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EAC should ‘promote uniform laws on financial inclusion to spur growth’
The East African Community (EAC) needs a strong and uniform regulatory framework that promote financial inclusion to ensure sustainable growth in the region, experts say.
Prof Lemma Senbet, from the African Economic Research Consortium (AERC), said EAC should put in place clear systems that promotes financial inclusion to spur growth.
He added that a regionally integrated financial system that also feeds into a global system will help strengthen the financial industry on the continent.
He also noted that a strong linkage between the financial industry and other sectors of the economy is crucial for Africa.
“It is important to have a globally competitive financial system and regulatory framework to ensure best practices,” he added.
He was speaking during a China-Africa Media Think Tank symposium in Mombasa, Kenya recently.
Prof Humphrey Moshi, the Centre of Communication Skills at the University of Dar es Salaam, Tanzania, said there is need to create linkage between financial sector development and poverty alleviation, as well as employment creation.
He said it is essential to develop the capacity of the financial sector to exploit its potential and contribute to the region’s growth.
“There is need to strengthen capacity of financial systems to perform multiple functions and not mere existence of the systems,” he added.
“Sub-Saharan African countries, including the EAC bloc, have undertaken a lot of economic and financial sector reforms over the last two decades, yet many still face a severe financial development gap compared to advanced and other developing economies,” Prof Moshi said.
He added that lack of access to finance by disadvantaged groups is one of the main obstacles to the sector’s growth. He noted that access to funding could promote broader economic growth.
Boosting trade relations
Africa is looking more to the east particularly China, for trade and investment partnerships, shifting from traditional western partners.
Michael Ehizuelen Omoruyi, of the Institute of African Studies at Zhejiang Normal University in China, said Africa’s low competitiveness in international markets affects trade between the continent and the rest of the world.
“Therefore, diversification and continuous industrial growth are key, and African countries can grow as dynamically as developing countries in East Asia and other parts of the world if governments put in place an enabling environment to attract FDIs and skills,” Omoruyi said.
“African nations need to move faster and woo major companies to invest on the continent,” Omoruyi said.
Meanwhile, Prof Meibo Huang, from Xiamen University in China, has said strong monetary ties with development partners could help accelerate economic growth in the region. However, Huang said lack of access to finance remains a big challenge to sustainable economic growth in the region and on the continent, generally.
He said it makes it imperative to maintain strong monetary co-operation and to engage stakeholders in finance development programmes.
He argued that co-operation with development partners is still at an early stage and unbalanced.
“It is, therefore, critical to balance this co-operation through strong overseas credit lines to boost economic growth,” Haung said during the symposium.
He said the China-Africa Development Fund has invested $3.2 billion in 83 projects in 35 African countries. This is expected to drive Chinese enterprises to increase African official foreign direct investments to about $16 billion in the next five years.
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The SADC we want: Reclaiming southern Africa through citizens’ power
Following the SADC Civil Society Forum that was held from the 14th-17th August 2016 at the Royal Swazi Spa Convention Center, the SADC Council of NGOs, Fellowship of Christian Councils in Southern Africa and the Southern Africa Trade Unions Coordinating Council, through its partnership with the Coordinating Assembly of NGOs in Swaziland (CANGO) as their local partner, issued the following Communiqué of the 12th Civil Society Regional Forum.
‘Citizens Rising – Reclaiming SADC for People’s Democracy’
The 12th Civil Society Forum (CSF) convened by the SADC Council of NGOs (SADC-CNGO), Fellowship of Christian Councils in Southern Africa (FOCCISA) and the Southern Africa Trade Unions Coordinating Council (SATUCC), gathered together more than 350 delegates from the 15 SADC countries, representing regional thematic networks and deliberated on progress made on the implementation of the resolutions of the 11th CSF and reflected on the key challenges facing the region.
The CSF determined and developed a clear action plan for a new path and strategies towards the realisation of people-centred development in Southern Africa, reclaiming our full citizenship, democratic dispensation and developmental priorities through:
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Deepening civil society participation in Regional Integration;
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Confronting the challenges and prospects for democratic governance in the post-liberation Southern Africa;
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Considering reports from 15 Member States on social, political and economic conditions and the level of democracy in each of them;
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Evaluating progress made by regional thematic networks and sectors in advancing the realisation of the SADC and Member States’ commitments, instruments and policies for regional integration;
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Engaging in deeper analysis and targeted action planning, and strategic coordination in the five commissions on:
- Democratising our democracies;
- Inclusive and sustainable development;
- Human security and development;
- SADC/Civil society engagement mechanism;
- Strategies and tactics for social mobilisation and movement building;
Having observed the critical challenges in our region, arising from the weak implementation of the regional integration and development agenda, due largely to the absence of political will, the institutional misalignment of SADC and marginalisation of social partners in national and regional governance, determined an Action Plan, Strategies & Tactics to mobilise SADC citizens and civil society to reclaim our democracy and institutions of governance.
We resolve to implement this Action Plan and Strategies & Tactics in an accountable and transparent manner, consistent with the values and ethical leadership which informed our liberation and sustained civil society organisations as the agents of social and political transformation.
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tralac’s Daily News Selection
The selection: Friday, 19 August 2016
Featured tweet, by the EIU’s @RobertAlanWard: Africa export revenue to China falls off from 2015 as commodity prices wilt, trade imbalance widens.
A suite of postings for pan-African, Southern and East African trade and development conferences:
TICAD VI Summit: Over 40 heads of states, UN secretary general Ban Ki Moon and top AU officials will attend the sixth Tokyo International Conference on African Development summit at KICC in Nairobi next weekend. An estimated 10,000 delegates – 6,000 Africans and 4,000 Japanese – are expected to attend the event to be held at the Kenyatta International Convention Centre (27-28 August). The Japanese delegates include executives of 100 top firms which are set to exhibit their products and scout for new opportunities in Africa. “We expect immediate economic benefit of hosting this event to double that of the recent United Nations Conference on Trade and Development (UNCTAD),” said Ms Mohamed at a media briefing on Thursday.
The 1st African Parliamentary Budget Office conference: During the conference (17-19 August, Cape Town) various PBOs within and outside the African continent will share their experiences and challenges, in particular on their creation, function and impact on fiscal oversight in their respective countries. The conference will also be a platform for different countries to learn from other experiences, especially because many African countries are developing their own PBOs. Other PBOs stakeholders and local and international bodies within fiscal oversight and broader accountability are also present at the conference. The secondary objective of the 2016 African PBO Conference is to create a platform for the development of an African Network of Parliamentary Budget Offices to facilitate regular engagements among members. The AN-PBO is proposed to be a platform for new and developed African PBOs to regularly share experiences and showcase successes. [Downloads include papers, speeches and the conference brochure]
Migration Dialogue for Southern Africa: The conference (16-18 August, Gaborone), on the theme Addressing mixed migration in Southern Africa - linking protection, immigration, border management and labour migration, is in partnership with the Government of Botswana, SADC Secretariat, UNHCR, UNODC and Save the Children. Participants – mostly senior government officials responsible for Home Affairs and Labour in the 15 SADC Member States – will deliberate on regional efforts to improve the region’s coordinated response to mixed and irregular migration. The focus will be on assessing the implementation of recommendations from the Ministerial MIDSA of 2015. Officials will explore related immigration, border management and labour migration issues to enhance the protection of vulnerable migrants and improve overall migration governance in the SADC region. The Southern Africa region has seen a rise in recent years in ‘mixed migration’, particularly coming from the East and Horn of Africa, the Great Lakes Region and countries in the SADC region itself.
Reminder: The Southern Africa Business Forum, in collaboration with the SADC Secretariat, hosts the Second Annual SABF Conference (24 August, in Swaziland) ahead of the SADC Summit (30-31 August)
Southern Africa data collection and the compilation of country and regional profiles: The consultative meeting (8-9 Sept, Lusaka) seeks to review draft country and regional profiles for 2016, and discuss the data collection processes that feed into the production of these profiles and into the ECA Databank. A review of the draft country profiles for Angola, Malawi, Mozambique, Mauritius, Swaziland and South Africa as well as the quarterly updates on; Botswana, Lesotho, Namibia, Zambia and Zimbabwe will be the main focus of the discussions.
Developmental regionalism, peace and economic transformation in Southern Africa: ECA Southern Africa Office and the African Peacebuilding Network of the Social Science Research Council are facilitating a regional forum (28-30 Sept, Mbabane) linked to a research project on the theme: “Developmental Regionalism, Peace and Economic Transformation in Southern Africa”. The main objective of the regional forum and research project is to interrogate the notion of developmental regionalism and how that applies to Southern Africa, especially within the context of the development trajectory of SADC, and the policy options and interventions necessary to ensure a sustained peaceful and stable regional developmental process in Southern Africa.
An East African regional anti-illicit trade conference: The broad objective of the conference (15-16 Sept, Nairobi), organised by the EABC and the Kenya Association of Manufacturers, will be to come up with proposed policy reforms and key recommendations for prioritised and expedited implementation. Key sectors affected by counterfeits and other forms of illicit trade will have an opportunity to discuss how their businesses are impacted, and what solutions they propose. EABC chief executive Lilian Awinja said they are pushing to have a robust legal and policy framework at the regional level to have proper enforcement and surveillance mechanism in all EAC partner states.
The inaugural East African Business and Entrepreneurship Conference: The East African Business and Entrepreneurship Conference and Exhibition (10-13 October, Nairobi) will be an annual event rotating in all partner states of the EAC, in collaboration with the respective investment agencies. The inaugural 2016 edition, organized by the East African Business Council, will take place with support from the Federation of German Industries. The national investment agencies of the EAC partner states will present actual bankable projects, thus pointing out the range of attractive investment opportunities emerging from national programmes and multinational development plans; moreover new opportunities arising from the regional harmonization processes will be highlighted. The conference will also focus on manufacturing, infrastructure, leather, textiles and energy in parallel sessions. [Draft programme, Conference brochure]
Rwanda to host 5th All-Africa International Honey Industry Exhibition: Some 2,000 participants, including researchers, policymakers, honey trade support networks, and development partners, are expected to attend the event (21-26 Sept, Kigali). Participants will be drawn from Africa, Middle East, Europe, and USA among others. Organized by ApiTrade Africa in partnership with Rwanda’s National Agricultural Export Development Board, the exhibition will feature bee products, beekeeping technologies, innovations and initiatives to promote the trade.
Call for papers: the Centre for the Study of African Economies Conference will take place on 19-21 March 2017 in Oxford. Submit your paper before 28 October.
Indian Ocean Commission: new Secretary General makes security his priority (SNA)
The newly appointed Secretary General of the Indian Ocean Commission said Thursday that security will be his priority during his four-year mandate. Hamada Madi Boléro made the statement after meeting with Seychelles’ President James Michel. “My mandate is going to be about security: food security, security of the persons and their assets, fighting against terrorism, drug trafficking, piracy as well as sanitary safety,” said Boléro. The new Secretary General said once there is security in all its forms, the member states will then be able to talk about developing the region.
Southern Africa: CSOs unveil public funds monitoring project for agriculture, health sectors (Zambia Daily Mail)
The Partnership for Social Accountability project is a consortium of four agencies that include Action Aid International as lead organisation, Eastern and Southern Africa Small Scale Farmers’ Forum, Southern African HIV and AIDS Information and Dissemination Services, and Public Service Accountability Monitor, and is supported by the Swiss Agency for Development and Cooperation. ActionAid Zambia country director Nalucha Ziba said reflecting on the UN Sustainable Development Goals agenda, the project will build the capacity of state officials and parliamentarians to more effectively manage public funds, support small-scale farmers and the media in holding leaders accountable. Ms Ziba said in the first three years of implementation, the project will focus on Zambia, Malawi, Mozambique and Tanzania. “Parliaments must provide effective oversight, citizens must be free and able to monitor and hold them to account. By strengthening state and civil society, the project will improve public services in our region, particularly in health and agriculture,” she said in a statement issued to the Daily Mail yesterday.
Rwandan businesses eye DR Congo market (New Times)
Local entrepreneurs in agriculture are paying particular attention to neighbouring DR Congo as they look to boost their business. As such, the Private Sector Federation, particulary the Chamber of Farmers, is organising a three-day agri-business trade mission (24-26 August) to Goma, the capital of the vast neighbouring country’s North Kivu Province, next week. Nearly 50 traders, companies and cooperatives, including Rwanda Farmers Coffee Company (RFCC), Inyange Industries, Rwanda Mountain Tea, and Bourbon Coffee will head to Goma to explore opportunities.
Mauritius-Pakistan Preferential Trade Agreement (goods): report by the WTO Secretariat
The Preferential Trade Agreement between Mauritius and Pakistan is the fifth RTA notified by Mauritius to the WTO and the ninth RTA notified by Pakistan to the WTO. Bilateral trade between the Parties is relatively small. In 2014 Pakistan was the 26th largest source of imports for Mauritius (0.6% of total imports) and the 38th largest export destination (negligible export share) while Mauritius was Pakistan’s 48th largest source of imports (negligible share of total imports) and 62nd largest export destination (0.1% of total exports). In terms of total and bilateral merchandise trade between the Parties for the period from 2004-2014, both Parties ran a widening trade deficit globally. In their bilateral trade Mauritius had a trade deficit with Pakistan during this period although the figures on bilateral trade reported by the Parties show considerable differences, with Pakistan showing a reduction in its trade surplus with Mauritius since 2010, the decline is less clear from figures reported by Mauritius.
Senegal: AfDB's Country Strategy Paper, 2016-2020
Senegal is located far to the west of several other countries in the centre and, to some extent, has difficulties accessing its neighbours and the rest of ECOWAS and suffers from a serious infrastructure gap. As a result, the country needs to invest in infrastructure to improve its internal and external accessibility through regional programmes to reduce intra-ECOWAS trade-related costs. These infrastructure gaps represent bottlenecks to the development of agribusiness, value chains and the competitiveness of Senegalese products.
Senegal’s geographical location places it in a favourable position regarding links between the West African zone, Europe, South and North America and South Africa (intersection of maritime links between ECOWAS and these zones) and provides an opportunity the country should seize. Also, concerning regional integration, the Bank’s flagship study entitled Regional Integration in West Africa: Challenges and Opportunities for Senegal, indicates that several dozen products have not yet realized their full export potential with ECOWAS. 45 out of a total of 232 products traded by Senegal with the region were identified as having unsaturated export potential. Each of them is of interest to 5 or more countries in the sub-region (ECOWAS and Mauritania). These products mainly concern agri-food industries, chemical industries and the metal and electricity industry.
Making it happen: selected case studies of institutional reforms in South Africa (World Bank)
Based on interviews with senior policy makers, the book captures the how-to of designing and executing these policies in a variety of strategic areas, including increasing budget transparency, developing an intergovernmental fiscal system, strengthening tax administration, enhancing the statistical system, developing a modern performance monitoring and evaluation system, expanding HIV/AIDS treatment, reforming the social transfer system, creating a modern national identity system, developing a system for the management of biodiversity, modernizing the national road network management, developing the framework for renewable energy, and formulating the country’s much-lauded constitution. Tracing a twenty-year journey of transformation, this book places particular emphasis on recording the design of these reforms and endeavors to shed some light on the decision-making processes. In particular, it attempts to provide insight on the trade-offs policy makers faced, and the sequencing and complementarities among the various reforms. It finds leadership at different levels, adoption of pragmatic and innovative solutions, and the focus on results as among the key drivers in implementing these changes. [Implementing successful reforms: the case of social assistance in South Africa]
South Africa: Coega courts R11bn Chinese deal (Fin24)
The Coega Development Corporation has signed the biggest automotive investment deal in Africa in the last 40 years. The R11bn investment is with the Beijing Automobile International Corporation for a completely knocked down automotive manufacturing plant in the Coega Industrial Development Zone. The BAIC investment is an outcome of the Forum on China-Africa Cooperation (FOCAC) that was held in Johannesburg in December 2015, where President Jacob Zuma and Chinese Prime Minister Xi Jinping signed no less than 26 bilateral agreements valued at approximately R100bn.
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35 African leaders, top businesses leaders headed to Nairobi for TICAD
Nearly 40 heads of State are expected in Nairobi next weekend as Kenya becomes the first African state to host the Sixth Tokyo International Conference on African Development (TICAD VI) Summit.
Kenya’s Foreign Affairs and International Trade Secretary Amina Mohamed said 35 leaders, among them Japanese Prime Minister Shinzo Abe, have so far confirmed their participation in the conference.
An estimated 10,000 delegates – 6,000 Africans and 4,000 Japanese – are expected to attend the event to be held at the Kenyatta International Convention Centre (KICC) from August 27 to 28th.
The summit activities start on Tuesday next week and continue through the weekend when Mr Abe is expected to hold a meeting with the African leaders.
The Japanese delegates include executives of 100 top firms which are set to exhibit their products and scout for new opportunities in Africa.
“We expect immediate economic benefit of hosting this event to double that of the recent United Nations Conference on Trade and Development (UNCTAD),” Ms Mohamed said at a media briefing Thursday.
The UNCTAD conference, which brought about 5,000 delegates to Nairobi, is estimated by the ministry to have injected Ksh6 billion ($59 million) directly into the economy. The government officials expect a direct cash injection of Ksh12 billion ($118 million).
Hotels, businesses to benefit
City hotels and accommodation facilities look set to gain tremendously from the event.
According to a notice published by the TICAD VI Secretariat, top hotels such as Serena, Nairobi Safari Club, Lilian Towers, Intercontinental, Sankara, Hilton, Radisson Blu, Sarova Stanley and Sarova Panafric are already booked for “special’ guests.
The Secretariat has asked delegates to seek accommodation from 94 other facilities located in the city’s periphery.
“But this conference is not only about the immediate economic benefits or its ability to strengthen existing bilateral relations with Japan,” said Devolution and Planning Secretary Mwangi Kiunjuri.
“TICAD VI will create confidence about our ability to host major international events,” he added.
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PBOs now play more active role in budget process
The emergence of the Parliamentary Budget Office (PBO) concept in recent times has seen more Parliaments from developing countries playing a more active role in the budgeting process of their countries.
This observation emerged during a discussion about “PBO challenges and experiences in support for fiscal oversight” on the second day of the 2016 African Parliamentary Budget Office Conference in Cape Town.
Mr Ayuba Silas, the Deputy Director of Nigeria’s National Assembly Budget and Research Office, told the conference that legislatures worldwide were becoming more assertive, tending towards a transformative legislature with “the result that they are reclaiming their power of the purse and are playing a more active role in the budget process”.
“This is as a result of the fact that in many developing and transitional countries, parliaments are moving in the direction of greater budget activism occasioned by democratisation and constitutional reforms, thereby creating opportunities for legislatures to redefine contribution to public budgeting.
“However, since national budgets often tend to be large, complex and difficult to understand by parliamentarians, given their apparent lack of budgetary expertise, the need therefore to build budget expertise within the Parliament cannot be overemphasised. It was therefore against this background that some parliaments deemed it fit and proper to establish their own Budget Offices to assist them, among other things, in fiscal oversight of the executive,” he said.
Mr Silas said PBOs are specialised units within the legislative branch that are supposed to produce objective budgetary, fiscal and programmatic information for the legislators.
The case for a non-partisan Budget Office rests on the assumption that legislatures need a source of information and analysis independent from the executive, to effectively execute its legislative and oversight functions.
“Also, there is a significant potential for these units (PBOs) to assist Members of Parliament in understanding the budget process, the broad fiscal challenges facing government and expenditure control and budgetary trade-offs that affect present and future spending,” said Mr Silas.
Dr Mostafa Askari, the Assistant Parliamentary Budget Officer in Canada, said there has been a significant growth in the number of PBOs in the past eight to nine years. PBOs provide objective analysis directly to Parliament about the state of the nation’s finances and trends in the national economy
Mr Jomo Nyambi, the National Council of Provinces’ House Chairperson for Committees and Oversight, said the role of the PBOs in the operations of Parliament had to be clearly defined.
“We need to clearly define the role and purpose of these important institutions, there are misconceptions that PBOs duplicate the work of the Treasury or Finance departments and such will lead to confusion and serious challenges,” said Mr Nyambi.
Parliamentary Budget Offices (PBOs) from seven African countries as well as those from the United Kingdom, Australia and Canada are meeting to share best practices and experiences on how to strengthen oversight on good governance and financial management.
PBOs in developing countries ‘should help in addressing economic inequality’
The Parliamentary Budget Office’s (PBO’s) International Conference was addressed by Mr Phil Bowen from the Australian Parliamentary Budget Office on Capacity Requirements for Parliamentary Budget Offices.
He started off by explaining the mandate of their PBO. “Our mandate is to inform Parliament by providing independent and non-partisan analysis of the budget cycle, fiscal policy and the financial implications of policies.”
And most of all, they always maintain its independent statutory role as a means to uphold its mandate of leveling the playing fields by ensuring that there’s equitable sharing of budget information and budget transparency.
“Our role is to provide a more level playing field for non-governmental parties and independent parliamentarians – and to improve election costings, transparency of budget information and fiscal policy setting.”
According to him, there is now a more level playing field in the budget space and transparency than has been the case before. “The playing field is more level for all parliamentarians than before. There is also a strong demand for Parliamentary Budget Office’s costings and budget analysis. And election costings are more accurate and parties have confidence to release costed election platforms prior to polling day. As a result, budget transparency has been improved.”
In his presentation Dr Seeraj Mohamed from the South African Parliamentary Budget Office, gave perspectives on the multifaceted demands on PBOs in developing countries that ultimately influence the type of capacity required. This demand, according to him, juxtaposes the fiscal policy of developing countries in relation to the New Economic Consensus (NEC). And he asked what can fiscal policy do? And what has changed with regard to how we see fiscal policy?
He stated: “If the NEC accepts fiscal policy, and can accept employment and output, then it must accept that it affects monetary policy too. So, fiscal and monetary policies have to be closely coordinated. The idea, based on the Ricardian Equivalent Theory that income effects due to fiscal policy will not cause changes in behaviour, has been discounted. Fiscal policy is no longer viewed as ineffective.”
He said in developing countries the issues of fiscal policy in the context of a developmental role of the state add a further question: have PBOs departed from the conventional approaches to fiscal policy? According to him, the role of PBOs in this context “would be to work within current frameworks to support frugal approaches to spending and fiscal discipline. With the interpretation of that role, many PBOs are required to be considerate of inequality and poverty, including race, ethnic, gender and other related concerns”.
To me, the change now faced by PBOs in developing countries is to balance the imperatives of fiscal policy, on the one hand, and economic development, on the other. “There are many developmental pressures on government spending that could lead to growing budget deficits and increased public debt to GDP (gross domestic product) ratios. There is a possibility that this spending may have supply side and demand side impacts on employment and output growth. Therefore, these concerns may affect costing and other analyses PBOs make over a medium-term budget cycle and for longer periods.”
The work that PBOs do in developing countries should reflect the work of legislatures deeply concerned with economic development and the need to address inequality, he said. “These requirements are related to the conventionally conceived role of PBOs as institutions that support fiscal discipline. However, they should also acknowledge the changing views on fiscal policy development in the NEC and the day-to-day work of PBOs in analysing, costing and assessing the gamut of existing and proposed spending related to economic development.”
Closing Remarks by the Chairperson of the NCOP, Hon. T R Modise, at the Parliamentary Budget Office Conference, 18 August 2016
We have reached the end of the First Parliamentary Budget Office Conference under the theme – “the role of African Parliaments Fiscal oversight: contribution to the African development agenda”. My task is simple as I have been requested to provide some closing remarks. We have had over the past two days lively and stimulating debates.
Our day to day operations will be guided by the will to ensure that our development in Africa is driven by the people and relies on its people, especially its women and youth, and caring for children. We further aspire towards a continent with a strong cultural identity, common heritage, shared values and ethics. Together, based on the ideals of Pan-Africanism and the vision of Africa’s Renaissance we will turn our continent into a strong, united and influential global player and partner.
This is first conference of African PBOs, and amongst the first good example of institutions and cooperation. We are building for transparency and accountability to promote good governance and economic development. It is not enough to call for a strong legislative sector in South Africa or in the continent without addressing the reason for this need; it is not enough to identify a need – it is important to understand how the need must be addressed and how to sustain and improve whatever mechanism we may develop to address this need. It is good to talk about the reduction of poverty and inequality; it is even better when we build institutions that can secure the future.
We in the legislature supported the creation of parliamentary budget offices to provide us with independent, objective and professional advice and analysis on fiscal matters, particularly national budgets and government spending.
We must not be able to hold the executive to account but fail to self- assess our own fiscal and general administrative and policy decisions. When we say to our citizen “we hold the purse-strings” we must be also be trusted to spend wisely.
Our expectations of the capacity and support of the PBO’s go well beyond the testing of the validity of the GDP and the revenue predictions and fiscal spending implications. We require support with reading budgets. We want information and advice on how fiscal decisions relate building democracy and economic development in Africa and all its countries.
South Africa has a national plan for the first time in her history. The NDP is an attempt to look at development uniformly across the provinces. The plan identifies the challenges of education, health, shelter, safety, decent work and inclusive growth path. It sets goals for infrastructure development, rural development and land reform. It call for reform and improvement in local government. The NDP is alive to issues of gender equality, racial disparities and environmentally sustainable development.
We have asked our PBO to help assess the progress with regard to NDP outcomes and how well government is planning/or expending. Early as it is, the patterns are interesting and can be used to guide future spending.
South Africa started off by trying the welfare of the majority through the provision of shelter, water, electricity, sanitation, education, primary health and social grants. This has made an important impact, the impact of global recession and the slow recovery have had serious and negative impact on our country – reversing the gender, racial and the urban/rural divides. This is why we take agenda 20163 seriously – it talks to our vision of a people driven, inclusive growth and sustainable development towards an integrated African continent built on our shared values, common heritage and strong cultural identity.
Our job as public representatives is to balance the great needs in our society with the available resources. These resources include the revenue as governments can raise and the debts that can be incurred. There are many different views on the balance. As public representatives we may be called upon to make a judgement based on our specific circumstances.
The important thing is that as nations we must agree on the “balances” and we work to ensure that we are accountable for every cent and that we stretch every cent as for as we can go in the interest of the people.
The task of the PBO is to help us with the process of prioritising and monitoring and evaluating. We must therefore establish and resource PBO’s to ensure that structures and processes are permanent and entrenched.
To our colleagues in Africa and across the world. We say we are together tied together building strong institutions for stability, peace and democracy threaded together by good governances.
We fully support the development of a network for African PBO’s to learn from one another and to support one another. The African PBO network will hold its next meeting before the end of 2016.
Brothers and sisters thank you very much your active participation in this conference.
I thank you.
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SADC officials meet to discuss region’s mixed and irregular migration challenges
IOM’s regional office for Southern Africa this week hosted a three-day Migration Dialogue for Southern Africa (MIDSA) conference in Gaborone, Botswana.
The conference, which started on 16 August 2016, is in partnership with the Government of Botswana, the Southern African Development Community (SADC) Secretariat, the United Nations High Commissioner for Refugees (UNHCR), the United Nations Office on Drugs and Crime (UNODC) and Save the Children.
Participants – mostly senior government officials responsible for Home Affairs and Labour in the 15 SADC Member States – deliberated on regional efforts to improve the region’s coordinated response to mixed and irregular migration.
Last year’s MIDSA resulted in a regional action plan to address mixed migration in the region at Ministerial level with four thematic areas prioritized for action: the protection of unaccompanied migrant children, statelessness, alternatives to detention and voluntary return.
This year’s theme is Addressing Mixed Migration in Southern Africa: Linking protection, Immigration, Border Management and Labour Migration. The focus will be on assessing the implementation of recommendations from the Ministerial MIDSA of 2015.
Officials will explore related immigration, border management and labour migration issues to enhance the protection of vulnerable migrants and improve overall migration governance in the SADC region.
The Southern Africa region has seen a rise in recent years in ‘mixed migration’, particularly coming from the East and Horn of Africa, the Great Lakes Region and countries in the SADC region itself.
Large mixed migratory groups, pushed by war, lack of protection, economic disparity or hope for better livelihood opportunities, have been moving south, with many countries in the SADC region frequently used as transit/rest stops.
Most of the individuals on the move are trying to reach South Africa. In the past few years, IOM has identified an increasing number of unaccompanied migrant children among them.
Recent research indicates that countries traditionally used as transit are also becoming source and destination countries for mixed and irregular migration.
While legal travel documents such as passports are required to facilitate part of the trip, many migrants also use fraudulent or fraudulently obtained documents to enter countries of destination.
Extensive, porous and unmanaged borders – many of which lack the basic infrastructure, human resources and equipment to fully function – exacerbate the situation. Corruption at borders and check points further enables and facilitates the passage of undocumented migrants.
“The world is witnessing an unprecedented level of mobility since the Second World War. Migration has become a central socio political theme across the world; so much so that it is reflected in the (UN) Sustainable Development Goals (SDGs) and Africa’s own Agenda 2063,” said IOM Regional Director for Southern Africa Josiah Ogina.
He recalled that the Regional Action Plan to address mixed migration was adopted at the Ministerial MIDSA last year and the SADC Labour Migration Action Plan was also adopted at a previous MIDSA. He urged for concerted efforts for the plans to come alive and serve their purpose.
“There is need for greater emphasis on interventions on border management which facilitate the legal and orderly movement or persons at borders, while addressing the legitimate security concerns of states,” he noted.
The conference was expected to build consensus on steps that need to be taken to advance the implementation of the two regional action plans both at regional and national levels. SADC Member States also assessed efforts that contribute to improved border management and labour migration in the region.
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Mauritius-Pakistan Preferential Trade Agreement (goods): Report by the WTO Secretariat
The Preferential Trade Agreement between Mauritius and Pakistan (hereinafter “the Agreement”), is the fifth RTA notified by Mauritius to the WTO and the ninth RTA notified by Pakistan to the WTO.
In 2014 Mauritius had a GDP of US$12,616 million and a population of 1.2 million, compared to Pakistan whose GDP in 2014 was US$246,876 million, with a population of 185 million. Mauritius was ranked 97 and 99 in terms of world merchandise exports and imports, with exports valued at US$2,662 million and imports at US$5,607 million, compared to Pakistan whose rank in 2014 was 48th and 36th in exports and imports with a value of US$24,722 million for exports and US$47,544 million for imports.
Their trade to GDP ratios are considerably different, 115.8 for Mauritius and 32.9 for Pakistan during 2012-2014. In 2014 the broad composition of trade of the Parties were similar, with exports dominated by manufactures especially for Mauritius (74.7% of total exports, and 56.7% for Pakistan), while manufactures and fuel imports are important for Pakistan (49.7% and 34.4% respectively) and manufactures and agricultural products for Mauritius (56.1% and 23.3%).
Bilateral trade between the Parties is relatively small. In 2014 Pakistan was the 26th largest source of imports for Mauritius (0.6% of total imports) and the 38th largest export destination (negligible export share) while Mauritius was Pakistan’s 48th largest source of imports (negligible share of total imports) and 62nd largest export destination (0.1% of total exports). In terms of total and bilateral merchandise trade between the Parties for the period from 2004-2014, both Parties ran a widening trade deficit globally. In their bilateral trade Mauritius had a trade deficit with Pakistan during this period although the figures on bilateral trade reported by the Parties show considerable differences, with Pakistan showing a reduction in its trade surplus with Mauritius since 2010, the decline is less clear from figures reported by Mauritius.
For product composition of trade by broad HS Sections of the two Parties, in their bilateral and global trade, two references periods are used: 2004-2006, before the Agreement entered into force, and the most recent three year period for which data are available, 2012-2014. Of Pakistan’s two largest categories of exports during 2004-06, textiles, and vegetable products, which accounted for 74% of its global exports, were also Mauritius’ main imports from Pakistan (accounting for 93% of Pakistan’s imports from Mauritius). During the period 2012-2014 these two categories remained Pakistan’s two largest exports globally and accounted for the two largest categories of imports by Mauritius from Pakistan. Of Mauritius’ three largest export categories in 2004-06 (textiles, prepared foods and machinery, which accounted for 77% of its global exports), only machinery accounted for 11% of Pakistan’s imports from Mauritius; Pakistan’s other main imports from Mauritius during this period were base metals, chemicals, and wood pulp (accounting for 73% of its total imports from Mauritius). In 2014-16 the situation was unchanged, with Mauritius’ key global exports remaining textiles, prepared foods and machinery (73% of total exports). Pakistan’s imports from Mauritius however were dominated by motor vehicles (92% of its imports from Mauritius).
Characteristic Elements of the Agreement
Background Information
The Agreement was signed on 30 July 2007 and entered into force for both Parties on 30 November 2007. It was notified to the WTO pursuant to Paragraph 4(a) of the Enabling Clause on 30 September 2015. The text of the Agreement is available on the Parties’ respective websites:
The Agreement consists of 25 Articles and three annexes A, B and C which form an integral part of the Agreement.
The objectives of the Agreement are to strengthen the Parties’ economic and commercial relationship; increase their volume of bilateral trade in goods and services; promote a more predictable and secure environment for the sustainable growth of bilateral trade; expand mutual trade by exploring new areas of cooperation; facilitate trade diversification; encourage further competition amongst their enterprises; and contribute, by the removal of barriers to trade, to the harmonious development and expansion of bilateral and world trade (Article 1). The provisions of the Agreement are to be interpreted in light of these objectives and decisions of the Joint Trade Committee established by the Agreement. The Committee shall observe the applicable rules of international law in making its decisions (Article 2).
Provisions on Trade in Goods
Import duties and charges, and quantitative restrictions
The Parties agree to provide national treatment to each others’ imports (Article 8). The Agreement shall not apply to preferences already granted or to be granted by any Party to third parties through bilateral, plurilateral and multilateral trade agreements or similar arrangements outside the framework of the Agreement (Article 7).
Article 4 of the Agreement on Scope and Coverage clarifies that it applies to trade between the Parties for the products specified in Annexes A and B, and the tariff preferences indicated therein. Article 5 clarifies that initially a preferential trade agreement will be established through the reduction and/or elimination of tariffs as indicated in the Annexes. However, upon the request of either Party, the Parties shall consider accelerating the elimination and/or reduction of tariffs set out in the Annexes, or to include new products. If there is an agreement to accelerate tariff reductions or elimination or include new products under the scope of the Agreement, it shall supersede any duty or staging category specified in Annexes A or B as approved by each Party in accordance with the provisions of the Agreement and its applicable legal procedures.
In addition, the Parties will identify measures, exchange information and negotiate with a view to eliminating all para-tariff5 and non-tariff barriers and any other equivalent measures on the movement of goods (other than imposed in accordance with Articles 13 and 14 on safeguards and anti-dumping and countervailing measures or after holding consultations under Article 20). They also commit to not increase existing para-tariffs or introduce new or additional para-tariffs without mutual consent upon entry into force of the Agreement. The Parties indicate that they currently have no para-tariffs in place. Furthermore the Parties agree to hold further consultations to consider further liberalization of their bilateral trade (Article 6).
The Parties may amend and develop the provisions of the Agreement through mutual consent, taking into account the experience gained through its application (Article 23).
- Liberalization of trade and tariff lines
Annexes A and B to the Agreement contain concessions respectively, by Mauritius to Pakistan and by Pakistan to Mauritius. Mauritius provides margins of preference over its MFN applied rates for the products listed ranging from zero to 100% in the first year following entry into force of the Agreement, followed by further liberalization in the second year, ranging from 33% to 100%. Pakistan provides a margin of preference of 50% at entry into force of the Agreement, followed by full liberalization at the end of the first year for the products listed in Annex B. In this regard Pakistan has indicated that it, like Mauritius, also implemented its tariff reductions on 30 November 2007, when the Agreement entered into force, and then on 30 November 2008 instead.
Mauritius’ tariff liberalization commitments for imports from Pakistan under the Agreement: In 2007, when the Agreement entered into force, around 79% of Mauritius’ tariff was duty free on an MFN basis, corresponding to 97.5% of its average annual imports from Pakistan during 2004-2006. In 2007, Mauritius liberalized 5 tariff lines for imports from Pakistan followed by 44 lines in 2008, corresponding to 0.2% of its imports from Pakistan during 2004-2006. Following full implementation of the Agreement 20.2% of the tariff will remain subject to duty for imports from Pakistan, corresponding to 2.2% of imports from Pakistan.
Pakistan’s tariff liberalization commitments for imports from Mauritius under the Agreement: In 2007, when the Agreement entered into force, 400 tariff lines (5.8%) were duty free on an MFN basis and under which 48.8% of Pakistan’s imports from Mauritius entered in 2004-05. In 2008 Pakistan liberalized tariffs on 75 lines or 1.1% of its tariff lines. Imports under these lines were negligible from Mauritius during 2004-06. As a result of full implementation of the Agreement, 93.1% of Pakistan’s tariff will remain subject to duties for imports from Mauritius, under which around 51.2% of imports from Mauritius entered Pakistan during 2004-06.
In addition to tariff elimination, Mauritius has committed to reduce tariff rates on 48 tariff lines (0.8% of the tariff). The lines correspond to around 1.2% of Mauritius’ average imports from Pakistan in 2004-2006. The products concerned include: flowers, vegetables and fruit, food preparations, tobacco products, wood and articles of wood and other made up textiles. The duties are reduced, in most cases, by a margin of preference of 50% of the MFN applied tariff.
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Liberalization schedule
Mauritius will eliminate tariffs only in HS Sections XV (base metals) and XXI (works of art) once implementation is complete. For most HS Chapters there is no difference between the final applied MFN and preferential duties for lines remaining dutiable. The HS Chapters for which Mauritius provides tariff preferences to Pakistan and where the final preferential average tariff for imports from Pakistan is lower than the corresponding MFN average are: HS 6 (live trees and other plants), 7 (edible vegetables), 8 (edible fruit and nuts), 19 (preparations of cereal), 24 (tobacco and manufactured tobacco substitutes), 44 (wood and articles of wood), and 63 (other made up textile articles). The differences in the average rates range from 2.2 percentage points in HS 7 to 15 percentage points for HS 6; Chapters 61 and 62 (articles of apparel and clothing) contain specific duties for which no ad valorem equivalents were available.
At the end of implementation Pakistan will retain tariffs across all HS Sections, eliminating some tariffs under HS Sections II, III, IV, VI, X, XI, XV, XVI and XX. There is no difference between average applied MFN and preferential tariffs by HS Chapter. Average (preferential and MFN) applied tariffs range from 5% for HS Chapters 31 (fertilizers), 81 (other base metals), and 88 (aircraft), to 71.3% for HS 22 (beverages, spirits and vinegar).
- Tariff rate quotas
Pakistan provides additional preferential market access through tariff rate quotas (TRQs) for textiles and clothing products as listed in Annex B of the Agreement.
The TRQs apply to products in Chapters 61 and 62 (articles of textiles and clothing) and provide either a 35% or 40% margin of preference over the applied MFN rate, which in 2007 was 25%. The preferential rate applies to imports of 200,000 or 300,000 pieces per tariff line per year. Mauritius does not provide TRQs under the Agreement.
Rules of origin
Article 11 and Annex C to the Agreement define the Agreement’s rules of origin. The Agreement confers origin on products that are wholly produced or obtained in the territory of the exporting Party; products not wholly produced in the territory of the exporting Party also qualify for preferential treatment if the total value of the materials, parts or produce originating from outside the territory of the exporting Party does not exceed 65% of the FOB value of the product and provided that the final process of manufacturing takes place within the territory of the Party and has undergone sufficient processing. Sufficient working or processing is defined by the Agreement as a change in tariff classification (CTC) at the HS six-digit level. Minimal operations and processes listed in Article 7 are not to be included in calculations of sufficient processes, nor is it necessary to establish whether power, fuel, plant and equipment and machines and tools used to obtain the final products originate in third parties (Article 6). Product specific rules are to be defined at a later stage. According to the Parties this has not been formally discussed so far.
Bilateral cumulation between the parties is permitted as long as the value addition in the exporting Party is at least 25% of the FOB value of the product concerned, and that the aggregate value addition in the territories of the Parties is at least 35% of the FOB value of the product (Article 8).
Under Article 10 goods that are directly transported without passing through the territory of third parties are considered to be directly consigned. Goods that are transported through third parties, with or without transhipment or temporary storage, can be considered originating if the transit is justified for geographical reasons or for transportation requirements. Such products should not have entered into trade or consumption in the third party, nor any operation other than unloading and reloading or any operation required to keep them in good condition. Products that have undergone subsequent production or any operation outside the territories of the Parties other than operations necessary to preserve them in good condition or to transport them to the territory of the importing Party, shall not be considered originating.
Certificates of origin as described in Schedule B to the Annex are required for products to be determined eligible for preferential treatment (Article 13). The Certificate shall be issued by an authority designated by the Government of the exporting Party, and notified to the other Party in accordance with procedures described in Schedule A (on operational procedures for the rules of origin) to the Annex. The Parties will cooperate to specify the origin of inputs in the Certificate; take measures necessary to address, to investigate and where appropriate to take legal and/or administrative action to prevent circumvention of the Agreement through a false declaration concerning country of origin or falsification of original documents; and cooperate fully, consistent with their domestic laws and procedures, in instances of circumvention or alleged circumvention of the Agreement, to address problems arising from circumvention, including by facilitating joint plant visits and contacts by representatives of the Parties upon request and on a case by case basis. If a Party believes that the rules of origin are being circumvented, it may request consultations to address the matter to seek a mutually satisfactory resolution. The consultations are to be held promptly (Article 15).
The rules of origin may be reviewed as and when necessary, upon request by either Party, and may be modified as mutually agreed (Article 16).
Export duties and charges, and quantitative restrictions
There are no specific references in the Agreement to export duties and charges or quantitative restrictions on exports.
Regulatory Provisions of the Agreement
- Standards
Sanitary and phytosanitary measures
Sanitary or phytosanitary measures are to be applied to the extent necessary to protect human, animal or plant life or health and should not be prepared, adopted or applied so as to create unnecessary obstacles to the Parties’ mutual trade or to protect domestic production. SPS measures applied pursuant to the Agreement shall be based on internationally established scientific principles and supported by sufficient evidence, taking into account the availability of relevant scientific information and regional conditions (Article 18).
Technical barriers to trade
Under Article 17 the Parties agree to ensure that standards or technical regulations are not prepared, adopted or applied so as to create unnecessary obstacles to their mutual trade or to protect domestic production. They must fulfil legitimate objectives taking into account any risk factor, including available scientific and technical information as well as the intended end use of products.
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Safeguard mechanisms
Safeguard measures may be taken where any product is imported into the territory of a Party in such a manner or in such quantities as to cause or threaten to cause serious injury in the territory of that Party. In such cases, the Party affected may take a safeguard after prior consultations with the other Party, except in critical circumstances, by suspending provisionally the preferential treatment accorded to the product concerned by the Agreement (Article 13).
Any suspension must be notified to the other Party and the Parties shall enter into consultations to reach a mutually acceptable agreement through the Committee established by the Agreement. The consultations shall take place in accordance with the provisions of Articles 20 and 21 of the Agreement (consultations and dispute settlement respectively).
The Agreement also has a prohibition and shortage clause which allows imports to be prohibited under certain circumstances (Article 15).
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Anti-dumping and countervailing measures
Anti-dumping and countervailing measures may be taken by the Parties under Article 14. For anti-dumping, where the Party determines that dumping8 is taking place in its territory of products originating in the other Party, it may impose an anti-dumping duty on the products concerned, if it determines that the dumping causes, or threatens to cause, material injury to domestic industry or to retard materially the establishment of a domestic industry.
The Parties are also free to apply countervailing measures in accordance with the provisions of the relevant WTO Agreements in cases where prices are influenced by unfair trade practices such as subsidies. No such measures have been taken to date according to the Parties.
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Subsidies and State-aid
There are no explicit provisions relating to subsidies and State-aid in the Agreement.
Article 16 permits the Parties to maintain or establish a State trading enterprise as provided for under Article XVII of GATT 1994. Each Party shall ensure that a state trading enterprise falling under its jurisdiction acts in a manner consistent with the provisions of the Agreement and accord non-discriminatory treatment in imports from and exports to the other Party.
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Customs-related procedures
Article 12 on Customs valuation states that matters relating to customs valuation are to be governed by Article VII of GATT 1994 and the WTO Agreement on the Implementation of Article VII of GATT 1994. Customs related procedures are also contained in the provisions on the rules of origin and Certificates of Origin.
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Other regulations
Article 15 permits the Parties to restrict imports from each other if this is necessary to remove or forestall a serious shortage, or threat thereof, of a product essential to the exporting Party. The Parties indicate that they have not taken any such measures to date.
Sector-Specific Provisions of the Agreement
There are no sector-specific provisions in the Agreement.
General Provisions of the Agreement
Transparency
Under Article 9 of the Agreement the Parties agree to ensure transparency in their relevant regulations and practices through publication of these regulations. They will also notify each other of existing and new measures which pertain to or may affect the operation of the Agreement. Furthermore, where any regulation, practice or notification has been made by a Party in a language other than English, an English translation of the text will be provided to the other Party.
Current payments and capital movements
There are no provisions on current payments and capital movements under the Agreement. According to the Parties, this issues will be discussed if the Agreement is expanded or under FTA arrangements.
Exceptions
The Parties agree not to apply measures in a manner so as to constitute an arbitrary or unjustifiable discrimination, or a disguised restriction on their mutual trade. Subject to this commitment, nothing in the Agreement shall preclude prohibitions and/or restrictions on imports or exports of products, which are justified on the grounds of public morality; religious values; national security; the protection of human, animal and plant life and health; the protection of national treasures possessing artistic, historic or archaeological value; the protection of exhaustible natural resources and genetic reserves; or regulatory restrictions on trade in gold or silver. Furthermore, nothing in the Agreement shall be understood to require either Party to provide any information, the disclosure of which is contrary to its essential security interests (Article 10).
If a Party wishes to apply an exception as provided for by the Agreement, it shall notify the other Party and accord sympathetic consideration to any representation that may be made by that Party.
Under Article 15 of the Agreement, import prohibitions by the Parties are permitted for products containing any inputs originating in any third party that the Party does not provide diplomatic recognition to or that is not covered in its trade policy. Any such prohibition must be notified to the other Party immediately.
Accession and Withdrawal
There are no provisions for third parties to accede to the Agreement. Either Party may terminate the Agreement through a written notification to the other Party. The Agreement shall terminate six months following the date of the notification (Article 22).
Institutional framework
The Agreement in Article 19 establishes a Joint Trade Committee consisting of Officials of the Parties. It shall review progress made in the implementation of the Agreement, including the review of notified para-tariff and non-tariff barriers, and any other functions under the Agreement. It shall meet initially within three months of the entry into force of the Agreement and at least once a year thereafter. It shall set out its rules of procedure at its first meeting and shall set up any sub-committees and/or working groups for any specific purposes it may consider necessary. According to the Parties, the Joint Trade Committee has not met yet. The last Joint Working Group meeting held in 2014 recommended that the Joint Trade Committee and the Sub-Committee on Customs matters be established. The latter has been established and met in September 2015 in Islamabad.
Pakistan: the Joint Trade Committee has not yet been convened. Any bilateral issues under the PTA are handled at the Joint Working Group Forum.
Dispute settlement
Article 20 deals with consultations, while Article 21 contains dispute settlement provisions. Under Article 20 each Party shall accord sympathetic consideration and adequate opportunity for consultations regarding any representations that may be made by the other Party on any matter affecting the operation of the Agreement. Such consultations shall take place in the Committee formed by the Agreement which shall meet at the request of other Party to consider any matter falling under the Agreement.
Any dispute between the Parties on the interpretation and application of the provisions of the Agreement or any instrument adopted within its framework concerning the rights and obligations under the Parties shall be amicably settled through consultations. While under Article 20, “consultations” serve the purpose of discussing any matter related to the operationalization of the Agreement, consultations under Article 21 are for resolving disputes that may arise between the Parties. Where a request for consultations is made pursuant to Article 21, the other Party shall, unless mutually agreed otherwise, reply to the request within 15 days of its receipt and enter into consultations in good faith, no more than 30 days after the date of receipt of the request, or any other period mutually agreed by the Parties, with a view to reaching a mutually satisfactory solution. If the requested Party does not respond to the request or enter into consultations in this period of time, the matter shall be dealt with in accordance with the working procedures drawn up by the Committee.
The consultations will be confidential and without prejudice to the rights of the Parties in any further conciliatory proceedings. Any dispute not settled within 30 days or any other period as agreed, the consultations shall be referred to the Committee which shall resolve the dispute according to its working procedures.
Relationship with other agreements concluded by the Parties
The Parties in Article 2 affirm their existing rights and obligations with respect to each other under the Marrakesh Agreement established the WTO and other treaties or agreements to which they are signatories.
Government procurement and Intellectual Property Rights
There are no provisions on Government procurement or intellectual property rights in the Agreement.
This report, prepared for the consideration of the Preferential Trade Agreement between and Mauritius and Pakistan, has been drawn up by the WTO Secretariat on its own responsibility and in full consultation with the Parties. The factual presentation reproduces as closely as possible the terminology used in the Agreement and in the comments provided and does not imply official endorsement or acceptance by the Secretariat of such terminology.
Related News
Regional business community roots for cooperation to curtail illicit trade
The East African Business Council (EABC) is considering ways to curtail counterfeits and other forms of illicit trade through inter-agency cooperation at national and regional level.
This will particularly be explored next month during a regional anti-illicit trade conference to be held in Nairobi, Kenya.
The broad objective of the conference will be to come up with proposed policy reforms and key recommendations for prioritised and expedited implementation.
Key sectors affected by counterfeits and other forms of illicit trade will have an opportunity to discuss how their businesses are impacted, and what solutions they propose.
EABC chief executive Lilian Awinja said they are pushing to have a robust legal and policy framework at the regional level to have proper enforcement and surveillance mechanism in all EAC partner states.
Awinja’s revelations come days after reports indicated that a Rwandan businessman, Emile Kayumba, was remanded to Uganda’s Luzira prison in connection with illegal dealing in ivory.
Earlier this week, media reports from Uganda indicated that, in October 2013, Uganda Revenue Authority (URA) impounded 832 pieces of elephant tusks weighing about three tonnes concealed in a container.
It is reported that the man linked to the case, Kayumba, was arrested last week at Entebbe International Airport. He was charged by anti-corruption court and remanded until August 25 for mention of the case.
“We are doing a lot on illicit trade, not just in ivory but also in other forms of illicit trade like counterfeiting, smuggling, money laundering and others,” Awinja told The New Times.
In October 2010, EABC, in partnership with the East African Community (EAC) Secretariat and the Kenyan government held the first regional anti-illicit trade conference.
At the time, key recommendations from the conference included: need to expedite harmonisation of legal regimes related to intellectual property rights (IPR) and the legislation regimes, including patents, copyrights, trademarks and industrial designs; and putting in place punitive laws to deter the practice of trading in counterfeit products and other forms of illicit trade.
Since then, areas of progress in the fight against illicit trade include adoption of the EAC Anti-Counterfeit Bill, 2013, by the Council of Ministers; full operationalisation of the Anti-Counterfeit Agency in Kenya; formulation of the Anti-Counterfeiting Goods Bill of 2015 in Uganda, which has been debated in parliament.
Rwanda has formulated the Competition and Consumer Protection Bill.
The EAC Heads of States and key businesses also endorsed and launched the EABC Regional Code of Conduct, in March 2016.
But the EABC says a lot remains to be done to win the fight against illicit trade.
Illicit trade includes intellectual property infringements; trade in sub-standard goods that can cause health or safety risks, parallel imports and undeclared local production, smuggling of excisable goods and a variety of illicit financial flows.
According to the organisers of the upcoming conference, it is driven by the economic opportunity it offers for illicit vendors to make money illegitimately in an environment where opportunity for economic benefit is perceived to outweigh the actual risks involved.
“The conference will address all these issues, stakeholders are invited to participate in large numbers and to contribute to the discussions to effectively come up with an action [plan] that works and which involves all stakeholders. Everyone has a role to play; the revenue authorities, the bureaus of standards, the police, the parliament, ministries, the media, the business community and others,” said Awinja.
Media help
Awinja told The New Times that EABC needs the media to help highlight how important the issue is.
“The media should highlight how it is affecting our businesses and the EAC economy and the work that needs to be done by various stakeholders to deal with the issue,” she said.
The Organisation for Economic Co-operation and Development (OECD) estimates that EAC governments lose over $500 million in tax revenue annually due to the influx of counterfeit and pirated products.
This figure does not encompass several other forms of illicit trade and, as such, total tax revenue losses from illicit trade would be larger.
Uganda is said to lose an equivalent of $1.4 billion – almost 5.5 per cent of its GDP – with Tanzania estimated to lose about $1.5 billion in revenue to counterfeits.
The Kenya Association of Manufacturers (KAM) estimates a loss of more than $500 million annually to illicit trade and its estimated government loses more than $350 million.
In April, Kenya burned 105 tonness of ivory and rhino horn in public show of the country’s determined intent to eradicate poaching.
Related News
CSOs unveil public funds monitoring project
A consortium of civil society organisations has launched a project aimed at contributing to the equitable, effective and responsible allocation and use of public resources for agriculture and health in Southern African Development Community (SADC) countries.
The Partnership for Social Accountability (PSA) project is a consortium of four agencies that include Action Aid International as lead organisation, Eastern and Southern Africa Small Scale Farmers’ Forum, Southern African HIV and AIDS Information and Dissemination Services, and Public Service Accountability Monitor, and is supported by the Swiss Agency for Development and Cooperation.
ActionAid Zambia country director Nalucha Ziba said reflecting on the UN Sustainable Development Goals (SDGs) agenda, the project will build the capacity of state officials and parliamentarians to more effectively manage public funds, support small-scale farmers and the media in holding leaders accountable.
Ms Ziba said in the first three years of implementation, the project will focus on Zambia, Malawi, Mozambique and Tanzania.
“Quality public services are a right for all. Service delivery across Southern Africa depends on transparent and accountable management of public resources. Governments have a responsibility to effectively plan and allocate resources.
“Parliaments must provide effective oversight, citizens must be free and able to monitor and hold them to account. By strengthening state and civil society, the project will improve public services in our region, particularly in health and agriculture,” she said in a statement issued to the Daily Mail yesterday.
Commenting on the development, SADC regional-national linkages programme coordinator Maxwell Mkumba said social accountability is vital for sustainable development in the Southern Africa region in meeting the goals and objectives of SADC, especially, poverty reduction and viable economic growth.
“We are committed to effective management of public resources across the region, and thus enthusiastically welcome this project, in line with the priorities of the Revised Regional Integrated Development Plan 2015/20, the African Union Agenda 2063, as well as the UN SDGs,” Mr Mkumba said.
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tralac’s Daily News Selection
The selection: Thursday, 18 August 2016
Marek Hanusch: ‘What would have happened if South Africa had lost its investment grade credit rating?’ (World Bank)
To this end, a team of economists from the World Bank and South African Reserve Bank looked at the history of past downgrades in 20 countries and estimated the impact on short-term borrowing costs. It is a rather broad-brush attempt at understanding the effect of a downgrade on borrowing costs. It employs annual data, only looks at short-term Treasury Bills (where risk premia are more pronounced among longer-term debt instruments), and there are still relatively few cases to study (most of them derive from the post-financial crisis period). Given these important caveats, the findings suggest that a downgrade to sub-investment (or sub-IG) grade by one major rating agency increased Treasury bill yields by 138 basis points on average. When a second rater follow suit with such a downgrade, Treasury bill rates increased by another 56 basis points (although this effect is not statistically significant). [Download: The ghost of a rating downgrade: what happens to borrowing costs when a government loses its investment grade credit rating?]
Making the most of demographic change in Southern Africa (World Bank)
This paper examines how demographic dividends may play out in the economically linked but otherwise diverse SACU economies, when presented with similar economic policy outcomes. SACU economies - Botswana, Lesotho, Namibia, South Africa, and Swaziland – have relatively diverse demographic and economic starting points. This diversity is present in terms of their demographic profile, as evidenced by South Africa being further along in the demographic transition process than the other countries. The diversity is also present in terms of their development indicators, as illustrated by the relatively lower educational attainment rates in Lesotho and Swaziland, or the extremely high unemployment rates in South Africa. Three broad questions are addressed: What is the potential contribution of demographic change to growth in the different SACU economies? What is the potential effect of demographic change on poverty reduction for SACU economies? What policy intervention might have the largest impact on the size of a SACU economy’s demographic dividend?
Nigeria, South Africa, Egypt urged to leverage intra-Africa trade, diversification (BusinessDay)
Key members of the Organised Private Sector on Tuesday emphasised urgent need for Nigeria, South Africa and Egypt to synergize by leveraging on intra-African trade in the bid to harness vast socio-economic opportunities in the region. This, according to the stakeholders drawn from National Association of Nigerian Traders (NANTS), Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), Nigeria Labour Congress (NLC), National Automobile Technicians Association (NATA), who converged at the stakeholders’ workshop on Economic Partnership Arrangement held in Abuja, can be achieved through the establishment of bi-national Commission among the three leading African economies.
Ghana: Trade ministry looks at promoting cashew value chain in Africa (News Ghana)
Mr Fredrick Yaw Alipui, Policy Advisor at the Ministry, said this during the opening ceremony of the second session of the third edition of the Master Training Programmeon cashew value chain promotion on Monday in Sunyani. The five-day international event, funded by Germany’s Federal Ministry of Economic Cooperation and Development, was organised by the Competitive Cashew initiative (ComCashew) together with African Cashew Alliance, the Ministry of Food and Agriculture, and the Cocoa Research Institute Ghana. It provided a platform for about 70 cashew experts from Ghana, Benin, Burkina Faso, Cote d’Ivoire, Mozambique, Gambia, Chad, Sierra Leone, Senegal, Mali, Togo and Nigeria to share knowledge, discuss best practices and lessons learnt, as well as to build national and regional networks for future collaboration.
Chad's first steps in the regional public securities market (IMF)
Selected Issues Report: Except for two issuances through bank syndication in 2011 and 2013, Chad never resorted to the regional public securities market before the last quarter of 2014, when the country issued its first ever Treasury bills. Since then, Chad expanded its issuances and was the largest issuer among CEMAC members in 2015. The first steps taken by Chad in the regional securities market have been encouraging, obtaining financing regularly at relatively low interest rates and without exchange rate risk. On the basis of a more comprehensive analysis of the CEMAC securities market, this chapter stresses some challenges and makes some recommendations to strengthen Chad’s participation in the regional public securities market. [Chad: 2016 Article IV Consultation documentation]
East Africa: Integrate regional exchanges to deepen cross-border trade – expert (New Times)
East African exchanges should fast-track integration initiatives like the capital markets infrastructure project, and create a pool of skilled personnel. This is essential to position the regional stock market as a platform of choice for raising long-term funding for governments and business community, Celestin Rwabukumba, the East African Securities Exchange Association chairman, has said. Speaking at the 27th consultative meeting in Dar es Salaam recently, Rwabukumba said the CMI project that is nearing completion presents new possibilities for investors seeking cross-border trade opportunities. With capital markets across the world becoming increasingly automated and integrated, regional stock exchanges require a modern system that meets different market needs. This will also make it possible for EAC capital markets to attract global capital flows and participate in international capital markets.
South Africa: Long-awaited ‘Border Bill’ finds resistance in Parliament (Daily Maverick)
On the face of it the Border Management Authority Bill aims to address long-standing concerns over South Africa’s porous more than 8,000kms of land and sea borders, 72 ports of entry and countless unpatrolled airstrips and cross-country crossings. The aim is to establish a single integrated authority with armed border guards “to contribute to the facilitation of legitimate trade and secure travel” against, among other things, cross-border crime syndicates, people trafficking and the health risks of “harmful and infectious diseases, pests and substances”. Exactly how this should be done is unclear as the Bill creates a framework without too much detail. An explanatory memorandum states that customs, immigration and law enforcement functions related to agriculture and environmental affairs would be transferred to this authority by ministerial proclamation. Co-operation with other organs of state and border communities remains.
Mauritius: achieves 1st in Africa ranking in UN e-Government Survey 2016 (GoM)
The United Nations e-Government Survey 2016 ranks Mauritius first in Africa (followed by Tunisia) and 58th worldwide, with an e-Government Development Index of 0.6231. In 2014 Mauritius was ranked 76th and Tunisia 75th. Issued at the moment when countries are launching the implementation of the 2030 Agenda for Sustainable Development, the survey offers a snapshot of trends in the development of e-government in countries across the globe.
Kenya: Capacity assessment of the domestic construction industry (pdf, AfDB)
The consultant is specifically expected to: (i) carry out a situational analysis on existing capacity of the industry in Kenya and particularly, relate the impact on economic growth of the current state of practice; analyze status of development of construction labour, materials and equipment to identify constraints; study the legal environment, industry structure for infrastructure development, national professional organizations; assess level of skills development critical to implementation of large scale infrastructure projects; and (ii) present findings, draw conclusions, and subsequently make policy recommendations to remedy the state of practice, and (iii) develop a national strategy for sustainable improvement of the capacity of domestic construction industry in Kenya. The assignment will be carried out over a period of 12 months.
IGAD: report on Al-Shabaab as a transnational security threat
Al Shabaab has aspired to become a truly regional organization, with the membership and horizons that transcend national borders. It became active in no less than six countries (Djibouti, Ethiopia, Kenya, Somalia, Uganda and Tanzania) of the region, striking terrorist attacks on five of them. It is well known that Al-Shabaab’s operation reach has expanded beyond Somalia to the wider region. The report has provided a series of recommendations to be taken by IGAD Member States and other stakeholders in order to mitigate the threat posed by Al-Shabaab. Subsequent to the submission of the report, on May 2016, IGAD commissioned a study on “Mapping Jihadist Organizations and Influences in the IGAD Region”, which is going to be reported to the UNSC Committee on Eritrea and Somalia. [Download]
ECOWAS Inter-Governmental Action Group against money laundering and terrorism financing in West Africa: workshop update
ICGLR: Third Party Audits for mineral exporting companies in Rwanda, DRC
The ICGLR Secretariat has successfully completed its pilot phase of the Third Party Audits of Mining companies and published 8 reports in a move to provide fact based credibility for certified conflict free exports of tin, tantalum or tungsten (3T) to the international market from the ICGLR Member States and compliance with all standards and requirements of the international mineral industry. The publication of Reports of the Eight Third Party Audits conducted in the DRC and Rwanda is a great achievement as it allows the audited mineral exporters to be issued with certificates that allow them to credibly export conflict free minerals. These companies are:
ECOWAS, civil society agencies work towards consolidating conflict prevention efforts
The workshop (16-17 August) had the objective of providing CSOs with a monitoring tool which can be used to track the progress of national conflict prevention programmes, design strategies that will enhance effective implementation of conflict prevention interventions at local and national levels, and discuss regional and national peace and security issues which are meant to be prioritized. More than 40 CSOs intervening in the field of conflict prevention and peacebuilding from the 15 ECOWAS Member States attended the Workshop.
Rwanda-Shanghai Investment Forum: update (New Times)
Chinese firms have been encouraged to take advantage of the security and immense opportunities in Rwanda to expand their businesses in the region and on the continent. Rwanda’s ambassador to China, Lt.Gen. Charles Kayonga was speaking during Rwanda-Shanghai Investment Forum that brought together Rwandan business community in China and Chinese investors from the city of Shanghai over the weekend. The event was organised by the Rwanda embassy in China and was facilitated by Touchroad Media Holdings and the Shanghai Science and Technology Development and Exchange Centre. RwandAir, the national carrier, is set to start flights to Guangzhou later this year and would definitely give Rwanda a lion’s share of the 100 million Chinese tourists going abroad annually. Speaking at the event, Liu Beimin, the deputy director for foreign economic co-operation at Shanghai Municipal Commission of Commerce, lauded efforts by Rwanda to further improve the business environment, as well as support international investors.
Southern African Development Community forum opens in Hanoi (VietNamNet Bridge)
African Parliamentarians’ Network on Development Evaluation (APNODE) grows in size and ambition (AfDB)
Kevin Amirehsani: 'The East African Community needs to focus on concrete objectives' (Global Risk Insights)
South Africa: EU economic trade agreements excite committee (Parliament)
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Making the most of demographic change in southern Africa
The countries of the Southern African Customs Union have relatively diverse demographic and economic starting points. These economies have the potential to realize demographic dividends and experience an acceleration in their income per capita growth and poverty reduction progress through forthcoming shifts in their age structures.
Between 35 and 75 percent of poverty reduction in 2015-50 in Southern African Customs Union economies could be attributed to demographic shifts in a business-as-usual scenario of economic development, if employment rates are at least maintained. The magnitude of the demographic dividends could be greater if countries are able to achieve policy outcomes in parallel in the areas of education, savings-investment, and employment.
Scenario analyses of these different policy outcomes interacting with the shifting age structures in different ways suggest quantitatively different economic impacts despite qualitatively similar policies. Improving educational attainment is found to be most important in Lesotho and Swaziland; mobilizing savings for higher investment can be most useful for Botswana; and improving employment rates, especially by closing gender gaps, can be most useful for South Africa and Namibia.
Introduction
Sub-Saharan Africa will be undergoing substantial demographic changes in the coming decades with the rising working age share of its population. Recent analyses suggest that demographic dividends in the region could account for 11 to 15 percent of GDP volume growth by 2030, while accounting for 40 million to 60 million fewer poor in 2030. However, the realization and magnitude of demographic dividends for a given African country would depend on their current demographic profile and their trends in their demographic changes, as well as their ability to create an appropriate enabling environment. An appropriate enabling environment would include improvements in educational attainment and quality, labor productivity, savings and investment, and job creation.
This paper examines how demographic dividends may play out in the economically linked but otherwise diverse Southern African Customs Union (SACU) economies, when presented with similar economic policy outcomes. SACU economies – Botswana, Lesotho, Namibia, South Africa, and Swaziland – have relatively diverse demographic and economic starting points. This diversity is present in terms of their demographic profile, as evidenced by South Africa being further along in the demographic transition process than the other countries. The diversity is also present in terms of their development indicators, as illustrated by the relatively lower educational attainment rates in Lesotho and Swaziland, or the extremely high unemployment rates in South Africa.
Three broad questions are addressed:
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What is the potential contribution of demographic change to growth in the different SACU economies?
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What is the potential effect of demographic change on poverty reduction for SACU economies?
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What policy intervention might have the largest impact on the size of a SACU economy’s demographic dividend?
Several different possible scenarios for demographic change and development in the SACU economies are considered following the approach of Ahmed et al. (2016) where a global dynamic simulation model is applied in tandem with a microsimulation model based on harmonized household and labor force survey data. Demographic changes in the different economies are considered against the backdrops of different policy outcomes in the areas of educational improvement, mobilizing savings, and improving employment rates. When considering the scenarios of individual interventions, Lesotho and Swaziland benefited the most from improvements in educational attainment rates by achieving higher economic growth and lower poverty rates. For other economies, interventions that had greater impacts were those that focused on improving employment ratios, through higher labor force participation, reducing unemployment, or eliminating gender gaps in the labor market.
The paper thus provides a comparative analysis across several policies highlighted by the literature as key interventions to realize demographic dividends. As such, this paper augments the substantial literature on demographic change and development by focusing on the policy outcomes necessary to realize (or maximize) the demographic dividend.
Nigeria, South Africa, Egypt urged to leverage intra-Africa trade, diversification
Key members of the Organised Private Sector (OPS) on Tuesday emphasised urgent need for Nigeria, South Africa and Egypt to synergize by leveraging on intra-African trade in the bid to harness vast socio-economic opportunities in the region.
This, according to the stakeholders drawn from National Association of Nigerian Traders (NANTS), Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), Nigeria Labour Congress (NLC), National Automobile Technicians Association (NATA), who converged at the stakeholders’ workshop on Economic Partnership Arrangement (EPA) held in Abuja, can be achieved through the establishment of bi-national Commission among the three leading African economies.
They also emphasised the need to include culture and tourism into the economic diversification of the present administration, improve and prioritise value addition as well as encourage patronage of locally made goods in the bid to achieve set objectives of reflating the economies of the participating countries.
A 2014 statistics in Europe showed that 69% of exports were to other countries on the continent; in Asia the figure stood at 52% and in North America intra-trade was 50% while Africa had the lowest of intra-regional trade of 18%.
Using the Gross Domestic Product (GDP) at the end of 2015 published by the International Monetary Fund, Bloomberg reported that the size of South Africa’s economy was $301 billion at the rand’s current exchange rate, while Nigeria’s GDP was put at $296 billion, followed by Egypt.
According to the fifth edition of Africa Competitiveness Report issued by African Development Bank (AfDB) unveiled during the World Economic Forum for Africa on 4th June, 2015, which studies on three key areas of economic activity – agricultural productivity, services sector growth and global and regional value chains:
“The data points to low and stagnating productivity across all sectors: agriculture, manufacturing and services, partly ad a result of ongoing weakness in the basic drivers of competitiveness such as institutions, infrastructure, health and education.”
According to Ken Ukoha, NANTS President noted that the EPA with EU was designed to impoverish Nigeria and other African economies and further worsen management of forex and interest rates.
Ukoha who observed that the Europe at present astronomic comparative advantage over the African continent, stands to gain $701 million while Africa stands to lose $470 million yearly if the pact becomes operational.
“It will lead to capital flight and shut us out of South-South trade with the Asian countries. So if we sign with Europe, you have shut yourself; so we should be wiser.
“At that time it will be extremely difficult to manage foreign exchange and interest rates will skyrocket. But what is in our basket to send to Europe? Some of the vehicles we bought for the parliamentarians, how many of them are built here?”
Ukoha who was part of the EPA negotiating team, frowned at the undue pressure being mounted on Nigerian government to sign the pact, saying: “everything about EPA was bad from the conception to negotiation process to its final outcome. The agreement itself is not fulfilling and does not give any hope to Nigeria as a country especially when you look at where we are coming from and where we are today. And I made bold to say this, we are coming from a background of colonialism, we are coming from a point where Nigeria had been shortchanged in terms of resources.
“Now if we are resource-stripped, do you think we should choose going into squeezing ourselves into an agreement that will clip our wings from legitimately using our own resources and regulating the economy? That will be too dangerous. Finally looking at the outcome of the agreement, there are many articles there that are in variance with the objectives of the EPA and the question is why should it be, why should our government be harassed, why should there be undue pressure to sign? I think if we sign the EPA it will be double suicide,” Ukoha observed.
While applauding the diversification of the Nigerian economy through agricultural sector, the NANTS chief emphasised the need for President Muhammadu Buhari’s administration to put industrialisation of Nigeria at the front burner.
He observed that the devaluation of Naira impacted heavily on the country due to dearth of industries that can produce what could be exported.
“If you look at the statistics, you will see that most of the things we consume are imported. For example, take a look at rice, wheat, fish and fishery products, you will see that most of these products are still being imported. If we are a consuming nation, it means we need to sit down and produce for our own population first because we have the market within the West Africa of about 350 million people with Nigeria having about 180 million,” Ukoha noted.
The Convener of the Stakeholders’ meeting, Vivian Bellonwu-Okafor, explained that the stakeholders’ meeting was conveyed to examine and harvest inputs of Nigerians on the objectives of EPA with EU, stressing that the proposed pact at present “is not in the interest of Nigerian economy.”
Bellonwu-Okafor who described the EPA as an unholy union between a 200 year old man and 15 year old girl, argued that the pact is Master-Slave relationship.
“When you look at it, you should ask what is the strength of these two partners? Let me give you this example: if you see a 15 year old girl who wants to get married to a 200 year old man. Common sense tells you there’s something wrong with that partnership. Everything is wrong because Nigeria is not economical well-positioned to enter this agreement, our industries are weak, the manufacturing sector has not yet found its bearing.
“But what we are expecting is that Nigerian government should have concerned itself with is to stabilise the manufacturing sector by casting conducive environment that will help a struggling small, medium scale and micro-enterprises and help them find their feet. It’s only when these ones have been sufficiently empowered to come up to certain level that you can enter into partnership with a continent that had colonised us in Africa for ages. For us, this is not a partnership but Master-Slave relationship,” Bellonwu-Okafor told BusinessDay.
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The East African Community needs to focus on concrete objectives
Efforts to advance the East African Community have often veered between halfhearted and impractical. The regional grouping must adapt – via strong yet achievable economic steps – in order to progress.
For some, the 1977 dissolution of the East African Community (EAC) finally marked the forlorn end of Africa’s decades-long flirtation with Pan-Africanism. For others, it represented the triumph of sovereignty and nationalism over unrealistic infatuations with asymmetric economic marriages.
The last fifteen years of the organization’s newest iteration have fallen somewhere in between the two – with ambitious pronouncements foreshadowing economic and even political integration coexisting with regional rivalries that have threatened to scupper the entire project.
However, what is most needed is not wasted political capital nor governments looking inward, but a balanced solution: concrete steps to solidify the existing union and increase free flows of capital and labor, while giving each of the EAC’s member states the ability to craft domestic policies to suit their own domestic environments.
How to achieve this? First, focus on improving the EAC’s economic mainstay – the customs union that binds together Tanzania, Kenya, Uganda, Rwanda, Burundi, and, very soon, South Sudan.
It all starts with the Customs Union
Since 2005, EAC member states have been able to trade goods and some services with each other free of tariffs, in most cases. They have also synchronized and often reduced most of their external tariffs, reducing the transaction costs of international trade for foreign exporters and reducing the likelihood of one East African state engaging in a costly trade war with one or more of its neighbors. In addition, since 2010, the EAC has had bits and pieces of a “common market,” meaning crossing its borders became much easier for many types of workers and many classes of financial assets.
The net impact of both of these developments have been cheaper goods and services for consumers, more investment for industries, and more opportunities for laborers.
Still, despite the fact that the customs union has essentially eliminated tariffs and quotas on goods originating in an EAC member state, progress on non-tariff barriers (NTBs) has been much slower. These include both trade impediments at the border (e.g. customs documentation requirements) as well as those within member states (e.g. administrative or police checkpoints).
Such obstacles are part of the reason why the World Bank estimates that intra-African trade costs about 50% more than equivalent intra-East Asian trade, which is a frightening statistic given that growth in many of East Africa’s major trading partners – China, Europe, and North Africa – has slowed considerably. This means that intra-regional trade needs to help cover this growing gap.
A tangible way forward
EAC lawmakers should renew their effort on further integrating the customs union by building on some modest successes from the past year: increases in the monitoring and evaluation of agricultural supports, better coordination in regional railway infrastructure, and the reduction of a number of trade permits required, which has greatly contributed to the 14% reduction in the average time taken to import goods from one EAC country to another.
Moreover, there is even more work to be done in ensuring that EAC member states fully implement the “Four Freedoms” called for in the Common Market Protocol – free movement of goods, labor, services, and capital. Only small steps have been undertaken in relation to the latter three. With the exception of engineering qualifications, standards for professional services like law and accounting have not been harmonized between EAC countries, and the region continues to see high-profile deportations of laborers from time to time, such as Tanzania’s recent decision to expel several thousand foreign teachers – many (if not most) of whom were Kenyan.
Capital is also unable to move around freely as it would in a normally-functioning common market. In fact, the East African Legislative Assembly publishing a damning report last year indicating that only two of 20 capital operations – external borrowing and repatriating proceeds from the sale of assets – are free from restrictions in all EAC member states.
Yet, even here, regional policymakers should know that the foundation for progress has been laid in the last year: a number of key business manuals have been standardized and operationalized throughout the EAC, the driver education curriculum of Kenya was recently chosen to be the model for the other five member states, and agreements on not double taxing EAC nationals are close to being ratified by parliaments across the region.
Other tangible steps which officials from Tanzania, Kenya, Uganda, Rwanda, Burundi, and South Sudan should endeavor to accomplish include increasing the harmonization of domestic taxes (especially VAT and excise taxes), promoting regional industrialization and investment policies which take into account different countries’ comparative advantages and development levels, and simply increasing public awareness of the EAC, which is abysmally low outside of political and business circles (Tanzania President John Magufuli’s recent order that the EAC flag and anthem be given equal prominence to their Tanzanian equivalents is a step in the right direction).
If this sounds less like a manifesto and more like a laundry list of tasks, it is because it should. The EAC has too much economic potential and has come too far for business transaction and compliance costs to still be as high as they are across the region, and for smuggling – of duty-free goods, ironically – to still be rife. Infrastructure deficits admittedly play a part, and they need to be addressed by Dodoma, Nairobi, Kampala, Kigali, Bujumbura, and Juba.
Regional politics behind the economics
Yet the biggest stumbling block thus far has arguably been a lack of political will, and much of this is down to political capital being needlessly spent on impractical pipe dreams of political federation.
The ambition of EAC leaders for a political union should be commended, especially given that none of the other seven major regional economic communities on the continent have a goal this lofty. But this kind of ambition pales in importance with the gritty and often unglamorous trade, investment, customs, and logistics progress that can boost incomes and broaden export markets for millions.
What’s more, talk of political union can often serve to scare governments, who are elected, first and foremost, to represent largely parochial interests. Last year’s push by Kenya, Uganda, and Rwanda to fast-track the community’s Political Federation Protocol (at the implicit expense of working on more attainable matters, like a common currency) resulted in a falling out of sorts with Tanzania – complete with almost humorous passport confiscations of visiting delegations and denials of tourist vans. This was only repaired by last October’s change of government in Dodoma.
It is much easier to convince politicians to boost their economies than it is to share power. And, in most regards, the tools for boosting EAC economies through regional and international trade linkages are there for the taking. The East African Community needs to focus on delivering what it was initially founded for – developing and maintaining a customs union and common market – before it dreams of far more.
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Integrate regional exchanges to deepen cross-border trade – expert
East African exchanges should fast-track integration initiatives like the capital markets infrastructure (CMI) project, and create a pool of skilled personnel.
This is essential to position the regional stock market as a platform of choice for raising long-term funding for governments and business community, Celestin Rwabukumba, the East African Securities Exchange Association (EASEA) chairman, has said. Speaking at the 27th consultative meeting in Dar es Salaam recently, Rwabukumba said the CMI project that is nearing completion presents new possibilities for investors seeking cross-border trade opportunities.
With capital markets across the world becoming increasingly automated and integrated, regional stock exchanges require a modern system that meets different market needs. This will also make it possible for EAC capital markets to attract global capital flows and participate in international capital markets.
Meanwhile, EASEA has agreed to increase product offerings at each stock market, train market intermediaries, carry out public awareness drives and support integration of market infrastructure as they plan to draft a five-year strategic plan. According to a statement from the EASEA secretariat, these initiatives are aimed at increasing market liquidity and depth.
Rwabukumba, who is also the Rwanda Stock Exchange (RSE) chief executive, has commended the Securities Industry Training Institute – East Africa, noting that the institute will help market players improve skills and technical capacity to meet global standards.
“The institute is at the forefront of driving capital market training to meet the growing demand for relevant expertise in the market,” he added during the summit attended by stock market chiefs from Uganda, Kenya, Tanzania and Rwanda.
He revealed that RSE is in final stages of automation of its trading infrastructure that will be linked to the central securities depository and real time cross settlement system at the National Bank of Rwanda.
Speaking at the event, the Dar es Salaam Stock Exchange chief executive officer, Moremi Marwa, said the exchange self-listed successfully through an initial public offer last month. It also became an affiliate member of the World Federation of Exchanges, and joined the UN Sustainable Stock Exchanges Initiative.
“These strategic partnerships will expose DSE to peer-to-peer learning platform for exploring how exchanges can enhance corporate transparency, efficiency and performance,” Marwa said. Marwa said the exchange also conducted public education campaigns and introduced mobile phone payments in IPO and secondary market trading. The Nairobi Securities Exchange and Officials from the Uganda Securities Exchange said they would soon start trading government bonds at the exchange.
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Prioritizing infrastructure investments: Helping decision-makers do their job
Government officials and PPP practitioners make difficult decisions about infrastructure projects all the time. But perhaps the choice they grapple with the most is which projects to select for implementation within a given investment period.
Many factors come into play, such as government budget constraints, the relative efficiency and effectiveness of investments, as well as costs and benefits of projects to society. With so much to consider, governments need improved decision-making frameworks that are rigorous enough to accommodate multiple components but practical enough to remain feasible and affordable.
It’s a tall order, and stakes are high for implementing national development plans. To help government officials rank investment opportunities, the World Bank created an Infrastructure Prioritization Framework (IPF). The IPF is a systematic approach to infrastructure investment prioritization and places financial-economic and social-environmental factors at the forefront of decision-making. The framework is transparent and objective, following a clear step-wise approach, but allows space for deliberation in order to remain responsive to policy.
Decision-making done right
The IPF framework is different from other approaches to infrastructure decision-making in four ways:
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It incorporates national policy goals, social and environmental sustainability considerations, and long-term development aims alongside financial and economic indicators.
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It provides decision-makers with an intuitive, graphical interface upon which to compare alternative investment scenarios.
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It encourages policy debate via the identification and weighting of criteria and the selection of projects from mid-priority categories, without affecting the effectiveness of the tool.
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It is predicated on parsimony and pragmatism.
The IPF is not intended to replace traditional planning or policy analysis, which remain critical to identifying problems, assessing their relative importance or urgency, and selecting from amongst alternative solutions. Rather, the framework helps governments prioritize projects within sectors from proposed infrastructure solutions grounded in policy analysis and/or feasibility studies.
That said, real-world results speak more compellingly than any theory. We piloted the IPF methodology in Panama, applying it to a select set of transport, water, and sanitation infrastructure projects. In the next two installments of this blog series, we’ll share the experiment with you. The next post will provide background information on infrastructure prioritization in Panama, with results of the pilot. Our last post will take a more technical look at the Infrastructure Prioritization Framework’s technical underpinnings, and close with recommendations for governments that want to implement IPF to a wider set of proposed projects.
As the need for forward-looking, sustainable infrastructure becomes more pressing – and as the mandate to do more with less reaches every corner of the globe – the decisions that PPP advisors make in the earliest stages of planning weigh even more heavily on national outcomes. The IPF lightens this load, easing the burden on governments while ultimately helping those who will benefit from well-planned infrastructure projects.
Background
The World Bank Group is committed to helping governments make informed decisions about improving access and quality of infrastructure services, including, where appropriate using Public-Private Partnerships (PPPs) as one delivery option. This approach is further enabled by working on: strengthening data, building capacity, developing and testing tools, promoting disclosure and encouraging engagement with all relevant stakeholders. The World Bank Group has tools to enable better informed decisions around PPPs.
In this series of three posts for the PPP Blog, the World Bank’s Cledan Mandri-Perrott and Darwin Marcelo introduce the Infrastructure Prioritization Framework (IPF), one of the PPP Tools available for PPP professionals, and explain how it can help governments with competing infrastructure needs, and describe its application.
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Hold govt accountable on campaign promises, Fayemi Charges CSOs
The minister of solid minerals, Kayode Fayemi, has charged the civil society organisations (CSOs) in the country to hold government at all levels accountable on their electoral promises.
The minister, who stated this at the Sixth Biennial People’s Forum of the West African Civil Society Organisation (WACSOF), said it is the primary duty of any government to give good governance to its citizens while tasking the CSOs and the media on their role as watchdog and voice of the voiceless.
According to him, democracy in the West African sub-region has come to stay as he urged WACSOF, being an umbrella body of the civil groups in the sub-region, recognized by ECOWAS, to insist on member states to give good governance to their citizens.
He said, “The issue of ECOWAS, how do we ensure that this is driven by the primary concern of the ordinary citizens of West Africa? Are we still citizens or subjects of the West Africa? How do we ensure that the citizens have rights and the leaders that were elected take those rights passionately? What are the roles of the civil society leadership on insisting that these things add values?”
The Acting General Secretary of WACSOF, Auwal Ibrahim Musa (Rafsanjani), called on CSOs to cooperate with government in their countries to address the problem of insecurity.
According to him, “WACSOF endeavours to facilitate the actualization of ECOWAS vision, where citizens will enjoy the benefits of a borderless, peaceful, prosperous and cohesive region, built on governance and they can better harness and access its enormous resources through the creation of opportunities for sustainable development and environmental preservation.
“The commission can only actualize its dream of free movement when we have realized a region where everyone can access unconstrained movement”.
Speaking on insecurity in the sub-region, Musa said “Given the volatile nature of the region and as it continues to receive threats of insecurity from Boko Haram insurgency and other similar conflict in the region, WACSOF has aligned its programmes in tandem with the Political affairs, peace and security commission, particularly the Early Earning Directorate of the ECOWAS Commission”.
Pre-event press briefing towards WACSOF 6th Biennial People’s Forum
Address by Auwal Ibrahim Musa (Rafsanjani)
Ladies and Gentlemen, the West African Civil Society Forum (WACSOF) is delighted to welcome you all to this pre-event press briefing aimed at informing you of the WACSOF 6th biennial People’s Forum.
The Peoples’ Forum is the supreme organ of WACSOF which is composed of all representatives of CSOs registered with WACSOF. Article 6.3 of WACSOF Charter provides that the People’s Forum shall be convened on an annual basis, prior to the statutory meetings of the ECOWAS Authority of Heads of State and Government in order to review the activities of the Regional Secretariat, induct new members, appoint new leadership, review the activities of ECOWAS Member States, and make recommendations to the annual ECOWAS Heads of State and Government summit. However, due to paucity of funding, this has been amended and it was agreed that the Forum would hold every 2 years with a mini forum held in between. In compliance with this, WACSOF has been able to convene five (5) full blown People’s Forum in Accra (2003), (2005), (2010); in Niamey (January 2006); in Ouagadougou (December 2006) and a Mini Forum in Accra (2007).
Since then, the organization has been confronted with funding challenges and the many attempts to address this have been ineffective. The People’s Forum remains the only space where the necessary critical decisions needed to revive the organization, can be taken.
The current implementation plan for the ECOWAS Regional Integration Agenda (Vision 2020) is the Community Strategic Framework (CSF) 2016-2020. In April 2016 the ECOWAS Strategic Planning Directorate, following a directive from the ECOWAS Council of Ministers and with the support of GIZ, held a meeting with civil society, on the CSF and its implementation, with particular emphasis on the role of civil society. The meeting resolutions were emphatic on the importance of WACSOF as the recognized umbrella body for civil society in the region, particularly in engagement with ECOWAS, and reiterated the need to ensure that it was strengthened to play its role effectively.
Also recently, a West Africa Regional Civil Society Networks and Organisations’ meeting took place in Lome, Togo, in June 2016, reiterating this call for the revival of WACSOF and called for the holding of a participatory WACSOF Peoples’ Forum as soon as possible.
It is against this background that WACSOF is proposing to hold the Sixth People’s Forum to critically address current institutional challenges it is facing and strengthen its capacities to better play its supervisory role of CSOs across the West Africa particularly as they seek to play their part in the implementation and monitoring of the CSF, and meet the expectations from its members and partners.
Objectives of the People’s Forum
The overall objective of the sixth biennial people’s Forum is to gather representatives of Civil Society Organizations from across the fifteen (15) ECOWAS Member States to provide key updated information on the ECOWAS Regional Integration Agenda, particularly the CSF, critically discuss challenges facing WACSOF and strategically address them in order to reinforce its institutional and operational capacities for an increased delivery on its mandate.
Specifically, the Forum seeks to:
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Update participants about the developments on the CSF and remind them of civil society’s role
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Renew the governance structures of WACSOF;
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Discuss and creatively address the major institutional and operational challenges facing the organization;
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Rebuild the trust of members and partners in the organizations;
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Redefine the strategy of engagement with ECOWAS;
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Anticipate some of the challenges that may hamper the efficiency of the organization;
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Explore new approaches of positioning the organization to efficiently play its institutional role.
Expected Outcomes
I am optimistic that at the end of this Forum, the following outcomes will be achieved:
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Updated information on CSF and the role of civil society
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Renewed and strengthened governance structures of WACSOF;
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Shared understanding of the challenges facing the organization and identified solutions and implementation methodologies to address them;
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Restored trust and confidence of members and partners in the organization;
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Strengthened relationship with ECOWAS;
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Anticipated strategy of addressing challenges that weaken the organization;
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Existing workable recommendations of repositioning the organization in the region.
The meeting will gather about one hundred (100) participants mainly from West Africa region comprising of delegates of Civil Society Organizations, representatives of ECOWAS, representatives of Civil Society umbrella organizations at a continental level and the media.
On this note I will urge that we all be part of the People’s Forum, as it leads to a new and more vibrant WACSOF strengthened to take up its space in the engagement with ECOWAS and in the implementation of ECOWAS Vision 2020.
Thank you and God bless you all.
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Focus on marketing standard gauge railway services ahead of completion
A status report released last week indicated that the Standard Gauge Railway (SGR) is 90 per cent done with completion of the Nairobi section expected early next year.
By any standard, and despite land acquisition frustrations, the project’s pace of implementation can be termed timely. The SGR now needs to embark on the task of marketing its services to ensure early utilisation.
This is necessary to generate early cash inflows to begin offsetting its debt commitments.
The SGR is perhaps the most significant project ever undertaken by Kenya in recent times. In terms of national and regional impacts, the last such significant project was building of the Mombasa-Nairobi petroleum pipeline in 1978.
When Kenya Pipeline Company (KPC) commissioned the Mombasa-Nairobi line it was to replace rail transportation of petroleum over that section.
At the time, bulk oil transshipment by road in the region was virtually zero. Although there was no legal protection against competition for the pipeline, the seven multinational oil companies did commit to exclusively use the pipeline.
However, there was a proviso by the oil companies that tariffs should be fair and commercial. Fortunately, there was regulation of petroleum prices at the time which permitted a full tariff pass-through to the market.
We can therefore correctly say that KPC had a captive and compliant clientele, which may not necessarily be the case with SGR.
With the imminent completion of the rail, SGR should already have formulated a business model for discussions with stakeholders who include potential clients and competitors (road transporters and RVR).
Free market model
There was an initial mention of the “take or pay” capacity protection framework that guarantees returns for the SGR investment.
There is also the free market model which recognises the existence of competition, in which case SGR would need to offer competitive tariffs based on value added services. Whichever approach, SGR needs to enunciate their strategy in good time to permit smooth and timely entry in the sector.
It is not apparent that SGR has in place an institutional and organisational capacity to begin laying out a market entry strategy and its implementation. In this respect, I think the SGR is seriously running out of time.
KPC actually appointed their nucleus management team in 1974, four years prior to project completion in 1978.
Like KPC, the SGR’s initial project termination will be in Nairobi – with firm plans for an additional stretch to Naivasha.
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tralac’s Daily News Selection
The selection: Tuesday, 16 August 2016
Global Innovation Index 2016 (WIPO)
According to WIPO, among the GII 2016 leaders, four economies – Japan, the US, the UK, and Germany – stand out in “innovation quality,” a top-level indicator that looks at the calibre of universities, number of scientific publications and international patent filings. China ranked 17th in innovation quality, making it the leader among middle-income economies for this indicator, followed by India, which has overtaken Brazil. However, Sub-Saharan Africa continued to lag behind. Mauritius took the top spot among all economies in the region (53rd), followed by South Africa (54th), Kenya (80th), Rwanda (83rd), Mozambique (84th), Botswana (90th), Namibia (93rd), and Malawi (98th). That said, since 2012, Sub-Saharan Africa has had more countries than any other region among the group of “innovation achievers” – countries that perform better than their level of development would predict. [Various downloads available]
Improving aviation safety in Africa: the key is integration (eTurboNews)
The updated EU list as of 16 June 2016 is dominated by African states namely; Angola, Benin, Comoros, Republic of Congo, Democratic Republic of Congo, Djibouti, Equatorial Guinea, Eritrea, Republic of Gabon, Liberia, Libya, Republic of Mozambique, Sao Tome and Principe, Sierra Leone, and Republic of the Sudan. The EU has totally banned or imposed operational restrictions on airlines registered in these states. The irony is that most of them are located in regions, or share borders with states, which meet international safety and regulatory oversight standards, and whose carriers fly into the EU. Possible assistance for the listed states, is a border crossing away. Aviation is a small industry in Africa, is expensive and ICAO standards will always haunt many African states. Regional integration is the best way to ensure compliance with the requirements of article 37. None of the East African states is on the EU list, thanks in part, to the EAC CASSOA.
ECOWAS: Ministers of meteorological services adopt report
The seven-page Report which was prepared by the Committee of Directors of National Meteorological and Hydrological Services, has six strategic pillars covering the improvement of service quality and service delivery as well as linkages and synergies between meteorology and development. The other strategic pillars border on the implementation of telecommunication and the World Meteorological Organisation’s Information System, as well as a resolution to advance scientific research and application while developing an implementation strategy for same. In monitoring and evaluating the programme, the ministers stressed the need for the ECOWAS Commission to drive the process by also strengthening the capability of the ECOWAS Department of Agriculture, Environment and Water Resources with a regional coordination. [Rethinking drug control policy in West Africa (OSIWA)]
IGAD: Infrastructure master plan workshop
A two day validation workshop for Terms of Reference for the development of IGAD Infrastructure Master Plan (IRIMP) began on Monday in Nairobi. Kwenya’s Cabinet Secretary for the Ministry of Transport, Infrastructure, Housing and Urban Development, James Wainaina Macharia, said it was unwise for corridors to be developed individually by Member States in isolation, as this would neglect and isolate important and resourceful regions in the Horn of Africa. IGAD's Mr Elsadig Abdalla said the plan will be expected to enhance fair sharing of water resources amongst competing uses, as well as identify infrastructure interventions that should be affordable and implementable with resources mobilized even through Public Private Partnership. He said he was optimistic that the Member States would validate the TORs to set the stage for the immediate commencement of the master plan studies.
South Africa: US chicken imports fall foul of quotas (Business Day)
According to the South African Poultry Association, US imports have been "erratic" since the beginning of 2016 with 2,299 tonnes, 6,906 tonnes and 1,238 tonnes coming into the country in March, April and May respectively. Association of Meat Importers and Exporters CEO David Wolpert agreed that US bone in chicken imports had been "far below expectations" and "very disappointing. The main reason is that importers are still importing from the EU because they can get it duty free and the quality is excellent." This might change, however, if the Sapa application to have agricultural safeguard duties imposed on EU bone-in chicken is approved by the International Trade Administration Commission. A decision is expected within the next two months. Should a heavy duty be approved, Wolpert predicted that importers would move away from Europe towards Brazil. If the application were approved, provisional safeguard tariff duties of 37% would be imposed on EU bone-in chicken portions.
South Africa: Duties on bolts and nuts squashed (IOL)
The International Trade Administration Commission of SA has terminated anti-dumping duties on bolts and nuts imported from the People’s Republic of China, according to an Itac report. Itac has asked Trade and Industry Minister Rob Davies to terminate the anti-dumping duties with effect from August 5. South Africa imposed the anti-dumping duties in 1999. Following Itac’s reviews, the anti-dumping duties were reimposed in 2004/5 and 2010/11. The duties are reimposed for five years.In October last year, the SA Fasteners Manufacturers Association told Itac that “after deliberation and taking into account that the anti-dumping duties were not effective to protect the Southern African Customs Union industry in combating these low priced imports, it was decided that the SACU manufacturers would not supply information to the commission to initiate a sunset review”. [dti's absence on steel price committee questioned] (Fin24)
Zimbabwe’s import restrictions: two updates
Cross border traders challenge industry to deliver (The Herald): Speaking at the Confederation of Zimbabwe Retailers breakfast meeting, Zimbabwe Cross Border Traders Association president Dr Killer Zivhu said Zimbabweans wanted to buy local goods, but they wanted to buy products of good quality that meet the demand. Dr Zivhu added that about 11 000 cross border traders bring such goods with at least 75 buses going to South Africa alone. He challenged Statutory Instrument 64 of 2016 put in place by the Government, restricting the importation of various goods into Zimbabwe, in order to protect and promote local industry for economic turnaround asking if it had not been put in place to promote “big brothers” in the country.
Govt mulls tweaking imports restriction policy (NewsDay): Speaking to NewsDay on the sidelines of a Confederation of Zimbabwe Retailers breakfast meeting yesterday in Harare, Industry and Commerce Minister Mike Bimha said they had set up an evaluation and monitoring committee to look at the impact of SI 64 of 2016 on local companies. On the flip side, since the import regulations, CZR statistics have shown an increase of local products on shelves by 20% to 70%, while imported goods decreased to 30% from 50%. Before the implementation of SI 64 of 2016, local products and imported products on the shelves formed 50% each.
Ghana: Gov’t seeks new strategy on AGOA (B&FT)
“Based on the various consultations that we have done so far, we think that we have to take what we call ‘all front approach’ to the strategy if we want to increase exports into the US market,” Mr Nyame-Baafi said on the side-lines of the workshop which was organised by the Ghana National Chamber of Commerce and Industry. The strategy, he explained, will be carried out in stages, with the first being that big time companies already exporting will be given some levies to enable them increase production and export to the US market. The second step will look at potential areas that will give the country competitive advantage. The third approach will be to build the capacity of Ghanaian companies who are already exporting local products into the US market. These companies will be supported to double their exports. The final approach is that companies will get funding to withstand any shocks in the global financial market.
Raymond Baker: Cooking invoices costs Africa billions (Business Day)
These and other similar statistics are compromised when export and import commodity classifications do not match, and when producing countries and importing countries are not fully and accurately recorded. Global Financial Integrity, with which I am associated, likewise uses UN Comtrade data as well as data from the International Monetary Fund’s Direction of Trade Statistics and from the published bilateral trade statistics of 30 countries. We, and all researchers in this area, depend on the accuracy and compatibility of reporting by governments. The outcome of the controversy over Unctad’s reported estimates should be a renewed determination to improve trade statistics so that the whole world can know accurately what is being bought and sold and who are the buying and selling partners. The UN Economic Commission for Africa, through a programme led by Thabo Mbeki and on which I serve, has worked diligently to place the issue of illicit financial flows on the global agenda. Through these efforts, 193 countries subscribing to the sustainable development goals have agreed to tackle the issue and work for their curtailment. [Gavin Keeton: UN wide of the mark on mineral export figures]
Nigeria and EU’s Economic Partnership Agreement: economic cooperation or economic slavery? (Social Action)
A report authored by Social Action, a social development organisation, indicates that Nigeria stands to loose up to $1.3 trillion in forms of customs duties, taxation and other revenue sources throughout the 10 year implementation period of the Economic Partnership Agreement. Vivian Bellonwu-Okafor, Head Social Action, Abuja, expressed concern over the imminent job losses and negative impact on the country’s proposed National Industrialization Revolution Plan (NIRP) as well as the danger of undermining Africa’s integration. [The analysts: Botti Isaac, Vivian Bellonwu-Okafor]
Ethiopia staves off worst of El Niño, but possible impacts of La Niña looming large (FAO)
The newly released Mid-Year Review of the Ethiopia Humanitarian Requirements Document - developed jointly by the Government of Ethiopia and UN agencies, non-governmental organizations and other development partners - indicates that 900 000 additional households need urgent agricultural support bringing the total number to 2.9 million in August. Meeting additional agricultural sector needs will require $45m bringing the total requirement for the agriculture sector to $91.3m for 2016. The overall food security situation has improved only slightly, with the number of people requiring emergency food assistance having decreased from 10.2 million to 9.7 since the beginning of the year. According to meteorological reports, a La Niña event is 55% likely for October to November and will have two major impacts on Ethiopia:
Research insights can help decision makers navigate trade-offs in East Africa (CGIAR)
When scientists from across the Nile river basin recently met to share findings and results, one conclusion in particular transpired: Increasing competition over resources such as land and water implies trade-offs that research can help expose. During the past 18 months, seven project teams in the Nile-East Africa region of the CGIAR Research Program on Water, Land and Ecosystems have been working to develop recommendations and solutions for sustainable intensification of agriculture. Among other insights, the importance of making decision makers aware of trade-offs emerged as one top-level priority from several projects: [Christian Siderius: Africa’s Nile basin countries should invest in rain, not big infrastructure projects (LSE)]
India: National committee on trade facilitation constituted (PIB)
The composition of the NCTF is inclusive at the national committee level which will comprise of Secretaries of all key Departments involved in trade issues like Revenue, Commerce, Agriculture, Home, Shipping, Health etc. It will also have Chairman CBEC, Chairman Railway Board, and Director General Foreign Trade as Members. Major trade associations like CII, FICCI, and FIEO etc are also its Members. Joint Secretary, Customs, CBEC will be its Member Secretary. The total membership stands at 24 and the Committee can co-opt any representatives from the State Governments on relevant issues. [Bangladesh: Trade and Transport Facilitation Monitoring Mechanism workshop]
James Zhan: ‘We need to work together to create a new narrative on investment promotion’ (WAIPA)
Trade facilitation is the other side of investment facilitation, there are enough academic studies to prove this. IPAs must recognize this. There needs to be enough ministerial engagement to put this on the forefront. There need to be creative approaches to expand this, particularly with regard to South-South facilitation and promotion. It is ultimately business links that lead to investment links. While this is pursued, the business community needs to understand that sufficient institutional linkages to government are important. There needs to be a respect for the formal setup and an ability and flexibility to move within it. Governments’ understanding of this helps to safeguard valuable resources for IPAs. As much as possible, the existence of separate silos should be discouraged and there must be a concerted effort to create synergies and linkages.
Develop mobile money infrastructure to raise financial inclusion (New Times)
New rules to allow more foreign direct investment in Kenya (Daily Nation)
Banks scramble for lucrative SMEs with juicy funding deals (Business Daily)
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‘Innovation divide’ persists; investment crucial to vibrant competitive economy, says UN agency
A new report published by the United Nations World Intellectual Property Organization (WIPO) has shown that for the first time, a middle-income country, China, has joined highly developed economies among global leaders in innovation.
“China’s progression reflects the country’s improved innovation performance as well as methodological considerations such as improved innovation metrics in the GII [Global Innovation Index],” noted a press release issued by WIPO on Monday.
However, despite China’s rise, an “innovation divide” persists between developed and developing countries, according to the Global Innovation Index 2016, released on 15 August 2016 by the WIPO, Cornell University, and the multi-nation business graduate school INSEAD.
Switzerland emerged as the global leader among innovative economies followed by Sweden, the United Kingdom, the United States and Finland. Switzerland ranked first in the 2015 index as well.
WIPO also noted that the 2016 findings point to an increasing awareness among policymakers that fostering innovation is crucial to a vibrant, competitive economy.
“Investing in innovation is critical to raising long-term economic growth,” said WIPO Director-General Francis Gurry. “In this current economic climate, uncovering new sources of growth and leveraging the opportunities raised by global innovation are priorities for all stakeholders,” he added.
The agency added that innovation requires continuous investment. Before the 2009 crisis, research and development expenditure grew at an annual pace of approximately seven per cent. However, 2016 data has indicated that global research and development grew by only four per cent in 2014.
“This was a result of slower growth in emerging economies and tighter research and development budgets in high-income economies – this remains a source of concern,” it noted.
According to WIPO, among the GII 2016 leaders, four economies – Japan, the US, the UK, and Germany – stand out in “innovation quality,” a top-level indicator that looks at the calibre of universities, number of scientific publications and international patent filings. China ranked 17th in innovation quality, making it the leader among middle-income economies for this indicator, followed by India, which has overtaken Brazil.
However, Sub-Saharan Africa continued to lag behind. Mauritius took the top spot among all economies in the region (53rd), followed by South Africa (54th), Kenya (80th), Rwanda (83rd), Mozambique (84th), Botswana (90th), Namibia (93rd), and Malawi (98th).
That said, since 2012, Sub-Saharan Africa has had more countries than any other region among the group of “innovation achievers” – countries that perform better than their level of development would predict. This year, Kenya, Madagascar, Malawi, Mozambique, Rwanda, and Uganda stood out.
“As economic growth in Sub-Saharan Africa is slowing, the GII 2016 shows that [the region] must preserve its current innovation momentum, while continuing to diversify economies away from oil production and commodity revenues,” noted WIPO.
Average regional performance shows strengths in the ease of starting a business, information and communication technologies (ICTs), business-model creation, and relative expenditure on education, with weaknesses in firms conducting global research and development, high-tech exports, the quality of local universities and number of scientific publications.
The press release further added that in general, further efforts are required in Human capital, Research and Infrastructure.
Highlighting the importance of investment in improving innovation quality as essential for closing the “innovation divide”, co-editor Soumitra Dutta, Dean at the Cornell College of Business pointed out that: “While institutions create an essential supportive framework for doing so, economies need to focus on reforming education and growing their research capabilities to compete successfully in a rapidly changing globalized world.”
The report also found that Europe benefits from comparatively strong institutions and well-developed infrastructure, while room for improvement is found in business sophistication and knowledge and technology outputs.
The WIPO press release also noted that Europe did particularly well in environmental performance, ICT access, and school life expectancy. At the same time, it noted that there is room for improvement in research and development, financed by businesses, research and development financed by foreign firms, high-tech exports, and international patent filings.
Pointing to the benefits of innovation, Bruno Lanvin, INSEAD Executive Director for Global Indices, and co-editor of the report said, “Some may see globalization as a trend in search of its ‘second breath.’ Yet, the relative contraction of international trade and investment flows does give even more strategic importance to the two sides of global innovation: on one hand, more emerging countries are becoming successful innovators, and on the other hand, an increasing share of innovation benefits stem from cross-border co-operation.”
The Global Innovation Index
The Global Innovation Index 2016 (GII) explores the rising share of innovation carried out via globalized innovation networks, finding that gains from global innovation can be shared more widely as cross-border flows of knowledge and talent are on the rise. It also concludes that there is ample scope to expand global corporate and public R&D cooperation to foster future economic growth.
At the national level, the report says that innovation policies should more explicitly favour international collaboration and the diffusion of knowledge across borders. New international governance structures should also aim to increase technology diffusion to and among developing countries.
Published annually since 2007, the GII is a leading benchmarking tool for business executives, policy makers and others seeking insight into the state of innovation around the world. Policymakers, business leaders and other stakeholders use the GII to evaluate progress on a continual basis.
The WIPO press release added that this year’s study benefited from the experience of its Knowledge Partners, A.T. Kearney and IMP³rove – European Innovation Management Academy, the Confederation of Indian Industry and du, as well as of an Advisory Board of international experts.
The core of the GII Report consists of a ranking of world economies’ innovation capabilities and results. Recognizing the key role of innovation as a driver of economic growth and prosperity, and the need for a broad horizontal vision of innovation applicable to developed and emerging economies, the GII includes indicators that go beyond the traditional measures of innovation such as the level of research and development.
» Download: Global Innovation Index 2016 (PDF, 7.54 MB)
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Nigeria to lose $1.3trn by 2026 to EPA arrangement – Report
A report authored by Social Action, a social development organisation, indicates that Nigeria stands to loose up to $1.3 trillion in forms of customs duties, taxation and other revenue sources throughout the 10 year implementation period of the Economic Partnership Agreement (EPA).
According to the report obtained by BusinessDay, in 2015, Federal Government collected the total sum of N3.74 trillion ($18.9 billion) from tax, out of which N1.6 trillion ($9.5 billion) was collected from non-oil sources as against the N2.2 trillion ($11.2 billion) collected in 2014 (out of which import tax amounted to N118.45 billion) ($601.26 million).
“With Nigeria importing more than 40% of the total EU export to ECOWAS at $11 billion as at 2011, by liberalizing trade with the EU, Nigeria stands to lose N167.09 billion ($1.1 billion) annually, while in 10 years, Nigeria will be losing about N1.6 trillion in tax revenue. In cash terms, it has been estimated that in domesticating the EPA, Nigeria will lose over $1.3 trillion (N208 trillion) in revenue as a result of finished goods coming from Europe,” the report noted.
Vivian Bellonwu-Okafor, Head Social Action, Abuja, told BusinessDay while giving the synopsis of the “Briefing paper on the EU-West Africa Economic Partnership Agreement and consequences for Nigeria,” to be unveiled on Tuesday, 16th August 2016 in Abuja.
Some of the stakeholders from various sectors of the Nigerian economy including National Assembly members, Manufacturers Association of Nigeria (MAN), Nigeria Labour Congress (NLC) and National Association of Nigerian Traders (NANTS).
Bellonwu-Okafor who expressed concern over the policy, however warned President Muhammadu Buhari’s administration of the impeding danger of assenting to the pact, as it poses greater threat to local and infant industries.
She also expressed concern over the imminent job losses and negative impact on the country’s proposed National Industrialization Revolution Plan (NIRP) as well as the danger of undermining Africa’s integration.
Going by the provision of Article 10 and 35(1) of the EPA that goods originating from the EU exported to West Africa countries shall be free of customs duties and restricts parties to the agreement from subjecting imports from any of the parties to any form of internal taxation or charges except transport charges that are based exclusively on the economic operation of the means of transport.
“In 2007, it was estimated that the value of Nigeria’s export (manufactured product) to the EU accounts for only 5.5% of the total export, when compared with petroleum products which was 41.8%. The total of manufactured products exported in 2007 stood at just 585 Euros ($770.70 million), while petroleum products exported valued at 4.457 billion Euros ($5,881.84 billion). As at the first quarter of 2013, Nigeria’s manufactured products exported has witnessed a remarkable increase of 70% from the 2007 exports. In order words, industrial and manufactured sector generated a total of $1.136.35 billion on export. The contribution of the manufacturing sector to the overall non-oil export to the EU stood at 28.4%,” the report stated.
Quoting a report from the Head, Division of International Economic Relations, Research Department of the Nigerian Institute of International Affairs (NIIA), “the revenue loss would trickle down to an average of $341 million by year 2020,” adding that
On the justification for declination to enter into the pact, the report stated that “the weak condition of the Nigerian economy which is characterized by overdependence on crude oil exports forecloses any real and/or potential benefits from an EU/ECOWAS EPA.”
The EPA also punctured Nigeria’s potency to key into the agreement considering inconsistency and poorly conceived government policies, as well as loss of potentials as lead exporter of some agricultural products such as cocoa, groundnut (peanut), rubber and palm oil in the 1970s.
Bellonwu-Okafor further observed that “the inherent danger is that Nigeria’s manufacturing sector may suffer as much as 30 to 35 percent disadvantage on cost over its competitors in Africa and Asia.
“Following years of secretive negotiations led by the European Union (EU), the EPA text was finalized in 2014 with a promise of benefits for developing West African countries like Nigeria including creating better access to EU markets and greater integration into the global economy.
“However, with negative reactions from Nigerian Manufacturers, civil society actors and trade experts citing the potent dangers to local and infant industries and the unbalanced benefits to European producers over local industries, the former President, Goodluck Jonathan refused to endorse the EPA. During the 49th Ordinary Session of the ECOWAS, in Dakar, Senegal, in June 2016, the government of Muhammadu Buhari delayed endorsing the EPA, opting instead to continue consultations with the Nigeria citizens,” she noted.