economies: Third edition (PDF, 5.6 MB)
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Role of Mining in National Economies: Third edition, supplement (PDF, 2.25 MB)
The meeting also saw the launch of a new report on the impact of automation on the shared-value paradigm, co-produced by the IISD and the Columbia Center for Sustainable Investment.
This report looks to the near and medium terms, exploring what will happen to the local employment and procurement components of the shared-value paradigm – and, by extension, to the mining companies’ social licence to operate – if technological change radically alters the amount of money mining firms are spending on hiring and procurement. It surveys the trends in technology development, and uses procurement and other data from two global mining firms to estimate the types of impacts we might see. It concludes by exploring the ways in which governments and firms might address the predicted results.
- Mining a Mirage? Reassessing the shared-value paradigm in light of the technological advances in the mining sector (PDF, 4.55 MB)
Annual General Meeting 2016: Communiqué
In September 2015, the international community adopted seventeen Sustainable Development Goals (SDGs) to guide the economic, social and environmental policy for all countries leading up to 2030. The SDGs and their associated 169 targets are at the core of the 2030 Agenda for Sustainable Development. Ultimately, the success of the SDGs will require collective action among governments, the private sector and all stakeholders. Partnerships such as the Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development (IGF) will be critical drivers for moving 2030 Agenda forward, and in this context the 12th session of the IGF’s Annual General Meeting (AGM) focused on the theme, “Mining and the Sustainable Development Goals.”
From 25-27 October 2016, the IGF convened its 12th AGM at the Palais des Nations, in Geneva, Switzerland. 250 participants registered to attend the 12th AGM, including from 39 IGF member countries and 14 observer countries, as well as representatives from international organizations, industry associations and civil society organizations. During the meeting, Liberia announced that it had completed the application process, bringing the total number of IGF member countries to 56.
Government representatives gathered on 24 October 2016 for workshops on regional priorities and best practices, followed by a discussion about IGF services and the IGF Task Force on Strategy. At the conclusion of the three-day AGM formal session, workshops on “SDG Implementation Challenges and Opportunities” and the “Mining Policy Framework and SDG Analysis” took place.
Joakim Reiter, Deputy Secretary-General of UNCTAD, welcomed participants to the AGM. Mr. Reiter highlighted the critical importance of aligning the mining sector with the SDGs, and drew attention to mining’s role: providing direct, indirect and induced jobs; ensuring linkages between mining and development through the creation of value-added mining products; and reducing gender inequalities to ensure that women benefit from employment and equal earning potential.
The Chair of the Executive Committee of the IGF, Glenn Gemerts from Suriname, stressed the importance of IGF in assisting governments, mining enterprises and civil society to find practical solutions to sustainability challenges by fostering mutual understanding in achieving the SDGs. Using Suriname as an example, Mr. Gemerts highlighted the potential of the IGF Mining Policy Framework (MPF) assessment to assist governments in better crafting mining policies for sustainable development through the revision of mining laws, strengthening capacity, and ensuring diversification of the mining sector.
The SDGS and Mining
The AGM discussed the ways in which the mining sector’s activities could be harmonized with the 17 SDGs. A number of SDGs were mentioned in particular as critical for attention by the mining sector. SDG 6 (clean water and sanitation) was highlighted, including the need to address water regulations in many countries and to recognize that water issues may lead to conflicts between local communities and industry. Links were made to SDG 8 (decent work and economic growth), which seeks diversified economies through local content, and SDG 16 (peace, justice and strong institutions), which addresses the prevention of tax evasion. SDG 17 (partnerships for the Goals) was noted as relevant, given the need to improve synergies among different parts of government, leverage public and private finance, sharing expertise and promoting international collaboration, and building partnerships. Dedicated panel discussions also focused on SDG 13 (climate change) and SDG 5 (gender).
A comparative analysis was presented on the degree of strategic alignment between the 17 SDGs and the MPF. The analysis revealed a number of strengths of the MPF as a sector-specific framework for achieving the SDGs by, for example, ensuring integrated social, economic and environmental assessments.
MPF Assessments
The AGM discussed the MPF assessment process, which focuses on helping the mining sector to make its maximum contribution to sustainable development within individual countries. The IGF Secretariat highlighted key projects and achievements from 2016, including ongoing assessments in Senegal, Mongolia and Suriname. In panel discussions with representatives from Senegal, Suriname, Uganda, and the Dominican Republic, the Secretariat was able to present recent experiences with the two-phase MPF assessment process. Discussions first focused on the value that the assessment process itself holds for participating countries, and then shifted to how countries have integrated assessment findings and strengthened capacities into mining law, policy and institutions. The Secretariat outlined what is expected of those countries that would like to request an MPF assessment, and presented its MPF work plan for 2017. There was agreement from the members to re-examine the MPF in future sessions in light of discussions on the SDGs.
Guidance for Governments
The finalized IGF Guidance for Governments on managing artisanal and small-scale mining was presented to members. An additional panel discussion on managing zones for artisanal mining was also held. Discussions were also held on the next Guidance for Governments on base erosion and profit sharing.
Closing Remarks
In closing, the IGF Chair thanked delegates for their participation and UNCTAD for its invitation to hold the next AGM in Geneva in late 2017. The dates for the meeting will be coordinated with the UNCTAD Secretariat in early 2017, and will be communicated to all stakeholders as soon as they are finalized.
The delegates thanked the International Institute for Sustainable Development for their work in managing the IGF during its transition and for enhancing the service it offers to members.