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Reserve Bank of Zimbabwe: 2016 Mid-Term Monetary Policy Statement
Walk The Talk to Restore Trust and Confidence
Background and Context
This Mid-Term Monetary Policy Statement is issued in terms of Section 46 of the Reserve Bank Act (Chapter 22:15). The major objectives of this Statement are to highlight the global and domestic financial developments; to provide an assessment of the monetary policy measures taken by the Bank in May 2016 to stabilize the economy; to present new measures to restore confidence within the economy; and to offer policy advice to deal with the fiscal and current account deficits in order to change Zimbabwe’s economic narrative to production and productivity which is very vital or imperative to restore trust and confidence within the national economy.
The policy measures presented in this Statement are designed to augment the measures taken by the Bank in May 2016. The new measures include the elimination of administrative hurdles of contracting offshore loans, resuscitation of the credit guarantee scheme to enhance local production by small to medium scale enterprises, putting in place nostro stabilization facilities to deal with delays in the remittance of outgoing foreign payments, promotion of internal devaluation using market-based mechanisms to restore competitiveness in the national economy, and encouraging the fast-track elimination of bottlenecks that are hampering the ease of doing business within the economy especially in the export production sectors.
The measures and policy advice which are well aligned to those presented by the Honourable Minister of Finance and Economic Development in the Mid-Term Fiscal Review Statement are designed to deal with the structural imbalances that continue to stress the economy. The structural imbalances are evidenced by the large current account and fiscal gaps generated by the difficult internal and external conditions, a legacy of dollarisation policy inconsistencies/contradictions, policy slippages and procrastination in the implementation of critical Government policies. These imbalances are further exacerbated by adverse weather conditions and weak investor sentiment leading to the under performance of the national economy.
The under performance of the economy which started in 2012 – three years after dollarisation – is also greatly attributable to the legacy of policy inconsistencies/ contradictions when the country went into dollarisation in March 2009, by default and not by design, to tame hyperinflation. This was soon after the formation of the Government of National Unity in February 2009. The policy inconsistencies/contradictions which were secondary to the political settlement include over liberalisation of both the current and capital accounts at a time when the country had very limited access to foreign finance due to debt overhang, and non- conducive investment climate due to sanctions and unattractive domestic investment policies; wrong choice of trading currency and; failure to benchmark with regional comparators to maintain competitiveness.
It is therefore a combination of the current internal and external imbalances and historical challenges that need to be urgently addressed for the proper functioning of the multi-currency exchange system that, de facto, is currently totally dominated by the use of US$. This situation requires the nation to do things differently and WALK THE TALK to transform the economy by changing the narrative from consumption to production. The economy is hungry for production and productivity. With the public sector wage and salary bill being one of the highest in the world at more than 90% as a share of fiscal revenue and inflation at -1.4% being low or in negative territory (deflation) for two years now since 2014, real wages and salaries have increased, crowding out capital and social expenditure – thus undermining the economy’s capacity to enhance employment and to be competitive.
The business climate, on the other hand, affected by limited access to foreign finance; unfinished business on land security tenure and investment regulations; and high input costs, has not been conducive to attracting the much needed domestic and foreign investment. In addition the increasing fiscal gap in the absence of external financing has led to a decline in private sector activity and a reduction in domestic credit as financial institutions try to contain foreign exchange induced demand pressures attributable to lending activities.
As if the above harsh conditions are not enough, the economic impact of the El-Nino induced drought also increased the need for imports to reduce food insecurity, whilst the decline in mineral prices depressed export proceeds. In addition, amid low investor sentiment, the appreciation of the US$ induced higher than expected demand for this currency, reduced remittances in US$ terms, especially from South Africa and the United Kingdom (following Brexit) and generated speculation. With South Africa being Zimbabwe’s main trading partner – accounting for around 50% of total trade – where the rand depreciated against the US$, competitiveness has also been severely eroded.
Whilst efforts taken by Government to deal with the above fragile economic situation have been commendable, a stronger than anticipated impact of exogenous shocks highlighted above continued to exacerbate the economic slowdown and precipitated the decline in fiscal space and the cash shortage situation.
Walking the Talk within the above context of weak economic conditions requires policy precision and urgent implementation of necessary reform measures to transform the economy. The process won’t be easy but must be done. It requires national sacrifice, sincerity and integrity. It requires the ability to share the adjustment or transformation burden across the board and between the fiscal and monetary policies. Reliance on one policy instrument to manage the current structural imbalances would not be sustainable to transform the economy and to restore trust and confidence.
Overall, transforming the economy from a consumptive to a productive one requires fiscal discipline, production discipline, policy discipline, and message/communication discipline (speaking with one voice) in order to achieve the optimal levels of economic turnaround depicted by the following economic functional identities:
i. Liquidity = f*(Exports/Forex Earnings)
ii. Exports/Import Dependence = f(Production)
iii. Production = f(Investment Climate/Incentives/ Ease of Doing Business)
iv. Investment Climate = f(Policy Measures/Policy Consistency)
* f is read as function of
The rest of this Monetary Policy Statement is organized as follows; Section 2 discusses external sector developments and their implications on domestic economic activities. Section 3 looks at the status of the financial sector. Section 4 discusses the impact of policy measures introduced by the Reserve Bank in May 2016. Section 5 provides new policy measures to enhance confidence and production in the economy. Section 6 provides policy advice and Section 7 is the Conclusion. The Appendices provide an update on the re-engagement, a brief RTGS and Nostro concepts within the context of the multi-currency exchange system and an update on closed banks.
External Sector and Inflation Developments
Global Economic Developments
Global economic recovery has remained fragile with adverse consequences on developing economies like Zimbabwe. The situation has been exacerbated by the referendum outcome which approved Britain’s exit (Brexit) from the European Union.
The Brexit vote has deepened economic, political and institutional uncertainty within the EU, threatening the growth momentum witnessed in the first half of the year. This uncertainty has negatively affected investor confidence and financial market conditions. Moreover, the bumpy adjustment in China also continues to undermine sustained global economic recovery.
The recent global economic developments, have compelled the International Monetary Fund (IMF) to downwardly revise the initial global economic growth projections for 2016, by 0.1 percent, on account of the negative macroeconomic consequences, especially in advanced European economies. Consequently, the IMF is now projecting the global economy to grow by 3.1 percent in 2016 and 3.4 percent in 2017.
Growth in Sub-Saharan Africa is expected to decelerate from 3.3% in 2015 to 1.6% in 2016, representing a 1.4% decline from the initial forecasts in April 2016. This slowdown is primarily driven by the downturn in international commodity prices and Brexit fallout. Moreover, economic growth prospects for regional economies, notably, South Africa, Botswana and Zambia remain vulnerable to the downturn in international commodity prices and the depreciation of domestic currencies.
International Commodity Price Developments
International commodity prices have generally remained subdued over the recent past mainly on account of weakening growth prospects in China, the world’s largest metal consumer. This notwithstanding, global commodity prices reflected a modest recovery, albeit from a low base, during the first half of 2016 on the backdrop of transient stabilisation of global markets.
Specifically, gold prices firmed by 16.3%, from an average price of US$1 096.68/oz in January 2016 to US$1 274.99/oz in June, 2016. Similarly, platinum increased by 15.3% from US$853.65/oz in January 2016 to US$984.45/oz in June, 2016.
Implications of global economic developments on domestic economic activity
The effects of the weak global economy are being transmitted to the local economy mainly through depressed commodity prices and weakening trading partner currencies on the back of a relatively strengthening US$.
The sustained low commodity price environment, particularly for precious minerals and base metals have implications on the domestic economy as the country mainly depends on primary and semi-processed minerals. Weaker prices for precious and base metals imply lower export revenues for Zimbabwe, while depressed oil and food prices have a moderating effect on the country’s fuel and food import bill.
Moreover, the strengthening of the US$, coupled with sustained low commodity prices environment, has weakened growth prospects of the country’s major trading partners, notably South Africa, Botswana and Zambia. This development has resulted in sustained depreciation of these countries’ domestic currencies to the detriment of Zimbabwe’s trade competitiveness.
Resultantly, the manufacturing sector in Zimbabwe has continued to lose competitive ground. The exchange rate based loss in competitiveness has conspired with other supply side rigidities affecting the economy to intensify the influx of relatively cheaper imports into the economy.
Balance of Payments Developments
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 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.
Over the period January to June 2016, merchandise exports declined by 8.7%, from US$1,232.3 million realized in 2015 to US$1,125.0 million in the corresponding period in 2016. Similarly, merchandise imports for the period January to June 2016 amounted to US$2,496.6 million, a 14.4% decline from US$2,917.1 million realized over the comparative period in 2015.
Figure 2 shows monthly merchandise exports and imports development for the period January to June 2016.
The decline in export and import performance is a reflection of the overall slowdown in economic activity, emanating from the drought induced contraction in agriculture, depressed commodity prices, suppressed capacity utilization in the manufacturing sector, as well as continued difficulties in accessing external lines of credit.
A combination of foreign currency management measures, including the prioritization of imports announced by the Reserve Bank in May 2016 and restrictions on selected imports by the Ministry of Industry and Commerce in July 2016, as well as the effects of a stronger US$ on the country’s terms of trade are expected to lead to a 0.9% decline in the import bill in 2016. Food imports (maize and wheat) are, however, expected to surge owing to the El Nino induced drought that ravaged the Southern African region, including Zimbabwe.
Continued reliance on imports of finished goods is unsustainable as it undermines current efforts to resuscitate domestic industrial production, leading to significant trade and current account deficits.
International Remittances
The continued appreciation of the US$ against regional currencies has also affected the dollar denominated value of remittance inflows, particularly from South Africa, which have over the years been a significant source of foreign currency in the country. The weakening of the South African rand against the US$, imply that Zimbabweans who are in South Africa are no longer in a position to send the same amount of money in US$ they used to remit back home. The rand value remittances have gone down in US$ terms.
This is evident from the decline in diaspora remittances of 13% from US$457.9 million for the period January to June 2015 to US$397.3 million in the corresponding period in 2016. This development has, therefore, affected general market liquidity in the economy with adverse effect on aggregate demand and sustained economic recovery.
Foreign Private Capital Flows
Private sector offshore external loans have been an integral source of liquidity in the economy since adoption of the multi-currency exchange system in 2009. These loans, as opposed to equity injection, have mostly been utilized for working capital and capitalization.
In the period from January 2016 – June 2016, the Bank approved and registered a total of 156 facilities with a monetary value of US$976.4 million. As is the norm, the agriculture sector has the highest contribution of 49% which is mostly buoyed by the tobacco sector. A comparison with the same period in 2015 shows that as at 30 June 2015, a total of 185 facilities had been approved with total monetary value of US$1.2 billion.
It is evident that due to the perceived unfavourable investment climate in Zimbabwe, investors have since devised a method to mitigate this perceived risk by using loans to finance their investments in the country as opposed to equity financing. This is also particularly true for some significant investors who have resorted to using the Engineering Procurement and Construction (EPC) model of investment as opposed to cash injection or equity into Zimbabwe like what they do in other countries such as Angola, Ethiopia, Mozambique, Zambia and Nigeria.
Policy Measures to Enhance Confidence and Production
The following policy measures are being put in place to enhance confidence and production in the economy, while simultaneously ensuring sustained financial stability:
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Ease of securing offshore loans;
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Incentivising inflows from the diaspora and private unrequited transfers;
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Nostro stabilisation facilities of US$215 million;
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US$20 million gold development initiative for small scale gold producers;
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US$10 million horticulture/floriculture pre- and post-shipment facility;
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Resuscitation of the credit guarantee scheme;
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Establishment of an offshore financial centre;
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Guidance on interest rates charged by microfinance;
i. Ease of Securing Offshore Loans. The current Exchange Control policy states that all external loans and commercial credit applications above US$10 million, for both the private sector and state owned enterprises, need prior approval by the Reserve Bank.
In order to enhance the ease of securing offshore lines of credit, the threshold of external loans that do not need prior Exchange Control approval is, with immediate effect, increased to US$20 million. Authorised dealers will still be required to register all such loans, in the usual manner, with the Reserve Bank.
In the same vein, the banking public should ensure that all unregistered offshore facilities should be regularised with the Reserve Bank through their banks.
ii. Incentivising inflows from the diaspora and private unrequited transfers. In view of the critical role of diaspora remittances in the economy and in order to enhance the remittance of such funds, the Bank shall be extending the export incentive scheme at a level of between 2.5-5% to diaspora remittances including any form of private unrequited transfers on funds remitted to Zimbabwe through normal banking channels with effect from 1st October 2016.
iii. Foreign Exchange/Nostro Stabilization Facilities of US$215 million. In order to deal with the current delays in the processing of outgoing foreign payments by banks the Bank has managed to secure facilities in an amount of US$215 million from international finance institutions to deal with the outgoing foreign payments backlog. In addition, negotiations are at an advanced stage to raise US$330 million from regional sources to enhance production and improve the liquidity situation in the country
iv. US$20 million gold development initiative facility to support small scale and artisanal miners. The Reserve Bank has secured US$20 million for Fidelity Printers and Refiners (FPR) to support small-scale and artisanal mining operations in order to increase gold production in the country.
With underground gold reserves estimated to be around 13 million tonnes, Zimbabwe’s rich gold reserves are clearly under-exploited. Only 586 tons have been officially mined over the past 36 years from 1980 to August 2016 as shown in Table 13. There is therefore great scope to vigorously promote the mining of gold across the country in order to liquefy the economy.
The gold development initiative (GDI) i.e the formalisation process of the small scale gold producers which will be executed according to responsible gold mining standards will need to be supported by fast-tracking the ease of doing business policy measures that include the reduction of cost of doing business as follows:
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Reduction in custom milling fees from the current US$8 000 on the basis that when the fee was US$2 000 there were 485 millers which were registered but now at US$8 000 the registered millers are now around 51. The challenge is that there are many millers who cannot afford to pay the required fee of US$8 000 but are still operating and selling their gold on the black market and/or smuggling gold out of the country.
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Reduction of licence fee for explosives. At US$100 about 5 000 small scale gold producers were registered and when the fee was increased to U$2 000 only 300 registered.
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Reduction of the Environmental Management Agency (EMA) fees. The fee for exploiting the environment at 2% of gross revenue is extremely high. Consideration should be made to scrap this fee in order to enhance gold production.
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Rural District Council (Land Development Tax) fees. These charges should be reviewed downwards based on ability to pay and must be determined in the context of all the other taxes, fees and charges that are applied to the mining industry.
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Environmental Impact Assessment (EIA). The fee at between 0.8%-1.2% of total cost (with a maximum cap of US$2 million) remains high and is a huge barrier to investment. Reducing this to a rate of 0.05% of the project cost with a reasonable upper limit of US$50 000 would be in line with international best practice.
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Reduction of Exploration Licenses, Claims and Related charges. The ground fees currently levied on prospective and mining firms in Zimbabwe are exorbitant.
v. US$10 million horticulture and floriculture pre and post shipment facility Horticulture and floriculture has previously been a fast growing export source with Zimbabwe having been one of the top exporting country in Africa in the 1990s. In order to increase production and exports of this sub-sector the Bank has arranged a facility of US$10 million for the pre and post-shipping requirements for producers of horticulture and floriculture. The facility would be disbursed through normal banking channels.
vi. Resuscitation of the credit guarantee scheme. The Reserve Bank is resuscitating the Credit Guarantee Scheme under the Export Credit Guarantee Company (ECGC) to support SMEs to increase production with effect from 1st October 2016.
The guarantee scheme, which used to be operational, was discontinued in 2002 as the guarantee limit had become too insignificant to support any meaningful business due to economic circumstances prevailing at the time. The credit guarantee scheme will address the challenge of lack of adequate and acceptable collateral, which is among the major challenges faced by marginalized groups including SMEs, women, youth, small holder farmers and rural population in accessing bank credit. The resuscitation of the credit guarantee scheme will go a long way in stimulating productive lending to the marginalized groups which will stimulate economic growth and poverty reduction.
vii. Guidance on interest rates charged by microfinance institutions. Microfinance has been identified as an important pillar of the National Financial Inclusion Strategy in Zimbabwe. However, the high costs of traditional microfinance loans limit the effectiveness of microfinance as a developmental and poverty-reduction tool. The high cost of microfinance loans is partly a reflection of the high cost of funds and the high transaction cost of traditional microfinance operations associated with high volumes of small, low-value loans.
The Reserve Bank has noted with concern that while banks’ lending rates have declined to an average of 15% per annum, some microfinance institutions continue to charge interest rates of over 20% per month. In this respect, microfinance institutions are expected to reduce their lending rates in the spirit of building inclusive financial systems and sustainable economic development. Accordingly, all microfinance institutions are urged to reduce their effective lending rates to a maximum of 10% per month effective, 1 October 2016. Future adjustments would need to be in tandem with the improvement on the tenure of the operating licences of microfinance institutions which are renewed on an annual basis.
vi. Establishment of an Offshore Financial Centre. The Bank is proceeding to putting in place mechanisms to establish an offshore financial centre as a confidence building measure under the auspices of the Special Economic Zones. Details of this initiative shall be unveiled in line with developments on the establishment of the Special Economic Zones in the country.
Policy Advice
1. Dealing with fiscal deficit in a sustainable manner that promotes economic growth requires a combination of the following measures;
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Leveraging and securitisation of the country’s vast resources (minerals, non-core assets, residential and commercial land) to obtain capital for development and to close the fiscal deficit. The country’s enormous potential for sustained growth and poverty reduction is achievable through leveraging and securitisation of the country’s generous endowment of natural resources.
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Acceleration of the reform and reorganisation of state owned enterprises (SOEs) including disposal through joint ventures and/or outright sale of some of the non-core SOEs to raise capital for development and to close the fiscal deficit. Additionally, production can be enhanced by granting investors contracts under long lease-back, build-operate-transfer (BOT) or build-own-operate-transfer (BOOT) agreements.
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Putting in place an attractive investment climate to generate investment-led growth. Investment, like people, likes security. Security of investment is a good or conducive investment climate. Security of tenure is the best form of reward or incentive for business. Putting in place a conducive investment climate, fortunately, costs almost nothing yet the cost of not having it is horrendous.
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The clarification of the Indigenisation Policy by His Excellency, the President, in April 2016 was a critical milestone towards improving the investment climate but the Act is yet to be aligned to the Policy. Similarly, regularisation of the 99-year land tenure security to make it a bankable document is yet to be done. Regularisation of these two policy documents will cost almost nothing but yet taking action on them would be tremendous as it would signal that domestic and foreign investment is welcome in Zimbabwe. We need to Walk the Talk to see this through in order to create an investor friendly environment.
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Work being done by the Office of the President and Cabinet on the ease of doing business is quite commendable. What is now needed is to Walk the Talk by fast-tracking the implementation of all the identified areas of improvement especially as they pertain to the regulatory environment of doing business in Zimbabwe. Business license application forms, for example, should be available on-line, identical to all applicants and processed as a routine procedure.
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Putting in place effective performance management systems across the board to ensure that performance commensurate with rewards and to inculcate positive work ethics. Special government projects that include the Brazil’s More Food Programme and the Directed Agriculture Programme should also be subject to this scrutiny.
2. Dealing with the current account deficit through internal devaluation to restore competitiveness. The use of the multi-currency exchange system puts Zimbabwe in a special circumstance that takes away the flexibility of adjusting the nominal exchange rate to maintain relative competitiveness. This unique situation is similar to the experience of countries within the Euro area, for example, which are unable to reverse a loss of competitiveness and balance of payments imbalance through a nominal devaluation of the currency.
For countries in this predicament, the loss of competitiveness can only be reversed internally, through relative gains in the efficiency in production and or through action to reduce cost of production i.e. internal devaluation – aimed mainly at reducing wages and other related labour costs.
Historical experiences with internal devaluation have been mixed. Others have been successful whilst other “successful” internal devaluation have been accompanied by falling demand and recession. The truth of the matter is that there are always pros and cons with devaluations, whether it is nominal or internal devaluation. Management and choice of internal devaluation is therefore critical.
Whilst there is general acceptance across the board in Zimbabwe about the need for internal devaluation in the country, there is no consensus on its form and format. Statistics at the Reserve Bank shows that the country would need to gradually devalue by up to 45% over a three year period to restore competitiveness.
Internal devaluation in Zimbabwe can be achieved through two possible approaches. The first approach would be for reduction in wages and salaries, accompanied by a similar reduction in the cost of finance and utility charges. Once this is done, the country would need to find a comparator to benchmark with to ensure that costs would not increase again without being checked. The challenge of this approach is that it can lead to further reduction in aggregate demand and to depression and recession. An equilibrium position would therefore need to be determined for this approach to produce desirable results.
The second approach, which also takes account of peculiarities in Zimbabwe, would be to achieve internal devaluation by a combination of improving the competitiveness of the country’s exports whilst simultaneously levelling the playing field between importers and domestic producers. This external rebalancing approach would incentivize foreign exchange earners (including all depositors) who are the generators of foreign currency whilst at the same time levying all payments of imports of goods and services (including withdrawals).
The intention of this approach would be to manage foreign exchange using market based mechanisms. There would be no charges on the use of plastic money and other electronic payment means. This approach would be neutral to net cash depositors. This will, therefore, be a market mechanism to support increased use of plastic money and for attracting foreign exchange deposits.
The downside risk of this second approach is that it would increase prices within the economy. The Bank, however, believes that the levy on imports would have a minimal effect on inflation given that the country is currently in deflation. Allowing some level of inflationary pressures in the economy would help to increase company revenues and profitability with positive multiplier effects on Government revenues, employment and GDP growth.
Most firms in Zimbabwe have already implemented or are in the process of implementing the first approach of internal devaluation of reducing wages and salaries. In view of these developments, it would be prudent to buttress the first approach by the second approach of internal devaluation to deal with the current account gap. The Bank shall be accelerating the second approach of internal devaluation after consultations with business and consumers.
3. Enforcement of local procurement by Government, in line with existing local procurement rules, is essential to conserve scarce foreign exchange and create a multiplier effect to stimulate local suppliers. The increased local business activity will, in time, boost fiscal space through increased taxes.
Conclusion and Outlook
The main message of this Monetary Policy Statement is that the Zimbabwean economy which is under stress as a result of harsh external conditions, structural imbalances and legacy policy inconsistencies/contradictions requires urgent and decisive steps to generate investment-led recovery in order to revamp production across all the sectors of the economy. Walking the Talk is critical because the large current account and fiscal gaps generated by these imbalances have inhibited private investment and restricted economic growth to as low as 1.1% in 2015 and projected at 1.2% in 2016. Enhanced production will increase employment, fiscal space, exports, economic growth and reduce import dependence and poverty. This is the panacea to restore trust and confidence.
Prudent fiscal policy is the main lever to deal with the internal imbalances and create an economic environment conducive to economic transformation. Accordingly, measures taken by the Bank in May 2016 and those presented in this Statement would need to be aligned to the fiscal policy measures presented by the Hon Minister of Finance and Economic Development in the 2016 Mid-Year Fiscal Policy Review Statement.
The measures would need to be supported by concessional external financing. Thus, with fresh foreign financing being an integral part of the envisaged Zimbabwe transformation agenda, completion of the re-engagement process is critical to improve Zimbabwe’s country risk premium.
The policy measures in this Statement and those announced by the Minister of Finance and Economic Development in the Mid-Year Fiscal Policy Review Statement, combined with fast-tracking re-engagement with the rest of the world will pave way for sustained growth and development. This would lead to an increase in economic growth from 1.2% this year to high single digits over the next three years, while inflation would be limited to lower single digits and international reserves would recover significantly.
Overall, the medium term looks favourable for Zimbabwe. Strong economic policies would also have an immediate impact in increasing competitiveness and attracting investment. The financial system which is currently constrained by the environment would be enabled to allocate scarce resources to the most effective use, and support production while facilitating the build-up of foreign exchange reserves.
I thank you.
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Forced displacement: A developing world crisis
Rooted in 10 conflicts, majority of refugees have been hosted by 15 countries, says new World Bank report
One global issue at the forefront of World Bank Group work this year and beyond is the forced displacement of people and its impact on ending extreme poverty. Forced displacement is a crisis centered in developing countries, which host 89 percent of refugees and 99 percent of internally displaced persons, says a new World Bank report. At its root are the same 10 conflicts which have accounted for the majority of the forcibly displaced every year since 1991, consistently hosted by about 15 countries – also overwhelmingly in the developing world.
Not just a humanitarian issue, forced displacement is emerging as an important development challenge, and the development approach to providing support to it is multifold. “Forcibly Displaced – Toward a development approach supporting refugees, the internally displaced, and their hosts” is a groundbreaking study conducted in partnership with the United Nations High Commissioner for Refugees (UNHCR), which examines the role of development in resolving the challenge of forced displacement.
It responds to the growing need to better manage these crises as an important development challenge, part of an overall effort to reduce poverty and achieve the Sustainable Development Goals. The aim of development support is to address the longer term, social and economic dimensions of displacement, in close collaboration with humanitarian and other partners working in complementary ways.
While the current crisis is severe – with a reported 65 million people living in forced displacement – the report finds that over the past 25 years, the majority of both refugees and Internally Displaced Persons under UNHCR’s mandate can be traced to just a few conflicts in the following areas: Afghanistan, Iraq, Syria, Burundi, the Democratic Republic of Congo, Somalia, Sudan, Colombia, the Caucasus and the former Yugoslavia.
Since people typically flee to neighbors of their countries of origin, the responsibility of hosting has not been shared evenly. About 15 countries have consistently been hosting the majority of refugees. At the end of 2015, Turkey, Lebanon, and Jordan, Syria’s neighbors, hosted 27% of all refugees worldwide; Pakistan and Iran, Afghanistan’s neighbors, hosted 16%; and Ethiopia and Kenya, Somalia and South Sudan's neighbors, hosted 7%.
“Forced displacement denies development opportunities to millions, creating a major obstacle to our efforts to end extreme poverty by 2030,” said World Bank Group President Jim Yong Kim. “We’re committed to working with our partners to help the displaced overcome their ordeal and seize economic opportunities, while ensuring that host communities can also benefit and continue to pursue their own development.”
“The search for durable solutions for refugees, internally displaced and stateless persons is central to our mandate,” said United Nations High Commissioner for Refugees (UNHCR) Filippo Grandi. “Enabling dignified and productive lives through development investment is key to this challenge. Working in a cooperative and complementary partnership, I hope humanitarian and development agencies can make a real difference in the lives of the world’s poorest and most marginalized populations.”
Unlike economic migrants who move to places where there are jobs, the forcibly displaced are fleeing conflict and violence, often suffering from a loss of assets, lack of legal rights, absence of opportunities, and a short planning horizon. They need dedicated support to overcome these vulnerabilities and regain confidence in their future – so they can work, send their children to school, and have access to services. Left without support, the displaced may face hardship and marginalization, as do those who are negatively affected in host communities, which can hamper development efforts.
The report identifies three phases of forced displacement where development institutions can intervene to help reduce the costs of the crisis.
1. Prevention and preparedness:
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Help potential hosts prepare before large numbers of people arrive by planning for contingencies, developing instruments to transfer resources rapidly, and creating ‘surge capacity’ for service delivery. Forced displacement peaks at an average of 4.1 years after its onset, giving countries time to prepare.
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Strengthen the resilience of those who stay behind, by financing investment in stable parts of unstable countries to maintain livelihoods. People weigh the risks of staying against the risks of leaving, and the majority stay, coping until they have exhausted all other options.
2. Mid-crisis action:
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Support host communities in addressing long-standing development issues, such as improving the business environment and reducing inequalities, which the presence of forcibly displaced may exacerbate.
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Strengthen and expand delivery of education, health, urban and environmental services to cope with the increase in population.
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Encourage policies that enhance freedom of movement and the right to work for the displaced, which are in the interest of host communities as well.
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Help the displaced move to places where there are opportunities, create jobs in hosting areas, or invest in skills and education that are in demand in the labor market
3. Rebuilding Lives:
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Support successful return by creating jobs and opportunities in communities receiving returnees, and assist with recovery efforts.
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Help those in displacement integrate locally, by providing development support for countries that are willing to provide adequate legal status to refugees.
Financing the global response will take significant resources. Development institutions can broaden financing approaches including contingent financing to support preparedness; policy or results-based financing; and guarantees to stimulate stronger private sector investment. Middle-income host countries need access to concessional financing, and low-income host countries require additional resources.
Local Solutions to the Global Forced Displacement Crisis
Forced displacement is not a new phenomenon. Many countries – especially in the developing world – have been managing these situations for years, at times decades. The ongoing Syrian crisis has provided renewed impetus for the global community to re-think how to support local and national governments to help the displaced and hosts alike.
“All the conflicts we are seeing worldwide at the current moment have become the epitome of everything that can go wrong in a conflict situation, and a lightning rod for the international community to realize that the status quo isn’t working,” said Ede Ijjasz-Vasquez, Senior Director for the World Bank’s Social, Urban, Rural and Resilience Global Practice. “Recognizing that every situation is different, we at the World Bank have focused on the need for tailored solutions that work for specific host country situations. Over the years, we have found that good development programs need to be informed by a good understanding of displaced populations and the communities that host them, and the relationship between them. We must help them help each other.”
As the Bank works to expand its support for the displaced as well as their host communities, not only in low-income countries but in middle-income countries as well, many ongoing efforts across the world, including the Great Lakes, the Horn of Africa, and the Sahel regions, in Jordan and Lebanon, as well as in Pakistan and Azerbaijan among others, may provide insight on approaches that work.
Every situation will have its own unique challenges, but ensuring that local host communities are supported and involved in long-term planning decisions, and enhancing job opportunities are among important elements of Bank support. Supporting and enhancing sustainable environmental and ecosystem services, including integrated natural resources management, is also necessary to overcome the environmental degradation and loss of vegetation cover that can result from an inflow of large numbers of people.
Supporting host communities
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In the Horn of Africa and the Great Lakes, areas hosting refugees and Internally Displaced Persons (IDPs) are often under-developed and underserved, and the Bank is taking a regional approach to improve access to services and economic opportunities. In Zambia, for example, the Bank is supporting both former refugees and host communities through a Community-Driven Development approach, strengthening large scale and community infrastructure to improve education and health services, as well as create economic and market opportunities. In the Democratic Republic of Congo, the Eastern Recovery Project focuses on developing agricultural markets in areas that have experienced high levels of population movement, benefitting hosting communities, displaced families and returnees. Through the Intergovernmental Authority on Development (IGAD), the Horn of Africa Project will help harmonize policies and practices related to forced displacement with the establishment of a regional secretariat for forced displacement and mixed migration.
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In Azerbaijan, 7% of the population (approximately 623,000 people) is displaced. After two decades, the displaced have not been able to build self-reliance, lacking access to high quality social infrastructure and housing. The problem is aggravated by the fact that most internally displaced are hosted by already poor communities. To respond to this challenge, the government of Azerbaijan has been implementing the Azerbaijan IDP Living Standards and Livelihoods Project since early 2012 to improve living conditions and increase the economic self-reliance of the internally displaced. To ease the burden on host communities and facilitate integration of IDP populations, the project finances small- to medium-sized infrastructure projects through a community driven approach. To date, more than 400 communities throughout the country have benefitted from these infrastructure developments.
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In Jordan, where most refugees live in towns and cities, long-term predictable financing to twenty local authorities who are each hosting significant numbers of refugees has enabled them to plan and expand water and waste management services, install new street lighting, rehabilitate roads, and provide new sporting and recreational facilities. These are important steps to ensure that host communities continue to be hospitable and reduce any possible tension as a result of increased pressure on services and the environment.
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In Lebanon where, like Jordan, refugees live amongst host communities, the Bank is providing communities with immediate relief through investing in critical infrastructure at the local level and targeted social initiatives that promote interaction and collaboration between refugees and host communities. The Bank also scaled up its support to the government’s safety net program to host communities impacted by the Syrian crisis to reduce poverty and increase social cohesion. In addition, the Bank helped the public education system absorb a large number of school-age Syrian refugees, while at the same time ensuring Lebanese students also stay in school and overall quality of education is enhanced.
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Pakistan has had a long history of managing displaced people – hosting over 1.5 million Afghan refugees for decades, the largest protracted refugee population globally (UNHCR). The Pakistan government is also managing a large number of temporarily displaced people within its own borders in Federally Administered Tribal Areas (FATA), supported by the Bank. The World Bank-administered Multi-Donor Trust Fund (MDTF) was formed in August 2010 at the request of the government of Pakistan and development partner countries to respond to the crisis in Khyber Pakhtunkhwa (KP), FATA, and Balochistan to support the reconstruction, rehabilitation, reforms, and other interventions needed to build peace and create the conditions for sustainable development.
Creating jobs and opportunities for both hosts and the displaced
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In the Great Lakes and Horn of Africa, where host communities depend on traditional livelihoods, such as agriculture, fisheries, and pastoralism, the Bank is providing training to improve production practices, supporting new technologies and equipment, improving storage and processing infrastructure, and increasing access to finance. Local consultations and assessment of local markets with the communities and local governments taking the lead have informed the Bank’s approach. In Zambia, for example, the project supports livelihoods ranging from access to agriculture and vocational training, to development of small-scale sub-projects or irrigation systems, for the most vulnerable former refugees and host community members.
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In Azerbaijan, the IDP Living Standards and Livelihoods Project supports livelihoods-related activities that provide resources and build skills for IDPs, so that they can compete in the labor market or to start their own businesses and, down the road, to help them obtain better-paid and more secure jobs. The project supports training and grants for business start-up, forming and funding of income-generating groups in IDP communities, and provision of micro-credit for business activities. Businesses are varied in nature but usually build on the agricultural skills that IDPs brought from their home communities, including cattle husbandry, sheep rearing, and crop production, but the project also financed opening of bakeries, retail shops, catering businesses and cafés. Despite the relatively short time these income-generating groups have been operating, most already generate robust incomes. The project provides young people with vocational training and support for business start-up, and also aims to achieve gender balance and reach equal numbers of young women and men.
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In Jordan, an upcoming program on “Economic Opportunities for Jordanians and Syrian Refugees” will support the Government meet its commitment for providing Syrian refugees with access to the labor market by improving the investment climate and formalizing Syrian employment by facilitating the issuance of work permits. In return, Jordan will benefit from favorable access of Jordanian goods into European markets. The World Bank will also leverage its municipal program to finance labor-intensive works benefiting both Jordanians and Syrian refugees.
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In Lebanon, an upcoming program on “Roads and Employment” is expected to create about 1.5 million labor days of direct short-term jobs for low-skilled Lebanese and Syrian communities through rehabilitating the roads network of the country. Additional jobs will also be created in the supply chain industries, as well as the engineering and consultancy services in Lebanon.
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Through the Pakistan MDTF, a total of 1,471 matching grants have been disbursed and an estimated 23,000 jobs have been created through this support in KP and FATA.
Whether it is the Bank’s support to public service provision and local authorities in Jordan and Lebanon, or local government and community-based organizations in rural Africa, ensuring long-term sustainability will require coordinated programming to ensure effectiveness and reduce duplication for improving the quality of services.
“Implementation is challenging enough,” said Markus Kostner, Global Lead for Stability, Peace and Security in the World Bank’s Social, Urban, Rural and Resilience Global Practice, “but much more needs to be done to build, incentivize, and facilitate coalitions of governments, the private sector, civil society, development and humanitarian actors, and affected people to prevent, contain, and respond to current crises, and also look ahead to anticipate and prepare for new ones.”
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EAC states accused of withholding support in war on fakes
A regional forum on Wednesday said inadequate commitment by East African governments has adversely affected the war on trade in counterfeit products.
The forum held in Nairobi said anti-counterfeit agencies in member states have been denied adequate funding for staff, facilities and regulatory frameworks that would promote the war against counterfeit goods.
A panel session, moderated by Kenya Association of Manufacturers (KAM) 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 (ACA) 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.
The agencies include ACA, Kenya Industrial Property Institute and Copyright Board.
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The People’s President? Citizens’ assessment and expectations of the fifth phase government
Almost one year into the fifth phase government: citizens approve of the removal of ghost workers, free primary education and the dismissal of public servants. But they disapprove of the sugar import ban and price directive.
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%. This is comparable to approval ratings for previous Tanzanian presidents. Other government leaders also have high levels of approval although none as high as the President. Citizens report that they approve or strongly approve of their village/street chairperson (78%), their local councilor (74%) and their MP (68%).
These findings were released by Twaweza in a research brief titled The People’s President? Citizens’ assessment and expectations of the fifth phase government. The brief is 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.
In addition to strong approval ratings, nine out of ten citizens (88%) are confident that President Magufuli can maintain his current momentum until the end of his term.
The majority of citizens also report that they think there have been improvements in almost all public services under the fifth phase government. The Tanzania Revenue Authority leads as 85% of citizens say services there are improved under the new government. Citizens also think services are better in schools (75%), police stations (74%), courts (73%), health facilities (72%) and water service providers (67%). It is important to note that these data show citizens’ perceptions of services and do not necessarily represent any hard improvements. Similarly, almost all citizens (95%) say that civil servants in service delivery, like doctors and teachers, as well as administrative civil servants have become more accountable and efficient.
However citizens themselves admit that they are not very informed about major national issues. Only 4% of citizens feel well informed about national politics and only 9% feel informed about health and education. This indicates that reported improvements in services are based on personal experiences or very localized information. However citizens remain hungry for more information on the sectors that impact their lives. When asked what topic they would like to ask their village chair, councilor or MP about, health, education, water and roads consistently emerged as critical issues. When it comes to President Magufuli, two out of ten citizens (18%) would like to ask him about prices and inflation.
A similar pattern emerges when citizens are asked whether they know and have engaged with local, district or national leadership. Almost all citizens (96%) know their village executive officer and almost half of them (47%) have interacted with him or her. However only 2 out of 10 citizens (21%) know their district executive director and only 4% have interacted with him or her.
Despite this strong approval for the work of the fifth phase government and President John Pombe Magufuli personally, citizens are keen for the principles of democracy and justice to be followed. Eight out of ten citizens think that public officials should only be dismissed when proof of wrongdoing has been established. A similar proportion of citizens (75%) think that officials should be dismissed for failing to perform their duties rather than for disobeying the President’s orders. And despite their enthusiasm for the dismissals of public servants, citizens hold mixed views on the impact of the public dismissals. Although nine out of ten (90%) say these dismissals deter other public servants from wrongdoing, four out of ten (37%) also think that it demoralizes other government officials. And half of citizens (48%) think that the dismissals will only cause public servants to find new ways to hide their wrongdoing.
“Citizens are very positive about the performance of the fifth phase government and President Magufuli in particular. They report that public servants across the board are more accountable and that they have noticed improvements in public services. However citizens are also concerned about due process. For example, they want proof of wrongdoing to be established before officials are named, blamed and shamed. They are also worried about decisions that affect their pockets, like the sugar ban. This shows that they will not just blindly approve of all of the actions of a popular president. They continue to value the fundamental principles of good governance,” said Aidan Eyakuze, Executive Director of Twaweza.
“The most exciting thing about these results” he continued “is the suggestion that citizens’ expectations have shifted. Previously there was a sense of a vicious circle of apathy in which experience of poor performance lowered expectations, which in turn allowed poor performance to continue unchallenged. But recent developments, have shown that public sector performance can improve. Citizens could well come to expect higher standards as a permanent and pleasant new norm.”
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tralac’s Daily News Selection
The selection: Thursday, 15 September 2016
Featured infographic, @ITCnews: Sweet trade - 3 out of 5 top exporters of cocoa beans are located in Africa, ITCdata shows
African factories have room to grow (Business Day): Of the $430bn additional manufacturing output McKinsey believes is possible, up to $209bn could come from a category called "global innovations for local markets" that includes motor vehicles and chemicals, where research and development is a key component, and which already accounted for 27% of African output in 2015. The regional processing of goods such as food and beverages, with the largest share of manufacturing today at 38%, could add as much as $122bn. Resource-intensive manufacturing of cement and petroleum products could contribute another $72bn of additional output, and labour-intensive manufacturing of such products as apparel and footwear the remaining $27bn. Such a step change in manufacturing in Africa is, without doubt, achievable. [The authors: Tenbite Ermias, Acha Leke] [Download the McKinsey Global Institute report Lions on the move II]
Integration critical to industrialization in Africa (AfDB): For the CFTA to fulfill its promise in helping Africa to industrialize, some deliberate policy choices have to be made to create a conducive environment for the continent’s participation in global value chains, and in particular on rules of origin (RoO) and trade in services. With regard to the RoO, there must be harmonization of these rules across the entire continent if Africa is to truly have a single market. While there are large areas of overlaps across products, there are some significant differences across some of the RECs, particularly with the SADC RoO. Also, the RoO must be as flexible and pragmatic as possible. Restrictive RoO tend to constitute trade barriers more than they facilitate trade. With reference to services, the increasing “servicification of manufacturing”, referring to the role of services as inputs in manufacturing, emphasizes the importance of having a competitive services sector as a bedrock for industrialization. Services increasingly make up a larger share of the value of finished manufactured products. Consequently, the need for a competitive services sector is critical to any discussion on value addition on the continent include – both in terms of enabling products to be cost competitive and creating opportunities for value addition. [The analyst: Babajide Sodipo]
Newly posted African trade and development conference documentation:
The concept note for the African Mining Vision CSO Forum, underway in Nairobi.
The full set of documentation ahead of the third meeting of the steering committee of support to the transport sector development programme (21-22 September, Addis Ababa). Two profiled reports, below:
Report on the corridor assessment and ranking for selecting at least One Pilot Smart Corridor (pdf): The consultant collected data and information necessary for assessing and ranking the ten transport corridors according to the agreed multi-factor criteria for selecting at least one pilot smart corridor as per the project terms of reference. Both the ten corridors and the criteria were agreed on at the Validation Committee meeting of February 2016. Here are the results of the assessment and ranking of the ten corridors: North-South 80.0, Northern 73.5, Dar es Salaam 59.5, Maputo 58, Djibouti 53.5, Beira 50, Central 48, Dakar- Bamako-Niamey 47.5, Abidjan-Lagos 41, Douala-N’Djamena-Bangui 30. From a technical point of view and based on the results above, the consultant recommends that the North South Corridor be selected as the pilot smart corridor.
Transport Policy Framework: draft (pdf): The Transport Policy Framework (White Paper) is a consultative document that contains the required policy initiatives. It is intended to inform discussions at a first stage of the process that brings together the AU, REC’s, UNECA, the Fad and member states for preparing a co-ordinated response to the challenge of implementing a transport system that integrates the continent over the next 15 years, whereas taking into account the long term needs of the sector and the long term objectives of PIDA.
The draft agenda for the First African Forum for National Trade Facilitation Committees (17-21 October, Addis Ababa).
TRIPS flexibilities and anti-counterfeit legislation in Kenya and the EAC: implications for generic producers (UNCTAD-UNIDO)
Kenyan regulatory laws include sufficient remedies to enforce quality standards and to prevent the registration of medicines bearing labels that mislead patients as to the characteristics of a drug. Thus, an extension of the Anti-Counterfeit Act to drug quality issues appears inappropriate and not necessary. The Act should be limited to counterfeit trademarks and copyrights in line with Article 51 of the TRIPS Agreement. Any reference to patents should be removed to avoid misunderstanding and potential application of criminal sanctions to generic manufacturers. This would be incoherent with other policy developments in Kenya and the EAC, where remarkable efforts have been made to prepare a policy environment that is conducive to local generic production, related investment and trade within the EAC.
Namibia: Leniency policy for cartels (The Namibian)
Namibia should consider introducing a leniency policy as a way of dealing with cartels in the economy. This policy is said to have worked well all over the world, including in neighbouring South Africa. The chairperson of the Competition Tribunal of South Africa, Norman Manoim said in an interview that consideration should be given as to whether the policy can be adopted without waiting until there has been a change to the legislation. Manoim was one of the guest speakers invited by the Namibian Competition Commission for its ‘Competition & Consumer Week’ held in Windhoek with a theme ‘Cartels and their impact on the economy’.
Why geographical indications for Least Developed Countries? (UNCTAD)
It is legitimate for developing countries, including LDCs, to consider GIs as an alternative to valorize and market their products embedded in rich environmental settings; or by protecting well-known geographically based products already recognized by consumers in the market (Yeung and Kerr, 2011). The cases of Bhutanese red rice, Harenna wild coffee, Wenchi volcanic honey, Pink rice from Madagascar and mullet bottarga from Mauritania show environmentally friendly production processes. Thus, producers in LDCs should be supported by long-term policies and programs aimed to promote collective action, traceability, monitoring and business development. It is necessary to examine the environmental impact after GI implementation due to a possible growth in demand. For example, following questions should be constantly posed and monitored: [The report is based on case studies, which include Ethiopia, Madagascar, Mozambique, Mauritania, Senegal] :
MEPs back trade deal with six African countries (EU)
The European Parliament approved an agreement granting duty-free access to the EU for products from Namibia, Mozambique, Botswana, Swaziland and Lesotho, and improved market access for South Africa on Wednesday. “This agreement will help our African partner states to reduce poverty and can also facilitate their smooth and gradual integration into the world economy. There are also many safeguards in the deal to ensure that local people truly benefit from this cooperation. The language on human rights and sustainable development is one of the strongest that you will find in any EU agreement”, said rapporteur Alexander Graf Lambsdorff (ALDE, DE), before the vote. MEPs approved the deal by 417 votes to 216, with 66 abstentions.
Bitange Ndemo: ‘Are we capable of negotiating global treaties?’ (Business Daily)
A new book, “Bounded rationality and economic diplomacy: the politics of investment treaties in developing countries”, has some insights that reveal the continent’s weakest link with respect to international treaties – the capacity to negotiate effectively while protecting its interest. We can choose to turn the idle capacity within academic institutions into a formidable negotiation teams that could not just help Kenya but the region. This can only be done through a deliberate effort to develop capacity. Of greater importance is the political will to do the right thing to avoid politicization of the economic process. [The writer is an associate professor at University of Nairobi’s School of Business]
Lesotho: water security and climate change assessment (World Bank)
Despite its abundant water resources, Lesotho remains vulnerable to the impacts associated with regular and recurrent floods and droughts, the report revealed. The floods in 2011 were the largest in the country since the 1930s, while the drought in 2015-16 period was the most severe on record. All the climate models indicate that average mean surface temperatures will rise, but precipitation projections vary greatly. The report also recommends improved data needed to continue to develop more sophisticated analyses of the complex issues around the country’s most important natural resource. Data constrains around agriculture, the economic uses and value of water, climate and hydrology have the potential to undermine future opportunities.
South Africa: Gauteng’s Township Stock Exchange project (GCIS)
As part of mainstreaming the township economy and transforming our townships into centres of innovation and manufacturing, we will also next month launch the Township Stock Exchange. The Gauteng township economy is estimated by the World Bank to be worth over R10bn. It is the critical site of the informal sector and more than 1.5 million people. Properly supported, it can contribute to inclusive growth and sustainable economic empowerment of the majority of our population. We believe this is a critical intervention that will help us build a vibrant manufacturing industry in our townships. Already large numbers of township entrepreneurs are makers of things - they are involved in manufacturing, albeit on a minimum scale. As this government, working together with the private sector, we are determined to support these home-grown, genuine entrepreneurs and catapult them to the next level. [The author: Premier David Makhura]
South Africa: The Real Economy Bulletin - Second Quarter 2016 (TIPS)
Behind the trends: Exports were the main driver of the surge in growth in the GDP in the second quarter of 2016, largely thanks to the auto industry. Critical for export growth was the persistence of relatively competitive exchange rates as well as some recovery in the U.S. and Europe in the past year. While welcome, these developments emerged in the context of fairly gloomy prospects for growth in the medium term. Growth in the BRICS: Divergent developments in the BRICS in the past five years illustrate the extraordinary impact of the slowdown in Chinese growth on middle-income economies. They also show how this kind of sharply slower growth can play out in greater political contestation and uncertainty. Growth in the SADC: The rest of Africa now represents around 30% of South Africa’s export market, up slightly from 2010. The bulk of South African exports to the rest of the continent go to Namibia, Botswana, Mozambique, Zambia and Zimbabwe. Because the region is growing rapidly compared to most other regions, despite the end of the commodity boom, it represents a significant opportunity.
Mozambique: Tomaz Salomão praises Bank of Mozambique for supporting limits on dollar use (Club of Mozambique)
Speaking at the Agrarian and Fishing Sectors Business Forum in Manica on Monday Salomão praised Rogério Zandamela’s appointment as governor of the Bank of Mozambique, and said that the first decision taken by his team was right. “A major concern that has been raised in this meeting is the issue of the slippage of the metical. On Friday, the central bank made an announcement which I believe was right. I mean restricting the movement of dollars in our country as a way of strengthening of the metical,” he said. Tomaz Salomão raised other concerns at the forum, such as the under-invoicing of exported products, and challenged ministries to address the situation to boost foreign exchange earnings.
Zimbabwe adopts Rand-based tourism pricing (The Chronicle)
Players in the local tourism industry have resolved to adopt a “rand-based” pricing system to cushion their businesses from the prevailing cash crisis. In the context of weakening regional currencies, the use of the strong US dollar has negatively affected tourist arrivals as the country is viewed as an expensive destination. Recent reports indicate that some tourists wanting to visit Victoria Falls, for instance, now prefer flying into Livingstone in Zambia from where they undertake tourism activities and only cross to Zimbabwe as Zambian clients — prejudicing the country of the precious earnings. Last week Finance and Economic Development Minister Patrick Chinamasa revealed that the approach (rand-based pricing system) has been agreed upon by the Government, players in the hospitality sector and the Reserve Bank of Zimbabwe. [Zimbabwe to scrap horticulture export permits]
Clearing the jam at Djibouti (African Business Magazine)
But such is Ethiopia’s growth – both in terms of economy and population; its current population of around 100m is set to reach 130m by 2025, according to the United Nations – that some say it’s going to need all the ports it can get. “Ethiopia’s rate of development means Djibouti can’t satisfy demand – even if Berbera is used, Ethiopia will also need [ports in] Mogadishu and Kismayo in the long run, and Port Sudan,” Ali says. “The bottleneck is not because of the port but the inland transportation – there aren’t enough trucks for the aid, the fertiliser and the usual commercial cargo,” Aboubaker says, explaining that even with other ports such as Berbera offering more docking options in the future, the problem of not enough trucks matching demand would lead to the same dilemma as now. It’s estimated that 1,500 trucks a day leave Djibouti for Ethiopia and that there will be 8,000 a day by 2020 as Ethiopia tries to address the shortage. [The author: James Jeffrey)
Tanzania: Freight forwarders oppose Kigali plan (The Citizen)
The Tanzania Freight Forwarders Association is up in arms against Rwanda’s request to clear own consignment at the Dar es Salaam Port. TAFFA chairman Steven Ngatunga advised the government to reject the proposal, saying it will deny Tanzanians employment at their own port.
Rural Development Report 2016 (IFAD)
Chapter 3: Structural and rural transformation in Africa. The agricultural sector has grown absolutely and declined relatively, as resources have shifted to other sectors, primarily services. The demand for services comes in part from the agricultural sector. Much demand is generated by resource rents (and in some countries official development assistance) channelled back into the economy through public spending (Gollin et al. 2013). The rapid growth in the service sector shows a high degree of responsiveness to new opportunities, but sustained growth in that sector will require technical change in agriculture to shift the foundations of the middle class from the public sector to competitive manufacturing and services.
Private investment in food systems is expanding quickly (World Bank 2013). What Reardon (2015) calls the “quiet revolution” in food supply chains spans retail, wholesale, first- and second-stage processing, packaging, branding and logistics. Also targeted for investment is the full range of product transformation functions: trucking, processing, storage and wholesaling. These transformations in food systems are very uneven among and within countries, with sharp differences in opportunity based on proximity to cities and access to key assets.
Trade delegation from Africa seeks food security at Big Iron (Grand Forks Herald)
This year’s group was heavily represented by sub-Saharan countries, a difference from the usual guest list that often is heavily represented by visitors from Soviet Union countries, where agriculture is more similar to Upper Great Plains farming. This year’s delegation is the largest to date from Africa. Visitors came from Angola, Benin, Ethiopia, Liberia and Nigeria. Dalva Ringote Allen, chairman of the board of directors of the Republic of Angola’s Ministry of Economy’s Institute of Business Foment, was among those leading a 56-member delegation from her country, focusing on developing agriculture in the wake of declines in oil prices, which the country exports.
Ethiopia is now the largest coffee market in Africa
ECOWAS states urged to adopt uniformity in Single Window Systems (GhanaWeb)
Namibia’s 20th National Rangeland Forum has started
Namibian Biomass Industry Group: case studies on demand for invader bush biomass
Nissan SA poised to expand into Africa
Jeff Nemeth: Getting wheels rolling on the continent
VW expanding its Africa commitment
CTI study roots for expertise sharing to industrialise Tanzania
Rwanda’s MINAGRI rolls out new strategy to boost agriculture
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Realizing the potential of Africa’s economies
Africa’s economic fundamentals remain strong, but governments and companies will need to work even harder to keep the region’s economies moving forward.
Many observers are questioning whether Africa’s economic advances are running out of steam. Five years ago, growth was accelerating in almost all of the region’s 30 largest economies, but the recent picture has been more mixed: while growth has sped up in about half of Africa’s economies, it has slowed in the rest.
Between 2010 and 2015, Africa’s overall GDP growth averaged just 3.3 percent, considerably weaker than 4.9 percent a year between 2000 and 2008. But average growth hides a marked divergence, finds a new McKinsey Global Institute report, Lions on the move II: Realizing the potential of Africa’s economies.
A much less robust economic performance by two groups of African economies dragged that average down – oil exporters hit by the decline in oil prices and countries affected by the political turmoil of the Arab Spring (Egypt, Libya, and Tunisia). For the rest of Africa, growth actually accelerated to 4.4 percent in 2010 to 2015 from 4.1 percent in 2000 to 2010. In addition, long-term fundamentals are strong, and there are substantial market and investment opportunities on the table.
Future growth is likely to be underpinned by factors including the most rapid urbanization rate in the world and, by 2034, a larger working-age population than either China or India. Accelerating technological change is helping to unlock new opportunities for consumers and businesses, and Africa still has abundant resources. The International Monetary Fund projects that Africa will be the world’s second-fastest-growing region in the period to 2020.
Despite recent shocks and challenges, spending by Africa’s consumers and businesses already totals $4 trillion annually, and is growing rapidly. Household consumption is expected to grow at 3.8 percent a year to total $2.1 trillion by 2025. African businesses are an even larger spender. From $2.6 trillion in 2015, business spending is expected to increase to $3.5 trillion by 2025.
Africa could nearly double its manufacturing output to $930 billion in 2025 from $500 billion today, provided countries take decisive action to create an improved environment for manufacturers. Three-quarters of that potential could come from Africa-based companies meeting domestic demand; today, Africa imports one-third of the food, beverages, and other similar processed goods it consumes. The other one-quarter could come from more exports. The rewards of accelerated industrialization would include a step change in productivity and the creation of up to 14 million stable jobs over the next decade.
While the potential that Africa offers is undoubted, the question remains: will it be achieved? Businesses and governments will need to work harder to capture the opportunity. Africa is home to 700 companies with annual revenue of more than $500 million, including 400 with annual revenue above $1 billion, and these companies are growing faster and are more profitable than their global peers. But Africa needs more of them. It has a lower number of large companies – and they are smaller on average – than one would expect given the corporate landscapes of other emerging regions. Corporate Africa needs to step up its performance to make the most of these opportunities. The top 100 African companies have forged their success by building a strong position in their home market before diversifying geographically, adopting a long-term perspective, integrating what they would usually outsource, targeting high-potential sectors with low levels of consolidation, and investing in building and retaining talent.
Governments will need to address the continent’s productivity and drive growth by focusing on six priorities emerging from this research: mobilize more domestic resources, aggressively diversify economies, accelerate infrastructure development, deepen regional integration, create tomorrow’s talent, and ensure healthy urbanization.
Delivering on these six priorities will require a transformation in the quality of Africa’s public leadership and institutions, as well as governance. All these imperatives require the vision and determination to drive far-reaching reforms in many areas of public life, and they require capable public administration with the skill and commitment to implement such reforms. What the past five years have shown is that Africa’s diverse economies – its economic lions – now need to improve their fitness in order to make the most of their undoubted long-term growth potential and to continue their march toward prosperity.
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Only targeted policies focused on rural people will eliminate poverty in developing countries, concludes new report
Economic growth is not enough to save those threatened daily with starvation. Governments need to tailor policies and investments to transform rural areas in developing countries if they want to eliminate poverty, according to a new global study released by the International Fund for Agricultural Development (IFAD) on 14 September 2016.
The Rural Development Report 2016, IFAD’s flagship publication, is a rallying call to policymakers and development practitioners to win the global war against poverty. It brings together leading thinkers to analyse the experiences of rural development in over 60 developing countries. This extensive research provides a solid foundation on which leaders and institutions can base their policy choices and investments.
“The Rural Development Report marks a change in perspective,” said Kanayo F. Nwanze, President of IFAD, prior to the launch of the report at the Italian Ministry of Foreign Affairs and International Cooperation in Rome. “It places the rural sector into the bigger picture of the country’s development. It demonstrates the need for a far more comprehensive and holistic approach to the economy to ensure prosperity for millions of rural people. It reinforces IFAD’s view, based on 40 years of experience, that investing in agricultural and rural development means investing in the whole economy.”
The focus on rural and agricultural development is critical, states the report, because the incomes of 2.5 billion people worldwide still depend directly on rural small farms which produce 80 per cent of food consumed in Asia and sub-Saharan Africa.
The report is set in the context of a rapidly changing world, with growing demand for food, increased migration to cities and the impact of climate change and environmental degradation. It provides insight into regional and country-specific challenges and historical legacies and how factors like employment, youth populations, rights to land, access to finance, gender equality and social protection influence successful interventions.
The report’s researchers identify four models of rural economic development according to the speeds of economic transformation and inclusiveness, and the objectives of their rural development processes. This systematic and rigorous analysis of the rural sector gives a greater understanding of what key investments and policy reforms should be prioritized so that rural people, and society at large, can benefit.
“We wanted to look at the changes in the daily life of people, not as an isolated and individual undertaking, but as part of the economic developments of their countries and the rural sector,” explained Paul Winters, Director, Research and Impact Assessment Division, IFAD. “We systematically looked at whether economic growth brought about poverty reduction and when increased productivity in the rural sector created more jobs and more opportunities to generate higher incomes for rural people.”
The report specifically looks at the impact of structural transformation (the reallocation of economic activity beyond agriculture to include manufacturing and services) and rural transformation (the diversification of rural incomes and gains in agricultural productivity) on poverty reduction.
Some of the report’s findings include:
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The majority of countries that have sustained a rapid transition out of poverty diversified their economies and advanced their agricultural sectors.
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Creating rural jobs is now just as important as spurring growth.
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Rural transformation is an integral part of a country’s economic development.
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Agriculture remains vital for economic development regardless of the stage of structural transformation. Leaders need to expand and deepen the agriculture-based rural economy with investments in developing modern agro-industries.
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The availability of finance and financial services is critical to the long-lasting transformation of rural livelihoods, yet 2 billion people globally have no access to regulated financial services and 73 per cent of poor people do not have bank accounts.
Some of the report’s regional findings include:
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Bolivia, Colombia, Ecuador, Mexico and Uruguay reduced rural income inequality, even as it increased in most Central American countries partly due to targeted government cash transfers.
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In China, India, the Philippines and Viet Nam, land reform, basic investments in rural areas and other sectoral policies have been decisive factors in rural transformation.
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Most African countries continue to wrestle with a growing youth population, small and declining manufacturing sectors, and deeply entrenched development barriers. Recent increases in agricultural productivity came not from advancing technology, but from bringing more land under cultivation.
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In the Near East & North Africa sub-region (NENA), rural transformation pathways have been adversely affected by instability and fragility. This has been compounded by structural issues related to scarcity of water and the youth bulge.
“Rural transformation is not automatic. It is a choice,” said Nwanze. “The choices made by governments and development practitioners have an enormous impact on the lives of people and nations.”
The report concludes that policies need to be inclusive and must bring poor, and often marginalized, rural people into the economic mainstream so that rural development is socially, economically and environmentally sustainable. This is the only way to achieve the 2030 Agenda for Sustainable Development and eliminate extreme poverty and hunger.
“The findings are a wake-up call to everyone who cares about the plight of the poorest children, women and men on our planet,” said Nwanze. “Every person, every government and every organization engaged in the battle against poverty should read it and act on its findings.”
» Download: Rural Development Report 2016: Fostering inclusive rural transformation (PDF, 5.89 MB)
Structural and rural transformation in Africa
A late starter in the development race, Africa displays diverse patterns of growth across a vast continent. Home to half the world’s fastest-growing economies over the past decade, the region has averaged 4 per cent growth and cut poverty rates from 57 per cent in 1990 to 48 per cent in 2010, a level that is relatively high compared to other regions. Schooling, health and infrastructure are improving, but still remain problematic in many countries.
Yet most African countries continue to wrestle with a youth bulge, small and declining manufacturing sectors, and deeply entrenched development barriers.
Alongside structural transformation, some rural areas are transforming deeply and rapidly. But while agricultural output and productivity are growing, crop diversification remains limited, i.e., the mix of commodities is changing only slowly, even as people eat more meat and fish, fruit and vegetables, and processed food.
Insecure land tenure, a lack of basic infrastructure, inadequate credit and insurance, and ethnic and gender disparities are all brakes on inclusive rural transformation.
Most countries that have achieved high structural and rural transformation have also cut poverty quickly, but few slow transformers have been able to do so. There’s much investment and policy work to be done.
Farming to survive, growing to sell
Projections indicate that Africa will remain predominantly rural until about 2035. Rural poverty remains deep and widespread, concentrated among young people and women. About 65 per cent of youth work in agriculture: only 16 per cent have waged jobs in the public and private sectors.
Agriculture accounts for 24 per cent of GDP across the region, and agribusinesses 20 per cent more, complemented by mining and services.
Recent increases in farm output came not from technology change leading to increased productivity, but from bringing more land under cultivation. In Kenya, land ownership is becoming more concentrated, even as the number of plots of less than one hectare has doubled to two million.
Yet much more food is being traded: Africa’s urban food markets are expected to exceed US$400 billion by 2030, a fourfold increase from 2013.
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Mobile connectivity a lifeline for refugees, report finds
New study by UNHCR and Accenture finds mobile phone and internet access is as critical to refugees’ safety and security as food, shelter and water.
As well as being essential for keeping in touch with loved ones, many refugees view access to a mobile phone and the internet as being as critical to their safety and security as food, water and shelter, according to a new report by UNHCR and Accenture.
The report “Connected Refugees: How the Internet and Mobile Connectivity Can Improve Refugee Well-being and Transform Humanitarian Action” is based on research undertaken in 44 countries on four continents. It shows that for many refugees a connected device is a lifeline and a critical tool for self-empowerment.
The study finds that while affordability is often a barrier to connectivity, refugees living in urban areas tend to have similar access to mobile networks as other urban populations. But for refugees in rural locations the picture is very different, with only one in six located in areas with 3G access, and one in five having no mobile coverage at all – significantly lower than for the population at large.
“In the world we live in today, internet connectivity and smart phones can become a lifeline for refugees, providing an essential means for them to give and receive vital information, communicate with separated family members, gain access to essential services, and reconnect to the local, national and global communities around them,” said Filippo Grandi, the United Nations High Commissioner for Refugees.
“Most importantly, connectivity can help broaden the opportunities for refugees to improve their own lives and pursue a vision of a future that would otherwise be denied to them,” he added.
The findings come at a moment when wars and persecution have driven more people from their homes than at any time since UNHCR, the UN Refugee Agency, began keeping records. At end of 2015, 65.3 million people were displaced worldwide, of whom 21.3 million were refugees.
Faced with a pressing need, the study recommends additional investments in three main areas, which together form the basis of a new UNHCR Global Strategy for Connectivity for Refugees. These include increasing the availability of mobile networks, improving affordability, and providing access to training, digital content and services.
The report also identifies a number of strategic interventions to help ensure connectivity, ranging from partnering with Mobile Network Operators and other technology and communications companies to improve infrastructure, making targeted investments in infrastructure, and enabling an environment and system for digital service delivery.
“Especially critical to this effort will be the engagement of the private sector, especially technology companies and mobile network operators. Accenture is particularly optimistic about the potential for UNHCR and the humanitarian community to work together with the private sector to improve the well-being and humanitarian support of displaced people through enhanced connectivity,” said Dan London, group chief executive of Accenture’s Health and Public Service business.
Accenture is a leading global professional services company, providing a broad range of services and solutions in strategy, consulting, digital, technology and operations.
Drawing on the business model of the Accenture Development Partnership (ADP), the report also identifies ways to engage the private sector to solve the connectivity challenge, leveraging creative partnerships and smart investments. ADP harnesses the global capabilities and experience of Accenture to impact positively the lives of people in the developing world.
“Private-sector partnerships are essential to scale the connectivity interventions globally,” said Roger Ford, ADP managing director. “Companies and corporations bring global reach, innovative business models, experience in the communications and telecommunications industries, relationships with government regulators and financial and human resources, all of which will be instrumental to connecting the world’s refugee population.”
Refugees and Connectivity: An Introduction
Over the last 25 years, the internet and mobile communications have transformed life in the industrialized and developing worlds alike. Now that so much information is readily available, we worry about overload more than scarcity. Mobile communications and social media provide abundant ways to stay in touch with friends, family and colleagues. Cloud computing, remote working and networked global teams are re-shaping the ways we interact and connect.
Not so for the world’s refugees. Today, more than 65 million people – the largest number since the Second World War – are living as refugees or are internally displaced, uprooted from their homes in search of safety, and often struggling to access the basic means of survival.
But displaced people are also living without the connectivity they need to obtain vital information, communicate with loved ones, access basic services and link to the local, national and global communities around them.
The places where they live frequently lack digital networks and infrastructure, or the connectivity available there is too expensive. The digital revolution transforming the world is leaving refugees behind.
The Need for Connectivity
UNHCR carried out a global assessment of refugees’ access to, and use of, the internet and mobile phones where available, to help inform the development of a new UNHCR Global Strategy for Connectivity for Refugees.
Refugees vs. Global Population: Mobile Network Coverage
Key findings
One of the key findings of the research is that while 7 per cent of refugee communities lack the requisite digital infrastructure for internet access and mobile communications, most refugees in urban areas live in places that have 2G or 3G mobile coverage. For those in rural areas, however, the situation is far worse, with 20 per cent living in areas with no connectivity.
Cost
Our assessment also found that refugees often spend up to a third of their disposable income on staying connected – highlighting the main obstacle to refugee connectivity: cost. Globally, refugees are 50 per cent less likely than the general population to have an internet-enabled phone, and 29 per cent of refugee households have no phone at all.
The need for communication
In all discussions between refugees and UNHCR staff, communication with friends and family was identified as the most important need from connectivity. Arguably, this need is greater for refugees than for the general population because displacement often separates refugees from their loved ones and can leave them isolated. Knowing where friends and family are and knowing that they are safe is of paramount importance to refugees.
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Benefits of Connectivity
Living unconnected means making contact and sustaining communication with loved ones is difficult and often impossible. Without access to up-to-date information on the situation back in their home countries and in their countries of asylum, refugees cannot make informed choices about how to improve their lives, or access basic services for health and education.
Lack of connectivity constrains the capacity of refugee communities to organize and empower themselves, thus limiting potential for self-reliance and livelihoods.
A connected refugee population can play a critical role in enabling organizations such as UNHCR to innovate effectively and to improve the quality of services that we provide. Connectivity has the potential to transform how we communicate, the way we respond to the protection needs of displaced people, and our delivery of humanitarian services. Most significantly, better connectivity can promote self-reliance by broadening the opportunities for refugees to improve their own lives. Access to the internet and mobile telephone services has the potential to create a powerful multiplier effect, boosting the well-being of refugees and of the communities that host them.
TRIPS flexibilities and anti-counterfeit legislation in Kenya and the EAC: Implications for generic producers
This paper aims to make a contribution to the ongoing debate in Kenya and the East African Community (EAC) about sub-standard drugs, access to medicines, local pharmaceutical production, and the role of IPRs enforcement and drug regulatory laws.
The United Nations Conference on Trade and Development (UNCTAD) and the United Nations Industrial Development Organization (UNIDO) collaborate on a global project to strengthen pharmaceutical production in developing countries and least-developed countries (LDCs). Within this context, UNCTAD assists in the implementation of flexibilities in intellectual property (IP) rights available under the World Trade Organization’s (WTO) Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). The full use of TRIPS flexibilities to protect public health, and, in particular, to provide access to medicines for all, is a target under Sustainable Development Goal 3 (“Ensure healthy lives and promote well-being for all at all ages”).
The availability of TRIPS flexibilities creates the legal space for the production of generic medicines, and may thus provide important incentives for foreign generic firms to invest in a country’s domestic pharmaceutical sector. UNCTAD considers the use of TRIPS flexibilities as an important element to promote generic pharmaceutical investment and domestic enterprise development under sustainable investment policy frameworks. In order for such frameworks to be coherent and effective, policy makers should avoid discrepancies between the use of TRIPS flexibilities, the enforcement of intellectual property rights (IPRs), and domestic laws and policies on drug regulation.
Overview of Policy Recommendations
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Recommendation 1: In the course of the current revision of the Kenyan AntiCounterfeit Act, the definition of “intellectual property rights” in Section 2 of the Act should be amended to only cover trademarks and copyrights and related rights. The Anti-Counterfeit Act should not apply to patents, in line with the minimum standards of the TRIPS Agreement and recent changes under Uganda’s 2015 version of the Counterfeit Goods Bill.
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Recommendation 2: The definition of “counterfeiting” in Section 2 of the Act should be redrafted, following the definitions of “counterfeit trademark goods” and “pirated copyright goods” in Article 51 of the TRIPS Agreement. The new definition should not apply to foreign IP rights or to activities undertaken abroad, in line with the principle of territoriality that governs intellectual property law.
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Recommendation 3: From a public health perspective, the existing drug regulatory laws appear sufficient to address the mislabeling of drugs that creates confusion about quality or other drug characteristics. There is no need to expand the scope of the Anti-Counterfeit Act to cover issues of product quality. Efforts should focus on upgrading the drug regulator’s capacity to enforce quality standards under domestic regulatory laws.
Overview: Anti-Counterfeit Legislation in the EAC
In 2010, the EAC Secretariat made available to Partner States an EAC Anti-Counterfeit Bill as drafted pursuant to a consultancy by two Nairobi-based law firms. The 2010 version received comments from Partner States’ governments and underwent a number of minor modifications. Consultations between the EAC Secretariat and Partner States then proceeded on the basis of the 2011 version of the Bill. In April 2015, however, the EAC Council of Ministers decided to discontinue the enactment of a separate law on anti-counterfeiting and instead placed draft provisions on counterfeiting within an amendment to the 2006 EAC Competition Act. The amendment applies anti-counterfeiting measures to protect trademarks and copyright, but not patents.
The EAC Competition Authority will have the power to harmonize the national legal frameworks on counterfeiting and piracy in the region. Partner States will be obliged to establish or designate an institution responsible for anti-counterfeit matters, and to enact laws prohibiting the manufacturing or production, the possession or control in the course of trade, the sale, hire, barter or exchange, or the distribution of counterfeit goods for trade. They should also prohibit the importation into, the transit through, transshipment or export from a Partner State. As a safeguard for access to medicines, the amendment provides that its provisions shall not be construed as prohibiting the manufacture, importation, sale or dealing in medicinal products generally known as generic medicines provided such medicines are not counterfeit goods.
In Uganda, as of March 2015, the latest version of the Counterfeit Goods Bill was with Cabinet after a number of changes made by the Parliament. Local civil society and the Ministry of Industry, Trade and Cooperatives played an important role in amending a previous version from 2009 to better reflect concerns related to public health and generic competition.
Tanzania adopted the Merchandise Marks Regulations in 2008, which contain provisions on counterfeiting.18 Patent legislation in Tanzania is divided between Tanzania-Mainland and the island of Zanzibar. In an effort to implement TRIPS Agreement public health-related flexibilities, Tanzania-Zanzibar adopted the 2008 Patents Act, which in cases of patent infringement and counterfeit trademarked goods provides for remedies comparable to TRIPS Agreement minimum standards. Tanzania-Mainland still relies on the pre-TRIPS Patents Act of 1995.
The Definition of “Counterfeiting”
The Kenyan Anti-Counterfeit Act in Section 2 states that:
“Counterfeiting” means taking the following actions without the authority of the owner of [the] intellectual property right subsisting in Kenya or elsewhere in respect of protected goods –
(a) the manufacture, production, packaging, re-packaging, labelling or making, whether in Kenya or elsewhere, of any goods whereby those protected goods are imitated in such manner and to such a degree that those other goods are identical or substantially similar copies of the protected goods; (b) the manufacture, production or making, whether in Kenya or elsewhere, the subject matter of that intellectual property, or a colourable imitation thereof so that the other goods are calculated to be confused with or to be taken as being the protected goods of the said owner or any goods manufactured, produced or made under his licence;
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(d) in relation to medicine[s], the deliberate and fraudulent mislabelling of [a] medicine with respect to identity or source, whether or not such products have correct ingredients, wrong ingredients, have sufficient active ingredients or have fake packaging; Provided that nothing in this paragraph shall derogate from the existing provisions under the Industrial Property Act.
Paragraph (d) on medicines was not part of the original draft provision. It was added to respond to concerns voiced about the impact the definition especially in paragraph (a) may have on the legitimate generic production of medicines. The chapeau to the provision establishes that the authorization from the IPR holder shall be the key criterion for determining counterfeiting, and paragraph (a) inter alia refers to the manufacture of goods that are substantially similar copies of protected goods. This could encompass the production of generics, especially as Section 2 provides that the notion of “intellectual property rights” includes “any right protected under the Industrial Property Act, 2001” (i.e. especially patents).
It is obvious that without the subsequently added paragraph (d), the broad definition of “counterfeiting” particularly in paragraph (a) would have encompassed activities by generic producers that do not necessarily meet the patent right holder’s approval. Such activities could relate to the use of the regulatory review exception for early generic market entry and especially the marketing of generic copies during the patent term in cases where the generic producer has reason to believe that the right holder’s patent is weak and may be challenged in infringement litigation. Consequently, generic producers engaged in these legitimate activities would have been exposed to criminal sanctions, which are triggered by activities that meet the definition of “counterfeiting” (see section on applicable remedies below for details).
Paragraph (d) of the above-quoted Kenyan definition of “counterfeiting” was drafted along the lines of the WHO’s definition of spurious/falsely-labelled/ falsified/counterfeit (SFFC) medicines. Its relationship with paragraph (a) of the provision is not obvious. In particular, it is unclear to what extent the unauthorized manufacture of copies of protected goods may still apply to generic producers’ activities, or whether paragraph (d) excludes paragraph (a) in the context of medicines. This ambiguity may have been the result of hasty drafting. In any case, it was criticized by the Kenyan High Court in its 20 April 2012 decision as not providing a sufficient safeguard for the right to life, dignity and health against IP enforcement actions targeting generic medicines. The Court drew the conclusion that Section 2 of the Anti-Counterfeit Act threatens to violate the petitioners’ right to life, human dignity and health as provided under Kenya’s Constitution.
The March 2015 version of the Ugandan Counterfeit Goods Bill removed patents from its scope of application, thereby addressing concerns that legitimate generic trade could be qualified and sanctioned as “counterfeiting.” Under the older, i.e. 2009 version of the Bill, the definition of “counterfeiting” was essentially a copy of the Kenyan definition, stating that:
“Counterfeiting” means without the authority of the owner of any intellectual property right subsisting in Uganda in respect of protected goods – The manufacturing, producing, packaging, repackaging, labelling or making, whether in Uganda or outside Uganda, of any goods by which those protected goods are imitated in such manner and to such a degree that those other goods are identical to or substantially similar to protected goods; […] (c) In the case of medicines, includes the deliberate and fraudulent mislabelling of medicines with respect to identity or source, whether or not such products have correct ingredients, wrong ingredients, have sufficient active ingredients or have fake packaging. [emphasis added]
As in the case of the Kenyan definition, the relationship between paragraph (a) and the specific paragraph on medicines was unclear. In the case of Uganda, the situation was made even more difficult by the use of the term “includes” (see italics in the above text), which is not used in the Kenyan provision. This could have been misunderstood as implying that paragraph (a) regarding manufacturing activities still applied in addition to paragraph (c), thus qualifying generic producers’ activities as counterfeiting. The criticism advanced by the Kenyan High Court (see above) applied to an even greater extent to this Ugandan draft provision. As in Kenya, the definition of “intellectual property rights” in the Ugandan Bill also included patents, thus potentially targeting generic pharmaceutical production activities. Finally, the Tanzanian 2008 Merchandise Marks Regulations have also raised concern as to potentially creating confusion between legitimate generic activities and IP infringement.
A striking feature in the Kenyan definition of “counterfeiting” is the extra-territorial application of IPRs existing in Kenya to activities occurring in third countries. According to the original drafting of the definition of “counterfeiting” in Kenya, an IPR holder in Kenya could have qualified manufacturing activities in a third country, such as for instance India, where its product enjoys no IPR protection, as “counterfeiting.” Domestic subsidiaries of these foreign manufacturers operating in Kenya would potentially have been exposed to sanctions related to “counterfeiting”, such as criminal remedies (fines and imprisonment). Considering the important presence of particularly Indian generic investors in the EAC Partner States, this could have a serious impact on decisions related to foreign investment in EAC Partner States.
Finally, a unique issue under Kenyan legislation is the application of Kenyan IP enforcement to protect foreign IP rights. Section 2 of the Anti-Counterfeit Act defines “counterfeiting” as taking certain actions without the authority of the owner of the IP rights subsisting in Kenya or elsewhere. The idea of enforcing foreign IP rights is in contradiction to the principle of territoriality that underlies IP law. This principle makes particular sense in the area of IP enforcement. Foreign rights holders would otherwise be entitled to claim enforcement of their foreign rights even if they do not meet the substantive requirements of protection under Kenyan IP laws. This would disregard the balance of interest between the protection of exclusive rights and the contribution that the IP owner should make to society. In practical terms, it would be very difficult for Kenyan authorities to know if certain rights not protected domestically are protected abroad. In addition, importers and consumers that rely on the fact that certain products are unprotected in Kenya may find themselves subject to IP enforcement because of foreign rights that they were unaware of. The need to respect the principle of territoriality should be reflected in an amendment to the current definition of “counterfeiting” in the Kenyan Anti-Counterfeit Act, as suggested below (Recommendation 2).
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Clearing the jam at Djibouti
With crop failures ranging from 50% to 90% in parts of the country, Ethiopia, sub-Saharan Africa’s biggest wheat consumer, was forced to seek international tenders and drastically increase wheat purchases to tackle food shortages affecting at least 10m people.
This meant extra ships coming to the already busy port city of Djibouti, and despite the hive of activity and efforts of multitudes of workers, the ships aren’t being unloaded fast enough. The result: a bottleneck with ships stuck out in the bay unable to berth to unload cargoes, both humanitarian and commercial.
“This is bad for the shipping line and for the customers of the shipping line when they are paying a lot of money for the waiting period,” says Ali Toubeh, a Djiboutian entrepreneur whose container company is based in Djibouti’s free trade zone. “Vessels that came in February were released in May.”
At the middle of July, 33 ships remained at anchorage including 12 waiting to unload about 476,750 tonnes of wheat – down from 16 ships similarly loaded at the end of June – according to information on the port’s website. At the same time, 15 ships had managed to dock including four ships carrying about 83,000 tonnes of wheat, barley and sorghum.
“We still have a lot of ships carrying humanitarian cargo waiting,” says Aboubaker Omar Hadi, chairman of Djibouti Ports and Free Zones Authority. “We received ships carrying aid cargo and carrying fertiliser at the same time, and deciding which to give priority to was a challenge. If you give priority to food aid, which is understandable, then you are going to face a problem with the next crop if you don’t get fertiliser to farmers on time.”
Hot hard work
Once ships have berthed, however, there remains the challenge of unloading them, a process that can take up to 40 days, according to aid agencies assisting with Ethiopia’s drought.
“I honestly don’t know how they do it,” port official Dawit Gebre-ab says of workers toiling away in temperatures around 38 degrees Celsius with humidity of 52 percent feel more like 43 degrees. “But the ports have to continue.”
The port’s 24-hour system of three 8-hour shifts mitigates some of the travails for those working outside, beyond the salvation of air conditioning – though not entirely.
“We feel pain everywhere, for sure,” Agaby says during the hottest afternoon shift, a brightly coloured vest bound around his forehead as a sweat rag, standing out of the sun between trucks being filled with bags of wheat from conveyor belts. “It is a struggle.”
To help get food aid away to where it is needed and relieve pressure on the port, a new 756km railway running between Djibouti and Ethiopia was brought into service early in November 2015 – it still isn’t actually commissioned – with a daily train that can carry about 2,000 tonnes, Aboubaker says.
Capacity will increase further once the railway is fully commissioned this September and becomes electrified, allowing five trains to run every day carrying about 3,500 tonnes each.
Djibouti also has three new ports scheduled to open in the second half of the year – allowing more ships to dock – while the new port at Tadjoura will have another railway line going westward to Bahir Dar in Ethiopia.
This, Aboubaker explains, should connect with the railway line currently under construction in Ethiopia running south to north to connect the cities of Awash and Mekele, further improving transport and distribution options in Ethiopia.
“Once the trains are running in September we hope to clear the backlog of vessels within three months,” Aboubaker says.
Djibouti lifeline
The jam at the port has highlighted for Ethiopia – not that it needs reminding – its dependency on Djibouti. Already about 90% of Ethiopia’s trade goes through Djibouti. In 2005 this amounted to 2m tonnes and now stands at 11m tonnes. During the next three years it is set to increase to 15m tonnes.
Hence Ethiopia has long been looking to diversify its options, strengthening bilateral relations with Somaliland through various memorandums of understanding during the past couple of years.
The most recent of these stipulated about 30% of Ethiopia’s imports shifting to Berbera Port, which this May saw Dubai-based DP World awarded the concession to manage and expand the underused and underdeveloped port for 30 years, a project valued at about $442m and which could transform Berbera into another major Horn of Africa trade hub.
But such is Ethiopia’s growth – both in terms of economy and population; its current population of around 100m is set to reach 130m by 2025, according to the United Nations – that some say it’s going to need all the ports it can get.
“Ethiopia’s rate of development means Djibouti can’t satisfy demand – even if Berbera is used, Ethiopia will also need [ports in] Mogadishu and Kismayo in the long run, and Port Sudan,” Ali says.
Trucking equation
“The bottleneck is not because of the port but the inland transportation – there aren’t enough trucks for the aid, the fertiliser and the usual commercial cargo,” Aboubaker says, explaining that even with other ports such as Berbera offering more docking options in the future, the problem of not enough trucks matching demand would lead to the same dilemma as now.
It’s estimated that 1,500 trucks a day leave Djibouti for Ethiopia and that there will be 8,000 a day by 2020 as Ethiopia tries to address the shortage. So many additional trucks – an inefficient and environmentally damaging means of transport – might not be needed, Aboubaker says, if customs procedures could be sped up on the Ethiopian side so it doesn’t take trucks 10 days to complete a 48-hour journey from Djibouti to Addis Ababa to make deliveries.
“There is too much bureaucracy,” Aboubaker says. “We are building and making efficient roads and railways: we are building bridges but there is what you call invisible barriers – this documentation. The Ethiopian government relies too much on customs revenue and so doesn’t want to risk interfering with procedures.”
Ethiopians are not famed for their alacrity when it comes to paperwork and related bureaucratic processes. Drought relief operations have been delayed by regular government assessments of who the neediest are, according to some aid agencies working in Ethiopia.
While the port’s food aid bottleneck has highlighted logistical frictions, Ethiopia and Djibouti look set to continue increasing ties and strengthening economic integration as they develop joint projects such as the new railway lines and an oil pipeline between the two countries.
Meanwhile as night descends on Djibouti City, arc lights dotted across the port are turned on, continuing to blaze away as offloading continues throughout the night and heavily laden trucks bound for Ethiopia set out into the hot darkness.
“Ethiopia has a population 100 times larger than Djibouti’s but it only imports and exports six times as much,” Aboubaker says. “Imagine the day that demand matches Ethiopia’s population size.”
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Lesotho needs enhanced water infrastructure to build climate resilience
Climate change key for Lesotho’s domestic and industrial water security, agricultural production and regional water transfers
Improving Lesotho’s national water resources infrastructure and increasing water security in an environment of drought and floods and future climatic variations, is central to boosting the Government of Lesotho’s efforts to promote long-term sustainable macroeconomic development including food security and job creation, according to a World Bank report released on 14 September 2016.
The report, Lesotho Water Security and Climate Change Assessment, examines the implications of climate change for Lesotho’s future development and economy, focusing particularly on the different water infrastructure investments being considered by the Government of Lesotho. Through assessing the performance of the water management system the study tests how different adaptation strategies would affect water availability for different sectors under a wide range of possible future climatic conditions up to 2050.
The report evaluates the vulnerabilities, challenges, and opportunities in the Lesotho water management system. It offers an analysis on the need to ensure continued development of one of the Mountain Kingdoms most valuable natural assets, its water resources, in order to increase security around the nexus of water, food, and energy along with sustained economic development. This is in line with the World Bank Group’s goal to support the most vulnerable by ending extreme poverty and promoting shared prosperity.
Despite its abundant water resources, Lesotho remains vulnerable to the impacts associated with regular and recurrent floods and droughts, the report revealed. The floods in 2011 were the largest in the country since the 1930s, while the drought in 2015-16 period was the most severe on record. All the climate models indicate that average mean surface temperatures will rise, but precipitation projections vary greatly.
“This analysis will not only help decision makers in Lesotho make robust choices to support their country’s sustainable development, it will help Lesotho in its efforts to develop resilience to overall future shocks in an increasingly unpredictable and variable climate,” said Guangzhe Chen, World Bank Country Director for Lesotho.
“We welcome this very important work. It is the first of its kind and provides us with the evidence that will help us utilize our most valuable natural resource effectively in improving the lives of our people and to develop resilience against future climatic shocks,” Ralechate Mokose, Minister of Water for the Kingdom of Lesotho.
Abundant water, along with high altitude and geographic proximity to major demand centers in southern Africa, is one of Lesotho’s most valuable renewable and sustainable natural assets. In a country characterized by high levels of poverty and income inequality, water contributes roughly 10 percent to overall gross domestic product (GDP). A large portion of this benefit comes from revenues associated with the Lesotho Highlands Water Project (LHWP) which enables the transfer of water from the water-rich highlands of Lesotho to the economic engine of the African continent in Gauteng, South Africa and contributes to the development of hydropower resources.
“We find that with projected temperature increases, climate change will have an impact on the long-term sustainable macroeconomic development of Lesotho, affecting domestic and industrial water security, patterns of agricultural production, and opportunities afforded through the further development of water transfer infrastructure,” said Chen.
Simulations show that continued development of existing water infrastructure such as the Lesotho Lowlands Water Supply Services (LLWSS) are critical to improving the reliability and resilience of the domestic and industrial sectors. They show that exploring interconnections between the developed water resources through LHWP and linking these to address domestic and industrial demands in the lowlands could help improve the resilience of the existing system. Furthermore, the implementation of the further phases of the LHWP will increase the transfer capacity and also support additional benefits including about 11,000 jobs to be created during the construction period.
The report also found that investments in expanding irrigation could increase incomes and enhance food security. Agriculture in Lesotho is almost entirely rainfed and therefore highly vulnerable to changes in precipitation, undermining efforts to improve food security. But adding 12,000 ha of irrigation could significantly impact crop production with additional maize, beans, peas, sorghum, and wheat ranging of 70,000 to more than 100,000 tonnes per year. This would represent an increase in yields of as much as 50%, depending on the climate scenario.
“Investing in monitoring and enhanced data acquisition will help improve future adaptive capacity and on-farm responses to changes in climate patterns and levels of variability,” said Marcus Wishart, World Bank Senior Water Resource Management Specialist. Adding that a more thorough assessment of the risks and opportunities for Lesotho’s agricultural sector of potential changes in climate, is also essential.
The report also recommends improved data needed to continue to develop more sophisticated analyses of the complex issues around the country’s most important natural resource. Data constrains around agriculture, the economic uses and value of water, climate and hydrology have the potential to undermine future opportunities.
The report found that integrated targeted water infrastructure investments, can increase water security, improve irrigation potential and enhance food security, while sustaining hydropower production without affecting water transfers.
Report conclusions include:
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Continued implementation of Lesotho Lower Lands Support Scheme, which is key to realizing national development goals
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Regional water transfers to provide important revenue streams to support economic development and poverty alleviation
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Multi-purpose development of water related infrastructure which can support expanded irrigated agriculture leading to enhanced food security and rural opportunities
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Recurrent investments needed to sustain data collection and analyses and provide the information required to inform policy decisions and guide investment planning
» Download: Lesotho Water Security and Climate Change Assessment (PDF, 5.17 MB)
* The World Bank’s International Development Association (IDA), established in 1960, helps the world’s poorest countries by providing grants and low to zero-interest loans for projects and programs that boost economic growth, reduce poverty, and improve poor people’s lives. IDA is one of the largest sources of assistance for the world’s 77 poorest countries, 39 of which are in Africa. Resources from IDA bring positive change to the 1.3 billion people who live in IDA countries. Since 1960, IDA has supported development work in 112 countries. Annual commitments have averaged about $19 billion over the last three years, with about 50 percent going to Africa.
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Are we capable of negotiating global treaties?
In the past two decades, African governments have paid billions to private companies in form of settlement of international disputes. Nearer home, Kenya is still reeling after the Goldenberg and Anglo Leasing rip-offs.
A new book, “Bounded Rationality and Economic Diplomacy: The Politics of Investment Treaties in Developing Countries”, has some insights that reveal the continent’s weakest link with respect to international treaties – the capacity to negotiate effectively while protecting its interest.
Investment Treaties (agreement establishing terms and conditions for private investment by nationals and companies of one country in another country) or Foreign Direct Investment (FDI), facilitate economic development of recipient countries that may not raise the resources necessary to make the investments.
The recent Tokyo International Conference on Africa’s Development (TICAD) in Nairobi sought to increase Japanese investments in Africa. It was touted as a big win for African countries. However, like in many other similar treaties, the devil is often in the details.
The public never gets to know these details and in most case they come out only when there are disputes. A couple of years back, the then Foreign Affairs minister, Moses Wetangula, was asked by Githunguri MP Njoroge Baiya to list the number of treaties and international agreements that Kenya had entered into since independence.
Like the good lawyer he is, he huffed and puffed and prevaricated but never gave a convincing answer. The result is that this issue remains shrouded in mystery.
In many countries, negotiators of such treaties are people with experience and knowledge in the specific areas of investment. More often, negotiators come from academic institutions and are widely published in their respective fields.
Some countries send huge multidisciplinary delegations to the negotiation table. Prior to discussions, they spend many days developing their negotiation strategy.
In his review of the new book, Oleg Komlik from the global academic community of researchers, students and activists interested in Economic Sociology and Political Economy states that “During the 1990s and early 2000s, developing countries have incurred significant liabilities from investment treaty arbitration and paid billions of dollars to the Western corporations.”
Largely identical treaties
The book seeks to answer the following questions: why developing countries signed largely identical treaties which significantly constrained their sovereignty, and why did they expose themselves to expensive claims and give a remarkable degree of flexibility to private lawyers to determine the scope of their regulatory autonomy?
Komlik concedes that “Only few developing country governments realized that by consenting to investment treaty arbitration, they agreed to offer international investors enforceable protections with the potential for costly and far-reaching implications.”
There are many reasons why developing countries behave apathetically at high-level negotiations.
High on the list is lack of confidence. Some even show up at the negotiation table completely unprepared or sometimes appear unconcerned with the happenings on the negotiation table to the extent that in the end they sign agreements that hurt their country in the long run.
Komlik affirms that “The majority of developing countries however signed up to one of the most potent international legal regimes underwriting economic globalization without even realizing it at the time.”
Some agreements at times may be fairly straightforward but negotiators use flimsy excuses to delay or completely refuse to sign agreements without articulating reasons why they refuse to progress a collective agreement.
For example, some East African countries have refused to sign the Economic Partnership Agreement (EPA) between the EU and the East African Community (EAC). In the absence of any good reasons for not signing, the perception of frustrating Kenya in this pact is real.
Within the EU trade regime, Kenya is classified as a developing country whereas all the other four partners are classified as least developed countries (LDCs).
The Daily News of Tanzania quoted President Magufuli as saying: “There are a number of questions to be looked upon, why are we signing the agreement while the EU has imposed sanctions on Burundi? Why are we signing while UK has pulled out of the EU?”
Clearly, the questions have nothing to do with the EPA or the economic benefits to the region. Considering the fact that Burundi continues to violate human rights, such questions put Africa in bad light.
From the World Trade Organisation to TICAD, such conferences present opportunities to build home grown capacity.
We can choose to turn the idle capacity within academic institutions into a formidable negotiation teams that could not just help Kenya but the region. This can only be done through a deliberate effort to develop capacity. Of greater importance is the political will to do the right thing to avoid politicization of the economic process.
The writer is an associate professor at University of Nairobi’s School of Business.
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Where African countries stand in pursuit of a visa-free continent
You have just finalised your travel plans: Done your budget, reserved the tickets and accommodation and confirmed your passport is up to date. Then it hits you: You don’t have any information on a visa for the African country you are visiting.
You assume it will be easy to get a visa as everything has been taken care of. But should you? Have you been to the embassy, filled out the forms, paid the fee and waited for the visa to be processed?
Take visiting the Democratic Republic of Congo or Nigeria, for instance. If you have journalist under “Occupation,” you must get a written approval from the Ministry of Information in Kinshasa or Abuja, before the embassy in Nairobi issues you with a visa. This will cost you $200, on top of the $50 visa fee.
While Mauritius, Rwanda and recently Benin are the leading examples of visa-free countries for Africans, Ghana from July introduced a visa-on-arrival policy for citizens of African Union member states.
But national sovereignty, irregular immigration flows, xenophobia, terrorism and refugees still make African countries hesitant to adopt a visa-free Africa or even adopt the African Union passport.
Cristiano D’Orsi, a lecturer in international legal protection for asylum-seekers at the University of Pretoria said that most countries on the continent have shown visa barriers for other African nationals.
“The best reason put forward for this has been the economic burden (of having immigrants), security threats and sovereignty issues. We have seen the likes of Kenya, Equatorial Guinea and South Africa use this to justify why some nationals have to obtain visas,” Mr D’Orsi said, adding that high unemployment within these countries is also a contributing factor to the lack of openness to other African nationals.
For instance, most nationals from West and Central African countries like Nigeria, Cameroon, and the Democratic Republic of Congo need visas to visit Kenya and South Africa to guard against economic crime, human and drug trafficking. Egypt has also emerged as one of the countries that requires all African citizens to have a pre-arrival visa to Egypt irrespective of nationality, age or purpose of travel. This, it says, is to guard its national sovereignty.
In 2013, the AU adopted Agenda 2063, as a collective vision for the next 50 years. Agenda 2063 committed African nations to speed up actions to introduce an African passport issued by member states, capitalising on the global migration towards e-passports, and abolish visa requirements for all African citizens in all African countries by 2018.
However, the African Development Bank’s Africa Visa Openness Report 2016 shows that, just under two years to the deadline, only 13 out of the 55 African countries offers free access to African nationals, with 55 per cent of Africans still needing a visa to visit African countries.
The report says that 75 per cent of countries in the top 20 most visa-open countries are either in West Africa or East Africa, and only one is in North Africa. None are in Central Africa.
The commissioner for social affairs at the African Union Commission, Dr Mustapha Sidiki Kaloko, said that the free movement of Africans around the continent is an antidote to migration to Europe and elsewhere outside the continent.
“If Africans have alternatives within the continent, then we will not be seeing these precarious journeys immigrants are making out of the continent,” Dr Kaloko said, adding that Rwanda and Mauritius have registered economic benefits by allowing Africans without visas into their country.
African Development Bank president Akinwumi Adesina said that African countries have the power to fast-track connectivity, attract investment and talent into a greater number of countries, promote business opportunities across borders and expand horizons for the continent’s young people.
“Africa largely remains closed, with Africans still needing visas to travel to over half of the continent. These headlines go against the continent’s goal to truly become ‘one Africa.’ Having an open visa policy does not require large resources or complex systems. Countries can apply positive reciprocity but also open up unilaterally,” Mr Adesina said.
From the AfDB report, Seychelles was the first African country where Africans did not need a visa to visit while Egypt, Western Sahara, Sao Tome and Principe, and Equatorial Guinea are the countries with strict visa requirement. Although Western Sahara – also known as Sahrawi Arab Democratic Republic – enjoys an observer status at the AU, its sovereignty is still in dispute with Morocco insisting it is still part of its territory.
Within the region, Uganda, Rwanda and Burundi have relaxed visa rules while Kenya has strict visa requirements for certain West African nations. Kenya is particularly alert to West African nationals, some of whom have been caught using Kenya as transit route for narcotics headed to the West. However, Kenya and Ethiopia have a visa-free relationship, the result of an historic deal between first president Jomo Kenyatta and Emperor Haile Selassie.
Quick-win on development
Director of Regional Integration and Trade at the AfDB Moono Mupotola said opening up a country’s visa regime is a quick-win on development as it attracts foreign direct investments and tourism opportunities.
“For Africa to achieve its visa-free status in the next two years, policymakers need to go back to the drawing board and relook at these requirements. It’s the only way to attract talent, investments and opportunities within Africa,” Mr Mupotola said.
The report also shows that Africa’s middle-income countries have low visa-openness compared with the continent’s smaller, landlocked and island states, which are more open. In 2013, only African countries offered liberal access to all Africans. At the end of last year, the number had grown to 13.
For instance, South Africa has tightened its visa requirements for fellow Africans due to huge flow of migrants after the country attained majority rule in 1994. Another African economic powerhouse, Egypt, has shifted its attention to sub-Saharan Africa since the February 2011 revolution that removed former president Hosni Mubarak.
Previously accused of paying too much attention to the Arab world at the expense of the continent to which it belongs, Egypt has set aside $150 million in initial capital for an Agency for International Aid that will focus on ventures in sub-Saharan Africa. However, visa requirements for African travelling to Egypt remain stringent.
The good news is that citizens of the six-nation East African Community and the 15-member Economic Community of West African States enjoy visa-free travel within their territories.
Although the Southern African Development Community has protocols on tourism, travel and the facilitation of the movement of people, there are still entry visa requirements between at least three SADC member states and the other 12 mainly because of the pace at which they are concluding the bilateral agreements.
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Why geographical indications for least developed countries?
Since 2010, the United Nations Conference on Trade and Development (UNCTAD) is supporting selected LDCs rural communities in their efforts to promote traditional products through Geographical Indications (GIs). GIs are a trade-related intellectual property right under the WTO TRIPS Agreement. The link between the territory and the uniqueness of the product is the distinctive developmental nature of GIs with respect to other forms of TRIPs.
Evidence from the market and literature shows that the promotion and protection of products under GIs may results in higher economics gains, fostering quality production and equitable distribution of profits for LDC rural communities. GIs encourage the preservation of biodiversity, traditional know-how and natural resources. Leveraging on biological and cultural diversification, the implementation of GIs may represent a unique opportunity to bring together the various players along the value chain supply, including producers, government authorities and researchers.
This study is the result of activities carried out under the UNCTAD project TAAK on market access and trade laws funded by the Italian Government and the Development Account project entitled “Strengthening the capacity of rural communities in least developed countries to utilize the market access opportunities provided by duty-free quota-free and enhancing value added of their traditional products”.
The case studies contained in this publication are based on documents and field missions carried out by teams of international and local experts from 2013 to 2015.
Why Geographical Indications for Least Developed Countries (LDCs)?
Limited product diversification and fluctuating market value of traditional products are issues that have been affecting trade flows of Least Developed Countries (LDCs) for decades. In spite of limited product and export diversification, mainly consisting of raw and low value added products (primarily commodities), a valuable array of traditional products and preparations is available in selected LDCs having potential to graduate to products of excellence which can compete globally. However, bringing small local producers upfront in the global value system does not necessarily carry them beyond subsistence. Competition in global markets is fierce, and many LDCs feel the need to develop quality names for the use of food, for instance through the protection geographical indications (GIs), to secure higher returns from sales.
UNCTAD, following its mandate, is currently building capacity based on best practices to be adopted at national level to preserve and protect traditional products by implementing GIs and complying with sanitary and phytosanitary (SPS) requirements, such as hazard analysis critical control point (HACCP) systems and the EurepGAP4 protocols. Likewise, UNCTAD promotes the introduction of initiatives and trade policies in development plans of LDCs aimed at preserving and enhancing the commercial and ethical value of their traditional products to maintain biodiversity and to successfully introduce pro-poor policies.
Literature shows that the protection of products (under GIs) results in higher economic gains, fostering of quality production growth and better distribution of profits. GI protection has wider positive benefits on local communities. In particular, GIs encourage the preservation of biodiversity, local know-how and natural resources. Agricultural products and foodstuffs are embedded in plant, forest or animal ecosystems. There are many different practices and forms of knowledge, revealing, as if that were necessary, the inventive capacity of societies. Food products are based on complex systems capable of maintaining various forms of biodiversity, ranging from a landscape to a microbial ecosystem, including plant varieties and local animal breeds. This situation is present in developed and developing nations; however, a differentiation has to be made among developing countries, as the situation of LDCs is rather precarious in terms of institutional transparency, capacities and infrastructure.
Food or handicraft products coming from such environmental endowments should be produced by local communities in a manner that allow LDCs to achieve the Sustainable Development Goals and to benefit from growing international trade. GIs as intellectual property rights (IPRs) can provide an adequate protection for accomplishing these goals in the current context of internationalization. Biological and cultural diversities are fundamental for revalorizing traditional food or handicrafts products having the potential to benefit rural communities, and in that way supporting them to cope with current challenges (e.g. food security). While traditional knowledge of indigenous and local communities has been recognized as being essential for understanding biological and cultural diversities attention should be paid when they access and use biological and cultural diversities to ensure fair and equitable benefits and to contribute to sustainable development. Indeed, GIs can be considered as an opportunity to accomplish the following tasks:
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Protection of local species that serve as raw material (e.g. ingredients) for potential GI products.
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Joint elaboration of Code of Practice/Book of Specifications/Product Specifications aimed at enhancing product quality but also at the design rules to build local awareness about environmental protection in these areas.
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Support of collective management (e.g. of the forest).
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Boost of local cohesion among potential GI users and consumers.
The term “geographical indication” was first used by the Agreement on Trade-Related Aspects of Intellectual Property Right (TRIPS) of the World Trade Organization (WTO), which came into force in 1995. Article 22(1)1 of the Agreement defines GIs as “indications which identify a good as originating in the territory of a Member, or a region or locality in that territory, where a given quality, reputation or other characteristic of the good is essentially attributable to its geographical origin”. Although the purpose of GIs was not to protect biodiversity but rather the reputation of a product, specific local biological or genetic resources, high degrees of biodiversity, provision of ecosystems, specific landscape functions or good agricultural practices can be major factors explaining such reputation. The registration of GIs would protect biodiversity in the sense that a particular variety or ecosystem, distinct from neighbouring ones, would be maintained. For example, the specificity of a GI product can be closely linked to the use of unique and locally adapted genetic resources, and its governance might include the sustainable management of local landraces or breeds.
But how can farmers from LDCs access and protect GIs? Diverse GI types bear the opportunity to protect products whose specific quality is linked to a geographical origin:
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Protected GIs can be regarded as a type of collective formal certification.
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In some countries, trademarks (TMs) can also be considered as a kind of legally protected GI in which companies usually own the rights (for instance in the United States of America or in Australia, but also in many developing nations such as Sri Lanka, Ethiopia or Kenya, where usually the State is the title holder).
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Some countries also use rather a general country-of-origin labelling as well as a branding strategy. Nevertheless, they do not constitute GIs as defined by the TRIPS Agreement. Some territories develop territorial brands as well, like almost every region in the European Union for promoting a basket of products and services.
In the context of LDCs, evidence shows how GIs can directly contribute to environmental conservation. For instance, according to the Agence française de développement (AFD), the use of a specific local biological resource in Tunisia is promoted for the production of Kebili dates. Additionally, producers of Oku honey in Cameroon preserve local natural resources when making honey in the nationally protected forest of Kilum-Ijim near Mount Oku. On the contrary, excessive intensification when the protected GI becomes a success may lead to great losses in biological biodiversity.
The rationale behind GIs is to valorize traditional specialty products. Nevertheless, if GIs are to contribute to policy objectives such as poverty alleviation and biodiversity conservation, they have to evolve and develop accordingly – not only as an IPR for the use of geographical names in trade, but also as an innovative axis to valorize environmental rich settings, animal welfare or cultural heritage by integrating regional value chains in the context of rural development, and growing suburban and urban populations in developing countries. Policy recommendations at the national level should include – where possible – that local and traditional varieties shall be valorized, e.g. by restricting the protected GI to traditional or rare varieties, land races and breeds or the prohibition of genetically modified organisms.
It is difficult that the GI protection considers all attributes of a product, namely: reputation, tradition, biodiversity, taste and quality. Hence, expectations about GIs should not be exaggerated. GIs can be developed through adaptive governance and co-learning of diverse supply chain actors in developing and developed countries in rural areas. In the best case scenario, the GI implementation should lead to the promotion of local (e.g. rural, suburban and urban) and external market alliances (e.g. to overcome gatekeepers in international supply chains who can prevent consumers from learning about the product origin) and to the inclusion of relevant provisions on environmental rules in the code of practice.
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tralac’s Daily News Selection
The selection: Wednesday, 14 September 2016
Mainstream human rights into trade agreements and WTO practice (OHCHR)
The United Nations Independent Expert on the promotion of a democratic and equitable international order, Alfred de Zayas, has called on States and Parliaments to ensure that all future trade agreements stipulate the primacy of human rights. Existing treaties should be revised to ensure that they do not conflict with the duty of States to fulfill binding human rights treaties and meet environmental and health goals. “Investors and transnational enterprises have invented new rules to suit their needs, rules that impinge on the regulatory space of States and disenfranchise the public”, Mr de Zayas warned during the presentation of his latest report to the UN Human Rights Council. [Reposting: Human Rights Impact Assessment of the CFTA (pdf)]
International trade is growing again after two years of decline (WEF)
Trade among members of the G20, a group of 19 countries and the European Union which represents 85% of global GDP, grew modestly in the second quarter of this year, the first increase since early 2014. Combined exports in the G20 rose by 1.5% in the second quarter of 2016, after falling for the previous seven quarters. However, there were some marked differences between individual countries. Exports grew in almost all G20 economies except Argentina, Canada and China. India, South Africa and Turkey all registered growth of more than 5%. [OECD: G20 Q2 GDP growth]
Chinese Special Economic Zones: lessons for Africa (pdf, AfDB)
The Chinese SEZs success should also be treated cautiously to the extent that these SEZs were part of a broad Chinese liberalization strategy and only consisted of a fraction of the reforms. Indeed, the most successful Chinese SEZs were those that were established and operated as a part of a national economic development reform strategy, and not as a “one off” venture. Experience from other regions – including the Chinese model – may not be replicable, and they must be willing to make adjustments and tailor the plan to their geographic, political, and economic situation. With this in mind, China’s experience provides the following four main lessons for Africa: [Update: Guangdong’s Africa Investment and Cooperation]
EAC monetary union ‘a threat’ to mega construction projects (Business Daily)
Bank of Uganda deputy governor Louis Kasekende said countries in the region would have to ensure their infrastructure or other spending ambitions are in line with the fiscal deficit ceiling set under the monetary convergence criteria. “Countries in this region have big infrastructure projects going on. These must in future be consistent with the EAC macroeconomic and monetary union convergence criteria,” he said. Mr Kasekende said the countries in the region would also need to ensure greater integration of operations in terms of trade. He noted that there had been residual barriers to trade, movement of capital and labour which prevented the full realisation of the integration project.
Addressing mixed migration in Southern Africa: Linking protection, immigration, border management and labour migration (IOM)
At the MIDSA Technical Workshop held in Gaborone from 16–18 August, SADC Member States and participating co-operating partners had the opportunity to reflect on, and discuss the progress made since the MIDSA Ministerial that was held in Victoria Falls in July 2015. Progress on the implementation of these activities, conclusions and recommendations, will be reported to the next MIDSA Ministerial anticipated to be held in the second half of 2017. Extract: Expedite national consultations on the Regional Bilateral Labour Agreement Guide for Southern Africa, the Regional Guide to Facilitate South-South Labour Mobility within Southern Africa, and the Regional Roadmap on Implementation of Output 2.3 of the Updated SADC Labour Migration Action Plan (2016-2019) with a view to taking it through the formal SADC processes for eventual adoption as official SADC guidelines. Use the guidelines provided for in the documents referred to in 3.4 above to develop national guidelines and tools to enhance labour mobility and labour market integration. Consider the establishment of a SADC ‘Labour Migration Forum’ to facilitate the ongoing exchange of information and good practices and to enhance co-ordination and co-operation. [The Elders: report on refugees and mass migration (pdf)]
Neil Cole: ‘Do Rwandese deserve SA’s blanket ban on travel visas due to diplomatic tension?’ (Business Day)
A Rwandan professional offered employment by a Pretoria-based intergovernmental organisation has been prevented from entering SA. The South African authorities have chosen to take a diplomatic stance against the country by withholding all South African travel visas to Rwandese citizens. Rwanda has not retaliated to the travel ban. South Africans are allowed to travel to Rwanda without visa requirements. This is probably because it is not in Rwanda’s national interests to deny access to citizens of one of Africa’s strongest economies. Despite the cause of tension between the two countries, and even if Rwanda is believed to be the initiator, mature states respond in ways that protect their national interests.
Univisa delays cost Zambia revenue, says tourism trade (Tourism Update)
The KAZA univisa, which allows travellers to enter both Zimbabwe and Zambia on a single visa, remains suspended despite appeals from the Zimbabwean travel trade to reinstate the visa. “Zambian authorities maintain that they have run out of paper allocated for Immigration by the UN,” explains Emmanuel Fundira, Group CE of Astoc Leisure Group. However, he adds that the industry view is that it is “a lame excuse”. There has been loss of revenue to Zambia in terms of net tourism inflows resulting from cross-border pick-ups, according to Fundira.
Botswana: We will cut red tape in business, Khama pledges (Mmegi)
President Ian Khama has told the 14th National Business Conference that his government would promote effective regulations and private property rights to ensure businesses are not hobbled by red tape. The President also said that to further modernise the economy and position it as a global competitor, “We will open up the provision of public utilities such as water and power as well as delivery of road infrastructure projects to private capital”.
Africa Dubai Precious Metals Forum calls for air transport restrictions for gold (PRweb)
Leaders of the global gold industry have called on airlines and aviation authorities to ban the transport of the precious metal as hand luggage to reduce the risk of smuggling, which is said to be costing billions of dollars a year in lost government revenue. They want gold to be shipped only as hold cargo, which would allow for "proof of responsible sourcing" and lift what is regarded as a threat to miners’ employment and mining companies’ profits.
Monetary policy and the future of central banking: implications for Africa (IMF)
All of this greatly complicates the conduct of monetary policy. Still, the good news is that many of Sub-Saharan Africa’s central banks have built adequate international reserve cushions. This includes Kenya, giving the CBK greater room for manoeuvre, and reducing the risk of a sudden reversal of capital flows in the first place. This confluence of international developments is heightening the domestic challenges that central banks are facing. Many still have limited operational capacity. This partly reflects persistent weakness in government cash flow management, which makes it difficult for central banks to adequately manage liquidity conditions. Another challenge facing many African countries is the persistence of very high spreads between the interest rates offered on deposits and those charged on loans. This has led to understandable frustration among borrowers about the cost of credit, and has produced political pressure for interest rate controls. However, the politicization of monetary policy bears well-known risks – for the soundness of the financial system and for credit access, notably higher-risk borrowers. [The analyst: Mitsuhiro Furusawa, IMF] [Uhuru Kenyatta: speech during Central Bank of Kenya’s 50th anniversary celebrations]
Yaounde Declaration, Plan of Action (2nd Africa Rural Development Forum)
Within the context of the Cotonou Declaration action points ‘A blueprint to implement rural development policies in Africa’ was developed and subsequently Endorsed at the 2nd Africa Rural Development Forum as a vehicle for advancing rural transformation across Africa and accelerating pace towards the visions of the African Union’s Agenda 2063. The Blueprint will support member states and regional players towards an integrated, cross-sectorial, and coherent set of actions based on local realities, priorities and a shared African vision and narrative.
EACCAS Climate Centre: update (New Times)
Rwanda has become the first country to sign up to a framework that paves the way for the establishment of the Climate Application and Prediction Centre for Central Africa, which will serve the 11 member states of the Economic Community of Central African States. The centre, which will be hosted in Cameroon, is expected to start operations next year. The centre will facilitate the development and provision of climate services at the regional and national level, and allow for the streamlining of climate information into various regional priority areas such as disaster resilience, food security and agriculture, fishing and aquaculture, natural resources management, water resource management and health.
Using foreign factors to enhance domestic export performance: a focus on Southeast Asia (pdf, Working Party of the Trade Committee, OECD): This paper discusses how countries can use foreign value added to enhance their domestic export performance. The discussion of the results, although applicable to all countries covered in the TiVA database, focuses on the ASEAN region which has been engaged in an ambitious regional integration process and seen their participation in regional and global value chains grow considerably. ASEAN’s participation in GVCs does not only create jobs at home, it also supports jobs in other countries: in 2011, ASEAN exports used foreign inputs produced by over 14 million workers located in other countries. China accounted for more than 4.5 million of these workers, with 4 million in other ASEAN countries and 2.5 million in India. ASEAN exports also supported 600 000 jobs in the EU, 400 000 in Japan, 370 000 in North America and Mexico, 140 000 in Korea and 100 000 in Australia and New Zealand. In ASEAN, as in other countries, workers engaged in forward GVC jobs have, on average, a higher productivity than workers employed in the production of gross exports – underscoring the importance of these jobs.
Export competitiveness and FDI performance across the regions of the Russian Federation (World Bank): Russia’s lagging regions have much more tenuous international engagements than the rest of Russia in exports and foreign direct investment. These findings suggest that foreign orientation is an important determinant of socioeconomic development and could be an important item on Russia’s regional policy agenda. Such policies might have a variety of objectives:
Opening markets: Mexico uncovers and slashes local barriers to competition (World Bank): In the past few years, the Mexican Federal Competition Authority (COFECE) and Better Regulation Authority (COFEMER), internationally recognized institutions, as well as the World Bank Group, have pointed out that subnational regulations restrict competition in local markets. In many municipalities in Mexico, regulations and government interventions allow market incumbents to deny entry to new firms, to coordinate prices, to impose minimum distances between outlets, or to grant incumbents exclusive rights to artificially protect their dominant position. In total, a lack of vigorous marketplace competition costs the Mexican economy about one percentage point of GDP growth each year – a shortfall that affects the country’s poorest households by an estimated 20% more than its richest households. Most countries, however, have never systematically scrutinized local barriers to competition.
United States challenges excessive Chinese support for rice, wheat, corn (USTR): USTR Michael Froman and US Secretary of Agriculture Tom Vilsack were joined by bipartisan members of Congress in announcing the complaint which challenges China’s use of “market price support” for three key crops (rice, wheat, and corn) in excess of China’s commitments under WTO rules. In 2015, China’s “market price support” for these products is estimated to be nearly $100bn in excess of the levels China committed to during its accession. This trade enforcement action marks the 14th complaint brought by the Office of the United States Trade Representative (USTR) against China at the WTO since 2009.
IGAD: communique of the 28th IGAD Extra Ordinary Summit on Somalia
Botswana: Govt issues first uranium mining licence
Trade Mark EA gives Sh24m grant to boost Mombasa port public participation
ECOWAS, TMEA Delegations visit EAC Secretariat in Arusha
Kaushik Basu: The state of economics, the state of the world
Christine Lagarde: Making globalization work for all
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International trade is growing again after two years of decline
This could be very good news – international trade grew in the second quarter of 2016, according to OECD figures.
This halts two years of declining figures. It’s a rare piece of good news for the global economy, and comes days before the G20 leaders’ summit takes place in China.
Trade among members of the G20, a group of 19 countries and the European Union which represents 85% of global GDP, grew modestly in the second quarter of this year, the first increase since early 2014.
Exports
Combined exports in the G20 rose by 1.5% in the second quarter of 2016, after falling for the previous seven quarters.
However, there were some marked differences between individual countries. Exports grew in almost all G20 economies except Argentina, Canada and China. India, South Africa and Turkey all registered growth of more than 5%.
Imports
Combined imports rose by 2.0%, after eight consecutive quarterly falls. All G20 economies recorded growth in imports in the second quarter of 2016, except Argentina, France, India, Indonesia, and Mexico, who all registered slight falls. Russia’s imports fell by 5.0%.
China recorded the highest growth in imports at 6.6% growth in the second quarter, but levels remain lower than in 2014.
The G20 comprises 19 individual countries: Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the United Kingdom, the United States of America; as well as the European Union.
Global trade in focus
International trade is an important driver of economic and corporate growth. This map shows just how much of that trade is driven by the movement of goods via shipping.
Constructed using 250 million data points, the map, made by data visualization company Kiln, shows the movements of the world’s commercial shipping fleet in 2012.
The red lines represent tankers shipping oil around the world. The blue lines represent raw materials such as iron ore and coal, and the yellow lines represent container ships carrying finished goods.
These tens of thousands of ships, travelling across our seas every day, drive global trade and the economy.
The G20
Whilst the international trade figures represent a glimmer of hope for growth in the global economy, they remain significantly below the post-crisis highs seen between 2011 and 2014.
Maintaining the Momentum of World Economic Recovery is a key theme at this year’s G20 summit.
World leaders will gather this weekend in Hangzhou, a city of about 6 million people southwest of Shanghai. It is the first time that China has hosted the event, now in its 11th year.
The G20 plays a significant role in shaping the fortunes of the world economy and is the premier forum for international economic cooperation. The group represents 84% of the world economy, 79% of world trade and 65% of the world population.
The G20 Leaders’ process was established after a joint EU-US initiative back in 2008 to tackle the global financial crisis.
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Mainstream human rights into trade agreements and WTO practice – UN expert urges in new report
The United Nations Independent Expert on the promotion of a democratic and equitable international order, Alfred de Zayas, on 13 September 2016 called on States and Parliaments to ensure that all future trade agreements stipulate the primacy of human rights. Existing treaties should be revised to ensure that they do not conflict with the duty of States to fulfill binding human rights treaties and meet environmental and health goals.
“Investors and transnational enterprises have invented new rules to suit their needs, rules that impinge on the regulatory space of States and disenfranchise the public,” Mr. de Zayas warned during the presentation of his latest report to the UN Human Rights Council. “In case of conflict, priority must be given to advancing the public interest rather than continuing the current emphasis on profit expectations of investors and transnational corporations”.
“It is high time to mainstream human rights into all trade agreements and World Trade Organization (WTO) rules and regulations, so that trade representatives and dispute-settlers know that trade is neither a “stand alone” regime not an end in itself,” he observed. “The WTO yearly ‘public forum’ is slowly but surely contributing to enhanced awareness of civil society concerns. Civil society including consumer unions, health professionals, environmental groups and other stakeholders must be part of the process of elaboration, negotiation, adoption and implementation of trade agreements.”
“A just, peaceful, equitable and democratic world order must not be undermined by the activities of investors, speculators and transnational enterprises avid for immediate profit at the expense of social and economic progress,” he added.
The report introduces the concept of R2A – responsibility to act in the public interest. The “R2A” reaffirms the ontology of governance and goes well beyond the better known “R2P”, Responsibility to Protect. “Governments, Parliaments and Courts must deliver on R2A and not compromise their constitutionally defined roles.”
The report illustrates how the investor-state-dispute settlement mechanism (ISDS), the recently proposed Investment Court System (ICS), and the WTO dispute settlement mechanism suffer from systemic business-bias and often fail to consider the human rights impacts in their awards and decisions.
The expert noted that a wide range of basic rights have been negatively impacted by trade agreements and arbitration awards; among them: the right to self-determination and sovereignty over natural wealth and resources (especially of indigenous populations), the right to life and health, e.g. when access to generic medicines is impeded, the right to work, the right to humane labour conditions, the right to access information – including on commercial treaties, the right to peaceful assembly and association, and the right to public participation.
“Civilization has taken centuries to build the rule of law and its system of transparent and accountable public courts, It is unconstitutional for countries to undermine the rule of law by establishing a competing system of pseudo-courts,” emphasized the expert, expressing concerns at the erosion of the rule of law through the privatization of dispute settlement. Instead the domestic and regional court systems should be strengthened and expanded. “The path to a democratic and equitable order is through the expansion of public courts, not the creation of private courts with questionable transparency, accountability or independence”.
“Arbitrators and judges must be required by their terms of reference to interpret trade agreements in the light of binding human rights treaty obligations. Domestic courts must deny effect to investor-State dispute settlement awards and WTO dispute settlement decisions that violate human rights,” he stressed.
In his report, the Independent Expert also draws attention to the fact that the Comprehensive Economic and Trade Agreement (CETA), the Trans Pacific Partnership (TPP), the Transatlantic Trade and Investment Partnership (TTIP) and the Trade in Services Agreement (TISA) have all been negotiated in secret, without consultation of key stakeholders and excluding public participation, thus in violation of articles 19 and 25 of the International Covenant on Civil and Political Rights.
“None of these treaties have any democratic legitimacy. None of them should be allowed to enter into force without public referenda, and if they do enter into force, their legality should be challenged before the constitutional courts of the countries concerned and before the regional human rights courts. An advisory opinion by the International Court of Justice reaffirming the primacy of the UN Charter over trade agreements would be instructive” stated the expert.
Moreover, Mr. de Zayas called for the adoption of a legally binding treaty laying down enforceable obligations by investors and transnational enterprises. A systematic follow up by the Human Rights Council to monitor the implementation of the recommendations of UN working groups, rapporteurs and independent experts is necessary.
“Surely the Council did not intend to convene an assembly of Cassandras when it established the Special Procedures. We believe in the added value of our reports and expect States to take our recommendations seriously into account,” the expert concluded. “For this we also rely on People Power and civil society activism.”
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Addressing mixed migration in southern Africa: Linking protection, immigration, border management and labour migration
At the MIDSA Technical Workshop on Addressing Mixed Migration in Southern Africa: Linking Protection, Immigration, Border Management and Labour Migration held in Gaborone, Republic of Botswana from 16-18 August 2016, SADC Member States and participating co-operating partners had the opportunity to reflect on, and discuss the progress made since the MIDSA Ministerial that was held in Victoria Falls, Republic of Zimbabwe in July 2015.
In particular, Member States and co-operating partners reflected on the extent to which work had been undertaken in relation to the protection of unaccompanied migrant children (a thematic area identified as a priority at the MIDSA Ministerial) and the protection of vulnerable migrants in general, as well as the extent to which preliminary work on statelessness, alternatives to detention and voluntary return and reintegration had been undertaken.
Following updates provided by individual Member States as well as co-operating partners during which they reflected on efforts underway and challenges experienced in implementing the activities agreed to in the Regional Action Plan, the following recommendations were put forward for further action, noting that several of the recommended activities are already being undertaken in a preliminary form. Progress on the implementation of these activities will be reported to the next MIDSA Ministerial anticipated to be held in the second half of 2017.
1. Protection
1.1 Develop a regional framework document on the protection of vulnerable migrants, that can be used as a set of guidelines in the development of a national framework/guidelines in each Member State. Such framework and guidelines must pay particular attention to unaccompanied migrant children
1.2 Establish or utilise existing multi-stakeholder forums at a national level that includes relevant government departments and agencies, civil society organisations and the private sector to facilitate co-operation on the protection of vulnerable migrants, and unaccompanied migrant children in particular. Where appropriate and feasible, extend this level of co-operation across borders by setting up or utilising existing joint cross-border forums
1.3 Develop and adopt appropriate and harmonised tools, mechanisms and SOP’s that can be used and implemented in all Member States to facilitate co-operation and co-ordination
1.4 Engage in ongoing capacity-building and training in the use of protection tools and mechanisms that have been or will be developed. This should be done at national level as well as on a multi-country level
1.5 Develop and implement awareness-raising and public education tools pertaining to the issues of vulnerability and protection. This must include awareness-raising and education about how citizens of Member States who have migrated to other countries will also benefit from the protection mechanisms and the ongoing training and capacity-building
1.6 Include the issue of protection in migration policies at a national level
1.7 Develop and implement alternative options to detention through the sharing of existing practices in the region and elsewhere in the world, and through consultations with relevant experts, organisations and institutions
2. Statelessness
2.1 Continue to advocate for the adoption and ratification of the African Charter on the Rights and Welfare of the Child, the domestication and implementation of, and adherence to the reporting obligations of the UN Convention on the Rights of the Child by SADC Member States.
2.2 Member States are encouraged to strengthen their capacity to enhance birth registrations and national identification systems, as well as to develop and maintain a well-functioning Population Register
2.3 Ensure equality between men and women to pass on their nationality to their spouse and children
2.4 Work towards the development and adoption of a SADC Ministerial Declaration/Action Plan on Statelessness
2.5 Member States are encouraged to ratify and domesticate the 1954 UN Convention relating to the Status of Stateless Persons, the 1961 UN Convention on the Reduction of Statelessness and the 1990 UN Convention on the Rights of all Migrant Workers and Members of their Families
3. Labour Migration
3.1 Establish a structure/institution or strengthen and utilise existing structures/institutions at national levels to manage and co-ordinate labour migration
3.2 Develop and harmonise labour migration policies and legislation and ensure that these include provisions for the protection of migrant workers
3.3 Develop and implement mechanisms such as bi- and multilateral discussions, exchange programmes, study-tours and expert inputs and advice to ensure ongoing sharing of information and good practices
3.4 Expedite national consultations on the Regional Bilateral Labour Agreement Guide for Southern Africa, the Regional Guide to Facilitate South-South Labour Mobility within Southern Africa, and the Regional Roadmap on Implementation of Output 2.3 of the Updated SADC Labour Migration Action Plan (2016-2019) with a view to taking it through the formal SADC processes for eventual adoption as official SADC guidelines
3.5 Use the guidelines provided for in the documents referred to in 3.4 above to develop national guidelines and tools to enhance labour mobility and labour market integration
3.6 Consider the establishment of a SADC ‘Labour Migration Forum’ to facilitate the ongoing exchange of information and good practices and to enhance co-ordination and co-operation
3.7 Work towards the establishment of an Employment Exchange Programme within the SADC region
3.8 Engage with individuals and organisations in the diaspora with regard to labour migration issues
4. Border Management
4.1 Consider reviewing the existing section on Border Security in the Regional Action Plan with a view to develop consistency in terms of purpose and orientation and to expand its scope beyond immigration issues
4.2 Develop a regional template/guidelines to facilitate harmonisation of border management policies, practices and SOP’s, including the standardisation of data collection and analysis
4.3 Promote co-operation between law enforcement agencies in responding to cross-border criminal activities
4.4 Promote dialogue between point of entry officials and humanitarian actors to ensure sensitivity to protection issues
4.5 Conduct assessments of existing bilateral and multilateral border management arrangements to determine whether they need to be revised and/or renewed
4.6 Work towards the development of Integrated Border Management Systems, taking into account specific conditions at national levels
4.7 Promote capacity-building on risk-based border management
4.8 Carry out border assessments of the nature and volume of cross-border flows and the capacity of national authorities to manage those flows
5. All Four Thematic Areas
5.1 Prioritise ongoing research, data collection and analysis in each of the thematic areas to better inform the development of policies, guidelines and good practices
5.2 Member States, the SADC Secretariat, the MIDSA Secretariat and co-operating partners should separately and jointly engage in resource mobilization to ensure the implementation of the above activities and recommendations at regional and national levels, as appropriate
5.3 Collect further information on activities being undertaken by Member States and co-operating partners at national and regional levels and compile a comprehensive progress report to be submitted at the MIDSA Ministerial to be held in 2017, and that can also be used for resource mobilisation
5.4 Engage and colloborate with other REC’s as well as the AU in the development and implementation of the above activities
6. Ancillary Matters
6.1 Migration Data in Southern Africa
6.1.1 Develop standardized templates for data collection
6.1.2 Ensure that migration data is collected in LFS, as well as censuses and household surveys
6.1.3 Enhance intra- and inter-regional collaboration on data collection and analysis
6.1.4 Develop ongoing interventions for capacity-building and training at national and regional levels
6.1.5 Develop systems and mechanisms for ongoing evaluation of the quality of data and data collection and analysis processes
6.2 Migrants in Countries in Crisis Initiative (MICIC)
6.2.1 Adopt the MICIC Guidelines to improve the protection of migrants in situations of conflict or natural disaster, and adapt their implementation as appropriate to local conditions and contexts
6.2.2 Include the MICIC Guidelines in regional and national action plans
6.2.3 Use the MICIC recommendations to identify, prepare for and respond to the needs of migrants in situations of conflict or natural disasters
6.2.4 Promote the MICIC Guidelines with other stakeholders and enhance co-ordination
6.3 MIDSA Sustainability Plan
6.3.1 Member States are encouraged to translate the recommendations pertaining to MIDSA sustainability in the Action Plan into concrete actions
6.3.2 Member States are requested to enhance their direct or in-kind contribution to MIDSA to ensure sustainability
6.4 Regional Migration Policy Framework
6.4.1 Work towards the development of a Regional Migration Policy Framework that incorporates all the different elements of migration and that can be used to guide the development/revision of national migration policies
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Monetary policy and the future of central banking: Implications for Africa
Remarks by Mitsuhiro Furusawa, IMF Deputy Managing Director, on the 50th Anniversary of the Central Bank of Kenya
Ladies and Gentlemen, Governor Njoroge, I am honored to join you today to commemorate the 50th anniversary of the Central Bank of Kenya.
I have had the pleasure of working closely with Patrick – if I may call you Patrick, Governor – during his previous incarnation at the IMF, and it is truly a joy to share this moment with you.
This is an important milestone for Kenya, so I am very happy to have this opportunity to reflect upon your journey over the past half century – and to discuss with all of you the way forward.
In the time we have today, I would like to discuss the current state of central banking in Sub-Saharan Africa and to explore the challenges that this region’s central bankers face as they address the increasingly complex forces at work in the global economy.
Of particular concern is a global economy marked by subpar growth with downside risks related to the ongoing adjustment in the global economy.
In addressing these challenges monetary policy has a central role to play. Along with government fiscal policies, well-designed and well-implemented monetary policies are essential for a country to achieve strong, sustainable and inclusive growth.
Evolution of Central Banking
Let me begin by briefly taking stock of developments in central banking and monetary policy over the last 50 years, and then placing those developments in the African context.
Traditionally, the primary objectives of monetary policy have been to maintain price and financial stability and to help achieve full employment.
At times there may appear to be a conflict between the goals of low inflation and economic growth. But we have learned from hard experience that high inflation distorts the private sector’s savings and investment decisions – leading ultimately to slower growth.
That is why countries have increasingly placed greater emphasis on price stability, and many of them have made low and stable inflation the primary objective for monetary policy.
To achieve the price stability objective, we have seen monetary policy frameworks evolve over time. In the period after World War II, monetary policy operated in the context of fixed exchange rates under the Bretton Woods system.
Following the collapse of that system in 1972, central banks generally used monetary targets and soft exchange rate pegs to bring down the high inflation that the world experienced through the early 1980s.
However, as inflation fell, and financial innovation emerged, the link between money targets and inflation outcomes became increasingly tenuous. In addition, the increase in capital flows – and the market volatility that followed – created significant challenges for small, open economies operating soft exchange rate pegs to deal with external shocks while seeking to achieve price stability.
This is why central banks have gradually switched to forward-looking monetary policy frameworks to stabilize their economies. Starting with New Zealand in 1989, many central banks responded to these challenges by switching to formal inflation targeting as a framework for monetary policy.
This approach essentially combines an explicit inflation target with a commitment to use market-based instruments and a flexible exchange rate to achieve the inflation target over the medium term.
Not all central banks adopted formal inflation targeting frameworks. But in most cases the operational framework has been similar – that is to say, it was centered on adjusting short-term policy rates to maintain low and stable inflation over the medium term.
These forward-looking monetary policy frameworks have been supported by legislative mandates to give central banks operational independence. This has been coupled with procedures that ensure central bank transparency and public accountability.
African Central Banking in Perspective
These trends certainly have influenced the way central banking and monetary policy have evolved in Sub-Saharan Africa. In the immediate post-colonial era, the new central banks lacked independence from their governments: they were directed to finance large fiscal deficits. There were pervasive foreign exchange and interest rate controls.
Starting in the late 1980s and increasingly during the 1990s, the region largely adopted monetary policy frameworks based on either monetary targets or exchange rate pegs. These were supported by smaller fiscal deficits and reduced central bank financing of those deficits.
Now, however, the weaker relationship between money and inflation, and the changing financial landscape, are again calling on African central banks to adjust their strategies.
Ghana, South Africa, and Uganda have adopted formal inflation-targeting regimes. Other countries with flexible exchange rate regimes are de-emphasizing the role of monetary aggregates and incorporating elements of the monetary policy practices of industrial and emerging market countries.
These practices include greater reliance on interest rates for the transmission of the monetary policy stance, improved liquidity management, and greater focus on policy analysis, forecasting, and communications.
Kenya does not formally target inflation. But since 2011 it has adopted a more forward-looking monetary policy framework centered around the CBK’s policy rate, which is set by a monetary policy committee. As many of you know, this policy is aimed at maintaining inflation within the government’s target range of 2.5 percent on either side of the 5 percent medium-term target. Using this framework, Kenya has successfully managed to keep inflation within the target range most of the time over the past several years.
Sub-Saharan Africa’s shift toward more forward-looking monetary frameworks has been supported by reduced fiscal deficits, generally more flexible exchange rate regimes, and a more intensive use of market-based monetary instruments.
At the same time, financial systems in the region have experienced significant deepening over the past decade. This should translate into potentially stronger monetary transmission over time.
A key element of this deepening has been the region’s emergence as a world leader in innovative financial services based on mobile phone technology. This has led to a breakthrough in financial inclusion, especially here in East Africa.
And as you know, Kenya has led the way: over 75 percent of your population has now financial access, up from about 40 percent just five years ago. This reflects the fast spread of M-Pesa, M-Shwari, and M-Kesho, which has helped reduce transaction costs and facilitate personal transactions.
On top of this, Kenya also has one of the most diversified and deep financial sectors in Sub-Saharan Africa. Your well-established government bond market is providing key support for effective transmission of monetary policy. Other African countries are making similar progress.
Challenges Facing Africa
Nonetheless, many central banks in Sub-Saharan Africa are facing serious obstacles as they design and implement effective monetary policies – not least because of the combination of external and domestic challenges. Allow me to elaborate.
The external factors are well known to this audience. Many African countries have been feeling the pain of the collapse in commodity prices. Growth has fallen sharply, and inflation is rising as a result of exchange rate depreciation.
Countries that are less dependent on commodities exports – including Kenya – are doing better. But the room for maneuver that their central banks have enjoyed for the past several years is becoming more confined.
A key reason for this is the region’s integration into global trade and financial networks. You are subject to forces well beyond your control.
For example, the uncertainty surrounding the timing of exit from unconventional monetary policies in advanced countries has increased the volatility of capital flows. The risk is that a sudden reversal of capital inflows could lead to a large and disorderly depreciation of the local currency, with adverse implications on both inflation and financial stability.
All of this greatly complicates the conduct of monetary policy. Still, the good news is that many of Sub-Saharan Africa’s central banks have built adequate international reserve cushions. This includes Kenya, giving the CBK greater room for maneuver, and reducing the risk of a sudden reversal of capital flows in the first place.
This confluence of international developments is heightening the domestic challenges that central banks are facing. Many still have limited operational capacity. This partly reflects persistent weakness in government cash flow management, which makes it difficult for central banks to adequately manage liquidity conditions.
Together with restrictions on access to central bank standing facilities for lending to banks and allowing them to place deposits with the central bank, at times this results in large variances between policy rates and the market rates relevant for commercial bank liquidity managing. This risks rendering policy rates irrelevant for commercial bank pricing and lending decisions, thus reducing the effectiveness of monetary policy.
Another challenge facing many African countries is the persistence of very high spreads between the interest rates offered on deposits and those charged on loans. This has led to understandable frustration among borrowers about the cost of credit, and has produced political pressure for interest rate controls.
However, the politicization of monetary policy bears well-known risks – for the soundness of the financial system and for credit access, notably higher-risk borrowers. International experience suggests that, in many cases, interest rate controls may actually end up reducing access to the banking system for small borrowers – such as farmers, SMEs and consumers – and may also revive informal lending at much higher cost for borrowers.
In addition, linking deposit and lending rates to the central bank’s policy rate may compromise the independence of the central bank, and hamper its ability to enact monetary policy towards achieving its main objectives – that is to maintain price and financial stability and to support the economy.
Finally, the limitations of high-frequency economic indicators in many countries, especially on external trade and the real economy, constrains monetary authorities’ ability to take corrective actions in a timely manner.
The Way Forward
So how can we best address these challenges? The answer will not be the same for countries.
Where countries have chosen to belong to a currency union, or maintain a hard peg, the exchange rate will continue to anchor monetary policy. In countries where institutional capacity remains very weak, building that capacity should be the first priority.
But for many others, notably the frontier economies in Africa that are rapidly integrating into global financial markets, more forward-looking monetary policy frameworks will be needed in the coming years.
Let me now turn to seven principles to increase the effectiveness of monetary policy for countries seeking to move towards forward-looking monetary policy frameworks, which are based on the experience around the world on such frameworks. Here I would like to emphasize that I am making points that apply across the region. Kenya already has embraced many of these principles.
First, the central bank should have a clear legal mandate of policy goals and operational independence to pursue these goals.
Second, the primary, medium-term objective of monetary policy should be price stability. Monetary policy ultimately has a limited capability to directly influence real variables such as output growth over the long-term.
Third, the central bank should make a medium-term numerical inflation objective the cornerstone for its monetary policy actions and communications. A transparent inflation objective provides a simple benchmark against which to measure performance.
Fourth, the central bank should carefully take into account the implications of monetary policy adjustments for financial stability. However, this should not come at the expense of undermining the central role of the medium-term inflation objective. Any significant erosion of central bank credibility can change inflationary expectations for the worse. This, in turn, could have an undesirable impact on real activity and financial stability.
Fifth, the central bank should have a clear and effective operational framework, by setting an operating target and clearly communicating the link between such an operating target and the medium-term inflation objective. This supports the functioning of money markets.
Sixth, the central bank should have a transparent, forward-looking monetary policy strategy that reflects timely and comprehensive assessments of the monetary transmission mechanism.
Seventh, central bank communications should be transparent and timely. This helps reduce uncertainty, improves monetary policy transmission, and facilitates accountability. The goal must be to build credibility.
Conclusion
Having listed these seven principles, I would like to stress each country faces unique conditions and challenges that will dictate the pace at which they proceed. What is essential is to have internally consistent policy goals, the institutional arrangements that give the central bank the operational independence to pursue these goals, and transparency.
Many countries in Sub-Saharan Africa, including Kenya, are well advanced along this road. It is an important achievement. The IMF is fully committed to provide any assistance that the Kenyan authorities and those across Africa may need to continue upgrading the monetary policy frameworks to address the challenges of the future.
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tralac’s Daily News Selection
The selection: Tuesday, 13 September 2016
The 28th IGAD Extra-ordinary Summit of Heads of States and Government takes place today in Mogadishu. Official hashtag: #IGADMog2016
The Vienna Investment Conference 2016 opens tomorrow on the theme ‘Quality FDI, growth and development’.
Les Rencontres Africa 2016: the aim of this event (22-23 September in Paris) will be to enhance economic and human ties between Africa and France, in anticipation of the Africa - France summit that will bring together African and French leaders in Bamako in 2017. [Brochure (pdf)]
Sand in the wheels: Non-tariff measures and regional integration in SADC (UNCTAD)
The SADC region has made good progress in eliminating or substantially reducing tariffs but intra-regional trade has not reflected this progress. While poor transport links are a problem, the existence of non-harmonized technical NTMs and NTBs is an ongoing concern. The analysis presented here illustrates the potential benefits of regulatory convergence and removing NTBs in SADC but highlights the need for specific data relating to the particular impediments faced by SADC exporters. It is relatively simple to list the numerous non-tariff measures, but assessing their impact is more difficult. Two methods involve trying to measure the effect on quantity using a gravity model or by looking at the gap between world and domestic prices.
Data on NTMs for the SADC region is incomplete and a greater effort at data collection is needed. However, to illustrate the methodology and potential impacts of reducing barriers, we assume SADC countries have similar NTMs as the average for Africa. The impacts on trade, output, employment and incomes of reducing these barriers are assessed using a global general equilibrium model. Depending on the initial trade flows and the magnitude and scope for removing the trade distorting effects of non-tariff measures, the increases in national exports are up to 2.2%. National output, employment and incomes will also increase in all SADC countries. [The authors: David Vanzetti, Ralf Peters, Christian Knebel]
Cecile Fruman: ‘Achieving the SDGs and the role of standards - a World Bank Group perspective’ (ISO)
South-South trade is a key feature of the new international trade landscape. As evidence of this, global value chain-related trade between developing countries has quadrupled in the last 25 years. It is clear that trade will have a central role to play in achieving the SDGs. When I say “trade” it is really shorthand for many of the issues central to the international standards agenda: not just trade of goods and services, but also investment, as well as flows of technology, ideas, and people. Central to this is the role international cooperation on standards plays in building the confidence that underpins these different exchanges. Trade will enable the achievement of all the SDGs – not just those where it is specifically mentioned. Let me focus on a few: [ISO Action Plan for developing countries 2016-2020 (pdf)]
The SDG 8.7 Alliance: North and West Africa consultation (ILO Africa)
The SDG 8.7 Alliance calls for a rethink on how stakeholders work together to achieve this goal. This high-level meeting in Abidjan [before the official launch of the Alliance 8.7 in New York, 21 Sept] should lead to recommendations on how best to mobilize all key initiatives, particularly in North and West Africa, to end forced labour, modern slavery and trafficking of people by 2030 and to end child labour in all its forms by 2025. Conference documentation can be downloaded:
Carlos Lopes: ‘Mega carriers dominate our skies, African aviation cannot take off in their shadow’ (The EastAfrican)
Indeed, where African nations have liberalised their air space, either within Africa or with the rest of the world, positive benefits have resulted. For example, the agreement of a more liberal air market between South Africa and Kenya in the early 2000s led to a 69 per cent rise in passenger traffic. Indeed, just allowing the operation of a low-cost carrier service between South Africa and Zambia (Johannesburg-Lusaka) resulted in a 38 per cent reduction in fares and a 38 per cent increase in passenger traffic. The continent has to create more space for low-cost flying. In an interconnected world, air travel is no longer a luxury, it is a necessity for a prosperous continent.
Kenya: Subnational Doing Business report
Doing Business in Kenya 2016 (pdf) is the third report of the subnational Doing Business series in Kenya. It measures business regulations and their enforcement in 11 counties: Busia (Malaba), Isiolo, Kakamega, Kiambu (Thika), Kisumu, Machakos, Mombasa, Nairobi, Narok, Nyeri and Uasin Gishu (Eldoret). The report measures regulations affecting 4 stages of the life of a small or medium-size business: starting a business, dealing with construction permits, registering property and enforcing contracts. [Downloads, pdf: News release, Presentation]
South African trade policy updates:
Rob Davies tells of SA moves to position itself for CFTA, Brexit (Business Day): Focusing on continental integration, Davies said he had been having informal dialogue with the trade ministers of Kenya, Egypt and Nigeria on how to add impetus to the process of uniting Africa in a free-trade area. The SACU was involved in negotiations on tariff schedules with the EAC and Egypt and had set itself the target of developing tariff schedules — the guts of a continental free trade agreement — by the end of this year. SA also hoped to conclude a motor industry agreement with Nigeria. The aim is for SA to support Nigeria’s motor industry and in return be allowed to supply inputs and completely built-up units.
Credit insurance group seeks expanded role (Business Day): The state-owned Export Credit Insurance Corporation of SA is looking into whether it should expand its role to become an "eximbank", which would allow it to make loans directly to exporters. The investigation was prompted by a request by the Department of Trade and Industry that it expand to become a fully fledged trade finance institution. Currently the ECIC can only provide insurance to local banks and institutions, on a loan that exporters obtain from the bank. It has a particular focus on emerging markets in Africa that are considered too risky for insurers. In his foreword to the ECIC annual report (pdf), Trade and Industry Minister Rob Davies noted that a revision of the corporation’s founding legislation was necessary to enhance its global competitiveness. He said 30% of SA’s export trade is with the rest of Africa, most of it in value-added goods and services. "This underscores the strategic importance of the African continent in our efforts to diversify our export markets at a time when trade with our traditional trade partners has stagnated despite the depreciation of the rand."
Trade and investment opportunities in Africa: Kenya (pdf, ECIC): Kenya is South Africa’s second largest trading partner (after Nigeria) on the continent outside the SADC region. Total trade between the two countries stood at $756m in 2014 - a 5.2% growth from $490m in 2005. The trade balance has been in favour of South Africa, with the latter exporting more than it is importing from Kenya. According to Figure 10, Kenya tends to import manufactured goods from South Africa. These include chemicals and related products, machinery and transport equipment, and manufactured goods. The surge in imports from South Africa over the past decade was estimated at 5.5%, showing a sustained demand for South African products. Tariffs imposed on South African exports to Kenya for 2014 are listed below (Table 6). The highest tariff of 71.9% is seen in the export of sugars and sugar confectionary. The tariffs for dairy, cereal, furniture and iron and steel exports have increased from 2013.
COSATU to make its submissions on the Border Management Authority Bill: COSATU will not agree to any attempt to locate the BMA, an armed security organ of the state, outside the public service. Such a move would be unprecedented within the history of South Africa. Any attempt to ram this bill through the throats of the workers in its current form, will lead to mass mobilisation and industrial action by COSATU unions inside and outside the public service. COSATU is unwavering in its opposition to any attempt to weaken and fragment the state, through unaccountable government agencies. [Today’s Parliamentary hearings: update]
Kenya: Eveready seeks COMESA watchdog’s approval to distribute global brands (Business Daily)
“The Comesa Competition Commission wishes to notify the general public and stakeholders that it has received requests for authorisation of agreements between Eveready East Africa Limited and the multinationals for distribution of their products,” said CCC in a statement. The commission is seeking views from the competitors, suppliers and customers who are required to submit written representations to it with regard to the agreement between Eveready and the said multinationals. Eveready is trying to diversify its business by widening their revenue stream at a time when the loss making company is struggling to remain relevant in the competitive market.
Singapore-Ethiopia Business Forum: speech by Dr Mohamad Maliki Osman (GoS)
Ethiopia has been one of Singapore’s earliest partners in Sub-Saharan Africa. We enjoy excellent political links and have been regular visitors to each other’s countries. Economic links, while less substantive, have been increasing steadily. In 2015, trade between Singapore and Ethiopia amounted to $24m, an increase of over 17% from the previous year. In all honesty, the geographical distance between Singapore and Ethiopia has for a long time kept our two economies apart and contributed to our unfamiliarity with each other. However, I am pleased to note that a handful of Singapore companies have taken the first step to base their operations in Ethiopia.
Chinese firms encouraged to invest in Africa (New Vision)
Uganda is one of seven African countries that have signed cooperation agreements with China’s southern province of Guangdong to boost investment on the continent. The countries will benefit from Guangdong’s development experience and investment in agriculture and agribusiness, manufacturing, renewable energy, skills training, trade and tourism.
Uganda: Understanding the prospective local content in the petroleum sector (pdf, AfDB)
The objective of the study is to understand the prospective local content of the petroleum (energy) sector given the backward and forward linkages embedded in the available economy wide data base, the 2007 Social Accounting Matrix. This is expected to facilitate the understanding of what kind of local content policies should be designed and why.
Agricultural research in Africa: investing in future harvests (IFPRI)
What SSA needs is rural capacity that incentivizes the delivery and uptake of new technologies and motivates the adaptation and innovation of these technologies across the extraordinary heterogeneity of African smallholder farming systems. Such an evolving rural innovation system will enable farmers, agribusiness firms, input and service suppliers, research institutes, and other public-sector institutions to continuously identify technology bottlenecks and to generate adequate solutions to overcome them. Improvements in education and training, better access to markets and information, and more fully developed links between farmers and service providers are also needed to increase productivity – in particular, to encourage the adoption of productivity-enhancing technologies.
Natural Resource Revenue Sharing (NRGI)
This NRGI and United Nations Development Programme report Natural Resource Revenue Sharing (pdf) provides a comprehensive summary of resource revenue sharing regimes around the world and offers advice to policymakers establishing or reforming their systems. The report draws on more than 30 case studies, eight of which are presented in the report. Based on this review, we provide 10 recommendations for designing and implementing efficient, fair and stable resource revenue sharing systems. [Dianna Games: DRC jungle mine builds wealth above ground]
Amiti Sen: ‘India need not genuflect at RCEP’ (The Hindu)
So, as the Government has been saying, India’s gains from a deal with RCEP would mostly lie in the area of services. Indian negotiators take pride in stating that due to their insistence, services would be part of a single undertaking and not carved off as a separate agreement as was done in the case of the FTA with Asean. In the India-Asean FTA, India got a raw deal in services as the pact on goods had already been signed and it did not have any bargaining chips left, but this time, negotiators say, they will not make the same mistake. Unfortunately, despite efforts by India to get members to give substantial offers in services, especially for professionals, the offers made so far are insignificant. Including a toothless pact on services in the proposed RCEP would not justify India’s participation in a trade pact where China is to be ultimately provided unrestricted market access for most products. [Cabinet nod for expanded trade with China, Asia-Pacific nations]
ECOWAS, other RECs urged to review peacekeeping approach
Senior UN officials highlight importance of South-South cooperation for sustainable development
Four things not to miss in shaping the new Global Action Agenda for Transport
COSATU International School: opening address
Meet on future use of satellite data in Africa opens in Kigali
G20 makes trade promises that the WTO cannot fulfill
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