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tralac’s Daily News Selection
The selection: Tuesday, 20 September 2016
Launching today, in Gaborone: Botswana’s Aid for Trade Strategy - promoting private sector key to development (@AndersP_UN)
In Nairobi, Kenya’s Parliament holds a special sitting to consider the ratification of the EPA with the EU
Decisions and Declarations from the AU’s Kigali Summit (pdf, AU)
Featured commentary, by Melaku Desta: ‘New AU financing formula and WTO law: some unknowns’
Beyond the MFN issue, what if an African country has already undertaken a zero tariff commitment at the WTO – i.e. the bound tariff level for the particular product is set at 0%? Any increase, even to 0.2%, would be in breach of GATT Art. II on schedules of commitments. Countries such as Mauritius that have gone in the Hong Kong direction of establishing a duty-free import regime may have a point here (and this might explain, at least in part, why Mauritius registered its reservations to the above AU Assembly Decision).
Finally, what if an African country has already concluded a bilateral/regional trading arrangement with a non-African country/ies in which it has undertaken to eliminate tariffs on “substantially all trade” as is required by WTO law? Will the introduction of a 0.2 % levy not put that country in breach of its bilateral/regional treaty obligations and, indirectly, of its WTO obligations (because chances are that such a bilateral/regional treaty has been reported to the WTO and justified under one or another of the exceptions mentioned above – GATT XXIV, Enabling Clause, GATS Art. V)? The Euro-Med agreements signed between AU member states in North Africa and the EU or the EPAs signed by some of the other African countries with the EU might easily encounter these challenges.
Ministers of Finance agree on the roadmap for implementing the 0.2% import levy to fund the AU
Mbogo Ngabo Seli, Chad’s Minister for Finance and Chair of the Committee of the Ten Finance Ministers (F10), emphasized that the meeting seeks mainly to implement the decision taken by the Heads of State and Government and indicated that the Ministers of Finance ought to identify how best to sufficiently implement the decision by enriching proposals made by the AU Commission, in order to bring into force the new financing mechanism. The AUC Deputy Chairperson also led deliberations on the composition of eligible goods, where it was agreed that the composition of eligible goods shall consider development programmes and national priorities of member States. Goods exempted from the AU import levy shall take into account goods already exempted by national laws and development policies. Further and in compliance with the Decision to begin the implementation in 2017 and in noting the variations in legislative requirements across member States, the AU Commission and the Ministers proposed a transitional period of implementation of the Decision of no later than the end of 2017.
CFTA: 6th meeting of the Continental Task Force (AU)
The 6th Meeting of the Continental Task Force on the Continental Free Trade Area, commenced [yesterday] in Nairobi. The meeting was organized by the Department of Trade and industry of the African Union Commission in preparation for the 3rd Meeting of the CFTA Negotiating Forum that will take place from 3-7 October 2016. Experts from the AUC, RECs, the AfDB, and the UNECA, will consider Terms of Reference for the Technical Working Groups and draft modalities for the CFTA Negotiations in trade in goods and trade in services. The meeting will also take stock of the on-going exercise to develop a draft negotiating text on the CFTA and discuss how to deliver on the Summit Directives on fast-tracking the establishment of the CFTA. Mr Prudence Sebahizi, Chief Technical Advisor on the CFTA, informed participants that the AUC is working together with the African Trade Policy Centre and the UNECA to organize the African Trade Week (ATW2016) from 26 November to 2 December in Addis Ababa. The objective of the ATW2016 is to provide a comprehensive, integrated and inclusive platform for policy dialogue between various constituencies, including public officials, parliamentarians, private sector and civil society on Africa’s current transformation agenda. [Continental Free Trade Area: legal texts and policy documents (tralac)]
@UNCTADinAfrica: UNCTAD support to develop draft AU Trade Facilitation Strategy appreciated as key for realizing AU BIAT and implementation of WTO TFA.
Rwanda’s export growth facility fund: why are exporters shunning the facility? (New Times)
Last year, government launched the export growth facility fund as part of the strategy to boost exports and narrow down the widening trade deficit gap. The aim according to Francois Kanimba, the Minister in charge of Trade and Industry was to channel more than Rwf1 billion, through the Development Bank of Rwanda , to facilitate exporters especially through SMEs. However, almost a year since the facility was first launched, Benjamin Manzi, BRD’s Head of investments, says the turn up is still low despite the availability of the money. The question should rather be why they are not coming for the money, which has been subsidized, he added. Manzi says they are also offering technical support and facilitating exporters to go and seek markets around the world on top of guaranteeing exporters by almost 70%
Afreximbank closes $300m China Exim-backed loan
The five-year syndicated loan, which closed on 12 September, was only open to investors from China and Taiwan. The facility was two times oversubscribed with 16 investors and banks participating and with Standard Chartered Bank serving as the sole coordinator, book runner, and mandated lead arranger. “This syndicated facility helps position Afreximbank to strengthen its role in the development of trade between Africa and the rest of the world, in particular China and the rest of the Far East,” said Denys Denya, the Bank’s Executive Vice President in charge of Finance, Administration and Banking Services. “The conclusion of this facility demonstrates Afreximbank’s increasing ability to attract much-needed resources into Africa and to fund trade finance related investments that will have a positive impact on Sino-Africa trade.” [The digital revolution in trade finance (BCG)]
Egypt: AFDB to approve the second tranche of loan to support budget before end of 2016 (MENAFM)
Q: AFDB is interested in supporting African trade. Will the bank loan to Egypt support trade with African countries? If yes, what will be the amount of funding? A: For Egypt, the bank has funded the Egyptian Agency for Partnership and Development to help promote greater Egypt-Africa trade and provide training to the commercial attaches posted in selected African countries. The bank as a whole is working to promote a greater volume of trade and provides financing for this with lines of credit to the banking sector as well as to the African Export-Import Bank, which is headquartered in Cairo. Other projects that are related to integrating Egypt with Africa include a grant for the feasibility of creating a navigational line along the Nile from Lake Victoria to the Mediterranean Sea, an energy study for Nile Basin countries, a study on facilitating trade between Egypt and Africa, and a partial guarantee for trade finance to commercial banks.
Ethiopia: Tourism Master Plan (UNECA)
In 2011, the UNECA commissioned a study to examine opportunities and challenges of tourism in Eastern Africa. The study concluded, among other things, that a regional framework to address challenges facing tourism in the region was needed. Based on this recommendation, IGAD developed a master plan with technical support from ECA. According to Geoffrey Manyara, an ECA Economic Affairs Officer who helped develop the master plan, member-states were spurred to action by IGAD’s regional framework. “The IGAD master plan recommended that member states with tourism development instruments in place should have them aligned to IGAD’s regional master plan,” said Mr. Manyara. “A number of member-states then approached ECA to help develop their respective master plan. So, we started Ethiopia’s in 2013 and finished in 2015.”
Uganda: Poverty Assessment Report 2016 (World Bank)
What drove Uganda’s poverty reduction? Agriculture. Households in agriculture account for 79% of the decline from 2006 to 2013. While diversifying income with activities not related to agriculture was increasingly important for Ugandan households, poverty reduction was just as fast for those households solely in agriculture as for those with diversified non-agricultural income sources. Agricultural incomes grew because the government got some key fundamentals right such as the pacification of the North, enhancements in infrastructure, liberal export markets and better market information for farmers and traders (thanks to an improved ICT sector). Luck was also on Uganda’s side: good weather benefited many households and positive price trends in international and regional markets aided real crop income increases. Our estimates show that 2/3 of the growth in agricultural income between 2006 and 2012 can be explained by good weather and favourable prices.
COMESA: Member States need to champion specific regional programmes
There is need for individual member States in COMESA to take lead in specific regional integration programmes in which they are active and have a competitive edge in order to improve on implementation. The President of Djibouti H.E. Ismail Omar Guelleh and the Secretary General of COMESA Mr Sindiso Ngwenya, made this proposal when they met in Djibouti City. They observed that Djibouti’s potential areas were in programmes relating to shipping, ports and cargo handling. The country’s port was well situated to serve the region and numerous investments were being made to expand its potential. Linked to the port is the development of roads as well as efforts to improve the air routes into Africa. Djibouti could also take the lead on clean climate and drought resistance share experiences.
Zimbabwe: Poultry output down on cash shortages (NewsDay)
The poultry industry in Zimbabwe tumbled by 8% in the first half of 2016 after producing 37,2 million broiler day-old-chicks compared to the prior year, an industry official has said. In an industry update, Zimbabwe Poultry Association chairperson Solomon Zawe said the sector was facing challenges such as shortage of cash, delays in salary payments for civil servants who form the largest block of formally employed workers in the country and competition from low priced beef coming onto the market due to drought-induced destocking. As such, the industry was facing a gloomy future, he said. [Zimbabwe: Competition law final draft set for Attorney-General (NewsDay)]
South African, global migration, immigration policy updates:
Policy Dialogue with civil society on the Green Paper on International Migration: address by Minister Malusi Gigaba (Home Affairs): The majority of asylum seekers come from SADC countries and most of them are economic migrants. The Green Paper proposes various measures to deal with economic migration from SADC, important for its own sake, with the additional benefit of aiding asylum seeker management. The refugee status is not a permanent status, and so it is inappropriate to link eligibility for permanent residence and citizenship to years spent in the country as a refugee. The policy proposes that refugees can apply for permanent residence, but on the grounds of skills, business activity, financial independence, or marriage to a South African citizen. [Draft First Amendment Bill of Immigrations Regulations (pdf)]
UN General Assembly’s first-ever Summit for Refugees and Migrants: an overview, lengthy summary of statements, New York Declaration (pdf), UNSG report: In safety and dignity - addressing large movements of refugees and migrants (pdf), UN Private Sector Forum discusses migration issues
OECD: International Migration Outlook 2016, Governments must address anti-immigration backlash
ECOWAS Chairman urges alignment of Member States’ health policies with regional, international plans
IORA regional workshop on Intersection of Culture in the Indian Ocean Region (10-11 October, Jakarta)
Tanzania becomes 1st globally achieving full mobile money interoperability
Kenya says Somalia has ignored pact to resolve maritime dispute
Fraser Institute’s World Economic Freedom 2016: Mauritius first in Africa
Russia: How services contribute to competitiveness
PIIE study gauges potential impact of US Presidential Candidates’ proposed trade policies
India tells EU it’s ready for early harvest scheme of trade, investment pact
Non-Aligned Movement: communiqué
Forever Young? What Africa can learn from Southern Africa’s demographic transition
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The 6th meeting of the Continental Task Force discusses fast-tracking of the establishment of the Continental Free Trade Area
The 6th Meeting of the Continental Task Force (CTF) on the Continental Free Trade Area (CFTA), commenced on Monday in Nairobi, Kenya. The meeting was organized by the Department of Trade and industry of the African Union Commission in preparation for the 3rd Meeting of the CFTA Negotiating Forum that will take place from 3-7 October 2016.
During the next two days, experts from the African Union Commission, the Regional Economic Communities (RECs), the African Development Bank (AfDB), and the United Nations Economic Commission for Africa (UNECA), will consider Terms of Reference (ToR) for the Technical Working Groups and draft modalities for the CFTA Negotiations in trade in goods and trade in services.
In addition, the meeting will take stock of the on-going exercise to develop a draft negotiating text on the CFTA and discuss how to deliver on the Summit Directives on fast-tracking the establishment of the CFTA.
The CTF is established to coordinate actions between the African Union Commission and the Regional Economic Communities and to ensure that the CFTA negotiations are conducted within the agreed timelines.
In his opening remarks, Mr. Prudence Sebahizi, Chief Technical Advisor on the CFTA, on behalf of Mrs. Treasure Maphanga, Director of Trade and Industry of the African Union Commission, expressed his gratitude to the Task Force for the progress made so far with regards to the CFTA negotiations.
The Head of the CFTA Unit recalled and highlighted outcomes of the meetings of the CFTA Negotiating Forum as well as the Meeting of the African Union Ministers of Trade. Mr. Sebahizi encouraged the Continental Task Force to work as a team to ensure that the negotiations are effectively concluded by 2017. He finally informed the participants that the African Union Commission is working together with the African Trade Policy Center (ATPC) and the UNECA to organize the African Trade Week (ATW2016) from 26 November to 2 December 2016 in Addis Ababa, Ethiopia.
According to Mr. Sebahizi, the objective of the ATW2016 is to provide a comprehensive, integrated and inclusive platform for policy dialogue between various constituencies, including public officials, parliamentarians, private sector and civil society on Africa’s current transformation agenda.
“The African Trade Week 2016 will provide networking opportunity through a Business-to-Business Exchange Programme (B2B Exchange) for the private sector and through an exhibition of productive and trade capacity building programs,” he concluded.
The main expected results of the 6th Meeting of the CTF include the finalization of remaining Terms of Reference (ToR) for the Technical Working Groups (Sanitary and Phytosanitary measures, Trade Remedies and Technical Barriers to Trade). The Meeting is also expected to discuss modalities for negotiations of trade in goods and trade in services, as well as, modalities to implement the Summit Decisions on fasttracking the establishment of the CFTA by the indicative date of 2017.
Further resources: Continental Free Trade Area (CFTA) Legal Texts and Policy Documents
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World leaders at UN summit adopt ‘bold’ plan to enhance protections for refugees and migrants
With more people forced to flee their homes than at any time since World War II, world leaders came together at the United Nations on 19 September 2016 to adopt the New York Declaration, which expresses their political will to protect the rights of refugees and migrants, to save lives and share responsibility for large movements on a global scale.
At the opening of the UN General Assembly’s first-ever Summit for Refugees and Migrants, delegations adopted the landmark Declaration, which contains bold commitments both to address current issues and to prepare the world for future challenges, including, to start negotiations leading to an international conference and the adoption of a global compact for safe, orderly and regular migration in 2018, as well as, to:
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Protect the human rights of all refugees and migrants, regardless of status. This includes the rights of women and girls and promoting their full, equal and meaningful participation in finding solutions;
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Ensure that all refugee and migrant children are receiving education within a few months of arrival;
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Prevent and respond to sexual and gender-based violence;
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Support those countries rescuing, receiving and hosting large numbers of refugees and migrants:
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Work towards ending the practice of detaining children for the purposes of determining their migration status;
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Find new homes for all refugees identified by the Office of the UN High Commissioner for Refugees (UNHCR) as needing resettlement; and expand the opportunities for refugees to relocate to other countries through, for example, labour mobility or education schemes; and
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Strengthen the global governance of migration by bringing the International Organization for Migration (IOM) into the UN system.
UN Secretary-General Ban Ki-moon congratulated Member States saying: “Today’s Summit represents a breakthrough in our collective efforts to address the challenges of human mobility.” He said the adoption of the New York Declaration will mean that “more children can attend school; more workers can securely seek jobs abroad, instead of being at the mercy of criminal smugglers, and more people will have real choices about whether to move once we end conflict, sustain peace and increase opportunities at home.”
Peter Thomson, President of the UN General Assembly, pledged to take forward the commitment of the membership “to begin a process leading to a global compact on migration, as well as to support a global compact on refugees. I will be urging Member States to maintain their high levels of ambition throughout these processes, and to always reach for the higher ground. The fate of millions of refugees and migrants rests with us.”
Mogens Lykketoft, President of the 70th session of the UN General Assembly, emphasized that all countries must do their part in responding to the global challenge. “The desperation and suffering of people in flight tugs at our collective conscience, and compels us all to act compassionately to forge a global response to what is clearly a global challenge,” he said.
Calling on all partners to support implementation of the Declaration’s commitments, Mr. Lykketoft also welcomed the Secretary-General’s campaign to counter xenophobia and intolerance. He said: “In the face of a changing world, it is vital that we do not give in to fear, but that we strive to maintain our principles and common humanity.”
Deputy Secretary-General Jan Eliasson read out a statement by the Secretary-General’s Special Representative on International Migration, saying the ability to protect refugees was a “barometer” indicating the effectiveness of international institutions.
Unfortunately, responsibility had often been passed to those closest to the crisis, he said, emphasizing: “Let today be the turning point.” The Office of the Special Representative would soon submit plans for strengthening the ability of the UN to coordinate adequate and equitable support to refugees and other migrants, he said, calling for the soonest possible development and adoption of global compacts on migration and refugees.
As called for in the Declaration, the Secretary-General also launched a new campaign called ‘Together – Respect, Safety and Dignity for All’ to “respond to rising xenophobia and turn fear into hope.” He urged “world leaders to join this campaign and commit together to upholding the rights and dignity of everyone forced by circumstance to flee their homes in search of a better life.”
Also today, the Secretary-General and William Lacy Swing, the Director-General of the International Organization for Migration, signed the new agreement by which IOM officially becomes a related organization of the United Nations system, thus strengthening the comprehensive global approach to migration.
When he addressed the opening session, Mr. Swing, said three elements had made the landmark agreement possible: global trends, trust and timing. Migration is driven by factors including demography, disasters, the digital revolution, technology, North-South disparities and environmental degradation, and is indeed a priority for all Governments.
What will happen next?
The New York Declaration also contains concrete plans for how to build on these commitments:
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Start negotiations leading to an international conference and the adoption of a global compact for safe, orderly and regular migration in 2018. The agreement to move toward this comprehensive framework is a momentous one. It means that migration, like other areas of international relations, will be guided by a set of common principles and approaches.
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Develop guidelines on the treatment of migrants in vulnerable situations. These guidelines will be particularly important for the increasing number of unaccompanied children on the move.
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Achieve a more equitable sharing of the burden and responsibility for hosting and supporting the world’s refugees by adopting a global compact on refugees in 2018.
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New AU financing formula and WTO law: some unknowns
At its July 2016 summit in Kigali, Rwanda, the AU Assembly held a special retreat to consider new proposals intended to ensure that the AU “is financed in a predictable, sustainable, equitable and accountable manner with the full ownership by its Member States”.
The new funding proposal adopted by the Assembly reads as follows:
“To institute and implement a 0.2 percent Levy on all eligible imported goods into the Continent to finance the African Union Operational, Program and Peace Support Operations Budgets starting from the year 2017”.
That is all there is in the Outcome document on this subject.
The origin of the goods on which the levy is to be imposed is clear: by using the language of “imported goods into the Continent”, it excludes goods imported into an African country from other African countries.
However, by qualifying the products on which the levy will be imposed as “all eligible goods”, the Decision (i) clearly suggests that the levy won’t apply to all goods coming into Africa; and (ii) has left to a future date the determination of which of these goods will be subject to the levy, and therefore “eligible”, and which ones won’t be.
Interestingly, the Decision does not provide any guidance on how this classification is to be done – e.g. will it adopt a positive list approach of goods to be “eligible” for the levy (and whatever is not included in the list to be exempted from it) or the other way round (i.e. a negative list approach in which goods not subject to the levy will be listed while all those not so listed will be subjected to the levy)? etc.
Whatever methodology is used, will it be guided by some general principles – e.g. exclude essential goods from the levy (such as food items, medicines, educational equipment, etc.) – or will it be left to each member state to decide? If the latter, will this be negotiated? etc.
Also, when it says “a 0.2 percent Levy”, 0.2 percent of what? Presumably of the import value of the product (e.g. the value determined according to the WTO customs valuation agreement)? What if a country is not a member of the WTO and follows a different methodology?
Then, will this proposal pass the test of WTO compatibility?
To start with the most obvious: what if the same or “like” product comes from another African country? MFN requires that WTO members may not apply tariffs on a product coming from one WTO member and not apply the same tariff on the same or like product when it originates in another WTO member. The only exception to this would be if the whole of Africa forms a free trade area (as the CFTA aims to become) or a customs union or some form of regional economic entity that can be justified as a south-south agreement as per the 1971 GATT Enabling Clause. At this moment, only the CFTA route looks viable; the fact that both the levy and the CFTA are meant to enter into force in 2017 might not be mere coincidence either, but of course I don’t know if this is indeed the case.
Beyond the MFN issue, what if an African country has already undertaken a zero tariff commitment at the WTO – i.e. the bound tariff level for the particular product is set at 0%? Any increase, even to 0.2%, would be in breach of GATT Art. II on schedules of commitments. Countries such as Mauritius that have gone in the Hong Kong direction of establishing a duty-free import regime may have a point here (and this might explain, at least in part, why Mauritius registered its reservations to the above AU Assembly Decision).
Finally, what if an African country has already concluded a bilateral/regional trading arrangement with a non-African country/ies in which it has undertaken to eliminate tariffs on “substantially all trade” as is required by WTO law? Will the introduction of a 0.2 % levy not put that country in breach of its bilateral/regional treaty obligations and, indirectly, of its WTO obligations (because chances are that such a bilateral/regional treaty has been reported to the WTO and justified under one or another of the exceptions mentioned above – GATT XXIV, Enabling Clause, GATS Art. V)? The Euro-Med agreements signed between AU member states in North Africa and the EU or the EPAs signed by some of the other African countries with the EU might easily encounter these challenges.
I suspect there will be many more issues to come here.
The question then is how to overcome any challenges that may come from other WTO members.
I doubt any country would take Africa to court (and, in any case, no case can be brought against Africa yet; it can only be brought against individual AU member states that are also members of the WTO because the AU does not have legal standing before the WTO).
But, if the proposed formula is really good enough for Africa to want to fight for it at the WTO, I think it can do so successfully through a politico-diplomatic route. I am thinking here of a waiver under Art. IX of the Marrakech Agreement as perhaps the most obvious route.
This article was originally published on the International Economic Law and Policy Blog under the title ‘New AU funding system and the WTO’.
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Ministers of Finance agree on the roadmap for implementing the 0.2% import levy to fund the AU
African Union two-day conference of Ministers of Finance concluded with the general consensus on the need to speedily implement the Financing of the African Union by 2017.
The consensus reflects several important outcomes of the Decision of the 27th Ordinary Session of the African Union Assembly of Heads of State and Government, in Kigali, Rwanda to impose a 0.2% levy on eligible imports for all members’ states to finance the Union.
The Ministers adopted the Guidelines on the modalities of implementing the levy to provide reliable and predictable funding for the Operational budget of the Union, the Union’s Program and Peace Support Operations budgets.
One of the important decisions to come out of the meeting was the consensus by Ministers of Finance on the need to reduce dependency on partner funds for implementation of continental development and integration programs and further on the need to relieve the pressure on Member States national treasuries to meet national obligations for payment of assessed contributions of the Union.
Dr. Nkosazana Dlamini Zuma, Chairperson of the African Union Commission noted that support from the outside cannot be the main source of development on the continent. On this, Dr. Dlamini Zuma restated the words of the late president of Egypt Gamel Abdel Nasser who said that “he who cannot support himself, cannot take his own decision” and also that of the late Julius Nyere of Tanzania who said “that it is stupid for us to imagine that we shall rid ourselves of our poverty through foreign financial assistance rather than our own financial resources.
The chairperson greatly lauded the pan African aspiration of self-reliance that these great leaders stood by. “It cannot be a better time to implement the 0.2 levy now that the AU is spearheading Agenda 2063 and its 10 year flagship projects, the import levy will help generate funds for reliable sustainable and predictable financing of the Unions activities,” reiterated Dr. Dlamini Zuma.
Mbogo Ngabo Seli, Chad’s Minister for Finance and Chair of the Committee of the Ten Finance Ministers (F10), emphasized that the meeting seeks mainly to implement the decision taken by the Heads of State and Government and indicated that the Ministers of Finance ought to identify how best to sufficiently implement the decision by enriching proposals made by the AU Commission, in order to bring into force the new financing mechanism.
AUC Deputy Chairperson H.E Mr. Erastus Mwencha underscored the importance of implementing the decision and lauded the initiatives taken by some Member States such as Kenya, to implement the decision and encouraged all Member states to put in place concrete measures for effecting the Decision at the national levels.
The Deputy Chairperson also led deliberations on the composition of eligible goods, where it was agreed that the composition of eligible goods shall consider development programmes and national priorities of member States. Goods exempted from the AU import levy shall take into account goods already exempted by national laws and development policies.
Further and in compliance with the Decision to begin the implementation in 2017 and in noting the variations in legislative requirements across member States, the AU Commission and the Ministers proposed a transitional period of implementation of the Decision of no later than the end of 2017.
The Ministers called on the African Union Commission to continue its financial management and accounting reforms with a view of creating an environment of greater transparency and accountability.
The quest for self-funding of the AU emanated from the OAU as set out in the Lagos Plan of Action in 1980, the High Level Panel on Alternative Sources of funding by Obasanjo, the former president of Nigeria also made recommendations and a step towards attaining a self-reliant Union.
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CEOs and world leaders meet at United Nations to activate private sector on refugee and migrant crisis
On 19 September 2016, more than 350 chief executives, Heads of State and Government, UN and civil society leaders gathered at the United Nations for the annual UN Private Sector Forum to discuss the role of business in advancing sustainable development and the important link between achieving the Sustainable Development Goals (SDGs) and preventing global instability.
UN Secretary-General Ban Ki-moon emphasized the critical role of business in helping to create a more unified response to the current humanitarian crisis and offering solutions that have the potential to save lives, protect rights and secure a better future for vulnerable refugees and migrants. “I call on the private sector to combat xenophobia and discrimination in the workplace and communities,” said Ban, adding that “business should enable equal employment opportunities for refugees and migrants...and invest in education initiatives for displaced youth.” He appealed to business leaders to “help us by raising your voices and taking whatever actions you can to defend the most vulnerable.”
With over 60 million people displaced worldwide, advancing the 2030 Agenda for Development is crucial to stem the growing flows of people fleeing conflict and insecurity around the world, address root causes of instability, and avoid future crises caused by large scale migration and forced displacement. With the theme of Business and the 2030 Agenda: Securing the Way Forward, the UN Private Sector Forum emphasized the important connections between the SDGs and the new Agenda for Humanity – which, together with the Paris Agreement on Climate Change and the Action Agenda on Financing for Development, are pillars of the 2030 Agenda.
In his keynote address, Prime Minister of Canada Justin Trudeau underscored the imperative to bring business to the table to address the refugee and migrant crisis. “All parts of society must have a shared role in building a successful, inclusive world. It is up to each of us to do what we can, where we can, to help migrants and refugees build better, more stable lives for themselves.” He continued on to encourage the business community to support migrants and refugees, providing them, “the sense of belonging that is humanity’s collective birthright.”
Marking the one-year anniversary of the adoption of the SDGs, the Forum saw the announcement of 50 corporate and other commitments and partnerships addressing each of the 17 SDGs. Major announcements include:
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GSMA, a global mobile industry association, will identify and mobilize action by the mobile industry on critical areas related to the humanitarian agenda and SDGs;
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IKEA Switzerland will open opportunities to refugees in the Swiss job market by offering six-month internships to nearly 100 refugees; and
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Oando PLC committed to investing in education for internally displaced children in Nigeria who have been driven away from their communities and schools by terrorist groups such as Boko Haram.
In an effort to encourage further UN-Business collaboration toward achieving the SDGs, the UN Global Compact launched the Partnership Passport, an interactive resource for companies to find new UN partnership opportunities and enhance existing ones.
The event also saw the launch of Children in Humanitarian Crises: What Business Can Do, a guide developed by UNICEF and the UN Global Compact outlining ways in which business can help uphold children’s rights and support and promote their well-being during humanitarian crises.
Since 2008, the UN Private Sector Forum has annually gathered CEOs and Heads of State at the United Nations to discuss pressing issues such as climate change, global development, and human rights. Hosted by UN Secretary-General Ban Ki-moon, this year’s Forum was held in the context of the UN Summit for Refugees and Migrants, and was organized by the UN Global Compact in collaboration with the Co-Chairs of the United Nations High-Level Meeting of the General Assembly to address Large Movements of Refugees and Migrant, in partnership with the International Organization for Migration (IOM); Sustainable Development Goals Fund (SDGF); The UN Refugee Agency (UNHCR); United Nations Children’s Fund (UNICEF); and the United Nations Foundation.
Business Action Pledge in Response to the Refugee Crisis
As the global refugee crisis is unfolding across Europe, the Middle East and Africa, the UN Global Compact, in partnership with the UN Refugee Agency (UNHCR), and with the support of other UN entities, civil society and NGO organizations, are calling on companies, as well as other stakeholders, to take action to diminish the suffering of people forced to flee conflict and support solutions for the resulting widespread societal disruption.
According to UNHCR, 60 million people, including 19.5 million refugees, have been displaced by conflict and over 410,000 people have crossed the Mediterranean from Syria, Iraq, Afghanistan, Sudan and other countries so far this year. Understanding that the primary responsibility for peace rests with Governments, the urgency of the global refugee crisis is a challenge that requires support from all actors in society – including business.
Some companies are already taking action by providing much needed financial support to UN Agencies, Funds and Programmes, as well as to other partners responding to the crisis. Yet, business leadership can extend far beyond financial donations. Companies with operations or supply chains in countries that are producing, transiting and receiving refugees are called upon to demonstrate leadership by taking action – as an individual company or in partnership with others. Companies should determine how best to support, based on their own assets and capabilities. The types of activities can include, but are not limited to:
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Core business. Addressing the refugee crisis through a company’s core business operations, including internal procedures, human resources hiring practices, training, sourcing policies, supply chains, as well as the development of products and services appropriate for refugees.
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Social investment and philanthropy. Financial contributions, relief items and strategic social investment support for NGOs, UN and multilateral agencies or directly to affected communities and/or contributing functional expertise through volunteering efforts.
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Advocacy and public policy engagement. Fostering social cohesion and inter-group dialogue and relationship-building in the workplace, marketplace and community.
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Partnership and collective action. Joining forces with Governments, UN entities, civil society organizations and/or other businesses to act collectively to find solutions to the refugee crisis and forge long-term partnerships for regional economic and sustainable development.
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Agriculture drives Uganda’s success in reducing poverty
Farms, cities and good fortune – assessing poverty reduction in Uganda from 2006 to 2013
Uganda has made big strides in reducing poverty. Much of Uganda’s progress has been due to agricultural income growth, peace and stability, education, urbanization, as well as sustained economic growth averaging 7% annually.
According to a new poverty assessment conducted by the World Bank, the number of people in extreme poverty in Uganda (those living on less than $1.90 (2011 PPP) a day) has fallen from 53.2% in 2006, to 34.6% in 2013. This reduction of 2.7% per year is higher than the regional average of 0.74 over the course of the same period, making it one of the fastest percentage point reductions in extreme poverty in Sub-Saharan Africa and the developing world.
Poverty reduction among households working in agriculture accounts for 79% of the national poverty reduction observed between 2006 and 2013. This underscores the important role the sector plays in creating lucrative livelihoods, especially given that it currently employs over 60% of the population. As the backbone of Uganda’s economy, the sector also contributes to over 70% of Uganda’s export earnings and provides the bulk of the raw materials for predominantly agro-based industries.
The growth in agricultural incomes of households over this decade was driven by favorable food prices and good rainfall, enabling poor smallholder farmers to obtain higher incomes from their produce. The government’s increased spending on road infrastructure, education, growth in urban centers, promotion of trade and access to new regional markets, as well as the return of peace to the war-torn northern region contributed significantly to further poverty reduction. Nonetheless, it was not driven by the adoption of modern farming techniques and practices.
“The use of agricultural inputs remains low, despite the important gains they would represent for farmers,” explains Ruth Hill, senior economist and co-author of the report. “In 2012, only one in four farmers was using fertilizer for their crops, while only one in ten used pesticides. Similarly, less than 12% of farmers received extension services – all of which affect their yields.”
Low input use can be linked to the low quality of inputs prevalent in local markets – on average, 30% of nutrients are missing in fertilizers available to farmers in local markets. It is also be related to the fact that for technology adoption to pay off, it must be complemented by access to credit and access to markets.
Reducing Non-Monetary Poverty
Despite these gains, the country’s performance on some important non-monetary dimensions of well-being is low. Access to basic services such as electricity and sanitation facilities remains limited, educational completion and progression remain low. For example, only a small fraction of households (14%) have adequate sanitation, half of the average in Sub-Saharan Africa, and only one in seven households use electricity for lighting, compared to one in three on average for the region. What’s more, one in three children are stunted, a sign of chronic malnutrition. Lack of progress in these areas poses a formidable barrier to the country’s aspiration of becoming a low middle income country by 2020. It must be noted however, that Uganda has made significant progress in other human development outcomes, such as child and infant mortality, maternal mortality and access to improved water, in the last decade.
Regional inequality persists and appears to be on the rise. Poverty reduction has been generally slower in eastern and northern Uganda, two regions which have undergone 20 years of civil conflict. The proportion of the total number of poor people who live in the Northern and Eastern regions increased between 2006 and 2013, from 68 percent to 84 percent, according to the report. Poverty incidence is also higher in the north (43.7 percent) and the east (24.5 percent) compared to the central (4.7 percent) and the west (8.7 percent). Three out of ten people in northern Uganda don’t have adequate sanitation and access to electricity is practically nonexistent.
A third of Ugandans remain poor and vulnerable to shocks despite the reduction of poverty. Between 2005 and 2009, for every three Ugandans who were lifted out of poverty, two fell back in. In addition, high fertility rates have held back poverty reduction in the country, by increasing the dependency ratio and slowing consumption growth among poor households by 15 to 20 percent, and have limited the participation of women in the economic development of the country.
“Those possessing higher levels of education are more resilient to shocks and are more likely to diversify their activities beyond agriculture,” noted Clarence Tsimpo Nkengne, senior economist and co-author of the report.
In addition, high fertility rates have hindered poverty reduction in the country. The increase in the dependency ratio of poor households from 1.38 in 2006 to 1.47 in 2013 held back poverty reduction by around 15 to 20%. While total fertility rates have been falling in Uganda (from 6.6 in 2005 and 5.9 in 2013), they remain high compared to the average in Sub-Saharan Africa (5.0 in 2013). Lower fertility rates can have a positive effect on household living standards and the participation of women in the economic development of the country.
“Most Ugandans are either poor or vulnerable to poverty. For every three families who escape poverty, two fall back in,” said Christina Malmberg Calvo, World Bank Country Manager for Uganda. “Bridging the regional divide is critical by spurring agricultural growth and improving education, health and basic infrastructure services.”
The long-term development vision of Uganda is to transform from a predominantly peasant and low income country to a competitive low middle income one by the year 2020. Reducing the number of people living in poverty will require both modernizing agricultural production and expanding employment income in non-agricultural sectors, according to the report. Lower fertility could also contribute significantly to further poverty reduction. The report emphasizes the continued transformative role of agriculture and proposes policy measures that focus on making better quality inputs and extension services available to farmers, alongside affordable credit.
Continuing the Fight Against Poverty
The report recommends several policy measures and actions that can help the country to sustain progress and achieve further poverty reduction.
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Ensuring that all households in Uganda have access to high quality basic public services is an important step to improve the wellbeing of the population.
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Modernizing agriculture is critical to empowering the poor and vulnerable. Providing smallholder farmers with better extension services, quality inputs, and credit will improve their livelihoods and further contribute to poverty reduction.
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In the long-term, raising the contribution of key non-agricultural sectors to poverty reduction – particularly education, health, and urbanization – will offer more sustainable options to further reduce poverty, and spur progress toward Uganda’s aspiration to attain the status of upper middle income country by 2040.
» Download: Uganda Poverty Assessment Report 2016 (PDF, 7.58 MB)
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Export growth facility fund; why are exporters shunning the facility?
Last year, government launched the export growth facility fund as part of the strategy to boost exports and narrow down the widening trade deficit gap.
The aim according to Francois Kanimba, the Minister in charge of Trade and Industry was to channel more than Rwf1 billion, through the Development Bank of Rwanda (BRD), to facilitate exporters especially through SMEs.
Exporters would then access the funds at about 8 per cent interest per annum, covering at least 50 per cent of the cost exporters incur as they try to seek new markets abroad.
More importantly, the fund was designed as a single facility with three separate windows including investment catalyst arm, the matching grant fund for market entry related costs, and the Export Guarantee Facility.
To implement this facility, Rwanda’s Development Bank (BRD) further agreed to unveil the facility through other financial institutions such as BPR, I&M Bank, EcoBank and Urwego Opportunity Bank.
The overall objective, according Minister Kanimba, was to try and broaden the range of financial services of Rwanda’s formal finance sector but also facilitate access of export-oriented SMEs (with a turnover ranging between 50,000 to 1M$) with growth potential to tailored export finance products and services.
However, almost a year since the facility was first launched, Benjamin Manzi, BRD’s Head of investments, says the turn up is still low despite the availability of the money.
“We have gone ahead to reduce the interest rates from 16.5 per cent to 10 per cent to facilitate the export sector but still the number of those coming for the money is still low,” Manzi told Business Times adding that exporters should stop complaining about lack of funds and rather go get the money because its available.
The question should rather be why they are not coming for the money, which has been subsidized, he added.
Manzi says they are also offering technical support and facilitating exporters to go and seek markets around the world on top of guaranteeing exporters by almost 70 percent.
“The EGF is meant to facilitate firms in the horticulture, agro-processing, artisanal mining and manufacturing sectors, so we want to ensure that we assist players in this sector to become more innovative and boost their productivity by availing them both credit, the grant, plus the guarantee in other banks,” Manzi said.
Why exporters can’t access the money
Despite BRD’s efforts, some exporters still say it is hard to actually access credit from the facility.
They accuse the banks of putting stringent and bureaucratic processes before one can actually have the money. Most exporters interviewed say banks are actually not availing money and when they do, the cost is always high.
“The challenge is often on the procedures which are always bureaucratic and intensely demanding. This often demotivates those that may want to tap into the facility,” a Kigali based exporter told Business Times on condition of anonymity adding that It is easy for banks to tell you we are giving money, but to actually get the money is another different thing.
“BRD’s current procedures are so stringent and most probably, that is why exporters are not interested,” he said.
Beneficiaries speak out
However, Donatille Nibagwire, the Managing Director FLORIS export company, exporting horticulture produce to the Middle East And Europe, says after presenting all the required documents, she was able to secure the funds she used to invest in her business.
“She says it’s not true that the procedures are too stringent especially once exporters have all the necessary requirements,” she said adding that it was actually BRD that approached her with the assistance.
“It was actually BRD that looked for me after knowing about my business and inquired if I wanted any credit assistance, she said, urging exporters to always have their documentation right.
BRD says it has helped connect exporters like Nibagwire and others with grants to go and conduct market surveys abroad.
Eligibility
According to BRD, the beneficiaries should meet the principle requirements such as being a registered Rwandan SME (with a turnover ranging between 50,000 to 1M $) operating, owned and controlled in Rwanda and must be operating in horticulture, agro-processing or manufacturing sectors.
The facility also supports those in artisanal mining and manufacturing among other sectors
According to sector experts, encouraging more exporters to take full advantage of the facility is critical for the sustainability of Rwanda’s export industry.
For example by subsidizing loans at 10% interest per annum it means a reduction on the market average interest rate of 16.5% since EGF will pay the extra 6.5% which is an important milestone towards boosting the industry.
Export targets by NAEB
The National Agriculture Export Board (NAEB) is projecting to fetch more revenues from tea exports, from $65 million (about Rwf44.2b) to $147 million (about Rwf100b) by 2017, while coffee export earnings are expected to more than double from $73 million to $157 million during the same period.
This will however require concerted efforts including facilities like the Export fund.
Government also plans to enhance honey, handcrafts and horticulture production and exports as part of the new strategy. Lack of access to affordable credit is only part of the problem, according to business analysts. The country’s export industry is still struggling with challenges, including, limited market, high taxes, poor export infrastructure and lack of skilled manpower.
The imbalance between exports and imports has greatly affected the country’s trade books.
For example, according to the National Bank of Rwanda (BNR), total exports dropped in value by 2.4% in the first half of 2016, to $268.57 million from $ 275.12 million, after a decline of 6.3% in the same period of 2015, as a result of poor performance recorded by the mining sector -36.6%, tea (-5.7%), coffee -9.2% among others.
There is hope that providing access to finance at competitive prices for Export oriented SMEs while improving knowledge of SMEs on export related finance via technical assistance will greatly enhance Rwanda’s export sector.
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Ethiopia’s Sustainable Tourism Master Plan 2015-2025
ECA’s deputy executive secretary, Giovanie Biha, has handed over Ethiopia’s Tourism Master Plan to the country’s minister of tourism and culture, Mrs. Aisha Mohammed Mussa.
The master plan, which is meant to guide tourism activities in Ethiopia for the next ten years, was developed by ECA in collaboration with Ethiopia’s ministry of tourism and culture.
Speaking at the event, Mrs. Biha applauded Ethiopia’s efforts to boost tourism, which she described as a sector that could speed up the much-needed structural transformation in Africa.
“In 2015, the value of the industry in Africa stood at over USD 180 billion, accounting for 8% of the continent’s GDP,” said Mrs. Biha. “This exceeds the contributions from manufacturing and the banking sector.”
The deputy executive secretary, however, deplored the fact that the global share of Africa’s tourism was only 3% of USD 7.6 trillion in 2015.
“That’s why ECA is relentless in its efforts to address the impediments to regional tourism development, including connectivity across the continent,” Mrs. Biha added.
In 2011, ECA commissioned a study to examine opportunities and challenges of tourism in Eastern Africa. The study concluded, among other things, that a regional framework to address challenges facing tourism in the region was needed.
Based on this recommendation, IGAD developed a master plan with technical support from ECA. According to Geoffrey Manyara, an ECA Economic Affairs Officer who helped develop the master plan, member-states were spurred to action by IGAD’s regional framework.
“The IGAD master plan recommended that member states with tourism development instruments in place should have them aligned to IGAD’s regional master plan,” said Mr. Manyara. “A number of member-states then approached ECA to help develop their respective master plan. So, we started Ethiopia’s in 2013 and finished in 2015.”
Uganda’s tourism master plan was completed in 2014, and work is on-going on the Djibouti master plan.
The handover ceremony took place during a UNWTO regional workshop on tourism in Addis Ababa. In her opening remarks, Mrs. Elcia Grandcourt, director of UNWTO’s regional program for Africa, depicted Ethiopian Airlines as a key driving force for the sustainable development of travel and tourism in Africa.
“We commend Ethiopian Airlines for the work done in support of air liberalization in Africa,” said Mrs. Grandcourt. “This includes the recent open skies agreement signed between Ethiopia and Rwanda, which denotes the positive impact of regional integration on the tourism sector.”
Executive summary
Introduction
As a result of sweeping economic reforms, the Federal Democratic Republic of Ethiopia (FDRE) has been enjoying unprecedented tourism growth in the recent years. International tourist arrivals have been on a growth trajectory since the 90s rising from 64,000 in 1990 to 681,249 in 2013. This has been matched by growth in the contribution of the travel and tourism sector’s direct contribution to the country’s GDP which in 2013 was 4.2%, translating to ETB 35,766.6m and is expected to grow by 4.8% p.a. reaching ETB 59, 495.2m (3.6% of GDP) by 2024.
Further, the industry is now an important source of employment accounting for 3.8% of total employment in 2013 representing 985,500 jobs directly and this is forecast to grow by 0.1% in 2014 to 986,000 (3.6% of total employment). Such performance has seen the tourism industry increasingly becoming an important economic sector in the country and has consequently been identified as an avenue through which the plan for accelerated and sustainable development to end poverty can be achieved, as articulated in the country’s Growth and Transformation Plan (GTP), (2010-2015) vision to:
“Build an economy that has a modern and productive agricultural sector with enhanced technology and an industrial sector that plays a leading role in the economy, sustaining economic development and securing social justice and increasing the per capita income of the citizens so as to reach the level of those in the middle-income countries.”
As pertains to the tourism sector, the GTP aims at doubling the tourist arrivals from 500,000 to 1 million, and a twelve-fold increase in tourist expenditures from 250 million USD in 2010 to 3 billion in 2015. The Government is also now in the process of embarking on the second GTP which seeks to propel the country to middle income status by 2025. Accordingly, building on the success of the GTP1, GTP2, further sets high targets for the tourism sector to be achieved by 2025. Of course, while these targets may seem ambitious, they fully reflect the aspirations of the country becoming ‘One of the Five Top Destinations in Africa by 2020’.
To help ensure that tourism growth delivers broad and equitable social, economic, and environmental benefits, the government of the FDRE adopted the National Tourism Development Policy (NTDP) in 2009 with a vision:
“To see Ethiopia’s tourism development led responsibly and sustainably and contributing its share to the development of the country by aligning itself with poverty elimination.”
The NTDP sets the sector’s general objectives that places emphasis on the tourism’s potential in terms of growth, employment generation (particularly for women and youth), foreign exchange earnings, and image building for the country. It also stresses the importance of achieving tourism growth sustainably, in alignment with other national development policies and with broad participation by the different stakeholders. In this context, the Ministry of Culture and Tourism (MoCT) – the agency mandated by FDRE to oversee the systematic development of tourism – prepared the Sustainable Tourism Master Plan (STMP) with financial and technical support from the UN Economic Commission for Africa (UNECA) Sub-Regional Office for Eastern Africa.
Guiding principles, aims and strategic objectives of the ESTMP
The main aim of this STMP is to establish a national framework for sustainable tourism development with a view to contributing to socio-economic development and poverty alleviation. The STMP therefore, sets out 10 Strategic pillars, priority projects and activities in a long-term implementation framework covering 2015-2025. These are broken down into short term, medium term and long term planning horizons.
The STMP adopts the NTDP vision for tourism in Ethiopia and its specific objectives as the base guiding principles and uses an integrated model of tourism planning including Destination competitiveness and sustainable tourism development approaches. Specifically, the STMP is guided by the following underlying principles:
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Tourism planning should adopt a system approach to development focusing not only on the development processes but also on the necessary inputs and outputs.
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Tourism development should be sustainable providing equity for both inter-generational, (whereby the current exploitation of tourism resources should not compromise the ability of future generations), and intra-generational, taking into account issues relating to enhancing social justice and poverty alleviation.
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The STMP should enhance the competitiveness of the country as a tourist destination by building on the existing unique aspects of each individual region that should complement the country’s overall image and creation of synergies in areas of common tourism interest.
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The STMP should provide strategies that would reduce the level of tourism economic leakages while at the same time enhancing tourism economic linkages and multiplier effect through sound value chain development policies.
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The STMP should provide strategies in line with the wider national, regional, continental and international development initiatives and economic development plans. Tourism development should be guided by sound research.
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The STMP should, therefore, provide a mechanism for skills, knowledge and technology transfer among member states with a view to enhancing sustainability, human capital and regional competitiveness.
Key objectives for the strategic pillars
Policy, Regulation and Institutional Framework
- Establish and improve framework for formulation and implementation of tourism policies and regulations
- Strengthen and harmonise public sector institutions
- Strengthen private sector institutions
- Strengthen public-private collaboration
- Strengthen linkages with other sectors
Tourism Product Development
- Enhancing the appeal of the country’s existing tourism products
- Expanding and diversifying the country’s tourism product
- Develop inter-regional tourism product
- Create a framework for tourism product development
Tourism Marketing, Branding and Promotion
- Intensifying the country’s appeal in the current target market segments
- Diversification of the country’s tourist market
- Build a national brand that improves and entrenches the image of the country as a tourist destination
- Disseminate and manage destination information
- Establish institutional and strategic frameworks for marketing the country
Investment in Tourism Facilities and Services
- Enhance the capacity of the existing tourist services and facilities
- Create a conducive environment to encourage investments in the tourism sector
- Promote investment opportunities for tourism services and facilities
Human Resource Development
- Address the short-term HR needs for the tourism sector
- Build a long-term supply of globally competitive human resource for the tourism sector
Tourism Research and Development
- Create a framework for tourism research and development within the country
Tourist Safety and Security
- Design and develop a tourism safety and security strategy
Tourism Support Infrastructure and Services
- Engender tourism industry development focus in national and regional infrastructure development
Conservation and Preservation of Natural and Cultural Resources
- Enhancing the conservation and preservation of natural and cultural resource
Tourism Development Financing
- Institutionalise the mobilisation of financial resources to fund tourism development
- Design strategies to mobilise financial resources to fund tourism development under the TDF framework
These strategic pillars and key objectives are organised to produce a coordinated response to future industry growth and emphasises their inter-relationships and equal importance.
In line with the projections of GTP2, the STMP has set a high growth target of 5 million international visitors in 2025. Based on this high growth scenario, receipts from international arrivals is projected to increase from a baseline of ETB 14.197 billion in 2012 to ETB 180 billion in 2025, with the corresponding number of tourism-related jobs rising from 985,500 to 4.8 million.
To ensure that this growth is realised in a competitive and sustainable manner, the master plan includes 10 strategic pillars with an indicative cost of ETB 5.306 billion.
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tralac’s Daily News Selection
The selection: Monday, 19 September 2016
The 6th Meeting of the Continental Task Force discusses fast-tracking the establishment of the CFTA (@AUTradeIndustry).
The UN Summit for Refugees and Migrants, in New York: conference website
Profiled conference resources:
South Africa: the minutes, documentation from last week’s parliamentary hearing on the Border Management Authority Bill.
African Union for Housing Finance: presentations from last week’s 32nd Annual Conference, on the theme ‘Housing and Africa’s growth agenda’.
Featured commentary, by Memory Dube: ‘Could emerging economies accelerate regional integration in Africa?’ (ICTSD)
It must be stressed from the onset that, to date, emerging economies’ influence on African regional integration has not been the result of targeted intervention. Instead, it consists of what observers can perceive by making connections and creating links between their trade, investment, and development aid interventions, where such interventions have regional implications. This, of course, is distinct from speeches or forum declarations where commitments to regional integration are made without specific allusion to any particular project. Emerging economies tend to have a bilateral, project-based approach to their engagement with African countries that, at cursory glance, cannot be said to speak to regional integration. Africa’s “traditional” partners (mainly EU countries), on the other hand, have long supported African regional integration efforts through trade-related development aid, with well-established technical support structures and capacity building initiatives. In considering the current role of emerging economies in regional integration, there are three avenues that can be considered: trade, investment, and development aid.
Financing the African Union: F10 Ministerial workshop (AU)
The two-day conference saw the Committee of Ten Finance Ministers (F10) convene to share ideas and best practices of implementing the decision. The F10 (representing the five African regions East, Southern, West, North and Central) met to discuss the draft terms of reference of the F10 which among others include; the review and evaluation of the annual budget of African Union before submission to the Assembly of Heads of State and Government of the African Union; propose implementation mechanisms of the Import Levy in particular; the collection of the funds, transfer of the collected funds and Peace Fund management arrangements. The F10 are also tasked with defining a roadmap for the implementation of the Decision, reviewing the status of the implementation of the 0.2% levy on all eligible imported goods into the continent to finance the African Union operational, program and peace support operations budgets starting from the year 2017 while ensuring the effective use of these resources.
The US-Africa Business Forum: Assessing progress and considering the stakes (Brookings)
Two years after the first US-Africa Leaders Summit and Business Forum brought together US and African CEOs in addition to heads of state and government, the US will convene a second US-Africa Business Forum on 21 September in New York City. Co-hosted by Bloomberg Philanthropies and the US Department of Commerce, the forum will emphasize opportunities for expanding US-Africa business, trade, and investment ties in key sectors positioned for growth, such as finance and capital investment, infrastructure, power and energy, agriculture, consumer goods, and information communication technology. While at the inaugural forum in 2014, nearly 150 CEOs from US and African companies announced more than $33bn in new deals - thus highlighting Africa as a strategic business and investment destination - this year, the forum promises to delve further into the question “How do you effectively do business in Africa?” It will also serve as an opportunity to assess how far the US has come in fulfilling its commitments from the last forum to the continent. [The analysts: Amy Copley, Amadou Sy]. Related Business Forum commentaries (Brookings): Witney Schneidman: Investing in solar energy, Robin Lewis, John Villasenor, Darrell M. West: ICT investment can drive economic growth, John McArthur: Expanding credit for small-scale irrigation
Women’s trousers top list of Kenyan exports to the US (Business Daily)
Official data shows that the United States ordered women trousers and shorts worth Sh4.2bn in the year to June, a 23.5% growth compared to Sh3.4bn in a similar period of 2015. The export of women’s wear has grown steadily over the last three years from Sh2.9bn in the first half of 2013, according to data from the Kenya National Bureau of Statistics. At Sh4.2bn women’s trousers accounted for nearly a third of the Sh13.4bn value of clothes shipped from Nairobi to Washington in the year to June, having grown by Sh1.5bn or 12.6%. [Kenya eyes more exports to US at Agoa summit]
East Africa: Illicit trade a security threat, region warned (New Times)
Pointing out the impact on security, Magdalene Munyao, Chairperson of the Anti-Illicit Trade Committee of Kenya Association of Manufacturers, said the crime is conducted by organised criminal groups, and was an opportunity for financing terrorism. Shedding light on the impact of illicit trade on investments, government revenues and social welfare, Munyao noted that it is a front for money laundering and has the potential to sabotage national economies. “KAM urges governments, the private sector and the consumers to work together in fighting this common enemy so that we may be able to; enhance the regional and national regulatory frameworks in order to protect EAC investments and consumers,” Munyao said. [Illegal trade ‘costing East Africa $500MN in tax’]
Tanzania changes tune on food exports to East Africa (The East African)
Tanzania is set to introduce new rules on food exports after it lifted a ban that had seen Uganda become the main source of grains in the region. The government said the lifting of the ban was prompted by forecast of surpluses. However, exporters will still require permits for rice and maize, and quotas will also be introduced to limit the export quantities. The Minister for Agriculture, Livestock and Fisheries, Charles Tizeba, said the new rules were meant to curb practices that jeopardise food security such as pre-harvest sale of produce. Mr Tizeba said traders were now free to export maize, sorghum, millet, rice, wheat, beans, cassava, potatoes and bananas potentially providing a respite for Rwandans who have over the past two months borne high food prices following a ban of exports there by Burundi.
Kenya to lose regional fuel market (Daily Nation)
The image of a visibly angry Energy Cabinet Secretary Charles Keter moving from one petrol station to another two weeks ago pouring adulterated fuel in Nakuru not only raised eyebrows but also questions why he was doing a job that would ordinarily be done by junior ministry officers. In the end, seven fuel companies had their licences cancelled. But Mr Keter has a bigger reason to worry. But on the regional front, all EAC countries apart from Uganda and Tanzania have since the beginning of the year reduced the amount of fuel they import from Kenya due to concerns over adulteration. So dire is the situation that Rwanda, which imports on average 60 metric tons of diesel through Kenya, completely stopped doing so in July opting for Tanzania which it claims has cleaner fuel and has a bigger axle load limit offering better economies of scale. Burundi, too, has since May not imported any diesel from Kenya.
Tanzania: Involve Parliament in EPAs, Ndugai advises government (The Citizen)
National Assembly Speaker Job Ndugai has asked Prime Minister Kassim Majaliwa to bring the Economic Partnership Agreements to Parliament so they can be debated before the government decides whether or not to sign them. In his remarks after the Premier had adjourned the august House on Friday, Mr Ndugai noted that MPs would have valuable input on the matter. His call comes only a few days after members of the business community also asked the government to involve them in deliberating the documents. They blamed the government for sidelining them in the last ten years during which it has been consulting with the EU through the EAC. [Honest Ngowi: ‘Postponing signing of EPAs: looking at issues of concern’ (The Citizen)]
South Africa: Busa rejects border agency due to cost (Business Day)
Business Unity SA has added its voice to growing opposition to a mooted border management authority and cautioned against such a move, citing the strain this would place on the fiscus when the country is faced with the prospect of having its sovereign credit rating downgraded. Busa pointed to the socioeconomic impact assessment study conducted on the formation of such an entity, which showed that setting up a border management authority would cost R15bn-R24bn, while capacitating the South African National Defence Force would come at a projected R2.5bn price tag. “The fiscal space for the establishment of the [authority] is simply not available.” [Government’s refugee plan is overkill]
South Africa: Review of system for import tariffs on key foods is nearing completion (Business Day)
The International Trade Administration Commission aims to complete its review of the system for determining import tariffs on wheat, maize and sugar before year-end, chief commissioner Siyabulela Tsengiwe said on Friday. Tshenge said in briefing Parliament’s agriculture portfolio committee that Economic Development Minister Ebrahim Patel had directed Itac to review the dollar-based domestic reference price and varied tariff formulas for the three commodities. "The reasons for these reviews are changed circumstances," he said.
Zimbabwe: SI64 paying dividends (Sunday Mail)
“We are happy to note that there are some industries that are now reaching 100% capacity utilisation, with cooking oil industry pushing to between 90 and 100 percent from around 50% a few months ago,” said Industry and Commerce Deputy Minister Chiratidzo Mabuwa. “The yeast industry was almost closed but it’s now at 83% capacity utilisation while the biscuits manufacturing industry has gone up from 35% to around 75% because of SI64. “Some big companies were about to fold because we were importing products that they were producing. We corrected that and gave them an opportunity to produce those goods,” she said. The deputy minister dismissed suggestions that SI64 pushed the prices of basic goods upwards.
UNCTAD eyes an agricultural future for successful customs automation (UNCTAD)
Trade in agricultural commodities is the next frontier for UNCTAD’s ASYCUDA program, which reduces bureaucracy, corruption, and trade delays in as many as 93 developing countries by automating customs procedures. The first country to pilot ASYCER - which stands for Automated System for Certification - was Ethiopia. "Flowers are especially perishable, and cutting customs clearance times can bring significant benefits to farmers," said Fabrice Millet, Chief of the ASYCUDA program at UNCTAD’s Division on technology and logistics. ASYCUDA is UNCTAD’s largest technical assistance program.
MERCOSUR is not really a free trade agreement, let alone a customs union (Vox EU)
The fact that Argentina and Brazil do not coordinate their most actively changing trade policies of antidumping and safeguards has other important implications. Each can and does continue to respond to political-economic shocks independently. Yet, this also makes them unable to take full advantage of the benefits of a customs union arrangement. In particular, the inability to credibly coordinate joint policy changes means they have been unable to amass increased bargaining power vis-à-vis the rest of the world – that might have otherwise arisen through increases in their (joint) import market power – to better negotiate collectively. [The analysts: Chad Bown, Patricia Tovar]
Deconstructing India’s Model Bilateral Investment Treaty (The Wire)
Released in 2015, a few provisions in the model treaty have drawn attention from trade partners. A greater look at this treaty, which will shape investor dispute battles in the future, is clearly necessary. There have been concerns regarding India’s model treaty and its seemingly protectionist approach that has come to inform this process. Recent reverses including the verdict in the Devas dispute, are also strengthening positions of both investors and the government. India has so far signed BITs with 83 different countries. According to UNCTAD, which keeps an account of the number of disputes, a total of 17 known investor-state dispute settlement cases were filed against India by the end of 2015. Of these seven are pending, nine were settled and India lost one case (excluding the recent Devas ruling). India was one of the top 15 most frequent respondent states in 2015 (sued most often). [The analyst: Priti Patnaik] [India’s appeal against WTO solar ruling rejected]
Aliko Dangote: Despite my influence, I need 38 visas to move around Africa (The Cable)
Cashaa, the Uber of money transfers, revolutionizes cash remittances to Africa (The Coin Telegraph)
Rwanda: Mining companies welcome revenue sharing scheme (New Times)
Ghana’s horticulture and floriculture potentials showcased (GhanaWeb)
Collins Odote: ‘We need more objective debate on the SGR’ (Business Daily)
China sets up council to promote investments with India (Indian Express)
Egypt sets up committee to resolve agricultural trade dispute with Russia (The Independent)
NZ dairy companies press WTO over Canadian subsidies
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Could emerging economies accelerate regional integration in Africa?
As the regional integration agenda in Africa gains speed, is the economic engagement of emerging economies on the continent contributing to that agenda? If so, how? If not, can it be leveraged to contribute?
After 2009, in the aftermath of the global economic meltdown, Africa has witnessed growth in trade and economic relations with emerging economies. This trend was driven partly by the resultant economic slump in the developed world and the fact that emerging economies, such as China, buffered African economies during the crisis by providing welcome alternative export markets, thus diminishing the effects of the crisis. While this relationship had already been steadily growing after the year 2000, from 2009 onwards a marked shift in relations between emerging economies and Africa took place, particularly as seen through the lens of China and India’s engagement in Africa.[1]
These developments have also taken place parallel to a regional integration discourse that has been gaining momentum in Africa. It was in 2008 also that the Common Market for Eastern and Southern Africa, the East African Community, and the Southern African Development Community agreed to negotiate the Tripartite Free Trade Area, which was signed in June 2015. At the same time, in February 2016, negotiations towards the establishment of the Continental Free Trade Area (CFTA) were launched, with the aim of having the CFTA in place by 2017. Both agreements are expected to provide the legal and policy framework to support and boost intra-regional trade.
While Africa’s economic engagement with European countries has undergone several changes over the years, its features are well known and understood. The economic relations between Africa and emerging economies are framed by relations that are still fluid and dynamic, thereby creating much scope to leverage and influence the regional integration agenda in Africa.
Context and background
Africa’s growing relationship with the emerging economies takes place within the context of changing and fluid global geopolitical dynamics. Within that frame, Africa has also become a battleground for economic influence between East and West, manifest in the myriad of “Africa” forums hosted by major developed and emerging economies that seek to strengthen political and economic ties.
On the trade front, it is necessary to factor in the Economic Partnership Agreements (EPAs) negotiations with the EU and the renewal of the African Growth and Opportunity Act (AGOA) by the US. While the EPAs are reciprocal free trade agreements, AGOA is a trade preference scheme, but all indications are that this latest renewal is the last iteration of AGOA. China and India also offer preferential trading arrangements to African countries through the Generalized System of Preferences (GSP) by offering duty free quota free access to their markets for least developed countries.
These developments also have to be considered within the context of an evolving global trade architecture, defined by the rise and spread of global value chains (GVCs) in modern day commerce, as well as the emergence of the so-called mega-regional trade negotiations, most exemplified by the Trans-Pacific Partnership (TPP) and Transatlantic Trade and Investment Partnership (TTIP).
Such developments are also taking place at a time when Africa, despite the end of the global commodities super cycle, is still experiencing a significant level of growth and remains an attractive investment destination, in addition to a large consumer market. This is notwithstanding the fact that Africa’s further growth potential is limited by a number of factors, including the undiversified nature of African economies, poor and inadequate infrastructure (both hard and soft infrastructure), as well as chronic supply-side deficiencies, which severely constrain African markets’ capacity to produce and supply goods and services to domestic, regional, and international markets.
In an era where the GVC structure is the norm, this has significant implications for regional integration in Africa and, indeed, future growth potential. Africa’s main preoccupation therefore, even from a regional integration perspective, has mostly been with industrialisation and infrastructure development, with the objective of facilitating the structural transformation of Africa’s economies, ensuring competitiveness of African-produced goods, as well as boosting intra-regional trade and facilitating integration into GVCs. The discourse on regional integration in Africa, which has been gaining momentum in recent years, frames all of the above.
Emerging economies and regional integration in Africa
It must be stressed from the onset that, to date, emerging economies’ influence on African regional integration has not been the result of targeted intervention. Instead, it consists of what observers can perceive by making connections and creating links between their trade, investment, and development aid interventions, where such interventions have regional implications. This, of course, is distinct from speeches or forum declarations where commitments to regional integration are made without specific allusion to any particular project. Emerging economies tend to have a bilateral, project-based approach to their engagement with African countries that, at cursory glance, cannot be said to speak to regional integration.
Africa’s “traditional” partners (mainly EU countries), on the other hand, have long supported African regional integration efforts through trade-related development aid, with well-established technical support structures and capacity building initiatives.
In considering the current role of emerging economies in regional integration, there are three avenues that can be considered: trade, investment, and development aid. Firstly, trade between Africa and emerging economies still remains significant, with China being Africa’s largest trading partner despite a 21 percent year-on-year decline in 2015, while trade between India and Africa also remains buoyant.[2] Other emerging economies, which have significant trade ties with Africa, include Saudi Arabia, South Africa, South Korea, Turkey, and the United Arab Emirates.
Secondly, on the investment front, while traditional partners remain the largest investors in Africa, three of the top ten investors are emerging economies: China, India, and South Africa.[3] Emerging economies are an important source of foreign direct investment (FDI) for Africa, although resource-rich countries – which are largely focused on – still get the lion’s share of this FDI.
Thirdly, emerging economies are also significantly involved through development assistance initiatives in Africa, which have also been growing in scope and coverage over the years. Development assistance from emerging economies, particularly China and India, tends to be presented as a package that bundles aid, trade, and investment initiatives, making it hard to distinguish one from the other. This is a strategic approach that speaks to the particular national economic interests of the emerging economies in Africa, and the Chinese “Angola” model is a particular case in point. The picture of development aid should, however, change when other emerging economies are considered.
As mentioned above, there is no institutionalised emerging economies approach to regional integration in Africa, as distinct from various vehicles created and employed by traditional partners to foster African regional integration and other objectives. Any reference to an institutionalised “Africa” agenda on the part of emerging economies, would, at most, address the South African initiative at the fifth BRICS (Brazil, Russia, India, China and South Africa) Summit in Durban in 2013. As Summit host, South Africa made BRICS-Africa engagement the core of the summit under the theme “BRICS and Africa: Partnership for Development, Integration and Industrialisation.” BRICS leaders also held a retreat with African leaders after the summit, creating an opportunity for both parties to engage beyond the bilateral level.
One of the key outcomes of the summit was the commitment to establish the BRICS Development Bank, now called the New Development Bank (NDB). The NDB is in the process of being established and could potentially play a very important role in regional integration in Africa by plugging some of the funding gaps that exist in infrastructure development and other priorities on the continent.
Clearly, while there is plenty of scope to shape the current and future engagement of emerging economies on the continent, the parameters are not yet set and it is in Africa’s interest to define them. Africa’s response to the emerging economies has been muted in terms of strategy, with countries more concerned with their own individual engagement with emerging partners. As industrialisation and infrastructure development tend to be priorities at national and regional levels, there is a need for both the harmonisation of the emerging economies’ individual engagements in Africa and a strategic response from African countries.
This should be pursued, however, in a manner that satisfies three primary objectives on the part of Africa: reducing barriers to trade and facilitating intra-regional trade; supporting the structural transformation of Africa’s economies, including through better integration and participation in GVCs; as well as expanding not only the export product basket, but also the means of production, for which infrastructure development is critical.
To achieve this, the regional integration approach that focuses primarily on market access has to shift and also concentrate on “behind the border” regulatory issues. This is especially important in light of the fact that African countries have to compete for investment in a world of GVCs and mega-regional trading arrangements. The world of commerce has changed so much that any active participation in the global economy demands that a country be plugged into GVCs. The facilitation of such participation bears on multiple issues, such as infrastructure development, industrialisation, investment regimes, and trade facilitation, among others. This brings to mind the mega-regional initiatives led by the US and the EU, TPP and TTIP, and the major elements of those negotiations. While it is understood that African countries are wary of committing themselves on such issues as intellectual property, investment, government procurement, and a host of other “behind the border” regulatory issues that these mega-regional initiatives are negotiating, it is also true that these are the same kind of issues that will partly determine the attractiveness of Africa as an investment destination and its ability to plug into GVCs.
Leveraging emerging economies for regional integration
Leveraging emerging economies’ engagement in Africa to strengthen regional integration can be based on a three-pronged approach:
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an African strategy for regional integration and associated priorities such as infrastructure development and industrialisation;
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a joint strategic African approach and response to emerging economies and their engagement on the continent;
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a full recognition of the role played by Africa’s traditional partners in regional integration so as to create opportunities for complementarities.
Regional integration is not a new phenomenon in Africa, as is the subject of emerging economies and their engagement on the continent. There are also plenty of research studies, projects, and programmes involving the regional economic communities, the African Union, African countries, as well as various stakeholders – both regional and domestic – on the subject of regional integration and how best to leverage on development partners. Efforts should be made, at the continental level, to integrate the various plans that have been adopted and are in motion, and compile a single living strategic plan that can be amended as circumstances demand but still addresses regional integration issues in a holistic manner, combining the various dots that currently exist in silos. Such a document should also engage with institutions such as the New Economic Partnership for African Development (NEPAD), the United Nations Economic Commission for Africa (UNECA), as well as the African Development Bank (AfDB), and be used as a blueprint for regional integration, infrastructure development, and industrialisation.
The document referred to above could then be used as the basis for crafting a strategic plan or approach for engaging with emerging economies on the continent. FDI-seeking initiatives targeting emerging economies, particularly when they speak to projects that could potentially have regional spillover effects, should be based on a common regional integration template. For example, such a template could take a form similar to the Programme for Infrastructure Development in Africa (PIDA). This is especially important when considering the fact that most of the emerging economies’ engagement on the continent tends to be bilateral in nature. The responsibility to ensure the regional compatibility of projects, therefore, does not lie with the investing country but more with the recipient country.
Lastly, there should be recognition by African countries that the roles played by traditional partners and emerging economies on the continent do not have to be mutually exclusive. There are many areas where both could potentially work together, and should work together, particularly when it comes to programmes designed to foster economic growth and development – and eventually enhance regional integration – in Africa. Using infrastructure as an example, while emerging economies tend to focus on hard infrastructure projects, traditional partners tend to focus on both hard and soft infrastructure, going into the regulatory issues beyond the border. The two approaches are compatible and can work together to Africa’s advantage. The same approach could be used with regard to trade and investment. For instance, on the trade front, the US’ AGOA presents an opportunity for value chain entry in various sectors such as automotive, clothing, and textiles, thus supporting the process to promote diversification. China, on the other hand, has been establishing industrial zones or “special economic zones” (SEZs) designed to foster investment. One idea to improve complementarity between the US and China’s efforts would be to ensure that these SEZs are also geared towards AGOA and allow for the production of goods or components that can be exported to the US under AGOA.
Conclusion
The rise of the emerging economies and their economic influence in Africa has led to competition between traditional and emerging partners to increase their scope of influence on the continent. This should be utilised as an opportunity for Africa to bargain for greater benefits as well as more ownership of its own development agenda and any support provided for this agenda. However, such a process, as outlined above, has to be led by Africa, otherwise the role of emerging economies and their contribution to regional integration will remain haphazard and unstructured.
Memory Dube, Senior Trade Officer in the NEPAD, Regional Integration and Trade Department, African Development Bank.
This article is published under Bridges Africa, Volume 5 - Number 7, by the ICTSD.
[1] Definitions of “emerging economies” are many and varied, but, for the purposes of this article, emphasis will be on China and India who have been particularly active in Africa, although it is acknowledged that there are other emerging economies engaging with the continent.
[2] S. Freemantle, “BRICS-Africa: the hype is gone, but much remains,” Standard Bank, Insight and Strategy, 8 June 2016.
[3] United Nations Conference on Trade and Development (UNCTAD), World Investment Report 2016, Geneva: UNCTAD, 2016.
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The US-Africa Business Forum: Assessing progress and considering the stakes
Two years after the first U.S.-Africa Leaders Summit and Business Forum brought together U.S. and African CEOs in addition to heads of state and government, the U.S. will convene a second U.S.-Africa Business Forum on September 21, 2016 in New York City.
Co-hosted by Bloomberg Philanthropies and the U.S. Department of Commerce, the forum will emphasize opportunities for expanding U.S.-Africa business, trade, and investment ties in key sectors positioned for growth, such as finance and capital investment, infrastructure, power and energy, agriculture, consumer goods, and information communication technology. While at the inaugural forum in 2014, nearly 150 CEOs from U.S. and African companies announced more than $33 billion in new deals – thus highlighting Africa as a strategic business and investment destination – this year, the forum promises to delve further into the question “How do you effectively do business in Africa?” It will also serve as an opportunity to assess how far the U.S. has come in fulfilling its commitments from the last forum to the continent.[1]
Progress in U.S.-Africa trade and investment initiatives
So where do U.S.-supported economic goals in Africa stand two years after the inaugural forum? To answer this question, we examine some of the commitments made at the 2014 forum and discuss their progress and outcomes to date.
Translating the energy and positivity from the first U.S.-Africa Business Forum into concrete trade and investment gains has no doubt been an arduous task. Many of the initiatives stemming from the first forum require immense political or technical lifts in order to be operationalized. For example, common roadblocks to large infrastructure – including energy projects – are standards, procurement, taxes, and project financing, which require technical expertise and coordination with local partners and sometimes regional and multilateral stakeholders. Implementation has been notably slow-going in some respects, as various U.S. government agencies are attempting to address multiple, complex, and mutually reinforcing facets to doing business in Africa simultaneously. Ultimately, implementation of these projects depends not only on U.S. leadership but largely on support from national systems and local political will too. Despite the slowdowns, however, there is still a general acknowledgement among U.S. business leaders that the conditions for doing business in Africa are progressively improving, and there is “money to be made” in the continent.
Several important achievements have been reached: For instance, as a part of the Trade Africa initiative, the U.S. signed a Cooperation Agreement on “Trade Facilitation, Sanitary and Phytosanitary Measures, and Technical Barriers to Trade” with the East African Community (EAC) in February 2015. This agreement aims to advance EAC partner states’ ability to meet international quality and safety standards by improving the countries’ technical regulations, standards, testing, and certification systems. Furthermore, in June 2015, President Obama signed the African Growth and Opportunity Act (AGOA) Trade Preferences Extension Act of 2015 into law, extending AGOA for 10 years. Another bill, the AGOA Enhancement Act, which was recently referred to the Senate Committee on Foreign Relations, builds upon the 2015 AGOA Act to allow the Millennium Challenge Corporation (MCC) to make regional compacts possible and encourage regional trade capacity building efforts in the Africa. So far, it seems progress has been made in implementing policies to meet trade-oriented goals, including both demand side (tariffs, quotas, etc…) and supply-side constraints (trade capacity, international standards, etc…). Power Africa, another key initiative of the current administration, has continued expanding energy access through the continent with some promising results, and with the enactment of the Electrify Africa Act in February 2016, U.S. support for ending energy poverty in Africa has become law.
On the business front, the U.S. Department of Commerce has doubled its presence in sub-Saharan Africa: It has established new offices in Angola, Tanzania, Ethiopia, and Mozambique, expanded its operations in Ghana, and reinstated a position at the African Development Bank. In turn, it increased the number of foreign commercial service officers in the region who provide crucial support to U.S. and African firms including counseling and technical assistance. It also held a number of events across the continent and in the U.S. – including the Trade Winds Business Forum and trade missions in eight African countries – to connect U.S. firms with local decision-makers and business opportunities. Meanwhile, the Department of Commerce’s Presidential Advisory Council on Doing Business in Africa led a fact-finding mission to Nigeria and Rwanda to learn from local stakeholders how U.S. government programs and policies can better support economic engagement between the U.S. and the region. From these visits, as well as several council meetings, the group compiled a series of in-depth reports, identifying the key successes and gaps of the U.S.-Africa business relations and providing guidance on future engagement.
From action to outcomes: a complicated picture
These notable policy achievements, however, are not necessarily reflected in the latest figures on trade outcomes between the U.S. and Africa. According to the IMF Direction of Trade Statistics, exports from the U.S. to African countries have actually decreased overall from $25.1 billion in 2014 to $17.5 billion in 2015, mostly due to huge declines in U.S. exports to Nigeria, South Africa, Angola, Togo, and Kenya. The drop in U.S. exports to Africa could be somewhat explained by the lower growth environment in the region, generally reducing demand for exports. Similarly, African imports to the U.S. decreased from $26.7 billion in 2014 to $18.8 billion in 2015, with the largest declines in imports from oil-exporters Angola, Nigeria, and Chad. Over the same period, the U.S. began shifting away from importing oil from African countries in favor of domestically produced oil. While these declines might seem to signal bad news for U.S.-Africa trade, U.S. exports and imports to the world (excluding the region) also declined from 2014 to 2015 as did global trade, indicating a broader slump across the international trading system, resultant from lower commodity prices as well as China’s diminished growth and import demand.
In terms of investment, according to Ernst & Young’s 2016 Africa Attractiveness Survey Program, the U.S. was the largest investor in the continent in terms of number of greenfield FDI projects in 2015, retaining its top position from the previous year – despite a 4 percent decline in projects. Unfortunately, taking a more granular look at the projects and specifically attempting to track the progress of deals reached during the 2014 forum is extremely difficult, except when individual companies choose to publicize their follow-up or they receive coverage from business reporters. For example, at the last forum, Coca-Cola announced that it would invest $5 billion over the next six years in Africa to fund new manufacturing lines and to create additional jobs across the supply chain. In June 2016, the firm opened a bottling plant in Mozambique, and later that month, in a merger with SABMiller and Gutsche Family Investment (Coca-Cola Beverages Africa), it announced that the new African company will expand services to 14 African countries and create more than 30 bottling plants throughout the continent. As the case of Coca-Cola shows, firms are implementing their promises across the continent, although is difficult to gauge to what extent companies have followed through on their stated commitments.
Expectations and recommendations for the Second U.S.-Africa Business Forum
The U.S.-Africa Business Forum series provides an excellent platform through which to launch a conversation, but requires concrete follow up from all stakeholders in order to precipitate action. Given the brevity of the forum, it is important for both U.S. and African partners to come to the table prepared – with strategies highlighting their key asks and the mutual benefits afforded to all partners – in order to take full advantage of their time together. Moreover, presenting updates on the investments and deals made at the last forum and publishing them on the forum website would provide greater transparency on these initiatives and allow U.S. and African companies to benefit from the lessons learned in various country- and sector-specific contexts.
It is also important for the right mix of leaders to connect during the forum in order to achieve the specific goals outlined by the administration through its Doing Business in Africa campaign – one of which includes job creation in the U.S. and Africa. While it is expected that the usual suspects from large African multinationals will attend, it is not clear whether African small and medium enterprises (SMEs) will be adequately represented at the forum. Considering that 66-80 percent of the formal employment in the region is in SMEs, and 50 percent of job creation comes from enterprises with less than 100 employees,[2] it is crucial that these players be considered active and vital contributors to Africa’s thriving business community and invited to the forum as well. That being said, it is worth noting that the U.S. does recognize the value of African SMEs through other means, including a wide array of development programming and the Global Entrepreneurship summit for SME leaders and entrepreneurs, which was held in Kenya in 2015.
Lastly, going forward, ensuring adequate support for U.S. investors and firms in Africa is imperative if the deals reached at the forum are to be successfully implemented. A larger presence of foreign commercial service officers, commerce specialists, and similar embassy support throughout the continent could facilitate many of the issues related to deal flow, legal regulations, and customs that currently serve as bottlenecks to greater U.S. business and investment. Providing targeted support for deals related to the Power Africa initiative and ensuring coordination with the regional Southern Africa Trade Hub as well as the East and West Africa Trade and Investment Hubs would help achieve U.S. and African business and development objectives simultaneously.
In conclusion, irrespective of our expectations for the forum, the next administration should keep building on the momentum behind U.S.-Africa business and investment promotion and follow through on the expert recommendations identified by the President’s Advisory Council on Doing Business in Africa.
[1] The White House released a number of statements identifying U.S. business and investment commitments to Africa during the 2014 U.S.-Africa Leaders Summit and Business Forum: They can be accessed here.
[2] According to figures from the International Labor Organization (ILO).
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Conference of Ministers of Finance kicks off on modalities of financing the African Union
The African Union’s financing requirements are increasing with the evolution of projects and development programs of the continent. This therefore underscores the need for reliable and predictable self-financing mechanisms of the AU operations and programs.
It is on this background that the conference of Ministers of Finance from Africa kicked off in Addis Ababa, Ethiopia on the 15th of September 2016 to look at the modalities of the implementation of the “Financing of the Union” decision taken by Heads of State and Government, during the 27th African Union Summit in Kigali, Rwanda in July 2016.
The two-day conference saw the Committee of Ten Finance Ministers (F10) convene to share ideas and best practices of implementing the decision.
The F10 representing the five African regions East, Southern, West, North and Central, met to discuss the draft terms of reference of the F10 which among others include; the review and evaluation of the annual budget of African Union before submission to the Assembly of Heads of State and Government of the African Union; Propose implementation mechanisms of the Import Levy in particular; the Collection of the funds, Transfer of the collected funds and Peace Fund Management Arrangements.
The F10 are also tasked with defining a roadmap for the implementation of the Decision, reviewing the Status of the implementation of the 0.2 percent levy on all eligible imported goods into the continent to finance the African Union operational, program and peace support operations budgets starting from the year 2017 while ensuring the effective use of these resources. At the same time, the F10 will review the compliance and adoption of the policies as well as propose the various resources mobilisation strategies for the Union.
Dr. Nkosazana Dlamini Zuma, Chairperson of the African Union Commission expressed appreciation to all member states, central bank governors and officials present for the milestone achieved. She described the achievement as a great deal for the Union to be at the implementation stage of the decision that was made in Kigali by the Heads of State and Government. Dr. Dlamini Zuma also emphasized the need for self-reliance of the Commission especially, as the driving force for Agenda 2063 and its 10 years flagship projects, which she added would be a challenge to realize, without sustainable financing.
She also urged the ministers of Finance to familiarize themselves with the AU Agenda 2063 and welcomed the Regional Economic Communities, such as ECOWAS and ECCAS experience-sharing of their self-financing model and the best practices.
Cabinet Secretary Henry Rotich, Kenya’s Minister of Finance while chairing the meeting, emphasized that the growing scope of activities of the AU does not match with the availability of the Union’s resources. “Our goal as Ministers is to ensure we come up with implementation procedures for sustainable financing of both the Union and its programs. This we shall do through brainstorming discussions as well as shared experiences from other countries and Economic Regions,” said Honorable Rotich.
The Deputy Chairperson of the African Union Commission, H.E Erastus Mwencha presented the draft guidelines for the implementation of the Assembly decision on financing for the Union. Mr. Mwencha encouraged the Ministers of Finance to be more involved in the budget-making process of the Union, the scope of how the 0.2 levy will apply and also identify areas in which the peace fund shall be applied.
The African Union Commission represented by the Director of Human Resources Management and Development Mr. Amine Idriss Adoum and the Director for Finance Mrs Assietou Sylla Diouf briefed the Ministers on the ongoing Human Resource reforms, capacity building reforms, strengthening of staff capacity through the AU leadership academy, the budget preparation process, budget breakdown percentages; all which the Union is overseeing to ensure accountability and efficiency of the African Union.
Illicit trade a security threat, region warned
Illicit trade is a serious security threat as it encourages widespread criminality, an official said as the second regional anti-illicit trade conference concluded Friday in Nairobi, Kenya.
Pointing out the impact on security, Magdalene Munyao, Chairperson of the Anti-Illicit Trade Committee of Kenya Association of Manufacturers (KAM), said the crime is conducted by organised criminal groups, and was an opportunity for financing terrorism.
Shedding light on the impact of illicit trade on investments, government revenues and social welfare, Munyao noted that it is a front for money laundering and has the potential to sabotage national economies.
“KAM urges governments, the private sector and the consumers to work together in fighting this common enemy so that we may be able to; enhance the regional and national regulatory frameworks in order to protect EAC investments and consumers,” Munyao said.
Illicit trade, she said, is defined as any practice or conduct prohibited by law and which relates to production, shipment, receipt, possession, distribution, sale or purchase including any practice or conduct intended to facilitate such activity. It comprises trade in illegal goods and services, and trading in legal goods illegally.
She said it was difficult to quantify or access its data since it operates outside the law.
The definition of illicit trade, she said, is broad enough to encompass additional activities including: trading with illegal weights and measures; human trafficking; environmental crime; illegal trade in natural resources; and trade in illegal, harmful or substandard goods that may carry serious health and safety risks.
Its impact to regional companies, Munyao said, is unfair competition and loss of profit by legitimate industries, loss of market share, brand and company reputation, among others.
Munyao said illicit trade also has a negative impact to: consumers and the public, the government, investments and the economy in general. Shedding light on how it poses a risk to health and safety, she noted that according to the International Policy Network, the number of persons in Africa that die from counterfeit medicines each year stands at 100,000.
“In Kenya alone in May 2014, deaths related to the consumption of illicitly produced and traded alcohol surpassed 90 while more than 100 people were hospitalized as a result of consuming illicit alcohol during the same period,” Munyao said, further noting that some domestic and industrial fires are attributable to fake cables and circuit breakers while accidents are attributable to fake spare parts and vehicle service fluids.
Governments also lose billions in taxes every year, depriving the public sector of significant revenues, she said.
In 2009, the value of global illicit trade, was estimated at US$ 1.3 trillion and was said to be increasing at a fast pace, she added.
The Global Financial Integrity Report 2011-2012, put the figure at about $650 billion for goods only and $2 trillion in total.
The Organization for Economic Co-operation and Development (OECD) estimates that EAC governments lose over US$ 500 million in tax revenues annually due to the influx of counterfeit and pirated products alone.
“This has a ripple effect to delivery of public services such as education, health, and infrastructure; and a ripple effect to the economy due to lost jobs and health issues,” Munyao said.
Illegal wildlife trade in Kenya is estimated at $15-20 billion yearly making it the fourth largest form of illegal trade falling behind only trafficking in illegal drugs, people and weapons.
As at 2014 it was estimated that Kenyan Manufacturers lose Kshs 50 billion to illicit trade while the Government loses Kshs 20 billion in revenue annually.
Robert Opirah, the Director General for Trade and Investment at Rwanda’s Ministry of Trade and Industry (MINICOM), admits that illicit trade is a destructive practice that misrepresents national economies, reduces legitimate business revenues and leads to depreciated socio-economic gains.
“The growth of illicit trade is a real threat to legitimate business transactions. What largely encourages illicit trade, among others, is lack of stringent legal and regulatory oversight mechanisms,” he told Sunday Times yesterday.
“MINICOM is trying to combat this malaise by strengthening the legal and regulatory frameworks governing trade. For example, we have laws on competition, consumer protection, and intellectual property rights. There are legislative reforms in other areas indirectly meant to curb this threat; such as the law on negotiable instruments, and others,” he noted.
Increasing public-private sector dialogue is also an avenue that increasingly isolates chances for illicit trade, Opirah added.
“As illicit trade is not confined to a single institution, we are fortunate to have other government institutions such as the Police committed and engaged in the fight”.
The East African Business Council (EABC) Chief Executive, Lilian Awinja, blames consumer ignorance, as “consumers think they are saving money,” is one of the factors contributing to illicit trade.
According to Grace Freedom Nicholas, acting Director of Consumer Protection and anti-counterfeit at Tanzania’s Fair Competition Commission (FCC), authorities there seized 1,151 containers with counterfeit between 2010 and 2016. The value of the goods seized was nearly three billion Tanzanian shillings.
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Tanzania changes tune on food exports to East Africa
Tanzania is set to introduce new rules on food exports after it lifted a ban that had seen Uganda become the main source of grains in the region.
The government said the lifting of the ban was prompted by forecast of surpluses. However, exporters will still require permits for rice and maize, and quotas will also be introduced to limit the export quantities.
The Minister for Agriculture, Livestock and Fisheries, Charles Tizeba, said the new rules were meant to curb practices that jeopardise food security such as pre-harvest sale of produce.
“As of now, a company could be permitted to export even 350,000 tonnes of a food crop at a go. This volume is about two times the capacity of the governments’ food reserves,” Mr Tizeba said.
The measures also appear to be aimed at reining in middlemen who capitalise on the harvest season and cash needs of farmers to buy produce at low prices, denying the growers high prices later, and entrenching poverty.
Tanzania’s food projected production for this year is 16.2 million tonnes while the food requirement for next year is 13.2 million tonnes, yielding a surplus of three million tonnes. The harvest of cereals is estimated at 9.5 million tonnes against a domestic consumption of 8.4 million tonnes.
The National Food Reserve Agency has a storage capacity of 246,000 tonnes. Data captured this month shows currently it has a reserve of 67,506 tonnes only of maize, rice and sorghum. Mr Tizeba said the government has disbursed Tsh27.8 billion ($12.7 million) to its zonal offices to enable them buy crops to fill the gap.
Though EAC is a Customs Union, trade in food is one of the sensitive areas that are left to national interests especially with regard to the terms of importing food during deficits and exporting in times of surpluses. However, there are Custom external tariffs for importing maize, wheat and sugar from which countries can seek exemptions in a bid to make the goods affordable by citizens.
Mr Tizeba said traders were now free to export maize, sorghum, millet, rice, wheat, beans, cassava, potatoes and bananas potentially providing a respite for Rwandans who have over the past two months borne high food prices following a ban of exports there by Burundi.
Tanzania’s Minister for Home Affairs Mwigulu Nchemba had told parliament in July that the country expected a surplus of 2.5 million tonnes of cereals and other crops.
“Based on a reliable rainfall pattern, we expect to harvest a bumper crop in many parts of the country in the September harvest. This will see us continue selling the surplus to neighbouring countries within the EAC,” Mr Nchemba said.
A study on the impact of maize export bans on agricultural growth and household welfare in Tanzania found that the country was hurting itself and its farmers, more than it was improving food security.
The study, which was carried out by Xinshen Diao of the International Food Policy Research Institute, found that banning cross-border maize exports had very little effect on the national food price index, and that the benefits from lower maize prices were captured primarily by urban households, while maize producer prices decreased significantly.
“The export ban further decreases the wage rate for low-skilled labour and the returns to land, while returns to non-agricultural capital and wage rates for skilled labour increase, further hurting poor rural households and thus increasing poverty for the country as a whole,” concluded the study, published by USAid in January 2016.
When the ban was in force, Uganda emerged as the main exporter of maize to the rest of the region.
Background
Tanzania’s on and off food export bans has often been frustrated by smuggling across porous borders and at times complicity by Customs officials.
Data from the East Africa Grain Handlers’ Regional Agricultural Trade Intelligence Network shows that while the ban was in force Kenya imported 13,103 tonnes of maize from Tanzania valued at $3.9 million in the first six months of this year.
The maize entered through the Namanga and Isebania border posts.
Lately, however, Kenya has increased maize imports from Uganda bringing in 11,002 tonnes valued at $3.3 million in the last three weeks. This was presumably after border controls were tightened given that the Uganda maize, at $299 per tonne, was two dollars per tonne more expensive.
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Women’s trousers and shorts top list of Kenyan exports to the US
Women’s trousers and shorts topped the list of items ordered by Americans from Nairobi under the duty-and-quota free deal in the first half of the year.
Official data shows that the United States ordered women trousers and shorts worth Sh4.2 billion in the year to June, a 23.5 per cent growth compared to Sh3.4 billion in a similar period of 2015.
The export of women’s wear has grown steadily over the last three years from Sh2.9 billion in the first half of 2013, according to data from the Kenya National Bureau of Statistics (KNBS).
At Sh4.2 billion women’s trousers accounted for nearly a third of the Sh13.4 billion value of clothes shipped from Nairobi to Washington in the year to June, having grown by Sh1.5 billion or 12.6 per cent.
This means local producers of the product reaped high returns in the review period, making the segment a lucrative niche market.
“The growth is attributable to the ease of doing business with investors expanding their businesses while new companies entering the market,” said Rajeev Arora, the advisor to Textile Value Chain of Kenya at the Industrialisation ministry. The KNBS data shows that women’s trousers exports from Kenya to the US have grown 44 per cent over the past three years, adding shine to the struggling local apparel industry.
Kenya is a beneficiary of the US preferential trade pact, the African Growth and Opportunity Act (Agoa), which allows sub-Sahara African countries to export goods to America tax-free.
Textiles and apparel account for over 80 per cent of Kenya’s total exports to the US under the pact. Last week, State House said it was looking to expand the list of products for export to the American market under Agoa as competition intensifies in the garment and apparel segment.
“Also of interest are meetings on improving access under Agoa,” State House spokesperson Manoah Esipisu said ahead of last week’s visit to the US by top government officials.
“We are looking to further improve Kenya’s exports to the US market under this programme.” Neighbouring Ethiopia has also been bullish on production of textiles and leather for export in its special economic zones, dominated by Chinese firms.
Mr Arora expects further growth in exports with the development of a proposed textile city at the Export Processing Zone (EPZ) complex in Athi River.
The EPZ promotes commodity exports and hosts firms like Celebrity Fashions, Global Apparels Ltd, Future Garments, Africa Apparel Ltd, Ashton Apparel, Mombasa Apparel and MK Apparel.
Kenya’s apparel landscape has recently been on the radar of US global fashion houses. In 2014, US-based Calvin Klein, Timberland and Tommy Hilfiger toured the EPZ complex eyeing space in the proposed multi-billion shilling textile city.
Kenya is betting on the EPZ to revamp the industry which was a key forex exchange earner and jobs creator in the 1980s before market liberalisation in 1991 opened floodgates of cheaper imported second-hand clothes.
Investors will enjoy a 10-year corporate and withholding tax holiday, value added tax (VAT) and stamp duty exemptions and utility connections.
The KNBS data shows, however, shows that US imports of women’s skirts dropped 43 per cent to Sh237.1 million in the year to June. Imports of women’s blouses also dropped four per cent to Sh298.1 million compared to Sh311.8 million in the first six months of 2015.
The US imported Sh3.5 billion worth of men’s trousers and shorts in the review period up from Sh3 billion representing a growth of 16.6 per cent.
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Zimbabwe: SI64 paying dividends…50pc capacity utilisation registered
Local companies have increased capacity utilisation by 50 percent while foreign companies are setting up plants in the country following the implementation of Statutory Instrument (SI) 64 of 2016. SI 64 controls importation of selected basic commodities.
Speaking on the sidelines of the Chartered Institute of Management Accountants (CIMA) conference in Victoria Falls, Industry and Commerce Deputy Minister Chiratidzo Mabuwa said SI 64 will help revive companies that were affected by importation of goods.
Following the gazetting of the statutory instrument, Government set an inter-ministerial committee to assess industry’s efficiencies. The Confederation of Zimbabwe Industries has also been assessing company performances.
“We are happy to note that there are some industries that are now reaching 100 percent capacity utilisation, with cooking oil industry pushing to between 90 and 100 percent from around 50 percent few months ago,” said the deputy minister.
“Yeast industry was almost closed but it’s now at 83 percent capacity utilisation while the biscuits manufacturing industry has gone up from 35 percent to around 75 percent because of SI64.
“Some big companies were about to fold because we were importing products that they were producing. We corrected that and gave them an opportunity to produce those goods,” she said.
The deputy minister dismissed suggestions that SI64 pushed the prices of basic goods upwards.
“Due to economies of scale, two-litres of cooking oil is now going for around US$2,90, down from US$4,30 in 2009. The more we produce, the less the prices for our basic commodities will be,” she said. Deputy minister Mabuwa said Willowton, a foreign company, is setting up a US$40 million plant in Mutare while Boom is planning to set up a US$50 million plant in Harare.
Companies in the rubber industry are also set to invest over US$50 million in the country. The new plants will create thousands of jobs and help boost the economy. Deputy minister Mabuwa said: “We are part and parcel of all these trading blocs (SADC, COMESA and Tripartite Free Trade Area) but what will we be trading or promoting when we have nothing to show from our industries?
“All these groups know that trading fairly among members states is essential but we can’t be a dumping site of cheap quality goods. “We can’t just be a supermarket nation, which is why we came up with the import management programme in the name of SI64.”
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tralac’s Daily News Selection
The selection: Friday, 16 September 2016
Featured trade law policy process: The South African government has published the Intellectual Property Rights Framework (pdf) for comment.
Featured commentary, by Gerhard Erasmus: ‘Regional competition Law: a COMESA perspective’: The promotion of competition and fair business practices is an essential aspect of market regulation and regional integration. This tralac Trade Brief provides an overview of the COMESA competition regime. It also mentions some of the challenges flowing from flaws in the design of the Regional Economic Communities.
Conference documentation, including discussion minutes: ‘The quality of growth in Sub-Saharan Africa’ – workshop of the JICA-IPD Task Force on Africa
IORA 20th anniversary conference ‘Learning from the past and charting the future’: updates
Blue economy concept recommended for IORA Summit (Antara News): The concept of a Blue Economy development will be highly recommended and discussed at the Indian Ocean Rim Association’s meeting in March 2017, a Foreign Ministry official said. The Chief of the Policy Assessment and Development at the Foreign Ministry Siswo Pramono made these remarks after the conclusion of IORA, which has come up with 11-point recommendations called the "Yogyakarta Message."
Toward people-driven cooperation (Jakarta Post): As the current chair of IORA, Indonesia also seeks to promote the people-to-people connectivity. Indonesia is known for its efforts to consolidate the IORA institution such as through the formulation of the IORA Concord and the plan to convene the IORA summit next year. Aside from that, engaging the people is also an integral element of Indonesia’s IORA chairmanship. The outcome documents will also be disseminated to IORA officials, so that it will contribute to their deliberation in strengthening the association. The Indian Ocean is an incredibly strategic waterway as it carries half of world’s container ships and two thirds of the world’s oil shipments. Furthermore, the Indian Ocean region also host a third of the global population. With its paramount importance, it is perplexing to witness how regionalism across the Indian Ocean still lags behind its peers in other oceans such as the Pacific. [Dimas Muhamad works in the Indonesian Foreign Affairs Ministry’s policy analysis and development division] [World Bank Blog: Africa leads in the pursuit of a sustainable ocean economy]
All set for Dar, Lubumbashi trade forum next week (Daily News)
Over 25 companies from Tanzania will be at the first Tanzania and Democratic Republic of Congo Trade Forum to discuss growing trade, investment opportunities and collaboration between the two countries that will explore different opportunities to secure investment in the Tanzania-DRC economic corridor. The forum will take place in Lubumbashi next week. Forum Manager, Ms Naomi Godwin, told a press conference yesterday that over 100 key business players from Tanzania and the DRC, and decision makers, are expected to attend. “It shall also look into the significant potential for promoting the ease of doing business in order to create a conducive environment for entrepreneurs and attract investments in manufacturing industry and transportation services as trade is the backbone of every economy."
Standard Bank’s West Africa Trans-regional Conference next month (BizNis Africa)
Scheduled to take place on 3-5 October, the West Africa conference is aimed at Standard Bank’s commercial banking clients from across sub-Saharan Africa who are interested in expanding their operations or partnering with businesses in the West Africa region across a range of sectors such as retail, infrastructure, agriculture, construction, manufacturing and information technology. It will draw delegates from Ghana, Nigeria, Angola, Côte d’Ivoire, China, South Africa as well as clients from southern and eastern Africa. Keynote speakers include Dr Ekwow Spio-Garbrah, Ghana Minister of Trade and Industry and one of Africa’s pre-eminent public servants and an authority on mass communication; Dr Wenbin Wang, CEO of the Industrial and Commercial Bank of China Africa and Non-executive Director of Standard Bank Group; and Olusegun Awolowo, CEO of the Nigerian Export Promotion Council.
Uganda risks losing AGOA deal over used clothes ban (Daily Monitor)
Uganda risks being phased out of African Growth and Opportunity Act deal if it bans the importation of used clothes, Daily Monitor has learnt. In a courtesy call to the Speaker of Parliament, Ms Rebecca Kadaga recently, the US ambassador to Uganda, Ms Deborah R Malac, discouraged the move to ban used clothes on the grounds that it could jeopardise free trade between the two countries. While clarifying on the matter, Mr Christopher Brown, the US embassy spokesperson, in an email said the ban could impact on creation of employment both here and in US. “The move will jeopardises the spirit of free market whose basis resulted into AGPOA,” Mr Brown said.
EAC states accused of withholding support in war on fakes (Daily Nation)
A panel session, moderated by Kenya Association of Manufacturers Chief Executive Phyllis Wakiaga, heard that EA governments hardly provide adequate security to anti-counterfeit inspectors during raids which makes it difficult to implement laws. Dr John Akoten, Kenya’s Anti-Counterfeit Agency Acting Chief Executive, noted that the multiple agencies dealing with counterfeit goods and services have created loopholes in the prosecution of suspects since it is difficult to line up witnesses from various agencies to tender evidence.
Malawi: Nice Trust embarks on popularizing SADC regional integration campaign (MNA)
The National Initiative for Civic Education (NICE) Trust has expressed concern over failure by communities at the grassroots level to benefit from the agreements that are signed between countries in the SADC region. The development has forced NICE to embark on a campaign in the Lower Shire District where they are popularizing SADC regional Integration which would help the locals know the procedures they should follow to access the benefits in question.
Zimbabwe: Beitbridge residents want share of border revenue (The Chronicle)
Beitbridge residents have called on the Government to start allocating part of the proceeds of revenue collected at the border post towards funding capital projects in the town. They told the Parliamentary Portfolio Committee on Finance and Economic Development on Wednesday that the town was not receiving anything from the national budget despite playing a critical role in facilitating international trade. The Committee chaired by Mutoko South MP, Cde David Chapfika, is on a countrywide tour collecting input from the people on what they wish to be included in the 2017 national budget. Beitbridge town secretary, Mr Loud Ramakgapola, said most of their infrastructure and other amenities were affected by the large volume of both cargo and human traffic which passed through the town daily. According to the Zimbabwe Revenue Authority, an average of 500 haulage trucks pass through Beitbridge going either side of the border daily.
Reserve Bank of Zimbabwe: 2016 Mid-Term Monetary Policy Statement
Merchandise Trade Developments: The economy has continued to be affected by sustained mismatches between export receipts and imports as evidenced by the disproportionate import absorption relative to exports especially for the period 2008-2015; a sign of weak economic fundamentals and over liberalisation of current and capital accounts. Figure 3 (p16) shows the Zimbabwe’s merchandise exports, imports and real GDP growth over the period 1990-2015. The graph also shows the sensitiveness of the economy to various shocks and vagaries, including droughts. [Foreign Trade and Investment Guidelines 2016 (pdf)]
Tanzania: BoT’s Prof Benno Ndulu explains ‘cash crunch’ (IPPMedia)
The governor of the Bank of Tanzania, Prof Benno Ndulu, yesterday sought to calm concerns about the state of the national economy, saying the cash squeeze being experienced by many Tanzanians is the result of the government’s extensive war on corruption and ongoing crackdown on tax evasion. Speaking at a news conference in Dar es Salaam, Ndulu said the country is undergoing a legitimate ‘redistribution’ of wealth away from those who were used to spending illegal proceeds and back into government hands for public sector investment. "There is no money that has vanished from circulation...this is what we call redistribution," he said, adding: "From an economic perspective, (it means) the money that was previously falling into illegal hands has now been diverted by the government to (help fund) public sector activities." Meanwhile, according to Prof Ndulu, Tanzania’s economy is on track to expand by 7.2% this year, up from 7% in 2015, boosted by construction, the government’s anti-corruption drive, and better management of public resources.
Tanzania: The People’s President? Citizens’ assessment and expectations of the fifth phase government (Twaweza)
When citizens were asked to name actions by President Magufuli’s that they approve of, more than six out of ten mentioned the removal of ghost workers (69%), free education (67%) and the dismissal of public servants (61%). When asked to name actions that they disapprove of, three out of ten (32%) mentioned the sugar import ban and price directive. However six out of ten citizens (58%) say that they do not disapprove of any of his actions. Overall approval ratings for President Magufuli are at 96%. These findings were released by Twaweza in a research brief based on data from Sauti za Wananchi, Africa’s first nationally representative high-frequency mobile phone survey. The findings are based on data collected from 1,813 respondents across Mainland Tanzania (Zanzibar is not covered in these results) between 4 and 20 June 2016.
Mombasa port posts marginal rise in cleared cargo (Business Daily)
Overall cargo cleared at the Mombasa port for the six months to June rose marginally by 1.4% even as the container traffic handled dropped. Kenya Ports Authority managing director Catherine Mturi-Wairi said a total of 13.4 million tonnes were handled at the port, up from 13.2 million tonnes in the six months to June 2015. But the container traffic dropped by 0.6% bucking a growth trend that has seen Kenya pour billions of shillings to expand the capacity. A total of 527,523 twenty foot equivalent units (TEUs) was registered in the six months compared to 530,608 TEUs for a similar period last year.
Ebrima Sall (CODESRIA Executive Secretary): China-Africa cooperation must be mutually beneficial (allAfrica)
Q: What will be the role of African think tanks in this new dynamic, in order to enable the continent to make the most of it? A: It is to take part in the reflection and provide input in discussions on how these relations could be managed, so as to be truly beneficial to Africa and China. But also, we Africans have to be more confident in the fact that we have made large contributions to these relations. We don’t only have raw materials to put on the table. When we are talking about common development, we should not see only what China brings, but also what Africa’s input is, and its contribution to these efforts. I believe that Africa has much to contribute, and the think tanks can help bring this out. What are the assets? What does it put on the table that is beneficial to China, and would also help this continent achieve its own objectives? The other thing is the monitoring, follow-up, evaluation and watchdog role.
India’s exports shrink 0.3% to $21.5bn in August (LiveMint)
India’s merchandise exports contracted by 0.3% to $21.5bn in August for the second consecutive month after expanding for the first time in 19 months in June. Growth in shipments by labour-intensive sectors such as gems and jewellery, ready-made garments and engineering goods prevented a steeper fall in August. A sharp drop in gold imports led to a narrowing of the trade deficit. Data released by the commerce ministry (pdf) showed imports shrank 14.1% to $29.2bn in August, leaving a trade gap of $7.7bn in the month. The overall trade balance, including merchandise and services trade, in April to August improved with a combined trade deficit at $13.1bn - 63.6% lower than the same period a year ago. [RBI releases July 2016 data on India’s international trade in services]
International regulatory co-operation and international organisations: the case of the Food and Agriculture Organization, the World Health Organization (pdf). These reports are part of an OECD project on International Regulatory Cooperation which will be launched on 2 November in Paris.
Politicians in Africa’s key economies take aim at central banks
Transforming Liberia, truckload by truckload
Mozambique: IMF statement
A delicate balance: Mozambique’s Nyusi in Washington
Abebe Aemro Selassie to head IMF’s African Department
Kenneth Rogoff: It’s time to phase out paper currency
tralac’s Daily News archive
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IORA: Toward people-driven cooperation
Borobudur is known for a lot of things, but holding a secret to Indonesia’s maritime adventures in the past is probably not one of them.
Philip Beale, from the UK, visited the Buddhist temple in 1982 and saw a carved stone relief of a ship with two outriggings, which he believed to be the proof of voyages across the Indian Ocean.
He was so convinced that 20 years later he initiated the construction of the ship’s replica, named Samudra Raksa (guardian of the ocean), and sailed with it in a seven-month expedition from Indonesia to Ghana to show that the ancient voyage using the ship was indeed possible.
The finding further reaffirms Indonesia’s maritime identity and its presence in the Indian Ocean, but more than that it also reinforces the notion that since immemorial times the Indian Ocean has always been a bridge that connects people across kingdoms and even continents.
Other oceans do that too, but the Indian Ocean’s history is somewhat exceptional. It has enabled relatively benign cross-border relations, and that is partly attributed to the fact that the relations were people driven.
Indonesia is a perfect example. Its immensely rich identity is shaped by external influences but it did not occur with the use of force. Our religious traditions from Hinduism to Islam were not imposed by malevolent invasion from kingdoms or sultanates outside the archipelago.
They were brought by traders, monks, scholars and ulema. While the ancient kings did have ties, it is clear that the people were the driving force behind the dynamic relations in the region.
Reflecting from that history, one of the most pivotal tasks for IORA (Indian Ocean Rim Association) is to nurture that people-to-people connectivity and to eventually make its cooperation more people driven.
That is essential for IORA to truly thrive. IORA members already enjoy solid political and official relations, they manage to stave off conflicts and they do an excellent job in maintaining regional peace and stability.
In order to elevate it to the next height, IORA needs to engage the people more, so that they can take part, own and advocate for a more vibrant IORA. If the people believe that a stronger IORA is in their interests, then they will encourage or even put pressure on their own government to pave the way for a stronger IORA.
Regrettably too many people in the region, including Indonesia, are in complete darkness as to what IORA does for them or even what IORA is. The fact of the matter is, IORA has made important headways in this area.
Some of IORA’s priorities are aimed to strengthening people-to-people connectivity such as in academic, scientific and technological cooperation. Most importantly IORA has also established platforms for non-governmental parties including the IORA Academic Group and IORA Business Forum, which are commendable steps in the right direction.
Notwithstanding IORA’s hard work, the severely lacking awareness toward IORA among the people means much more needs to be done.
As the current chair of IORA, Indonesia also seeks to promote the people-to-people connectivity. Indonesia is known for its efforts to consolidate the IORA institution such as through the formulation of the IORA Concord and the plan to convene the IORA summit next year. Aside from that, engaging the people is also an integral element of Indonesia’s IORA chairmanship.
This among others manifests through the convening of an international symposium under the theme of “20th Anniversary of IORA: Learning from the Past and Charting the Future” now being held in Yogyakarta.
The symposium is an important initiative; it engages various stakeholders that include the private sector, scholars and officials both from IORA member states as well as dialogue partners.
The symposium provides a rare opportunity to various stakeholders to get their voices heard in helping IORA chart its future direction.
Some often criticizes IORA for being ineffective and lackluster. The symposium is their time to share their ideas on how to turn it around.
The outcome documents will also be disseminated to IORA officials, so that it will contribute to their deliberation in strengthening the association. The Indian Ocean is an incredibly strategic waterway as it carries half of world’s container ships and two thirds of the world’s oil shipments.
Furthermore, the Indian Ocean region also host a third of the global population. With its paramount importance, it is perplexing to witness how regionalism across the Indian Ocean still lags behind its peers in other oceans such as the Pacific.
Engaging the people and making IORA more people driven is one of the keys to help the association live up to its tremendous potential.
Indonesia is determined to work together with other IORA members and dialogue partners to enable the people taking part in the journey of IORA, owning its process and cultivating their sense of belonging to IORA. If the spirit of IORA goes beyond conference halls and become the household name among the people, then the people will finally be the engine that propels regional partnership forward, just like they once were.
The writer works for the Foreign Affairs Ministry’s policy analysis and development division, which hosted the IORA international symposium from Sept. 13 to 14 in Yogyakarta.
All set for Dar, Lubumbashi trade forum next week
Over 25 companies from Tanzania will be at the first Tanzania and Democratic Republic of Congo Trade Forum to discuss growing trade, investment opportunities and collaboration between the two countries that will explore different opportunities to secure investment in the Tanzania-DR Congo economic corridor.
The forum which will take place in Lubumbashi next week is aimed at bringing together high level private sector operators from both Tanzania and Democratic Republic of Congo.
The Forum Manager Ms Naomi Godwin told press conference in the city yesterday that over 100 key business players from Tanzania and Republic Democratic of Congo and decision makers are expect to attend this private sector driven forum.
“On keeping the strong relationship between these two countries, Tanzania and DR Congo trade forum will acknowledge the benefits to invest in agri-business in both countries,” Ms Godwin said.
“It shall also look into the significant potential for promoting the ease of doing business in order to create a conducive environment for entrepreneurs and attract investments in manufacturing industry and transportation services as trade is the backbone of every economy.
Ms Godwin said that expected outcomes of the trade forum is to strengthen bilateral ties and enhance trade relations between two countries, increased volume of exports between both countries and it improved conducive environment for trade between both countries.
Under the theme “Strengthening bilateral Trade and Investment opportunities” the forum will assemble over 100 key business players from Tanzania and DR Congo’s Private Sectors. It will also include key policy decision makers from both governments.
Tanzania Private Sector Foundation (TPSF) Acting Executive Director Mr Louis Accaro said that DR Congo has been showing much interest in energy and mineral exploration from Tanzania oil and gas sector as the consultations began at the end of August this year in Dar es Salaam in order to enable Kinshasa to export its oil through the proposed pipeline system from Hoima in Uganda to the Tanga port in Tanzania.
He said, apart from that, this annual Tanzania DR Congo Trade Forum comes after the growth in the economy of Democratic Republic of Congo in 2015 to 7.7 percent, as it has been reported by World Bank.
He pointed out that their performance is driven by robust extractive industries and related investments despite the global economic slowdown and the decline in the demand and price of minerals exported by the democratic republic of Congo.
The Forum is organised with Tanzania’s Embassy in DR Congo in collaboration with Tanzania Chamber of Commerce, Industry and Agriculture (TCCIA); Tanzania Trade Development Authority (TANTRADE), Federation des Enterprises du Congo (FEC), Tanzania Truck owners Association (TATOA) Tanzania Private Sector Foundation (TPSF) and 361 Degrees.