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4th Annual EAC Secretary General’s Forum for Private Sector, Civil Society and other interest groups held in Dar
The 4th Annual Secretary General’s Forum for Private Sector, Civil Society and Other Interest Groups was held from 3rd to 4th March 2016 in Dar es Salaam, United Republic of Tanzania with participants drawn from the civil society, private sector and members of other interest groups from the Partner States.
Addressing the participants during the official closing session on 4th March, 2016, Dr. Ramadhan Mwinyi, Deputy Permanent Secretary in the Ministry of Foreign Affairs, East African, Regional and International Cooperation, Tanzania noted that the forum was the best practice of how to engage dialoguing parties for the East Africa integration agenda.
“This being the 4th year of consistent dialogue is testament of the commitment of all stakeholders to an all-inclusive sustained engagement in the EAC integration process,” said Dr. Mwinyi
The Deputy Permanent Secretary who represented Minister of Foreign Affairs, East Africa, Regional and International Cooperation, Amb. Augustine Philip Mahiga further pledged to the participants that the region will remain very active in responding to the needs of the civil society, private sector and other interest groups.
In his remarks, the EAC Secretary General Amb. Dr Richard Sezibera challenged the citizens to lead the anti-corruption crusade in East Africa by electing ethical leaders. “Democracy should be about citizens determining their stake in how they want to be governed, empowering citizens to became prosperous and improving the dialogue of what model of countries they want to have,” said Dr. Sezibera.
Amb. Sezibera emphasized the need for citizens in East Africa to stop rewarding corrupt and unethical leaders by not re-electing them back to office.
The German Ambassador to Tanzania and EAC, Amb. Egon Kochanke, while giving his remarks commended the EAC Secretariat and regional dialogue partners for having institutionalized the annual event saying the forum would yield positive outcomes for the integration process.
Amb. Kochanke further lauded the fact that out of 76 resolutions emanating from the dialogue over the past three years, more than 20 resolutions had been fully implemented, adding that about 40 resolutions were well on track to implementation. “We are impressed by the rich discussions that transpired throughout the forum and the diversity of citizens representations from all spheres of EAC,” said the Ambassador
The EAC Deputy Secretary General in charge of Productive and Social Sector Hon. Jesca Eriyo noted the private sector’s notable progress towards improving governance through the launch of the Code of Conduct for the Private Sector by the EAC Heads of State at their 17th Ordinary Meeting held on 2nd March in Arusha.
On his part Prof. Adebayo Olukoshi of the Asia Institute of Democracy and Electoral Assistance in his keynote address, challenged African leaders to embrace social justice and democracy by establishing strong electoral independent institutions.
Meanwhile, the EAC Secretary General officially launched the new EAC mobile application which seeks to provide real time news updates and improve access to EAC information through mobile phones.
Also present at the Forum was the EAC Deputy Secretary General in charge of Political Federation, Mr. Charles Njoroge.
The 5th Annual Secretary General’s forum will be held in September 2016.
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ILO: Large gender gaps remain across broad spectrum of global labour market
New ILO report highlights the enormous challenges women continue to face in finding and keeping decent jobs around the world.
Despite some modest gains in some regions in the world, millions of women are losing ground in their quest for equality in the world of work, according to a new report prepared by the International Labour Organization (ILO) as part of the ILO’s Women at Work Centenary Initiative.
“The report shows the enormous challenges women continue to face in finding and keeping decent jobs,” said ILO Director-General Guy Ryder.
“Our actions must be immediate, effective and far-reaching. There is no time to waste. The 2030 Agenda is an opportunity to pool our efforts and develop coherent, mutually supporting policies for gender equality.”
The report, Women at Work: Trends 2016 examined data for up to 178 countries and concludes that inequality between women and men persists across a wide spectrum of the global labour market. What’s more, the report shows that over the last two decades, significant progress made by women in education hasn’t translated into comparable improvements in their position at work.
At the global level, the employment gender gap has closed by only 0.6 percentage points since 1995, with an employment-to-population ratio of 46 per cent for women and almost 72 per cent for men in 2015.
In 2015, 586 million women were working as own-account and contributing family workers across the world. As globally, the share of those who work in a family enterprise (contributing family workers) has decreased significantly among women (by 17.0 percentage points over the last 20 years) and to a lesser extent among men (by 8.1 percentage points), the global gender gap in contributing family work is reduced to 11 percentage points.
Although 52.1 per cent of women and 51.2 per cent of men in the labour market are wage and salaried workers, this in itself constitutes no guarantee of higher job quality. Globally, 38 per cent of women and 36 per cent of men in wage employment do not contribute to social protection. The proportions for women reach 63.2 per cent in sub-Saharan Africa and 74.2 per cent in Southern Asia where informal employment is the dominant form of employment.
The report also provides new data for up to 100 countries on paid and unpaid working hours and access to maternity protection and pensions.
Women work longer hours
Women continue to work longer hours per day than men in both paid and unpaid work. In both high and lower income countries, on average, women carry out at least two and a half times more unpaid household and care work than men. In developed economies, employed women (either in self-employment or wage and salaried employment) work 8 hours and 9 minutes in paid and unpaid work, compared to 7 hours and 36 minutes worked by men.
In developing economies, women in employment spend 9 hours and 20 minutes in paid and unpaid work, whereas men spend 8 hours and 7 minutes in such work. The unbalanced share of unpaid work limits women’s capacity to increase their hours in paid, formal and wage and salaried work. As a result, across the world, women, who represent less than 40 per cent of total employment, make up 57 per cent of those working shorter hours and on a part-time basis.
In addition, across more than 100 countries surveyed, more than one third of employed men (35.5 per cent) and more than one fourth of employed women (25.7 per cent) work more than 48 hours a week. This also affects the unequal distribution of unpaid household and care work between women and men.
The cumulative disadvantage faced by women in the labour market has a significant impact in later years. In terms of pensions, coverage (both legal and effective) is lower for women than men, leaving an overall gender social protection coverage gap. Globally, the proportion of women above retirement age receiving a pension is on average 10.6 percentage points lower than that of men.
Globally, women represent nearly 65 per cent of people above retirement age (60-65 or older according to national legislation in the majority of countries) without any regular pension. This means some 200 million women in old age are living without any regular income from an old age or survivor’s pension, compared to 115 million men.
Other key highlights of the report
There has also been further segregation in the distribution of women and men across and within occupations, over the past two decades, as skill-biased technological work increases, notably in developed and emerging countries. Between 1995 and 2015, employment increased most rapidly in emerging economies; the absolute change in employment levels was twice as high for men as for women (382 million versus 191 million respectively), regardless of the level of skills required, indicating that progress in getting women into more and quality jobs is stagnating.
In developed countries, women spend on average 4 hours and 20 minutes on unpaid care work per day, compared to 2 hours and 16 minutes by men. In developing countries, women spend 4 hours and 30 minutes per day on unpaid care work, compared to 1 hour 20 minutes for men. Although this gender gap remains substantial, it has decreased in a number of countries, mostly due to the reduction in time spent on housework by women, but not to significant reductions in their time spent on childcare.
In terms of wages, the results in the report confirm previous ILO estimates that globally, women still earn on average 77 per cent of what men earn. The report notes that this wage gap cannot be explained solely by differences in education or age. This gap can be linked to the undervaluation of the work women undertake and of the skills required in female-dominated sectors or occupations, discrimination, and the need for women to take career breaks or reduce hours in paid work to attend to additional care responsibilities such as child care. Though there has been some small improvement in reducing gender wage gaps, if current trends prevail, the report confirms estimates that it will take more than 70 years to close the gender wage gaps completely.
Getting to equal by 2030
The ILO theme for International Women’s Day 2016 is “Getting to Equal by 2030: The Future is Now”, reflecting the urgency of addressing these gaps if the U.N. 2030 Sustainable Development Agenda is to be achieved. Nearly all of the agenda’s goals have a gender component.
The report is also an important contribution to the ILO’s Women at Work Centenary Initiative. The Initiative marks the commitment of ILO constituents to gender equality as the ILO approaches its centenary in 2019, and is geared toward identifying innovative action that could give new impetus to the ILO’s work on gender equality and non-discrimination.
“Achieving gender equality at work, in line with the 2030 Agenda for Sustainable Development, is an essential precondition for realizing sustainable development that leaves no one behind and ensures that the future of work is decent work for all women and men,” said Shauna Olney, Chief of the ILO’s Gender, Equality and Diversity Branch.
The 2030 Agenda represents a universal consensus on the crucial importance of gender equality and its contribution to the achievement of the 17 Sustainable Development Goals. More jobs – and quality jobs – for women, universal social protection and measures to recognize, reduce and redistribute unpaid care and household work are indispensable to delivering on the new transformative agenda.
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How to get out of the box on SDT and move the SDGs and the WTO negotiations ahead?
Target 10a of the Sustainable Development Goals (SDGs) adopted as part of the 2030 Agenda by the United Nations last year provides that “the principle of special and differential treatment for developing countries, in particular least developed countries” should be implemented, in accordance with World Trade Organization (WTO) agreements, as part of the achievement of SDG 10 on reducing inequality within and among countries.
In 2013, WTO Members established a Monitoring Mechanism to review the implementation of existing special and differential treatment (SDT) provisions, but it has proven extremely difficult to design SDT, that is “precise, effective and operational” and at the same time politically feasible, for new WTO agreements.
One reason reaching agreement has been so difficult is because the global economic and trade landscape has undergone substantial change since 2001, which has led to the view among some Members that the economic implications of SDT in a global trade deal are different now compared to when the negotiations began. For example, according to the WTO, the share of developing countries in global trade rose from 33 percent to 48 percent between 2000 and 2012, while South-South trade accounted for 25 percent of world trade, up from approximately 10 percent twenty years ago. According to the IMF, based on Purchasing Power Parity (PPP), emerging economies accounted for around 35 percent of global Gross Domestic Product (GDP) in 2014.
This has given rise to fierce debate within the WTO, with some arguing that rights and obligations should be distributed among developed and developing Members and that emerging economies, still entitled to traditional SDT, should contribute more than poorer countries to a WTO outcome. Others, however, argue that the economic argument for SDT for the developing Members that make up 2/3 of the WTO’s membership remains highly valid, including the need to preserve policy space for domestic adjustment in some sectors that are not strong enough yet to face up to the competition that comes with rapid liberalization, and that emerging economies are still confronted with serious developmental challenges. According to the World Bank, 21.3% and 11.2% of the population of India (2011) and China (2010) are still living on less than US $1.90 a day.
The reality is that, politically, it is impossible for parliamentarians of developed countries to accept that emerging economies should continue to be sheltered under the same SDT as poorer developing countries. However, it is equally difficult to imagine that politicians in emerging economies would agree to forfeit their developing country status and undertake even similar obligations as developed countries. In the absence of solutions to untie this tight knot, substantial progress in WTO negotiations seems to be very difficult. WTO Members are currently deeply divided over how to move WTO negotiations forward. In the Nairobi Ministerial Declaration of December 2015, many Members reaffirmed the DDA mandates and progress since then, while others did not reaffirm the mandates and called instead for “new approaches”.
In my view, because of the high political sensitivity, blunt attempts to redefine “developing countries” or to regroup developing countries to separate big economies from small are therefore political dead ends. Rather than continuing the doctrinal and conceptual debate on the developmental status of emerging economies, negotiators could look at the specifics of each negotiating subject in a flexible and pragmatic manner to find solutions. Successful cases already exist in recent WTO agreements, including the Trade Facilitation Agreement (TFA) and the new Information Technology Agreement (ITA), in which at least some emerging economies have voluntarily exercised de facto “opt out” of SDT.
Meanwhile, the established notion of “principal supplier” in the WTO could also serve as a potential parameter to test where emerging economies may be willing to do more than other developing Members, such as on market access. The “principal supplier” rule was used in previous negotiations under the General Agreement on Tariffs and Trade (GATT), the predecessor of the WTO, to refer to the country or countries that were the most important source of a particular product imported by another country. According to the GATT Analytical Index explanation of Article XXVIII on modification of schedules, in early GATT negotiations: “Participating countries [could] request concessions on products of which they individually, or collectively, [were] the principal suppliers to the countries from which the concessions are asked.” Nowadays, in the context of Article XXVIII, principal suppliers are those WTO Members most affected by changes of schedules, such as increases in tariffs on a product, and therefore have the right to be part of compensation negotiations resulting from the schedule modification.
The logic that a principal supplier country is strong in producing and exporting a particular product, hence may be in a comfortable position to offer better market access and withstand the potential competition from exporters of that product from other countries, could be applied to current WTO negotiations. In fact, such a methodology has already been referenced in DDA negotiations, albeit in an informal manner rather than an agreed principle. As a former trade negotiator of China, I heard many times, such as in negotiations of environmental goods, demands among Members for tariff concessions from other members on particular products based on arguments that the latter were already dominant producers and exporters of those products.
The next step would be to go deeper into trade statistics to do a comprehensive evaluation of which WTO Members are already principal suppliers of particular products and make more specific suggestions about how the concept could be applied fairly in WTO negotiations. Some emerging economies, such as India and China, purely because of their sheer size and big populations, may naturally be principal suppliers of many products. Traditional trade statistics only measure the simple value of exports but not added value, hence may exaggerate the dominance of countries in the production of a product, when in fact the country is responsible only for the product’s assembly, for example. All in all, like in any negotiations, balance is the key.
In a nutshell, the “principal supplier” concept could help Members jump out of the box of doctrinal debates on SDT and serve as an interesting starting point to look at where each WTO Member could potentially contribute more in a fair manner. If the concept helped WTO Members reach agreement on new multilateral trade rules, it could contribute not only to the achievement of Sustainable Development Goal 10, through increased trading opportunities for poorer countries, but also to a range of other SDGs, including Goal 8 on economic growth and employment, and Goal 17 on a Global Partnership for Sustainable Development.
Xiankun Lu, a former senior trade negotiator of China to the WTO, is Partner of IDEAS Centre Geneva and Executive Dean of New Huadu Business School Switzerland. The views expressed in this article reflects the personal views of the author and do not necessarily represent the views of the institutions the author is affiliated to.
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Next steps towards a workable and effective climate regime
On December 12, 2015, 188 countries accounting for 98% of Green House Gas (GHG) emissions committed themselves to controlling emissions under a new ‘bottom up’ approach through goals pledged at the national level (the Nationally Determined Contributions (NDCs)).
On the heels of the failed Kyoto Protocol, the Paris Agreement is really the first important step taken to limit temperature increase, as pledges, if sustained beyond 2030, would limit temperature increase to around +30 C above pre-industrial levels. This falls short of the +1.50 to +20 as set out in the Agreement so more needs to be done. Compact contributions by 49 experts in a recent book financed by Ferdi discuss next steps to build a regime for limiting climate change that would be both workable and effective.
The Agreement is to come into effect in 2020 with a review process starting in 2023 – repeated on a 5-year cycle – that will assess contributions to mitigation, adaptation and finance in the light of future scientific results from the IPCC. Rules for Monitoring, Reporting and Verification (MRV) and a move forward towards climate finance for adaptation and mitigation in developing countries all represent steps in the right direction. Yet, building and sustaining a workable and effective climate regime is a daunting challenge requiring changes on many fronts. Contributions, collected in seven parts, present ideas on how to ramp up and build on the Paris Agreement. Some key suggestions are summarized below.
I. Quantifying the challenge. Co-chairs of the fifth report of the Intergovernmental Panel on Climate Change (IPCC) for Working Group I (on science) and for Working Group III (on mitigation policies) stress the urgency of getting started and that preserving key resources for human subsistence (land, food and water), as defined in UNFCCC Article 2, calls for greater efforts than if temperature increase were the only goal. Sustainability thus lowers our remaining carbon budget for the century by 30% beyond the level if temperature change was the only target. Urgency remains: to reach the +2°C relative to the pre-industrial level by the end of the century would require a pathway with emissions falling at 4.4% a year if the start date is 2015, but at 6.3%, if the decline starts in 2020, and it would be an (unreachable) 20% annual decline if started in 2030.
II. Divergent views from the regions. Differences in perceptions about the relevance of historical emissions for future obligations and about the political processes leading to countries negotiating positions are great. These will surface in the next round of discussions on mitigation commitments – scheduled for 2018 – and beyond. Descriptions on differences in perspectives from Africa, China, India, Japan, the EU and the US reveal why a ‘hybrid’ solution including a legally binding part establishing common rules complemented by elements left to the national legislation of each State had to be adopted in Paris. These differences also show the difficulties ahead when more ambitious measures will have to be taken. Converging on perceptions is a challenge ahead.
III. Dealing with architecture and governance. We have a ‘decentralized regime complex for climate change’ rather than an integrated regime for climate change. Hopefully the Paris Agreement has set up a process that promotes learning and cooperation to deal with challenges ahead. Are similar countries making similar pledges? How can MRV be effective and low-cost so as to ensure net benefits and encourage participation? How much can we expect from ‘experimental governance’ and from a ‘building blocs’ strategy? Both involve mobilizing stakeholders beyond central governments to include the private sector and civil society at large and should be complements to the UNFCCC approach. How should one ‘green the GATT’ to help avoid a clash of the trade and climate communities by tackling ‘trade leakage’ and free-riding?
IV. A plethora of policy options. Experience shows that many approaches to implementing the NDCs can be effective. An example is the regulatory approach followed by the US under the Clean Power Plan (CPP) that mirrors the one adopted for the Paris Agreement. The CPP may lead to a cost-effective outcome brought about “through the back door.” Four variations to direct carbon pricing, the pillar of Sweden’s successful climate policy, can also be envisaged: (1) the removal of fossil fuel subsidies; (2) fuel taxation; (3) cap and trade, and direct regulation; and (4) the promotion of renewable energy, as has been done by Germany over the last 15 years.
The hybrid architecture that is emerging from the Paris negotiations includes bottom-up (NDCs) and top-down (MRV) elements. Instruments will differ across jurisdictions calling for linkages. For this architecture to be effective, the pros and cons of diverse forms of linkages across jurisdictions (e.g., acceptance of allowance or credits in another jurisdiction or crediting for compliance) need to be evaluated. This will reduce mitigation costs which, in turn, should encourage greater ambition later on.
V. Difficult choices on technology options. Stabilizing GHG concentrations requires progressively reducing emissions to zero, and/or offsetting positive emissions with an equivalent removal of CO2 directly from the atmosphere. These are the only possibilities. There is scope for reducing emissions with existing technologies, but new technologies will be needed to close the gap between the cost of fossil fuels and alternative energy sources as the scale of effort increases over time. Adoption of carbon pricing will help, but ‘disruptive’ innovation with funding many times greater than current levels will be needed. This gap needs to be addressed in the next round of negotiations.
Emissions can be reduced through energy conservation and the substitution of nuclear power for fossil fuels but, because these approaches are limited, attention has focused on renewable energy (solar and wind). These will need to be scaled up to a much higher level. In addition, CO2 will need to be removed from the atmosphere. Carbon capture and storage is another option with high advantages like reducing leakage-related issues, but it faces high economic and social costs of storage. Hurdles are also faced by solar and carbon geo-engineering, the latter which is very cheap but faces governance problems and does not limit acidification of oceans.
VI. Burden sharing will be critical. The poorest countries have been the most severely hit by climate shocks and are projected to be the most vulnerable in the future. They have contributed the least to our current situation and have the least resources to deal with climate change. Improved access to health care and well-targeted social safety nets will be necessary but building low-carbon cities will be primordial as urban growth will be occurring in Africa. (Applying the average carbon replacement value for key construction materials of developed countries to all new urban construction expected to take place in the 21st century would require one-third of the available carbon budget for limiting climate change to +2°C). Obtaining finance and using it effectively is a big challenge for developing countries where governance and institutional capacities are usually weakest.
VII. Mobilising climate finance. A “redirection” of investments towards low-carbon options of around $5-6 trillion per year will need to be invested in infrastructure in the world’s urban, land use, and energy systems in the next two decades. Additional investments to cope with the societal transformations required to achieve the +2°C target amount to about 0.75 percent of world GDP in 2013. By contrast, limiting climate change to +2°C by means of carbon pricing would generate revenues equal to about 2.1 percent of OECD aggregate GDP in 2013. Carbon pricing and the removal of fossil fuel subsidies is urgent since the “alternative sources” of finance identified in 2009 (carbon markets and prices, taxes on transport and international financial transactions, and the green bond market) have been disappointing. Strong government leadership will be needed to steer finance towards a low-carbon future.
Cooperation must therefore occur in multiple areas simultaneously. New financial tools like the creation of “climate remediation assets” based on governments’ public guarantee of an attractive return on investing in low-carbon activities would help meet the needs of the developing world, estimated by the World Bank (2010) as 140-175 billion dollars a year by 2030 for mitigation actions and another 75-100 billion for adaptation. These estimates, necessary to address the fairness issue are two to three times the $100 billion per year commitment agreed at Copenhagen in 2009.
In conclusion, these contributions show that the scale, breadth, and complexity of the task are unprecedented, so that we have no alternative but to face this challenge directly. The Paris Agreement is a stepping stone that needs to be developed and improved upon. The UNFCCC process will remain central to any global effort, but it will not be the only game in town. The climate problem is too complex, too far-reaching, and too important for any one institutional arrangement to address it on its own. The contributions in this book provide some guidance for how the world can navigate the unchartered territory that lies ahead of us.
Jaime de Melo is a member of the E15 Expert Group on Trade, Finance and Development. He is an Emeritus professor at the University of Geneva, the Scientific Director of FERDI, a non-resident fellow of the Brookings Institution, and an invited professor at the Johns Hopkins University Bologna Center.
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tralac’s Daily News Selection
The selection: Monday, 7 March 2016
Starting today, in Dar es Salaam: East African Legislative Assembly sitting, 7-18 March. Twitter updates: @EA_Bunge
Later this week, in Lusaka: Regional Economic Communities coordination meeting, 9-12 March
Featured commentary, by Shawn Donnan: 'What ails global trade?' (The Straits Times/Financial Times)
The story is repeated and amplified far beyond Charleston. Last year saw the largest collapse in the value of goods traded around the world since 2009 - when the impact of the global financial crisis was at its worst. Moreover, major ports such as Hamburg and Singapore have reported slowing growth and even declining volumes. Barring a spectacular turnaround in the global economy, the subpar performance is likely to be repeated this year, making it the fifth straight year of lacklustre growth in global trade - a pattern not seen since the doldrums of the 1970s.
McKinsey argues that those moves, replicated in the US and elsewhere, have had a global impact, as carmakers and other companies have begun to bring production closer to home or to concentrate it in larger markets. Those patterns are starting to show in the data, with growth in global consumption of many finished products such as cars and pharmaceuticals outpacing trade growth in those goods in recent years, says McKinsey, while trade in many intermediate goods such as fabric and electrical parts has slowed.
Ethiopia: Foreign trade revenue fails to meet targets in seven months (Ethiopian Herald)
Briefing on nation's foreign trade performance here yesterday, Ministry Trade Expansion Directorate Director General Assefa Mulugeta said that some $1.51bn was secured from the export of various products failing to meet the target $2.1bn during the reported period. The revenue garnered from coffee, cereal crops, meat and Chat has achieved between 75-99% whereas horticulture, fruits and vegetables, dairy products, textile, livestock, chemical, construction inputs and others have registered 50-74%, he said. Of all the export items, Assefa said that gold, minerals, processed fruit products, foods, Tantalum, beverages, vet medicine and metal products, among others, have generated lower foreign revenue below 50%.
Trade in services: case studies from Africa (AU)
This volume is a compendium of five case studies of successful services exports in Africa. It highlights Air Transport Services in Ethiopia, Banking Services in Nigeria, Business Processing Outsourcing/ICT Services in Senegal, Cultural Services in Burkina Faso, and Higher Education Services in Uganda. The studies are an examination of possible best practices in services exports on the continent, as seen from the suppliers’ point view, with a review of the role of government policy and other factors that may have shaped their success. The studies find that most of the services exports from African Union members at present go to the regional market but some African countries have already diversified beyond the continent. In addition, they find that while certain initial factors have been key to the competitiveness of services sectors, supportive government policies and a conducive business-enabling environment have also been critical to their growth. [The editors: Sherry Stephenson, Carolyne Tumuhimbise] [Download]
CFTA-related tweets, by @snkaringi: President @UKenyatta today expressed the need for Kenya & Ghana to harmonize their vision with the CFTA supported by ECOWAS and EAC. Critical, as this week @UNCTAD and partners support ECOWAS' efforts to develop regional strategy 4 CFTA in Accra.
Related: President Kenyatta commits to a borderless African continent (Peace FM), President Kenyatta roots for increased Kenya-Ghana trade (Capital News)
TFTA: COMESA ministers urge states to speed up signing the Tripartite Agreement (COMESA)
In their Sixth Extra Ordinary meeting in Lusaka, 3–4 March 2016, the Ministers noted that since the launch of the TFTA in June 2016, 16 out of the 26 countries had signed the agreement. So far, none of the tripartite countries have ratified the Agreement. Those that have signed include Angola, Burundi, Comoros, D R Congo, Djibouti, Egypt, Kenya, Malawi, Namibia, Seychelles, Rwanda, Sudan, Tanzania, Uganda, Swaziland and Zimbabwe. Giving an update on the status of the TFTA, the COMESA Secretariat reported that national consultations on signing were on-going in Lesotho and Seychelles while similar consultations on ratification were underway in Sudan, Swaziland and Zimbabwe. The Ministers were also informed that considerable amount of work had been done during three subsequent meetings convened by the technical working groups on Rules of Origin, and Trade remedies. As a result, six out of seven annexes that had been finalized were submitted to legal scrubbing. These are Annexes 3,5,6,7,8,9 on non-tariff barriers, customs cooperation, trade facilitation, transit trade and transit facilitation, technical barriers to trade and sanitary and phyto-sanitary measures respectively.
Mozambique, Malawi eye one-stop border posts (StarAfrica)
Mozambique and Malawi have announced plans to establish one-stop centres at four border crossings in Tete and Niassa provinces as part of a strategy to facilitate the movement of people and goods, state radio reported Saturday. According to Radio Mozambique, the one-stop border posts would be established at the Chiponda-Mandimba and Mchinji-Mwami borders in the northern province of Niassa as well as Mwanza-Zóbuè and Dedza-Calómuè borders in the western Tete province.
West Africa: draft conclusions and recommendations from the ICE meeting (UNECA)
To member states: (i) continue to support ECA in its efforts towards the development of national statistics systems and support sub-regional development initiatives; (ii) strengthen technical collaboration with ECA as well as the domestication of country profiles as aid instruments for decision-making in the formulation of economic and social policies for the structural transformation of sub-regional economies.
Related: Bringing international trade innovations to West African countries: an interview with Ms Valentina Mintah (Leadership), 2015 SWAC Forum summary report: resilience and food security in West Africa (OECD SWAC)
COMESA: Enhancing financial inclusion through enhancement of the regulatory and supervisory framework (COMESA Monetary Institute)
The workshop produced a regulatory and supervision frame work which balances financial inclusion and financial stability and also recommended the preparation of Model Strategy for Financial inclusion in COMESA Region from 2017-2022, which details performance benchmarks for financial inclusion; a wider basket of products and services for financially excluded and possible delivery channels of the identified services. [Financial inclusion in Rwanda 2016 (FinScope)]
Key Bills on East African single currency complete (The East African)
The Bills for the establishment of the East African Monetary Institute, East African Bureau of Statistics and the Surveillance, Compliance and Enforcement Commission have been completed. “The EAMI Bill was finalised and is awaiting approval by the Sectoral Council on Finance and Economic Affairs, a statistics Bill was negotiated and is with legal drafters while the EA Surveillance, Compliance and Enforcement Commission Bill will be negotiated this month,” Geoffrey Mwau, director-general of the Budget, Fiscal and Economic Affairs Department in Kenya’s National Treasury told The EastAfrican. It has however emerged that the partner states are yet to complete preparing the Medium Term Convergence Programme covering the financial years 2015/16 to 2019/20. According to Kenya’s Ministry of East Africa Affairs, this exercise was to be concluded before the July 2015 meeting of the Sectoral Council on Finance and Economic Affairs.
East Africa: twitter updates
@KagutaMuseveni: With South Sudan joining the East African Community, our regional block’s geographical area is now almost the same size as India
@DonatBagula: Ethiopia interested 2 consider membership @NorthernCoridor 2 foster regional integration
@Kiptoock: Yesterday in nbi at N/Corridor projects meeting of immigration, labour & trade ministers, PS's & officials
Related: Lonzen Rugira: 'South Sudan and Burundi - from Arusha with a bitter taste in the mouth' (New Times), Kenya to soldier on even as partners in Lapsset pull out (Daily Nation), Oil pipeline: Which way for Uganda? (Daily Monitor), Mitumba ban - a plan that will soon unravel (editorial comment, The EastAfrican), Kenya to phase out passports, adopt regional travel permit (Club of Mozambique), Adopt EA passport cautiously (editorial comment, Business Daily), Charles Onyango-Obbo: 'Juba now allowed to play barefoot in the big league' (The East African), Magufuli begins austerity drive to instil discipline at EAC Secretariat (The East African)
South Sudan: Human Development Report 2015 (UNDP)
Chapter 6 explores the elements for creating the foundation of inclusive prosperity based on a vibrant national private sector and strong regional integration. For such prosperity to occur both immediate and longer term policy issues need to be addressed, as well as the hydrocarbons sector brought into alignment with national aspirations, given its current predominance as both an engine and impediment to sustainable growth. This chapter explores five cornerstones for establishing a sustainably growing and inclusive economy. [Eugene Owusu: 'South Sudan - beyond the dangers of today to the hopes of tomorrow' (The EastAfrican)]
Egypt: Planning for 2030 (Ahram)
The strategy was drafted jointly by the government, the private sector and NGOs and took two years of meetings and discussions to finish. The cases of several other countries drafting similar strategies were thoroughly studied in putting together the strategy, including those of Malaysia, India and the UAE. “We also looked at the EU, especially the Eastern European countries which have several socio-economic similarities with Egypt. The Polish experience was very helpful as it was similar to ours 20 years ago,” said Nihal Al-Megharbel, first assistant to the minister of planning and one of the main authors of the report.
Chinese investments to boost Africa's manufacturing capacity (Shanghai Daily)
"There are opportunities for certain manufacturing capacity to shift to Africa," Jeremy Stevens, Economist with the Standard Advisory (China) Limited, told Xinhua in an interview during a forum on the China-Africa Economic Cooperation convened by the CFC-Stanbic Bank. The forum was attended by dozens of Chinese investors, mostly corporate clients of the Standard Bank, to discuss ways of managing the economic challenges and the volatile debt markets in China. CFC-Stanbic Bank executives said there was need for regular exchange of information on how to effectively help economic players in both China and Africa to manage the economic challenges likely to affect them. "The slowdown in China suits Africa's needs because there would be more Chinese firms willing to invest outside China in order to generate economic growth and create an investment climate that would suit their long-term economic growth potentials in future. Africa will benefit," Stevens told Xinhua. [China-South Africa investment provides Uganda phosphate project with $240m boost (Mining Weekly)]
Korea-Africa trade and investment: increasing private sector investments in frontier markets through a regional approach (AfDB)
The services to be provided under the assignment include: a) conduct a survey among Korean chaebol and SMEs that are interested in doing or expanding business in one of the following regions in Africa: (i) Great Lakes; (ii) Horn of Africa; (iii) Sahel; and (iv) Mano River Basin. The region will be identified based on its potential for Korean companies to do/expand business there. The survey will assess, prioritize and cluster the main investment and trade sectors and identify the biggest constraints to do business. [Africa's power infrastructure: EOI for estimating investment needs, preparation of analytical reports (AfDB)]
WTO woos African states with top slot at key organ (Business Daily)
The World Trade Organisation members have elected Xavier Carim of South Africa to head its dispute settlement body (DSB) in yet another effort aimed at putting developing states at the centre of global trading system. Mr Carim will begin by steering DSB’s next regular meeting scheduled for March 23 after WTO delegates elected him by acclamation to replace outgoing chairman Harald Neple of Norway. Mr Carim faces numerous disputes, among them access of biotech products to global market and agricultural subsidy.
Women’s rights to land must be strengthened: African parliamentarians (UNECA)
‘Save Wildlife’ conference updates, downloads
Michael Froman: 'Trade policy’s role in protecting wildlife' (State Department)
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COMESA Ministers urge States to speed-up signing the Tripartite Agreement
The COMESA Council of Ministers has urged member States that have not signed the Tripartite Free Trade Area (TFTA) Agreement to do so and those that have signed to start the ratification process.
In their Sixth Extra Ordinary meeting in Lusaka Zambia on 3rd – 4th March 2016, the Ministers noted that since the launch of the TFTA in June 2015, 16 out of the 26 countries had signed the agreement. So far, none of the tripartite countries have ratified the Agreement.
Those that have signed include Angola, Burundi, Comoros, D R Congo, Djibouti, Egypt, Kenya, Malawi, Namibia, Seychelles, Rwanda, Sudan, Tanzania, Uganda, Swaziland and Zimbabwe.
Giving an update on the status of the TFTA, the COMESA Secretariat reported that national consultations on signing were on-going in Lesotho and Seychelles while similar consultations on ratification were underway in Sudan, Swaziland and Zimbabwe.
At the Summit that launched the TFTA in June 2015, in Sharm el Sheikh, Egypt, the Heads of State and Government directed the tripartite member and partners States to expedite the conclusion of the outstanding negotiation issues. These were in the Phase I of the negotiations process covering tariff offers, trade remedies and Rules of Origin. A time-frame of 12 months from the date of the launching was given to conclude the issues.
The tripartite was founded on three pillars namely, market integration, industrial development and infrastructure development. Phase I covers the market integration pillar which includes the removal of tariff and non-tariff barriers; as well as the implementation of trade facilitation measures, all of which are essential for the establishment of a well-functioning Tripartite FTA.
The Ministers were informed that considerable amount of work had been done during three subsequent meetings convened by the technical working groups on Rules of Origin, and Trade remedies. As a result, six out of seven annexes that had been finalized were submitted to legal scrubbing.
These are Annexes 3,5,6,7,8,9 on non-tariff barriers, customs cooperation, trade facilitation, transit trade and transit facilitation, technical barriers to trade and sanitary and phytosanitary measures respectively.
Tariff negotiations take place bilaterally between and among the tripartite/ member States and Customs territories. The outcomes of these bilateral negotiations are then presented to the Tripartite Trade Negotiation Forum.
In their final decisions, the Ministers urged member States to confirm their tariff offers to other TFTA member/Partners States and submit their tariff 2012 books to the Secretariat by 30 April 2016. The books should show clearly all current trade regimes they participate in and duties on products originating from TFTA countries.
On rules of origin, the Ministers noted that 47.9 per cent of all chapters relating to the negotiation on list rules remained outstanding and these represented 55% of total intra-tripartite trade value.
Further, the Ministers supported the adoption and approval for legal scrubbing on the Annexes on Rules of Origin and a dynamic approach to the negotiation of the rules based on key identified indicators.
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Trade in Services: Case studies from Africa
The services sector contributes almost half of the African continent’s economic output, and it has been growing at about twice the world’s average, signifying its transformative potential for the entire continent. This volume is a compendium of five case studies of successful services exports in Africa.
It highlights Air Transport Services in Ethiopia, Banking Services in Nigeria, Business Processing Outsourcing/ICT Services in Senegal, Cultural Services in Burkina Faso, and Higher Education Services in Uganda. The studies are an examination of possible best practices in services exports on the continent, as seen from the suppliers’ point view, with a review of the role of government policy and other factors that may have shaped their success. The countries and sectors were selected on the basis of their service sector performance.
In some cases (such as for Cultural Services in Burkina Faso), the authors have looked for non-traditional service sectors, especially where the private sector’s role in exploring the foreign market has been a critical success factor. Policy makers will find in this volume a gold mine of effective strategies that can be valuable in stimulating their services exports. Services firms can also learn from these case studies, while researchers and students can benefit from a trove of information to further stimulate research on African trade in services. Further, this compendium clearly demonstrates how public-private partnerships are critical to the growth of the services sector.
The studies find that most of the services exports from African Union members at present go to the regional market but some African countries have already diversified beyond the continent. In addition, they find that while certain initial factors have been key to the competitiveness of services sectors, supportive government policies and a conducive business-enabling environment have also been critical to their growth.
This report concludes that the services sector has the potential to become a significant driver of sustained economic growth and structural transformation in Africa. This is a very important finding in light of our Agenda 2063 aspirations.
Overview of services exports for growth and development: Case studies from Africa
In the current context of globalised trade, African economies must improve their competitiveness and diversify their economic base. Trade in commodities, though still the prime generator of employment and foreign exchange earnings, can no longer by itself power Africa’s development. Export preferences for traditional products such as bananas, sugar, and clothing are eroding; African economies must focus on new, sustainable sources of employment, exports, and growth. The increasingly competitive services trade is an important emerging opportunity to explore.
In January 2012, the African Union Summit of Heads of Government adopted an Action Plan for Boosting Intra-African Trade and a framework to fast track the proposed Continental Free Trade Agreement (CFTA). The plan highlighted trade in services as a promising approach to enhance intra-African trade and increase competitiveness.
African services trade has been largely underexploited to date; therefore, the African Union Commission has undertaken five case studies highlighting successful service export strategies. The papers are designed to raise awareness of the service industry’s export potential, and are particularly timely given the decision by the African Ministers of Trade to negotiate services in 2015 in pursuit of CFTA implementation. These case studies are part of an ongoing effort by the African Union Commission to increase awareness of the contribution of services to individual African economies.
The general objectives of these services case studies are threefold:
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To promote knowledge of services trade and of the actual and potential contribution of services exports to economic development and regional integration in Africa
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To obtain data on service sectors and exports for inclusion in a repository of services ‘best practices’ in Africa and an African Trade Observatory services database
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To illuminate the critical impact of policy choices on successful services sector development and export growth across Africa.
Many are not aware that all African economies already export services in some form. The contribution of these exports to economic growth and trade profiles are even less understood. International trade is now characterised by global value chains, in which services play a key role; Africa has yet to realise its full potential in this arena. Understanding how to successfully promote and leverage services exports may encourage African leaders to shape policies that are service-provider friendly and boost participation in regional and global trade.
Scope and Coverage of Case Studies
Little is written specifically about individual services sectors in African economies. This is a challenge for policy makers; to make better informed decisions on appropriate service-sector policies, they need more information on services and the role they play in national development and international trade. We analyse five services sectors in five African countries in order to begin to fill this knowledge gap:
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Air Transport Services: Ethiopia
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Banking Services: Nigeria
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Business Process Offshoring (BPO) and ICT Services: Senegal
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Cultural Services: Burkina Faso
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Education Services: Uganda
All but Nigeria are least developed countries, significant because the case studies highlight least developed AU members’ active engagement and comparative advantage in certain service export markets. This is contrary to the widely held perception that African countries at lower levels of development cannot export services. That is simply not true; services exports often add significantly to national output, employment, and foreign exchange earnings, including in least developed countries.
For each case study, a local expert worked in tandem with an international specialist. A questionnaire tailored to the specific structure of the service sector in question was used as the basis for interviews with national counterparts in each country. The case study research was made possible through the support of international donors, including the European Union (EU), the U.S. Agency for International Development (USAID), Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), and the United Nations Development Programme (UNDP).
All five case studies follow a similar outline so their findings are as comparable as possible. Content includes:
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Basic data on services in the selected country
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Overview of the selected service sector: market structure and contributions to gross domestic product (GDP), employment, growth, and trade
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Policy and institutional framework for the service sector
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Success stories in exporting the service in question
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Factors affecting comparative advantage in the selected service sector, including skill availability; literacy and training; financial attractiveness; business environment; infrastructure quality, especially in the telecommunications sector; and ease of doing business
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Government policies affecting successful services exports, including how services policy has been incorporated into national economic objectives and strategic planning, and what types of incentive policies the government has adopted to promote the services sector in question
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Analysis of strengths, weaknesses, opportunities, and challenges (SWOT) to encourage service sector development and exports
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Lessons learnt and best practices.
Although covering very diverse sectors, including two traditionally considered non-traded, the five case studies all underline how services markets developed and which policies enabled their success.
Main Conclusions and Policy Lessons from the Case Studies
The five case studies set out conclusions and recommendations for how governments can develop a more effective services trade policy framework. Best practices in these export success stories, and also less successful outcomes, are highlighted in the studies. Below are the main conclusions and policy lessons under six headings.
1. Most services exports from these five sectors are directed at the regional market, but some exports have already been diversified beyond the continent.
The five countries have had notable success in exporting services in the respective sectors studied. In the case of education services and cultural services, most of these exports have been directed to the regional market within Africa. However, banking services, BPO/ICT services, and air transport services have travelled not only within, but also beyond African borders. BPO/ICT exports from Senegal are going to France and other Francophone locations in Europe. Ethiopian air transport services are directed all over the world, with destinations in Europe, the Americas, and Asia. Banking services from Nigeria are present in international operations in six countries outside of Africa. Exporting services typically begins at the regional level and moves further afield if successful.
2. Successful exports in one mode of supply have generated services exports in other, complementary modes.
It is striking to observe that when one mode of supply has generated successful services exports, exports in complementary modes of supply often followed. For example, the successful export of Ugandan higher education services through attracting foreign students has led to three universities establishing branch campuses abroad. EAL’s successful export of air transport services has led to the establishment of local training schools for pilots and air transport personnel. Successful Nigerian banking services exports have led to the establishment of foreign branches and subsidiaries, accompanied by the movement of skilled Nigerian banking personnel. This underlines the importance of implementing policies favouring modal neutrality both at home and in common export markets, so that firms can choose the most effective and efficient mode of service delivery.
3. Initial advantage in the services sector was due to specific factors, in many cases leveraged into bigger export growth and success over time.
In all five cases certain factors gave each country an initial advantage in their particular sector: location, size, factor endowment, or historical development, as follows:
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Air transport services in Ethiopia: First mover advantage with the establishment of Ethiopian Airlines in 1945, and its geographical hub location
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Banking services in Nigeria: Inflow of petroleum foreign exchange, providing a surplus of capital in the domestic market to leverage for investment abroad
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BPO/ICT services in Senegal: Skilled entrepreneurs with good knowledge of, and connexions to the French market
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Cultural services in Burkina Faso: Numerous creative artists and a historical tradition of cultural festivals and activities
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Education services in Uganda: Unique position of Makerere University after its 1935 transformation into a Centre for Higher Education in East Africa to serve the needs of the East African region.
All five countries have been able to parlay or leverage these initial advantages into bigger growth and export success over time, some more successfully than others.
4. Government policy has been critical in helping initial advantages to grow; conversely, the lack of supportive government policy has hampered further growth in services exports.
In some of the cases studied, the government was proactive in helping initial advantages grow for the specific service sector; in other cases government policy has been neutral or inactive. In the latter cases it is questionable whether the sector’s initial success is sustainable.
Whilst government policies were not present during the Senegalese BPO/ICT industry’s infancy, the government soon actively targeted the sector with a number of directed support policies. In Burkina Faso the government has been consistently involved from the outset, providing targeted policies and financial support for the cultural services sector.
In other cases, the respective government has developed an appropriate regulatory framework enabling the sector’s success. This is the case for air transport services in Ethiopia and banking services in Nigeria where the government has not provided direct support, but has ensured both an open and competitive domestic environment as well as sound regulatory structures.
In the case of higher education services, the Government of Uganda has identified the sector as a policy priority following its initial reform, but has not implemented any specific support policies, putting the further growth of education services exports somewhat into question.
5. For cases where government policy has actively supported services sector development, services exports have grown impressively.
Various types of proactive policies have been shown to play a positive role in this regard. For all sectors studied, when government policy proactively targeted services development (whether it be through positive incentives including subsidies, training programmes, and tax incentives; key trade policy decisions and engagement; or sectoral regulatory reform and liberalisation), the sector in question grew substantially.
Exports of Senegalese BPO/ICT services were strongly facilitated by liberalisation and trade commitments in the telecommunications sector in concert with other facilitating policies and investment incentives. Likewise, the liberalisation of an “open skies” policy in the Yamoussoukro Decision provided an impetus to develop Ethiopian air transport services and also served to design a liberal and open regulatory framework. Similarly, regulatory reform, accompanied by strong fiduciary principles and guidelines, created a sound financial environment in which Nigerian banks could first consolidate their capital base and subsequently expand to foreign operations. Targeted policy interventions and governmentsponsored private-public partnerships for cultural activities have allowed cultural services to continue to thrive in Burkina Faso. Reform and liberalisation of the Ugandan education sector allowed the establishment of private universities and has enabled the country to attract numerous foreign students, thereby stimulating higher education service exports.
The five case studies demonstrate that supportive government policies and/or an adequate regulatory framework significantly impact the success of services exports.
6. Constraints and weaknesses of other service sectors threaten to inhibit expansion of successful services exports in the cases studied.
The future expansion of successful service export sectors is threatened by the weaknesses of complementary service sectors in the home market. In the case of Senegalese BPO/ICT services, a weak education sector limits a sufficient supply of skilled human resources in the form of trained engineers and computer specialists. Inefficiencies in the financial services sector constrain EAL’s ability to raise capital and take out loans to expand the air transport services sector. The lack of low-cost Internet in the Ugandan telecommunications sector severely constrains further expansion of education services. Exports of Burkinabe cultural services are negatively impacted by the small size and weak infrastructure of the tourism sector; it is difficult to attract larger audiences to various cultural fairs and shows. Thus the entire services environment and the viability and efficiency of related services sectors play a decisive role in the export success and sustainability of each specific service sector examined.
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North Africa: Combined efforts necessary to seize green industrialization opportunities
The Economic Commission for Africa (Office for North Africa) concluded, Friday 4 March 2016 in Rabat, its 31st Intergovernmental Committee of Experts (ICE). During this four day meeting, more than 150 delegates, experts, academics, private sector and civil society representatives studied the potential role of green economy in accelerating industrialization in North Africa.
At the end of the meeting, participants called for the development of an environment friendly industry and a more inclusive growth model in the subregion. They also encouraged States to pay special attention to the impact of industrial policies on the environment, employment, growth and trade, as well as on the potential role of green economy in development.
The “green industrialization” challenge in North Africa requires stronger regional cooperation, to share experiences and pool efforts in order to generate and take advantage of as many opportunities as possible in the sector.
In addition, following an expert group meeting organized on the margins of the ICE meeting on “Industrialization through trade in North Africa in a multi-agreement context”, participants called for regional integration to be considered as a strategic industrialization lever. They urged countries in the subregion to accelerate such an integration to speed up industrial development. As industrialization can no longer be designed in isolation, cooperation between countries is also viewed as necessary to achieve the joint development of dynamic competitive advantages at the regional level.
In addition to these two meetings, two ECA-specialized institutions – the African Trade Policy Center (ATPC) and the African Institute for Economic Development and Planning (IDEP) joined the Office for North Africa to organize a high level trade policy dialogue in preparation for the start of negotiations for the African Continental Free Trade Agreement (CFTA) in April 2016.
The CFTA is an opportunity for North African countries to access a market with more than 1.1 billion inhabitants. Industrialization in the subregion should be designed taking into account the CFTA, and countries are encouraged to ensure its consistency with commitments made in relation with other trade agreements.
The Economic Commission for Africa (ECA) is one of the five regional commissions of the UN Economic and Social Council (ECOSOC). In North Africa, ECA’s sub-regional office aims to support development across the region (Algeria, Egypt, Libya, Morocco, Mauritania, Tunisia and Sudan) by helping the countries set up and apply policies and programmes that can contribute to their economic and social transformation.
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‘Diversify to combat weakening currencies’
African countries need to reinvigorate efforts to diversify their economies in the wake of plummeting global commodity prices which have weakened local currencies across the continent and forced economies to revise GDP growth downward.
Most countries in Africa have not heeded calls to diversify economies for several decades and this is now haunting their economies.
For net exporters of commodities, output has slowed considerably because of commodity prices that have declined sharply over the past three years.
As a result, currencies of these commodity-exporting nations have also plummeted to record lows, exacerbated by the slowdown in the Chinese economy which has threatened to worsen the retreat in prices.
Robert Lynch, a currency strategist at HSBC Holdings Plc in New York recently cautioned that correlation between currencies and commodities has diminished.
“The China story is important, and so seeing some weakness in these currencies at a time when some of these commodity prices are under pressure, I certainly would put it as a factor,” he said.
China has become the biggest consumer of African commodities and the slowdown in the Asian economy has meant demand for Africa’s commodities diminished as well.
As Chinese growth slows, so has Africa’s.
The World Bank says Sub-Saharan Africa’s growth will decline from 4,6 percent last year to 4,2 percent this year as the major source of revenue for most governments decline.
According to the International Monetary Fund (IMF), the weak commodity price outlook could also subtract almost 1 percentage point annually from the growth rate of commodity exporters, from this year to 2017 as compared with 2012 /14.
The situation has not been helped by the fact that the greenback has been enjoying its fastest rise in 40 years this year as it is strengthening dramatically against all the world’s other major currencies.
Analysts say the trickle effects of low commodity prices could affect the ability of African governments to pay back debts accumulated over the past decade which were encouraged by surging commodity prices and a global appetite for high-risk debt.
In the case of Zimbabwe, Government has revised economic growth for 2015 to 1,5 percent from 3,1 percent as a poor agricultural season and lower global commodity prices take their toll on productivity.
The combination of a weakening South African rand and a strengthening United States dollar has rendered mining output uncompetitive compared to others in the region.
Mining contributes more than 15 percent of Zimbabwe’s GDP with gold and platinum exports accounting for over 80 percent of mineral exports.
Zimbabwe has the second-largest known platinum reserves after those of South Africa but producers have been groaning under the strain of low prices and high taxes. The country also produces chrome, diamonds and coal among 30 other minerals that have a potential to boost export receipts.
Zimbabwe Economic Policy and Research Unit executive director Dr Gibson Chigumira recently said the currency volatility would definitely affect platinum output.
“We have a geology that facilitates that our platinum production is very viable and competitive, but because of the devaluation in South Africa with their geology, which is worse than ours they are now more competitive than us. But it’s simply because of the change in exchange rate,” he said.
But the country has no currency of its own after it adopted a multi-currency regime in 2009, leaving the central bank with no monetary autonomy and lack of exchange rate flexibility to enhance export competitiveness.
Experts said the only way to address problems that arose from this scenario was to “look at internal processes in terms of reducing costs of production.”
The Reserve Bank of Zimbabwe in August proposed that the country should pursue internal devaluation to promote export competitiveness in the absence of its ability to effect nominal exchange rate adjustments.
Zambia’s central bank gave warnings in August that the falling price of copper was putting immense strain on the kwacha.
As the falls in the price of copper hit the country, the kwacha dropped to 10,150 last month before reaching a low of 12,134 to the dollar today.
The southern African nation derives 70 percent of export earnings from copper which accounts for 11 percent of Zambia’s gross domestic product.
The slide in global copper prices has already prompted the government to slash its economic growth forecast for this year to 5 percent, from an initial 7 percent.
And a deepening power crisis has increase pressure on the country’s mining industry, threatening output, jobs and economic growth in Africa’s second biggest producer of the metal.
Glencore, Vedanta Resources Plc and China’s NFC Africa and CNMC Luanshya Copper Mine have all said they might shut down some operations due to the harsh business environment.
But the closure of mines and smelters is likely to hit its output, which was projected to increase to 916,767 tonnes by 2018 from 741,916 tonnes in 2015.
The threat of lower revenues and the sharp slide in the kwacha has renewed pressure on Zambia to diversify its economy.
Analysts say 90 percent of the problems the country is experiencing are externally triggered and “this is a huge wake-up call that you cannot depend on an export whose price you cannot control.”
The economy of Angola is one of the most heavily oil-dependent in the world. Consequently, when the price of oil drops, the Angolan economy suffers excessively.
Angola’s gross domestic product of about $124 billion is the third biggest in sub-Saharan Africa after Nigeria and South Africa.
But Africa’s second-largest oil producer has been struggling to cope with crude prices that have slid more than 40 percent over the past year.
The price of a barrel of global oil benchmark product, Brent North Sea crude dropped to $48.61 per barrel on Monday.
Angola’s central bank has devalued its currency as the drop in oil prices cut the main source of government revenue and export earnings.
The rate for the kwanza was weakened to 130.442 per dollar in September. Currently, the kwanza is trading at 135,302 against the dollar.
Earlier this year, government had to cut its 2015 budget by 26 percent to 5,4 trillion kwanza ($46 billion).
Angolan Finance Minister Armando Manuel told the media that Angola’s financial planners had assumed crude oil would be selling for between $88 to $92 per barrel when they crafted the nation’s budget.
South Africa’s economy contracted in the second quarter, worsening the outlook for a country grappling with a plunging currency, power shortages, and a slump in commodity prices.
Gross domestic product fell for the first time in more than a year by 1.3 percent from the previous quarter. South Africa is the top exporter of platinum, coal, iron ore, gold and other minerals.
“The depreciation has occurred side-by-side with falls in commodity prices which hurt in terms of what we get for our exports,” Lungisa Fuzile, Director-General of the Treasury was quoted saying.
Government has since revised growth prospects to 1,5 percent this year.
The country has a vibrant manufacturing sector which makes up about 13 percent of the economy. However, the sector contracted by an annualised 6,3 percent in the second quarter of this year.
Like all commodity based economies, Botswana faces a similar challenge created by a drop in the sale and prices of its rough diamonds.
Diamonds account for about a third of the country’s gross domestic product (GDP), 80 percent of exports and 40 percent of the entire government’s revenues.
In 2013, the country is reported to have exported polished diamonds worth 6,6-billion pula.
The government of Botswana holds a 15 percent stake in De Beers, and is also an equal partner in the mining corporation Debswana and sorting house DTC Botswana.
But De Beers sales have slumped, with rough exports dropping 15 percent year-on-year to $1,7 billion in the first half of 2015.
The diamond cutting and polishing industry has also been affected and an estimated 1 000 jobs have been slashed in the past year as manufacturers have scaled down operations.
In August, Botswana cut its GDP growth forecast for 2015 to 2.6 percent from an earlier projection of 4,9 percent. The treasury also revised its budget to post a deficit as a percentage of GDP to 1,1 percent for 2015/16 rather than the surplus initially touted.
Nigeria, Ghana and Kenya among others, have also not been spared.
Industry experts say the problem now needs African countries to work together to find solutions that work.
In a paper titled ‘Africa needs its own version of the Airbus Project’, founder and executive chair of the Mandela Institute for Development Studies Nkosana Moyo says a more unified African market could create the scale for which investment for significant production levels would become easier to attract.
“In the southern African development community, there has been a lot of talk about industrialisation of late. This is not an unreasonable aspiration. If countries in a sub-region, say platinum producers, take a joined-up approach to the building of a sub-regional value chain for platinum, I think this will be entirely feasible,” he said.
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Rwanda financial inclusion up
Rwandan financial exclusion has dropped by 17 percentage points from 28.1% in 2012 to 11% in 2015/16, however the percentage of banked adults increased from 23% in 2012 to 26% in 2015.
According to findings in the latest FinScope survey, this slight increase was mainly due to new banking channels entering the market resulting in increased outreach of existing banks.
Presiding over the launch of the Finscope 2016 survey findings, Prime Minister Anastatse Murekezi said having 89% of Rwandans (about 5.2 million individuals) financially included was a great achievement.
“We believe that financial inclusion is critical to achieve inclusive & sustainable economic growth & development. Survey shows us that we are on-track towards meeting our target of 90% financial inclusion by 2020,” Prime Minister Murekezi said.
The FinScope survey is a yardstick that provides a holistic understanding of how individuals manage their financial lives. It identifies the factors that drive financial behavior and those that prevent individuals from using financial products and services.
The first FinScope survey in Rwanda took place in 2008 and 2012 largely driven by demand for credible information to guide policy interventions and financial service providers in their efforts to expand the reach and depth of the Rwandan financial system.
In his remarks, Claver Gatete, the Minister of Finance and Economic Planning said that Finscope survey provides insights to guide policy makers and regulators in terms of how to address or respond to some of the challenges they face in order to meet financial inclusion targets.
Gatete said it also provides financial service providers with crucial strategic information regarding their target markets and the financial services that these markets need – enabling them to extend their reach and broaden the range of services they provide
“The FinScope survey findings and recommendations guide the formulation of several reforms in the Financial Sector of Rwanda. Implementation of these reforms has significantly contributed to the progress in terms of financial inclusion,” Minister Gatete said.
Finscope 2015-16 survey also indicates that the total banking network increased from 1,282 (branches, outlets and banking agents) in 2012 to 3,085 in 2015. The percentage of adults, who are formally served, increased from 19% in 2012 to 42% in 2015. This shift was mainly due to the Mobile money uptake and continued increase in the uptake of Umurenge SACCOs services.
Mobile money and Umurenge SACCOs played a significant role in pushing out the boundaries of formal financial access for farmers, farm workers and individuals who earn an income from piece-work than for individuals earning an income through formal employment.
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Key Bills on East African single currency complete
East African Community member states have completed drafting crucial legislation required to fast-track the establishment of a single currency regime.
The EAC heads of state signed a protocol in November 2013 in Kampala committing to a 10-year road map towards achieving a monetary union in 2024.
The protocol provides for the introduction of a single currency and creation of a single central bank for the region.
The Bills for the establishment of the East African Monetary Institute (EAMI), East African Bureau of Statistics and the Surveillance, Compliance and Enforcement Commission have been completed.
“The EAMI Bill was finalised and is awaiting approval by the Sectoral Council on Finance and Economic Affairs, a statistics Bill was negotiated and is with legal drafters while the EA Surveillance, Compliance and Enforcement Commission Bill will be negotiated this month,” Geoffrey Mwau, director-general of the Budget, Fiscal and Economic Affairs Department in Kenya’s National Treasury told The EastAfrican.
The review of the Bills by the EAC taskforce had been planned for May 2015 but was delayed due to the political crisis in Burundi.
The partner states now have a five-year timeline to achieve key targets.
These include overall inflation of eight per cent, fiscal deficit including grants of three per cent of GDP, gross public debt (50 per cent of GDP in net present value terms) and a floor on reserve coverage of 4.5 months’ worth of imports.
The partner states are also expected to comply with three indicative requirements including a ceiling on core inflation of five per cent, fiscal deficit excluding grants of six per cent of GDP and a tax-to-GDP ratio of at least 25 per cent. To qualify for the monetary union, each country will have to meet the convergence criteria and comply with them for at least three years.
According to the East Africa Monetary Union (EAMU) Protocol, the primary convergence criteria will become binding by 2021.
More work pending
It has however emerged that the partner states are yet to complete preparing the Medium Term Convergence Programme (MTCP) covering the financial years 2015/16 to 2019/20.
According to Kenya’s Ministry of East Africa Affairs, this exercise was to be concluded before the July 2015 meeting of the Sectoral Council on Finance and Economic Affairs.
“The partner states are still in the process of finalising the medium-term convergence programme to show where they are and how they intend to move from there,” said Peter Njoroge, a director of economics at Kenya’s Ministry of East Africa Affairs.
According to the EAMU protocol, the East Africa monetary institute should have been in place before the end of last year while the other institutions have a deadline of 2018.
Each country’s convergence programme is expected to cover the main sectors of the economy including the real economy, the inflation outlook, fiscal and monetary aggregates, growth and the balance of payments (current account).
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Overview of recent economic and social developments in Africa
Report prepared for the Ninth Joint AUC-ECA Annual Meetings of the AU Conference of Ministers of the Economy and Finance and ECA Conference of African Ministers of Finance, Planning and Economic Development, taking place from 31 March to 4 April 2016 under the theme: “Towards an Integrated and Coherent Approach to Implementation, Monitoring and Evaluation of Agenda 2063 and the SDGs”
Introduction
Africa’s economic growth declined moderately following the slight contraction in growth in the global economy, which was mainly due to subdued growth in emerging market and developing economies, while a modest recovery continued in developed economies. Looking forward, Africa’s real GDP growth is expected to increase by about 4.3 per cent in 2016 and 4.4 per cent in 2017.
Growth continues to be driven by strong domestic demand and investment (particularly in infrastructure). The improving business environment, lower costs of doing business and better macroeconomic management continue to enhance investment. The buoyant services sector and a focus on non-oil sectors by oil-exporting economies to mitigate the continued decline in oil prices will contribute to the positive medium-term prospects. In addition, the increasing trade and investment ties within Africa and between Africa and emerging economies as well as the recovery of traditional export markets, particularly in the eurozone, will positively contribute to the mediumterm prospects.
All the African subregions and economic groupings experienced current account deficits in 2015 that were driven to some extent by declining commodity prices, as oil-exporting countries recorded the first current account deficit since 2009 in 2014. On the other hand, low oil prices led to the narrowing of the deficit in oil-importing countries. Most African countries exercised tight monetary policy as global headwinds weighed on the region, mainly to curb rising inflation together with high fiscal and current account deficits. Inflation rates increased mainly as a consequence of weaker domestic currencies owing to declining commodity prices and rising food prices on the continent.
Africa’s medium-term prospects remain positive, despite the downside risks such as the current dry spell over the East and Southern parts of the region, which might significantly affect agricultural production as most of the economies are based on agriculture. The weak global economy, monetary tightening in developed economies and security and political instability concerns in some countries still remain a challenge.
Developments in the global economy and implications for Africa
Global growth declined moderately from 2.6 per cent in 2014 to 2.4 per cent in 2015, reflecting subdued growth in investment and household final consumption. The economic slowdown and rebalancing of economic activity in China away from investment and manufacturing towards consumption and services, lower prices for energy and other commodities (affecting economic activity in countries such as Brazil and the Russian Federation, as well as in other commodity-exporting countries) and gradual tightening in monetary policy in the United States are some of the key factors that have weighed negatively on global growth.
Growth in world trade remained subdued in 2015 at 2.6 per cent, the lowest rate since the global financial crisis, mainly owing to weak aggregate demand in emerging and developed economies, especially China and those in the euro area, the appreciation of the United States dollar against other currencies and rising geopolitical tensions in Iraq and the Syrian Arab Republic, and between Ukraine and the Russian Federation. These developments have had significant effects on trade in developing countries, including those in Africa. However, in the short term, trade growth is projected to accelerate to 4.0 per cent in 2016, thanks to strengthening demand from developed countries, which is expected to lift exports from developing countries.
The global outlook in the short term is slightly positive with growth projected at 2.9 per cent in 2016 reflecting a further increase in emerging and developing economies, in particular in Brazil, China and the Russian Federation, as well as in Middle Eastern countries and other Latin American countries. Nevertheless, the macroeconomic uncertainties that have persisted since the global financial crisis and the volatility of commodity prices will continue shaping the medium-term outlook. Against this backdrop of falling commodity prices, global growth patterns, declining trade flows, capital flows and diverging monetary policies, exchange rate volatilities have become more pronounced. The continued decline in oil prices, however, may generate a positive outlook for the African continent because of the number of oil importers, while oil exporters may see a deterioration of their current account balances and depreciation of their exchange rates.
The overall impact on Africa will strongly depend on the recovery in China and the euro area, which are Africa’s main trade partners. The political tension in Syria and some other parts of the Middle East, coupled with the issue of illegal migration facing the euro area, will also create serious concerns, as it will directly affect the demand side in Africa’s trade partners. Tightening monetary policy in the United States resulting in a muted increase in United States interest rates will also enhance the movement of capital outflows from developing and emerging economies.
Africa’s economic performance and prospects in 2015
Africa’s growth rate declined slightly from 3.9 per cent in 2014 to 3.7 per cent in 2015 owing to the global economic slowdown (see figure 1). Yet Africa’s growth is the second fastest after East and South Asia. Growth in Africa continues to be driven by domestic demand. Growth in private consumption is influenced by increased consumer confidence and an expanding middle class on the continent, while investment is driven mainly by an improved business environment and lower costs of doing business. Continued government spending on infrastructure projects, in particular, has also been positively contributing to growth. The external balance, however, had a negative impact on growth in 2015, as a result of weak and volatile commodity prices.
Private consumption continues to be the main driver of Africa’s growth
The contribution from private consumption grew from 1.6 per cent in 2014 to 2.7 per cent in 2015 (see figure 2). Despite the increase in infrastructure development on the continent, gross fixed capital formation contributed 1.0 percentage points to growth in 2015 (as was the case in 2014). This was mainly due to the reduction in capital inflows as a result of the slowdown in the global economy, especially among Africa’s development partners in the euro area and some emerging economies such as Brazil, China and the Russian Federation. Net exports continued to weigh negatively on growth in 2015.
Varying growth performance across economic groups and subregions
Despite the low oil prices, oil-exporting countries, with a 3.5 per cent growth rate, continue to perform well (as declining oil prices are partially cushioned by healthy dynamics in the non-oil sectors in some countries) as compared to both oil-importing and mineral-rich countries, with an average growth of 3.5 per cent and 3.0 per cent respectively (see figure 3). Growth in these two groups of countries is mainly driven by private consumption contributing 3.1 per cent and 3.2 per cent to growth, respectively.
Private consumption continued to be the main growth driver across subregions in 2015, despite the decline in its contribution to growth in East and Central Africa, mainly due to the global economic slowdown that has led to a reduction in investment flows to these subregions. However, it increased significantly in North, Southern and West Africa, contributing 2.2 per cent, 2.1 per cent and 3.4 per cent, respectively, to growth in 2015. Meanwhile, gross capital formation contributed significantly to growth in the East and North Africa subregions at 1.8 per cent and 1.6 per cent, respectively, mainly as a result of increased investments in infrastructure projects in both subregions.
At the subregional level, East Africa maintained the highest growth rate in the region at 6.2 per cent in 2015, despite experiencing a growth decline relative to 2014 levels, mainly as a consequence of lower growth in Ethiopia and the Democratic Republic of the Congo.
Growth in West Africa decreased to 4.4 per cent in 2015, mainly driven by a more pronounced lower growth rate in Nigeria on the back of a weaker oil sector and power outages. The consequences of the 2014 Ebola outbreak in the most affected countries, namely Guinea, Liberia and Sierra Leone, also continued to weigh on these countries’ growth potential, despite Guinea and Liberia returning to positive growth.
The overall growth rate decreased slightly from 3.5 per cent in 2014 to 3.4 per cent in 2015 in the Central Africa subregion, despite its improved performance in the mining sector. While most countries in the subregion maintained a relatively high growth path, the security concerns in the Central African Republic and the decrease in oil production in Equatorial Guinea led to a decline in the subregion’s GDP.
Growth in North Africa (excluding Libya) accelerated from 2.8 per cent to 3.6 per cent over the 2014-2015 period. The positive developments have been helped by the improved political and economic stability in the subregion, and the subsequent increase in business confidence, especially in Egypt and Tunisia. A significant inflow of external aid into Egypt has enhanced public expenditure and boosted investment in large infrastructure projects, such as the expansion of the Suez Canal. The gradual recovery of export markets and improved security should support growth, especially through tourism. Political challenges in Libya continue to have a negative impact on both political and economic governance, as well as economic performance in the subregion.
Southern Africa’s growth increased marginally from 2.4 per cent in 2014 to 2.5 per cent in 2015. The improvement in growth performance of the subregion was heavily influenced by the relatively lower growth in its biggest economy, South Africa. Weak export demand and low prices for its key commodity exports, as well as electricity shortages, contributed to the country’s subdued performance. In Angola, GDP growth remained strong despite low oil prices, as the Government embarks on investing in strategic non-oil sectors such as electricity, construction and technology. Mozambique and Zambia recorded the highest growth in the subregion, driven by large infrastructure projects and FDI in the mining sector, respectively.
African countries’ growth still relies on a narrow base
While economic growth rates have been higher in Africa compared to most of the regions in the last decade, it is also clear that in many African countries growth has continued to rely on a narrow base. As a result, the number of Africans in absolute poverty has risen and inequality remains a major concern. More importantly, Africa’s economic growth has been associated with increased exploitation of non-renewable natural resources with minimal value addition and employment generation, and growth sustainability remains a major concern.
African economies are mainly dominated by the services sector followed by the industrial sector, with a marginal contribution from the agricultural sector (see figure 5). However, it has been widely recognized that industrialization is critical for Africa’s structural transformation and efforts to create jobs, foster value addition and increase income.
The impact of low oil prices on the growth of African economies is mixed
Crude oil prices continued to decline at a monthly average of 4.1 per cent over the period from June 2014 to October 2015. Robust supplies and lower demand due to the global economic slowdown have generally explained the decline in commodity prices across the board.
The Economic Commission for Africa (ECA) analysis using monthly data from January 2000 to October 2015 reveals that oil prices have had a significant positive impact in oil-importing and mineral-rich countries, but a negative impact on oil-exporting countries. Thus, the overall effect of low oil prices on Africa’s growth appears to be marginal. This marginal impact of the oil price decline emphasizes the significance of the continued diversification initiatives being undertaken by African countries, especially into non-oil sectors, and also the effect of improved macroeconomic management and the associated fiscal policies.
Low commodity prices and large investment projects underpin the growing fiscal deficits
Africa’s fiscal deficit increased from 5.1 per cent of GDP in 2014 to 5.6 per cent of GDP in 2015. The continued decline of oil prices and volatile commodity prices reduced fiscal revenues in many African countries, whereas high spending on infrastructure, fiscal loosening and higher spending in the lead-up to elections in a number of countries contributed to increased expenditure over the period. The fiscal deficit is expected to narrow in 2016 to 4.6 per cent of GDP as commodity prices and growth in emerging and developed economies are expected to pick up.
The fiscal deficit was the largest in North Africa, widening from 9.7 per cent of GDP in 2014 to 10.0 per cent of GDP in 2015. Over the period 2014- 2015, the fiscal deficit increased in West Africa (from 2.0 per cent to 2.5 per cent), in East Africa (from 3.8 to 4.6 per cent) and in Southern Africa (from 4.0 per cent to 4.3 per cent). The deterioration of the fiscal balance was greatest in Central Africa, where the deficit widened from 3.1 per cent in 2014 to 4.6 per cent of GDP in 2015.
The fiscal deficits of oil-rich countries reached their highest levels since 2012 at 5.7 per cent, largely driven by the low oil price. However, fiscal balances are projected to improve to 4.3 per cent of GDP in 2016 as commodity prices are envisaged to recover and as some oil exporters remove subsidies to alleviate pressure on their national budgets. However, with oil prices projected to remain below their recent peaks, fiscal revenues are not expected to return to earlier levels in oil-exporting countries.
Tight monetary policy amid falling commodity prices and declining revenues
African countries exercised tight monetary policy as global headwinds weighed on the region. As has been the case with most developing countries, the inflation rate rose from 7.0 per cent in 2014 to 7.5 per cent in 2015. The strong United States dollar and high food prices exerted inflationary pressures in the region, despite weak global growth and low commodity prices partially offsetting the rise in inflation. Currency devaluations, especially in the oil-rich countries, amid falling oil prices and declining revenues and exports also exacerbated the rise in inflation. These inflationary pressures, together with high fiscal and current account deficits, have led to the tightening of monetary conditions, including the hiking of monetary policy rates in countries such as Angola, Ghana, Kenya, Malawi, South Africa, Uganda and others to curb inflation. However, a moderating trend is expected for 2016 and 2017 in view of lower food and energy prices, improved security situations and diminishing impacts from subsidy cuts in 2014.
Exchange rates continued to depreciate, although with minimal impact on exports
Most African currencies depreciated in 2015, a trend that started in 2014. This was driven partly by low oil prices, but also the strong dollar and the expected tightening of the United States monetary policy.
Currency depreciation is expected to be associated with increased exports and a decrease in imports. However, for African countries the association between exchange rate and trade seems to be very weak and, in some countries, not in line with the theory. This could suggest that there are other factors behind Africa’s lack of competitiveness, which undermine the benefits brought about by currency depreciation. While the cost of doing business in Africa has been decreasing, there are still considerable barriers to enhancing Africa’s trade, suggesting a lack of product diversification and value addition.
Current account deficits recorded by all economic groupings and subregions
Current account deficits increased from -3.9 per cent in 2014 to -5.0 per cent of GDP in 2015, with all economic groupings and subregions reporting deficits (see figure 11). Declining commodity prices and global demand as a result of the global economic slowdown, especially in emerging economies, played a significant role in the current account trends, with oil-exporting African countries recording their first current account deficit since 2009 (2.1 per cent) in 2014, followed by a deficit of 5.1 per cent in 2015. For oil importers, the low oil prices led to a narrowing of the deficit. Of the subregions, the current account deficit was largest for Central Africa (8.1 per cent), followed by East Africa (7.4 per cent) and then Southern Africa (5.7 per cent).
Africa’s total exports of goods and services declined by 3.2 per cent in 2013 and 5.2 per cent in 2014, while its total imports grew by 3.0 per cent in 2013 and by 1.7 per cent in 2014. The continent’s total imports are dominated by consumer goods, whereas its exports consist mainly of primary commodities, including fuels and bituminous minerals, and agricultural products such as cocoa, fruits, fertilizers and vegetables. In terms of value, in 2014 fuel exports decreased by 13.2 per cent, and ore and metal exports by 8.2 per cent. On a positive note, whereas Africa’s exports to most of its trading partners have stagnated or even declined since the 2008 financial and economic crises, intra-African trade has since then increased considerably in terms of both volume and diversification of manufactured products and services.
Stable FDI with declining reserves and increasing net debt among African countries
African countries saw FDI remain stable at around 3 per cent of GDP in 2015, and are expected to remain at this level in 2016 and 2017. The recovery in North Africa was reflected in the pickup in FDI inflows from 1.4 per cent in 2014 to 1.7 per cent in 2015. Southern Africa (in particular, Angola, Mozambique, South Africa and Zambia) and Central Africa have been the main destinations for FDI. East Africa (particularly Ethiopia, Kenya and Tanzania) also attracted a significant amount of investment, especially in infrastructure.
In terms of business function, manufacturing represents 33.0 per cent of FDI, while extraction remains at 26.0 per cent and construction at 14.0 per cent of FDI. By sector however, coal, oil and natural gas dominate at 38.0 per cent of FDI. Therefore, there is still scope for diversification from primary commodities and construction-related investments. FDI into Africa has partly been driven by strong economic growth in key economies, but also the low interest rates in the United States and Europe in 2015, which led to an increase in the flow of FDI into emerging economies. However, with the expectations of monetary tightening by the United States (which finally took place in December 2015), FDI inflows may have started being diverted back to mature markets.
The falling oil and commodity prices drew down the international reserves of African countries from 17.1 per cent of GDP in 2014 to 15.8 per cent of GDP in 2015. The oil price decline also affected the net debt of African economies, which increased from 5.8 per cent to 9.9 per cent of GDP between 2014 and 2015, compared to 1.6 per cent in 2013, and is projected to rise further to 11.4 per cent in 2016.
Medium-term growth prospects and risks
Looking forward, Africa’s real GDP growth is expected to increase by about 4.3 per cent in 2016 and 4.4 per cent in 2017. Growth continues to be driven by strong domestic demand (particularly investment in infrastructure). The improving business environment, lower costs of doing business and better macroeconomic management continue to enhance investment. The buoyant services sector and a focus on non-oil sectors by oilexporting economies in order to mitigate the continued decline in oil prices will contribute to the good medium-term prospects. Further, the increasing trade and investment ties within Africa and with emerging economies, as well as the recovery of traditional export markets, particularly in the eurozone, will positively contribute to the medium-term prospects.
At the subregional level, Southern Africa and West Africa are expected to experience relatively high real GDP growth both in 2016 and 2017; while real GDP growth in Central, East and North Africa is forecasted to increase in 2016, but with a slight decline in 2017. However, African economies face significant risks that require special attention by policymakers to maintain the requisite growth. More importantly, the turbulence in the global economy has been underpinned by severe financial instability, widening sovereign-debt problems and high unemployment, especially in developed economies. Africa’s vulnerability to these shocks calls for a rethink of its growth and broader development strategy.
Weather-related shocks, such as drought in East and some parts of Southern Africa in particular, pose a challenge to the agricultural sector, which is still the main employer in most African countries. Low harvests will also increase the risk of inflation through higher food prices in the affected countries. These dry spells may also affect the hydropower generation capacity in the affected countries, hence posing a threat to the greening of Africa’s industrialization, as economic agents may switch to thermal electricity power generation that is not green.
Security concerns and political unrest in some countries also remain an issue as they can lead to domestic disruption and decreased investment in these countries.
Recent social developments in Africa
Africa made considerable progress towards achieving the Millennium Development Goals despite challenging initial conditions. The baseline, generally 1990 for most of the Millennium Development Goals, was relatively low compared to other developing regions. There is an overall positive direction, with significant proportions of progress with variation across certain Goals, across and within countries.
Status of progress towards social outcomes in Africa
In Africa (excluding North Africa), poverty levels have dropped, although at a slow pace, from 56.5 per cent to 48.4 per cent between 1990 and 2010. The proportion of Africa’s population facing hunger and malnutrition demonstrated a meagre 8 per cent improvement between 1990 and 2013.
Africa is close to achieving universal primary enrolment in 2013, with over 68 per cent of the 25 countries (with data available) achieving a net enrolment rate of at least 75 per cent. However, the completion rates reported are still at 67 per cent, denoting that education quality is lagging behind quantitative gains. Gender parity in primary schooling improved from 0.86 before 2012 to 0.93 after 2012, but secondary and tertiary gender parity are at 0.91 and 0.87 respectively, which is still below the 0.93 benchmark.
Under-5 mortality fell from 146 deaths per 1,000 live births in 1990 to 65 deaths per 1,000 live births in 2012, an improvement of 55.5 percentage points compared to the Millennium Development Goal 4 target of a two-thirds (67 per cent) reduction by 2015. The efforts to combat HIV/AIDS, malaria and tuberculosis have yielded some noteworthy achievements in terms of incidence, prevalence and mortality rates.
Progress towards the environmental goal has been somewhat lacklustre. Only a quarter of Africa’s population have gained access to improved drinking water sources, which is the lowest proportion globally. Similarly, the proportion of people with access to improved sanitation has increased from 24 per cent in 1990 to 30 per cent in 2012. However, the disaggregated figure of both improved access to water and sanitation is skewed towards urban areas. The inadequate attention paid to rural areas and communities in terms of rural infrastructure combined with population growth results in land degradation, decreasing agricultural productivity, lower incomes and reduced food security.
Despite the good progress registered, there are inequities based on income, gender, ethnicity and location. In terms of the human development index (HDI), which measures average achievements in three basic dimensions of human development, a long and healthy life, knowledge and a decent standard of living, most African countries are in the lower ranks of human development. The inequality-adjusted HDI value drops by 33 per cent, the highest drop globally.
Employment mostly generated outside the formal economy
Unemployment rates for Africa (excluding North Africa), disaggregated by sex, were 6.9 per cent for males and 8.8 per cent for females in 2014, which represent marginal declines of 0.2 and 0.1 percentage points over the 2009 rates. Notably, economic growth has not kept pace with employment growth, largely because growth has been driven predominantly by capital-intensive sectors such as mining and oil, and the export of primary commodities with little value addition, among others.
Most jobs in Africa, particularly for the youth and women, continue to be generated outside the formal economy, where the skills profile is predominantly poor. It is further observed that 9 in 10 rural and urban workers in Africa have informal jobs, and most employees are women and the youth.
Over the next 10 years, at best only one in four youths will find a wage job, and only a small fraction of those jobs will be “formal” in modern enterprises. Thus, the informal economy is the major source of employment on the continent, accounting for nearly 70 per cent in East, Central, Southern and West Africa, and 62 per cent in North Africa.
However, the working-age population is growing more rapidly
The active working-age population (25-64 years) is growing more rapidly than any other age group, more than tripling in size between 1980 and 2015, when it stood at 123.7 million (33.3 per cent) and 425.7 million (36.5 per cent), respectively. The active working group is largely composed of young people, and its growth over time is a feature of the demographic dividend that could lead to productivity gains and economic growth in Africa. The demographic dividend depends on the young population having the right skills profile to secure the positive effects.
Africa will have the highest urban growth rate
Over the period 2015-2020, Africa will experience the highest rate of urban growth globally, with a rate of 3.42 per cent annually compared to the world rate of 1.84 per cent over the same period. The percentage of Africa’s population that is urban increased from 27 per cent in 1980 to 40 per cent in 2015, and is expected to pass the 50 per cent mark by 2035. This will be accompanied by a considerable rise in demand for urban services, infrastructure and employment, all of which are already severely constrained.
Beyond the demographic shift, urban areas currently contribute more than 55 per cent of GDP to African economies. The economic role of cities, however, is largely driven by consumption rather than production. Unlike other parts of the world, urbanization in Africa is not linked to industrialization, which in turn has led to “consumption cities” that are populated primarily by workers in non-tradable services. Moreover, African cities remain largely informal. This is particularly problematic given the youth bulge in the region, and the concomitant need to create decent jobs.
Urban growth in Africa is also expected to be accompanied by increased energy and resource demands, with the associated impacts on ecosystems supporting urban areas. Globally, urban areas account for over 70 per cent of greenhouse gas emissions. African cities have comparatively lower carbon dioxide emissions, but this is projected to increase significantly in the absence of strategies for urban resource and energy efficiency. Evidence points to the importance of decoupling at the city level to reduce environmental impacts and enhance resource efficiency and productivity, especially by promoting compact cities. As the least urbanized region globally, Africa has a unique opportunity to minimize the carbon footprint of its cities through infrastructure and land use practices that promote density and reduced car-dependence and fossil fuel energy consumption.
Given the growing demographic, economic and environmental significance of urban growth in Africa, cities need to be accounted for in the continent’s green economy agenda. In particular, urban agglomeration leads to resource efficiency and economies of scale in industrial production through intra-industry and inter-industry interactions. If it is to be resource- and energyefficient, Africa’s industrialization requires an efficient framework of urban centres that produce industrial goods and high value services, along with transportation networks to link national economies with regional and global markets. Greening Africa’s industrialization thus needs to be linked to the urban transition underway in the region.
Policy implications
African countries have made notable gains in improving their regional business environment. Together with the increased economic and political stability across most subregions, these gains have supported growth through enhancement of private consumption and increased public and private investment. However, the recent commodity price developments have highlighted the persistent structural weaknesses of many economies, particularly in terms of government revenue, exchange rates and current account balances. This calls for a stronger emphasis on strategic non-oil sectors, such as electricity, construction and technology, particularly in economies heavily dependent on oil revenue.
The global economic environment has increased the need for prudent and counter-cyclical macroeconomic management strategies. The continued low prices offer an opportunity for improved fiscal management and consolidation through the cutting of utility subsidies. Expenditure should instead be targeting high-priority sectors with emphasis on strategic non-oil sectors for accelerated structural transformation.
With Africa’s continued exportation of commodities, the current global economic slowdown underscores the need for Africa to figure out how it could extract more value from its global trade and other economic activities. Given the more diversified nature of trade between African countries relative to trade with the rest of the world, intra-African trade provides an opportunity for diversification of production. At the same time, diversification of trade patterns can also be a source of improved resilience to external shocks. African countries should seek to enhance intra-African trade by strengthening regional integration, lowering the cost of trade and non-physical barriers to trade, and making a strong commitment to the continental free trade area that is under negotiation.
Economic growth rates have been higher in Africa compared to most regions in the last decade; however, in many African countries growth has not been inclusive, the number of Africans in absolute poverty has risen and inequality remains a major concern. This is mostly because Africa’s economic growth has been associated with increased exploitation of non-renewable natural resources with minimal value addition and employment generation, which undermines its growth sustainability.
The growth of an unplanned urban Africa with a youthful population needs to be matched with an industrialization process that provides the skills demanded and efficient and adequate public services delivery. The focus on the current, largely young and female, informal sector workers to drive the new agenda is a vital aspect of an industrialization process. It is feasible to increase productivity and contribute to improved welfare in the informal sector by providing training, access to credit and social protection.
As most African economies are based on agriculture, a sector dependent on rainfall, they are vulnerable to climate variability. Given that sustainability has been placed at centre stage in the process of industrialization, environmental standards should be seen not as an obstacle to competitiveness, but as a potential driver of growth. Africa must improve its resilience to both environmental and socioeconomic shocks, manage its natural capital and minimize pollution, all of which can be achieved by greening its industrialization process.
The continent’s industrialization and broader development has been held back by erratic energy supplies. The importance of reliable and sustainable energy sources for structural transformation cannot be overemphasized. Africa must tap into and use renewable energy resources to avoid the mistake that developed countries made by not taking into consideration renewable energy issues.
West Africa’s experts appreciate and salute the remarkable work of ECA
The Intergovernmental Committee of Experts for West Africa meeting was held from 25 to 26 February 2016 in Dakar, under chairmanship of His Excellency Mr. Birima Mangara, Minister designate a the Ministry of the Economy, Finance and Planning in charge of Budget and in the presence of the Director of the ECA Sub-Regional Office for West Africa, Mr. Dimitri Sanga.
In his speech, Mr. Birima paid “well-deserved homage to ECA for its enormous contribution to the structural transformation of West African economies.” In the same manner, he indicated that “the government of Senegal appreciates the true worth of the initiative taken by ECA to organise in Dakar for the second consecutive year, the statutory meeting of its Sub-Regional Office for West Africa”.
Addressing the emerging process in which each West African state is involved in, Mr. Birima affirmed that “the country profiles constitute an appropriate response, since they offer efficient tools to decision-makers in the process of identification and implementation of economic and social strategies capable of achieving structural transformation of our economies”.
As an alternative source of high quality data, he said: “the country profiles constitute a high performing tool for decision-making which also facilitates the sharing of better practices”.
He also “saluted the ECA for the willingness to build up the experts on the usefulness of country profiles, particularly in sharing these products with other institutions”. He “encouraged all the experts to fully collaborate henceforth with the Sub-Regional Office for West Africa in order to overcome the challenges relating of the production of quality data which is urgent to the good implementation of economic and social policies for the people”.
As regards the outgoing president of the ICE, Mr. Pierre N’Diaye, he expressed with assurance that it was “a promising document on the implementation of the recommendations made to the ECA”.
According to Mr. N’Diaye, “the four recommendations made to the ECA were translated into action. Appreciable efforts were made by the Office as testified by the report of activities. Thus a request made by the Office to detail in its annual report the types of support solicited by member States and sub-regional organisations were taken into account as support for capacity-building of statistics of member States”.
The Director of the ECA Sub-Reginal Office for West Africa Mr. Dimitri Sanga in his welcome address expressed once again on behalf of the Executive Secretary General of ECA Mr. Carlos Lopes, “the gratitude of ECA to His Excellency Mr. Macky Sall, President of the Republic of Senegal for his relenting efforts towards the economic and social development of our region and the whole of Africa”.
Justifying the choice of the theme for the 19th ICE for West Africa, Mr. Sanga affirmed that “he was it depending on the all the reports to be published on the progress of countries in the sub-region and beyond our continent during the current period”. According to Mr. Sanga, “in addition to being a knowledge product, the ECA country profiles fall within the process of dialogue on cooperation policies and capacity-building in the areas of statistics and planning”. Mr. Sanga further said that the final objective “was to obtain a knowledge product shared, showing real value added for countries of our sub-region, constituting a major contribution in the structural transformation of our economies”.
The 19th session of the Intergovernmental Committee of Experts for West Africa also debated on and adopted several reports. These were: (i) Report on the implementation of the Programme of Work of the ECA Office for West Africa for 2015 and outlook for 2016, (ii) Report on the socio-economic profiles for West African countries, (iii) Report on the implementation of regional and international agendas: MDGs and SDGs, (iv) Report on the theme: “Mobilizing more resources to finance development: need to implement the Africa Mining Vision”.
The experts also listened to some presentations namely: (i) Report on the ECA continental initiatives: African Social Development Index (ASDI): preliminary results for West Africa, (ii) Report on ECA continental initiatives: ECA Capacity development strategy tool for the transformation of Africa (iii) ECOWAS presentation on the theme “Financing regional development projects in the ECOWAS space” and (iv) The experience of Senegal on the transition from MDGs to SDGs.
The experts at the end made strong, pertinent and strategic recommendations to member States, ECA and ECOWAS, the implementation of which will no doubt give new dynamism to the structural transformation of economies in the sub-region.
To ECA (i) conduct an analysis on sources of growth in ECOWAS countries in order to identify the factors and strategies to promote robust, sustainable, inclusive growth and employment creation in the sub-region; (ii) coordinate and share efforts to collect, process and produce data as well as the production of studies within the sub-region in order to reduce the burden of work on national structures involved with the production of statistics and to avoid duplication.
To member States (i) continue to support ECA in its efforts towards the development of national statistics systems and support sub-regional development initiatives; (ii) strengthen technical collaboration with ECA as well as the domestication of country profiles as aid instruments for decision-making in the formulation of economic and social policies for the structural transformation of sub-regional economies.
To ECOWAS and sub-regional organisations (i) accelerate the organisation of the round table for donors for the financing of community development projects (CDP) in order to quickly implement identified projects.
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Van Dam: “Tackling poachers and illegal trade globally together”
Representatives from almost 40 countries, non-governmental and international organisations have made arrangements on how to tackle poaching and illegal trade in animals during the international ‘Save Wildlife: Act now or Game over’ conference in The Hague.
Participants agreed on the use of new technologies, combating corruption and stimulating the economy in order to protect wildlife. Minister for Agriculture, Martijn van Dam, announced this at the end of the conference on 3 March 2016.
Concrete actions
Van Dam said, “I am extremely satisfied with the outcome of the conference. The situation for some animals is critical. There has been an alarming increase in poaching. For that reason, we did not want to end this conference with declarations, as normal, but with concrete actions. And that has been achieved. In total, twelve ‘wildlife deals’ have been concluded. These will both enhance the fight against poaching, trade and the organised crime that lies behind these activities, and afford better protection to wildlife.”
Almost 300 participants attended the conference. Some 45 ministers and representatives of governments, scientists, NGOs and companies from Africa, North America, South America, Asia and Europe participated in the high-level segment. They concluded at least twelve ‘wildlife deals’ for concrete actions, particularly in Africa and Asia.
Reintroduction of rhinos in Rwanda
The Netherlands is contributing €200,000 to the reintroduction of rhinos in Rwanda. Rwanda has requested the Netherlands to cooperate in the reintroduction of 20 rhinos to a well-protected area. The Rwandan government is doing this together with African Parks and assistance from the local population. Local rangers are being trained to protect the animals. The amount that the Netherlands is contributing is enough to help two rhinos.
Anti-poaching technology
Smartparks is a project in which GPS transmitters are attached to animals so they can be tracked. Park rangers are trained to ‘read’ their behaviour. Antelopes, for example, act differently when poachers are in the vicinity. Park rangers can respond to this. This training is being provided by Sensing Clues, African Parks, Shadowview, Wageningen University and Advanced Instrumentation.
Wildcat has developed software that enables poaching and trading to be mapped. The arrangement is for this software to be made freely available and used by Zimbabwe, Sri Lanka, Indonesia, the Horn of Africa and the Black Mambas (South Africa’s female rangers). It can be operational within six months and works in the same way as the incident room of a fire brigade, for example.
Alternative income
Community Venture Capital Funds is providing funds for local people to use in initiatives that include starting their own shop.
Over the last few years, the Netherlands has contributed around €6 million to combating wildlife crime. Some of this has funded projects such as the X-ray equipment used to screen containers in the port of Mombasa. Other money is being used for the training of rangers by the Netherlands Forensic Institute, while various agricultural projects have also been started as a source of alternative income for the local population.
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WTO woos African states with top slot at key organ
The World Trade Organisation (WTO) members have elected Xavier Carim of South Africa to head its dispute settlement body (DSB) in yet another effort aimed at putting developing states at the centre of global trading system.
Mr Carim will begin by steering DSB’s next regular meeting scheduled for March 23 after WTO delegates elected him by acclamation to replace outgoing chairman Harald Neple of Norway.
“At its meeting on February 26, the DSB appointed Ambassador Xavier Carim as the new chair,” WTO Secretariat said in a statement.
With a Brazilian, Roberto Azevedo as its director-general, WTO has lately been pulling all stops to project itself as an Africa (and developing states)-friendly agency.
In December, the agency settled on Nairobi as the first African city to host its ministerial conference with chairperson – Kenya’s trade and international affairs secretary Amina Mohamed – helping the world to break a 10-year deadlock.
Brazil, India, China and South Africa had previously led developing states in championing the anti-domination protests against WTO, leading to collapse of previously ministerial conference.
With key reforms already recorded in the negotiation and implementation arms of the WTO, the all-powerful DSB has been seen as the remaining “unfriendly” aspect of multilateral trading system.
Kenya unsuccessfully pushed for the appointment of Prof James Thuo Gathii, an international trade scholar, as a member of DSB in part of international efforts to make it appealing to the developing states.
When he took over as WTO boss, Mr Xavier Carim Azevedo identified reforms at the DSB among the priorities during his first term in office.
Most developing nations have cited DSB’s long and tedious process among the barriers to their participation in the international trade.
Apart from poor representation at the organ, it takes a firm several years to push its case through the DSB stages. The process which also requires firms to hire well-trained international trade experts, begins when the aggrieved firm lodges its complaint with its country’s ministry in charge of trade, a process that may last several weeks.
Once the firm argues its case successfully, its host government (which unlike the firm is the WTO member) may then adopt the case as dispute against the offending.
To build its case, the member state which adopts its firm(s)’ dispute starts by reviewing numerous WTO rules as well as commitments that members may have made to each other at past forums.
Given the volumes of commitment papers churned out over the last 20 years, that process can drag on for months, even years.
It is until the member is certain of its ability to argue its case through that the process is set rolling. Most poor countries would rather conceal their case than go through that lengthy process.
Latest data produced by WTO indicates that only 500 cases have been concluded since the body was set up 20 years ago. South Africa and Egypt are the only African states that have had cases against them run the full course.
Mr Carim faces numerous disputes, among them access of biotech products to global market and agricultural subsidy.
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tralac’s Daily News Selection
The selection: Friday, 4 March 2016
UNECA’s 2016 Conference of Ministers – 'Towards an integrated and coherent approach to implementation, monitoring and evaluation of Agenda 2063 and the SDGs' (31 March - 5 April, UNECA):
Profiled briefing note 'Global and continental frameworks – implications for Africa': In sum, notwithstanding its shortcomings, the Addis Ababa Action Agenda offers an important contribution to Africa’s development, particularly in the areas of technology, illicit financial flows, energy and remittances. The devil, however, is in the details. Commitments have been made before and several remain unfulfilled. Ensuring the fulfilment of the commitments in the Addis Ababa Action Agenda will require a robust follow-up mechanism underpinned by the development of regional and national targets and timelines to track progress, particularly on the broad statements of intent. [Concept note] [Documentation]
Three profiled launches: Measuring progress on Africa's regional integration agenda, The problem of measuring corruption in Africa, Bilateral investment treaties in Africa: balancing rights and obligations between host countries and investors
Related events in Addis: ECA-AU to host inaugural Africa Development Week (31 March - 5 April), Regional Coordination Mechanism for Africa (2-3 April)
African Union Gender Pre-Summit: communiqué (AU)
We recommend as follows: AUC, RECs and Member States to...Adopt an integrated approach to reinvigorate dialogue between stakeholders participation, in playing a leadership role in public office by 2020. on the opportunities, gaps and solutions for enhancing women’s economic empowerment and ensure that women are at the centre of sustainable development, peace, regional integration and economic growth initiatives in Africa; Address challenges which hinder progress in achieving women’s land and property rights in Africa, as well as identify and promote practical approaches to addressing these challenges with a view to securing commitment towards promoting proven models. [Various downloads]
tralac's Annual Conference 2016: 'Towards rules-based governance in African trade and integration?'
At this year’s tralac Annual Conference (7-8 April) we will discuss, inter alia, the following issues: why African trade and integration efforts benefit from rules-based governance; safeguards and trade remedies; standards; connecting Africa for competitiveness; private litigation, dispute resolution and community law developments.
Mapping global and regional value chains in SACU: sector-level overviews (World Bank)
This report compiles sectoral value chain case studies that were carried out as part of parallel work, including the SACU Regional Trade and Transport Facilitation Assessment and previous report on Mapping Regional Value Chains in SACU. As the two studies were carried out for different purposes and with a different approach, the structure and focus of the outcomes are not fully consistent across sectors presented in this report. However, in all sectors, the case studies provide an overview of the structure of the value chain and inter-linkages across firms in SACU, along with their positioning in wider GVCs. They also provide some discussion of the main constraints impact GVC participation and competitiveness, as well as the constraints to developing more integrated RVCs. [Table of contents: Manufacturing; Agribusiness; Minerals and tourism; Conclusions] [A reposting: SACU in global value chains: measuring GVC integration, position, and performance of Botswana, Lesotho, Namibia, South Africa, and Swaziland]
Is a ‘factory Southern Africa’ feasible? Harnessing flying geese to the South African gateway (World Bank)
Given East Asia’s spectacular success with integrating into GVCs, we first assess the probability that SACU can copy their flying geese pattern. That was initiated by Japanese multinational corporations investing in successive East Asian countries thereby becoming the lead geese, to be joined subsequently by MNCs from other countries. We argue that the conditions for pursuing a flying geese approach are difficult to replicate in SACU. Therefore, we proffer and explore the proposition that South Africa could serve as the gateway for harnessing MNC geese flying from third countries into the SACU region, in time propelling regional development through knowledge and investment spillovers, and serving as a conduit into GVCs. However, there may be substantial obstacles to deepening this integration potential. Other African gateways are emerging as alternatives to South Africa. And some SACU governments would prefer to build regional value chains (RVCs) rather than prioritize GVC integration. [The authors: Peter Draper, Christoph Andreas Freytag, Sören Scholvin, Luong Thanh]
A capability-based assessment of GVC competitiveness for the SACU region (World Bank)
With competition for GVC investment taking place in a truly global market, factor competitiveness relative to other countries matters a lot. In this context, the purpose of this note is to shed some light for policymakers, in this case specifically in the Southern African Customs Union (SACU) countries, on where to focus efforts to drive competitiveness for GVC participation. This is a data-intensive exercise that requires indicators to represent underlying capabilities, disaggregated international trade data, and finally, a classification of which products are likely to be trade within GVCs. [The authors: Vilas G. Pathikonda, Thomas Farole]
Zimbabwe: Economic growth notes - spatial integration in Zimbabwean product markets (World Bank)
The purpose of this policy note is to provide evidence on the level of integration between Zimbabwe’s domestic markets for grain and staple foods. Efficient and integrated agricultural markets are an important vehicle for growth and poverty reduction. The note determines whether Zimbabwe’s provincial markets are integrated and explores the determinants of market integration. It provides estimates of the speed of adjustment between markets pairs. The analysis investigates the extent to which distances and demand for the products determine market integration. The paper concludes with a discussion of other structural or policy related factors that affect integration and efficiency of domestic markets. [The authors: Shireen Mahdi; Matteo Bonato, Johannes Herderschee]
Cargo piles up at Beitbridge (The Herald)
The Shipping and Forwarding Agents Association of Zimbabwe chief executive officer, Mr Joseph Musariri called on the Government to waive the implementation of the CBCA on goods which were shipped before it became operational. “It is sad that cargo is piling up at Beitbridge border post where most importers are having challenges in acquiring the transitional CBCA certificates” he said. Industry and Commerce Minister Mike Bimha told The Herald Business that the ministry was yet to receive the border reports but like any new system the CBCA would also be prone to teething challenges. “We are working together with Zimra and the Standards Association of Zimbabwe on this new programme. Together, if the report on the challenges at the border comes, we will address them immediately as this is still a new system.”
Rwanda Economic Update: Rwanda at work (World Bank)
The EAC countries and the DRC account for more than half of Rwanda’s exports. In goods exports, DRC accounts for 32%, followed by the EAC countries (20%). The high share of exports to DRC reflects its high share in re-exports (mainly fuel products). European countries account for about 15%. Thus, future development of these countries will affect Rwanda’s exports. On the other hand, China accounts for less than 5% of Rwanda’s exports. The origins of Rwanda’s imports are different from Rwanda’s export destinations. While imports from the EAC countries are similar to the share of exports to these countries, China has the largest import share at around 20%. Thus, fluctuations of the Chinese yuan affect imports from China (see annex 1.2). [Download]
Revised RISDP: a new growth path for SADC’s industrial development? (tralac)
The review was not merely an exercise to adopt new target dates for implementation of the targets set out in the RISDP, but a more fundamental reflection and enquiry to ensure that regional and global realities were taken into account in the design of SADC implementation strategy. It is noteworthy that the adoption of the Revised RISDP coincided with the adoption of the SADC Industrialisation Strategy. This SADC Industrialisation Strategy 2015-2063 was adopted by the same Summit of Heads of State and Government. More importantly, one might want to understand what are the synergies, contradictions, new provisions in the RISDP, and which one is the leading document? [The author: Brian Mureverwi] [SADC Industrialisation Strategy and Roadmap 2015-2063]
Related event: Financing the SADC strategy and roadmap on industrialization (ICE meeting, 17-18 March, UNECA]
South Africa: Revitalisation and refurbishment of government established industrial parks - EOI (AfDB)
The Department of Trade and Industry has received a grant from the African Development Bank for the Enterprise Development Pilot Project with special reference to conducting a study on the revitalisation and refurbishment of government established Industrial Parks, in particular those in the former homelands and townships. The Revitalisation and refurbishment of the government established Industrial Parks is an initiative of government to promote industrialisation and manufacturing, as well as fulfil spatial economic development policies. The activities included in this project are:
Critical issues in the negotiations of the Continental Free Trade Area (tralac)
This paper raises the question as to whether the envisaged CFTA will result in a single trading arrangement for Africa or add another layer of overlapping trade regimes in the continent. In this regard, lessons from the Tripartite FTA negotiations are highlighted. Subsequent sections deal with some negotiation, design and implementation issues in the context of new global trade and production realities. [The author: Paul Kalenga]
JB Cronjé: 'Where to from here for the Tripartite FTA negotiations on movement of business persons?' (tralac)
ASEAN: advances and challenges in regional integration (IMF)
A decade ago, there was much discussion about when Asia might achieve full economic integration, including the establishment of a monetary union. This reflected rapid expansion of intra-regional trade in Asia, and the optimism in the success of European integration, as the 50th anniversary of the Treaty of Rome was approaching. Now, while there remains a broad consensus on the desirability of economic integration, the landscape has become more nuanced. [Conference www]
From global savings glut to financing infrastructure: the advent of investment platforms (IMF)
To enhance the cooperation between public and private partners, there is a new class of facilitators like the European Investment Bank or the Asia Infrastructure Investment Bank. But how can they avoid engaging private investment in inefficient infrastructure projects, bridges to nowhere, or avoid granting too generous concession terms, like high highway tolls? The paper makes a number of suggestions, including the creation of infrastructure securities and a global infrastructure investment platform. [The authors: Rabah Arezki, Patrick Bolton, Sanjay Peters, Frederic Samama, Joseph Stiglitz]
Zim relaxes visas for China, scraps for SADC countries (NewsDay)
South Sudan’s Yei traders petition government over foreigners’ control of trade (Sudan Tribune)
EAC: Push South Sudan to adapt to EAC rules (editorial comment, Daily Monitor)
Lessons learned on industrial and trade development of tropical timber and timber products in Africa (ITTO)
Nigeria, Turkey sign trade, economic partnership agreement (Footprint to Africa)
Ethiopia-Qatari joint technical committee holds second meeting
Sweden to approve new five-year aid strategy for Ethiopia (MFA)
What influences FDI into Africa? (KPMG Africa)
Southern Africa: drought report (AgBiz)
Global Food Price Index: February 2016 (FAO)
Lesotho: DIRCO briefing to SA parliament
Engineers Without Borders Canada researches local procurement in sub-Saharan Africa
Digital protectionism? Or label the US government uses to criticize policy it doesn’t like? (CFR)
India: 2016 Article IV Consultation report, Selected Issues report (IMF)
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What influences FDI into Africa?
Foreign Direct Investment (“FDI”) inflows to Africa – The Analysis
A KPMG analysis of the factors that attract investors in Africa show that corruption, poor infrastructure and onerous business conditions in fact do not scare off investors, if the mineral, oil or gas resources are sufficiently attractive in the context of global demand – but warns that even tough miners stay away from politically instable regions.
Robbie Cheadle, Associate Director, Deal Advisory, KPMG in South Africa, states that the lure of significant natural resources is always measured against the stability of local political and business environments, which are impacted by security factors, infrastructure and government policies.
“Total foreign direct investment (“FDI”) inflows to Africa have increased by 20% in the five-year period ended 2014. Southern Africa achieved the largest increase in FDI inflows over this period, followed by Central and East Africa. However, FDI inflows to both North and West Africa have declined since 2010, due to political instability that led to terrorism and internal security issues, as well as policy uncertainties arising from continuously changing and adverse government policies,” says Cheadle.
Using 10 sources, ranging from the 2014 and 2015 World Bank’s “Ease of Doing Business” surveys; to Transparency International’s Corruption Perception Index, the contributors to the KPMG analysis say four primary factors help attract investments to African states. These are:
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Comparatively high growth expectations compared with developed economies;
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Politically mature governments with independent judiciaries;
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Available land and significant mineral and other resources;
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Increasing domestic consumption.
Despite the downturn in certain commodity prices, FDI to African countries with exceptional mineral or oil and gas resources continued in 2014 and 2015, albeit at reducing levels as a result of the lower commodity and oil prices, where local politics and business proved supportive, with a large portion of the total US$88.0 billion announced greenfield FDI projects into Africa during 2014 being into the extractive industries.
The Republic of Congo, Nigeria and Mozambique all featured in the top five FDI inflow host countries in Africa in 2014, despite their low rankings in the 2015 Transparency International Corruption Perception Index and the 2015 World Bank Ease of Doing Business Survey and Nigeria and Mozambique were both cited as notable recipients of FDI inflows during 2015 in the UNCTAD’s Global Investment Trend Monitor published in January 2016 (“UNCTAD Report”). Other African countries with high-potential natural resources but challenging business environments, that received high levels of FDI inflows during 2014, are the Democratic Republic of Congo, Equatorial Guinea, Tanzania and Uganda.
Cheadle indicates that this shows that if the natural resources in a country are sufficiently attractive to investors, they will look for solutions to difficulties in starting and running businesses and corruption issues in a particular country. “The biggest deterrents to FDI inflows, regardless of the quality of a countries geological base are armed conflict, political uncertainty and security threats, as can be seen from the reduced FDI inflows to North and West Africa in recent years to 2014. Egypt, which is gradually addressing its security issues, experienced increased FDI inflows during 2015 of 40%”
It is notable, however, that a significant portion of the announced greenfield FDI projects into Africa during 2014 were in the manufacturing and services sectors. “This is an important trend, as many African countries seek to diversify their economies away from an over-reliance on the extractive industries, particularly during the current cycle of lower prices for certain commodities,” indicates Cheadle.
In order to successfully diversify Africa’s various economies into the services and manufacturing sectors, these economies will need to compete with regards to their business environments with other developing economies such as China and India. Examples of this trend of successful diversification are Morocco in North Africa, which experienced increased FDI inflows during 2014 of 4%; Rwanda in Central Africa, which experienced increased FDI inflows during 2014 of 4%; Kenya in East Africa, which experienced increased FDI inflows during 2014 of 96% and Ethiopia in East Africa, which experienced increased FDI inflows during 2014 of 26%. In addition, according to the UNCTAD Report, Egypt in North Africa experienced increased FDI inflows of approximately 40% during 2015.
“While stable politics and security coupled to outstanding natural resources will always attract strong FDI inflows, subject to global demand, the report advises all African countries can increase their FDI inflows by looking to diversify their economies and by making it easier to do business in their countries. Well known factors in the local business environment that send investors elsewhere include poor infrastructure, corruption, onerous regulations, taxation regime and laws that limit starting and operating a business. While African countries individually need to focus on improvements in these areas, Africa as a whole needs to focus on improving in the areas of economic liberalisation and regional integration,” concludes Cheadle.
» Download: What influences foreign direct investment into Africa? (PDF, 5.84 MB)
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Rwanda Economic Update: Rwanda at work
The Rwanda Economic Update (REU) reports on and synthesizes recent economic developments and places them in a medium term, regional, and global context. It analyzes the implications of these developments and policies for the outlook of Rwanda’s economy. These reports attempt to make an analytical contribution to the implementation of Rwanda’s national development strategy. Each edition includes a special feature on a selected topic. The report is intended for a wide audience, including policy makers, business leaders, other market participants, and the community of analysts engaged in Rwanda’s economy.
Overview
Despite an adverse external environment stemming from a slowdown of the Chinese and European economies, Rwanda has maintained steady growth in the first three quarters of 2015. Gross Domestic Product (GDP) growth remained steady at 6.9 percent during this period. Thus far, the decline in commodity prices has been favorable for Rwanda – a net importer of energy products. Macroeconomic stability measured by inflation and exchange rates has been maintained.
However, downside risks have been increasing, both externally and domestically. A deteriorating external environment has led the World Bank to revise down its global and regional growth forecasts in early 2016. The global growth forecast was revised down by 0.4 percent to 2.4 percent for 2015, and by 0.4 percent to 2.9 percent for 2016. The growth forecast for Sub-Saharan Africa (SSA) was 3.4 percent in 2015, down from 4.6 percent in 2014, mainly due to the region’s reliance on fuel, minerals and metals, and agriculture commodities. On the domestic front, risks are on the horizon, including delayed execution of the budget and inadequate financing for development. Put together, both external and domestic risk has led the World Bank to adjust its growth projections for 2015 (7.1 percent), 2016 (6.8 percent), and 2017 (7.2 percent).
The special topic of this edition focuses on jobs in particular the employment dynamics of the past decade. The focus on jobs is motivated by two observations. First, the inter-sectoral shift of labor from agriculture to non-agriculture has been particularly fast in Rwanda and has been a main driver of poverty reduction and economic growth. The extent to which Rwanda can sustain this shift will determine in part whether the country can keep up its pace of growth and poverty reduction. Second, as Rwanda moves gradually towards a middle-income status and the labor force continues growing rapidly, jobs, especially in the non-farm sector, will become increasingly important as a transmission mechanism between aggregate growth and household living standards. The special topic will dissect and revisit the main employment trends between 2001, 2006, and 2011 (more recent data is not available yet); formulating firm recommendations on job creation going forward is outside the scope of this report.
Rwanda at Work
The 2011 Snapshot: Agriculture and informality define Rwanda’s employment landscape
Despite firmly positive trends over the past decade, employment in Rwanda in 2011 remained characterized by agriculture, informality, and low earnings. In 2011, about 70 percent of workers had their main job in agriculture, with the remaining 30 percent engaged in a myriad of non-farm activities. Farm self-employment, or people working on their own on their family’s farm, accounted for almost 60 percent of employment, followed by farm wage employment, which accounted for 12 percent. In the nonfarm sector, self-employment in small enterprises dominates, closely followed by wage employment in the informal sector. The private formal sector provides employment to four percent of working Rwandans, while the public sector absorbs three percent of workers. Taken together, the modern wage sector accounts for seven percent of total employment.
For the majority of the population, earnings are low. In 2011, median monthly earnings from all jobs amounted to Rwf 18,175 (in 2011 prices), meaning that half of workers earn Rwf 18,175 per month or less (amounting to US$31 using the official exchange rate and US$74 using the purchasing power parity (PPP) adjusted exchange rate)5 . 90 percent of workers earned less than Rwf 65,000 per month (US$263 in PPP terms), and less than six percent earned Rwf 100,000 per month or more (approximately US$405 in PPP terms). One third of workers are engaged in so-called low-earning jobs, meaning that their labor earnings place them below the national poverty line.
The Trends: A move to non-farm employment and higher earnings
Among the most salient of recent employment trends has been the move to non-farm occupations. In 2011, 30 percent of employed Rwandans had their primary job outside agriculture, up from 23 percent in 2006, and 11 percent in 2001. The move towards non-farm occupations as a main source of employment understates the true extent of the shift: considering all jobs, regardless of whether it is the primary or secondary occupation, the share of workers with an occupation outside agriculture increased from 30 percent in 2006 to 45 percent in 2011. Farmers are increasingly taking up non-agricultural secondary jobs next to their primary occupation on the land.
The move to non-farm occupations has been driven by the youth, in particular young men. The share of young men with a job in agriculture sharply dropped between 2001 (89 percent), 2006 (69 percent), and 2011 (55 percent), indicating that more and more young men are abandoning agriculture altogether. Middle-aged and older men do not abandon agriculture as readily, but are increasingly likely to have their main occupation outside farming (while keeping secondary occupations in agriculture). The shift to non-farm employment as the primary occupation is the result of two complementary dynamics: on the one hand, young people are abandoning agriculture altogether and moving to non-farm occupations, while on the other, older workers increasingly shift their main occupation outside farming but maintain a strong foot on the farm (as a secondary occupation).
Within agriculture, farm wage labor is on the rise, and this is driven by young women. The share of workers employed as unpaid labor on the family farm dropped from 38 percent in 2006 to 29 percent in 2011, while the share of wage farmers increased. The move to wage farming is also driven by the youth, and in particular by young women. Although there is no panel data, the net job additions in agriculture between 2006 and 2011 are indicative of young women (aged 16-30) moving from unpaid farming on the family farm to paid farming on somebody else’s farm. The employment transitions are significantly gendered: while young men tended to move out of agriculture towards non-farm occupations, young women have shifted employment dynamics within agriculture.
Though still low, individual labor earnings increased substantially since 2006. Median earnings from all jobs increased by 66 percent between 2006 and 2011, and the share of workers with earnings that placed them below the poverty line (defined as “low earners”) decreased from 54 percent to 33 percent. Agriculture led the earnings increase: Earnings of independent farmers almost doubled while those of wage farmers and unpaid farm workers increased by half. As a result, the low earnings rate in agriculture dropped from 59 percent in 2006 to 37 percent in 2011. Low earnings are increasingly a consequence of underemployment: of all low-earners, almost 60 percent would not be low earners if they could increase hours worked to reach full-time employment.
Diversification into non-farm occupations has been most closely correlated with the increase in earnings. In a decomposition framework, 12 percent of the increase in median earnings can be accounted for by the higher share of workers with an occupation outside farming. There are a number of interesting differences in the correlates of earnings growth between lower earning and higher earning workers. Taking up additional jobs has been particularly important for earnings growth of low-earners, while diversification into non-farm occupations – both as main and secondary occupations – explains the largest part of the earnings increase for higher earners. Poor workers have increased earnings by working more jobs, while better-off workers have boosted their earnings by progressively moving to non-farm activities.
Going Forward: The employment outlook for Rwanda
Rwanda, as with many African countries, is faced with a substantial jobs challenge. Between 2015 and 2020, the working age population is projected to grow by 220,000 every year, outpacing the rate of job growth between 2006 and 2014 (158,000 jobs a year). The Second Economic Development and Poverty Reduction Strategy (EDPRS 2) aims to create 200,000 off-farm jobs every year – double the rate of non-farm job creation between 2006 and 2014 (103,000 jobs per year). While the formal private sector is growing quickly, its low base means that the majority of labor market entrants over the coming five years will need to seek employment in the informal non-farm sector or in agriculture. Assuming that formal private sector employment keeps on growing at over 16 percent per year (the observed growth between 2006 and 2011), its employment share will remain low over the coming five to ten years.
Going forward, Rwanda appears to need a two-pronged jobs strategy. First, given that agriculture will remain the main employer for the majority of workers over the coming five to ten years, increasing earnings from agriculture remains the most direct way to improve economic conditions for the bulk of the population. This is especially important given the apparent stall in the move to non-farm employment in recent years (the share of workers with a main job in the non-farm sector stood at 30 percent in 2013/14, only marginally higher than the 28 percent in 2010/11). Increasing earnings from agriculture entails not only further increasing productivity, but also having the required infrastructure in place to reduce post-harvest losses and facilitate access to markets. Second, new labor market entrants are increasingly likely to find or create employment in the non-farm sector. While a small share of those new workers will manage to get a job in the public or formal private sector, the bulk will be employed in the informal sector. A key policy question is how the business environment in the informal sector can be improved to allow informal activity to blossom, at least in the short to medium term when the formal sector will not yet be large enough to absorb the rapidly growing labor force.
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8th African Union Gender Pre-Summit on the margins of the 26th AU Summit: Communiqué
We, Ministers of the African Union (AU) in charge of Gender and Women’s Affairs, representatives of Regional Economic Communities (RECs), intergovernmental conferences, members of the Gender is my Agenda Campaign (GIMAC) network, Civil Society Organizations (CSOs), UN Agencies, African Development Bank (AfDB), development partners and private sector organizations meeting at the 8th AU Gender Pre-Summit under the AU Year 2016 Theme: “African Year of Human Rights, with particular focus on the Rights of Women”, held from 17 to 21 January 2016 in Addis Ababa, Ethiopia, at the African Union Commission (AUC) Headquarters at the margins of the 26th Ordinary Session of the Assembly of Heads of State and Government of the African Union;
1. Refer to the AU theme for 2016 “African Year of Human Rights with particular focus on the Rights of Women”;
2. Reaffirm the content of the 10 Year Implementation Plan of Agenda 2063, the Sustainable Development Goals (SDGs), the Solemn Declaration on Gender Equality in Africa, the Protocol to the African Charter on Human and Peoples’ Rights on the Rights of Women in Africa (Maputo Protocol), the African Women’s Decade (2010-2020), the Beijing +20 Declaration and Plan of Action the United Nations Security Council Resolution 1325 and other related Resolutions, the Sandton Declaration of Heads of State and Government on 2015 “Year of Women’s Empowerment and Development Towards Africa’s Agenda 2063”, and other Gender policies and frameworks;
3. Appreciate the commitment by AU Member States to declare 2016 as the: “African Year of Human Rights, with particular focus on the Rights of Women”;
4. Recall the 27th session of the Gender is my Agenda Campaign (GIMAC) held from 17 to 18 January 2016 in Addis Ababa, Ethiopia at the United Nations Economic Commission for Africa (UNECA) under the theme, “Looking towards 2020: Securing Women’s Rights through Gender Equality and Silencing the Guns in Africa;”
5. Welcome the election of the Bureau of the Specialised Technical Committee (STC) on Gender Equality and Women’s Empowerment (GEWE) and express our appreciation to the Government of Sudan for hosting the inaugural session of the STC; 6. Acknowledge existing global, continental, regional and national frameworks on Gender Equality and Women’s Empowerment and recommit to the implementation and mutual accountability of those existing frameworks without renegotiating their content;
7. Aware of efforts to promote GEWE around the continent, yet women’s access to basic and quality education, ownership and control of assets, access to public procurements, opportunities for scalable entrepreneurship, inclusion in financing frameworks, and representation in decision-making positions among other social, economic and political rights still remain severely limited;
8. Note that the implementation of existing GEWE frameworks still remains a challenge for most African countries due to their slow pace of ratification and domestication as well as the inadequacy of technical and for financial resources to operationalize GEWE agenda; and underlining that only three (3) Member States have reported on measures taken to implement the Maputo Protocol as required by Article 26;
9. Recognize existing and emerging threats to Africa’s development, including climate change, conflicts, terrorism, the illicit proliferation of arms and health pandemics (Ebola, HIV/AIDS) and the disproportionately negative impact they have on women’s lives and well-being; and underscore women’s sexual and reproductive health plays a critical role in their lives and that large numbers of African women and girls continue to die from pregnancy-related causes annually;
10. Appreciate the commitment of Heads of State and Government of the African Union to GEWE, having devoted two themes in 2015 and 2016, respectively, to this key development priority, and notably in adopting (six) 6 key priority areas on the socio-economic and political rights of women;
We, Ministers of the African Union (AU) in charge of Gender and Women’s Affairs, representatives of Regional Economic Communities (RECs), intergovernmental conferences, and members of the Gender is my Agenda Campaign (GIMAC) network, Civil Society Organizations (CSOs), UN Agencies, African Development Bank (AfDB), development partners and private sector organizations therefore commit to:
11. Assess progress on women’s participation and decision making in politics, public office, the judiciary and other public spheres at all levels; identifying the challenges and barriers hindering their effective participation as well as developing and implementing strategies to accelerate -the implementation of these commitments;.
12. Facilitate consultations and agreement on the opportunities, gaps and solutions for enhancing women’s socio-economic empowerment and ensuring that women are at the centre of sustainable development, peace and security, regional integration and economic growth in Africa.
13. Identify how national regulations and policies, on one hand, and practices from financial institutions, investors, and businesses on the other, can be more closely aligned to improve women’s financial inclusion, effective participation in the formal and informal economies, strengthen and strengthening gender budgeting processes, increase gender sensitivity of macro-economic policies and strengthen women’s access to public procurements;.
14. Monitoring trends in migration and displacement, particularly challenges and their impact on women, , refugees and internally displaced persons, girls as well as identifying reflect on best practices to address the their specific vulnerabilities and strengthen their capacities of this target group in Africa and in the countries of destination and transit; and to adopt international conventions on trafficking to prevent cross-border trafficking;
15. Accelerate the implementation of the Women, Peace and Security Agenda on the continent through the establishment of a continental results framework to monitor and report on national and regional Women, Peace and Security commitments at all levels, learning from the outcomes of the Global Study on UN Security Council Resolution 1325, among other key studies, and in collaboration with RECs, the UN, and civil society.
16. Share status updates and devise solutions to increase the representation of girls and women in Sciences, Technology, Engineering and Mathematics (STEM) and in Technical Industrial Vocational Education and Training (TIVET);
17. Strengthen the implementation of existing instruments on sexual and genderbased violence resulting from ongoing existing discriminatory practices, including Harmful Traditional Practices (HTPs) such as child, early and forced marriages; ensuring the ratification, domestication and implementation of the articles of the Maputo Protocol related to sexual and reproductive health and reinforcing the role society should play to end violence against women and girls;
18. Provide an opportunity for various stakeholders to consult and address the challenges, which hinder progress in achieving women’s land and property rights in Africa, as well as identify means to advancing relevant solutions with a view to securing greater commitment towards promoting best practices.
We recommend as follows:
AUC, RECs and Member States to:
19. Implement, in line with Article 4 (L) of the Constitutive Act of the African Union, gender parity at all levels of decision-making at the AU Organs. The AUC should guarantee an alternating system between men and women in the position of Chairperson and Deputy Chairperson of the Commission. We commend the AU for implementing the gender parity rule at the level of Commissioners and similar efforts at that for Directors;
20. Commit to designing, in collaboration with all stakeholders, new Gender Strategy which will reflect priorities in Agenda 2063, the Sustainable Development Goals (SDGs) and COP 21 and aligned with existing GEWE frameworks, as well as developing a more robust Monitoring, Reporting and Evaluation Mechanisms in support of said strategy;
21. Share the outcomes of the 8th AU Gender Pre-Summit during the 27th Ordinary Sessions of the Assembly of the African Union;
22. Assess the implementation of commitments made on GEWE in Africa, with specific reference to the 2015 theme of “Year of Women’s Empowerment and Development Towards Africa’s Agenda 2063” and the African Women’s Decade (2010-2020), and develop follow-up intervention strategies to accelerate the implementation of commitments on Gender Equality and Women’s Empowerment;
23. Recognize and value unpaid care and domestic work predominantly done by women by enforcing existing laws, raising awareness with private sector actors on the protection of their rights and implementing programmes to help them graduate to better conditions of work;
24. Implement and strengthen accountability on existing decisions, policies and frameworks for the protection of women and girls’ rights, and in collaboration with other relevant stakeholders continue to raise awareness and develop a common strategy on the implementation of the 2016 theme of “African Year of Human Rights, with particular focus on the Rights of Women”.
25. Organize a continental Campaign on the ratification and domestication of the Maputo Protocol and eradication of HTPs, align national legislations to reflect women’s sexual and reproductive health rights, create a legal fund for women victims of human rights violations; hold perpetrators of sexual exploitation and abuse accountable, and ensure women’s effective inclusion and participation in peace dialogues;
26. Increase budget allocations to programmes and organisations dedicated to GEWE and strengthen the capacity of stakeholders to ensure effective mainstreaming of priority actions in all areas;
27. Adopt an integrated approach to reinvigorate dialogue between stakeholders participation, in playing a leadership role in public office by 2020. on the opportunities, gaps and solutions for enhancing women’s economic empowerment and ensure that women are at the centre of sustainable development, peace, regional integration and economic growth initiatives in Africa;
28. Engage practitioners, policy-makers, civil society organizations, and a broad range of stakeholders to review the implementation of the Women, Peace and Security Agenda on the continent, learn from various experiences and challenges, and reflect critically on what is needed to accelerate implementation and monitoring at all levels, as well as on the way forward;
29. Increase resource allocations and create enabling conditions to increase women’s participation and visibility in women in Science, Technology, Engineering and Mathematics (STEM) and in Technical and Vocational Education and Training (TVET);
30. Address challenges which hinder progress in achieving women’s land and property rights in Africa, as well as identify and promote practical approaches to addressing these challenges with a view to securing commitment towards promoting proven models;
31. Intensify efforts to increase women’s political participation and their appointment in decision-making positions, especially in non-traditional fields such as the military and their share of public procurements, industry and support their efforts to scale-up their enterprises;
32. Congratulate the African Union Commission, under the leadership of the Chairperson, H.E. Dr. Nkosazana Dlamini Zuma, for the adoption and implementation of Agenda 2063 and its 10-Year Implementation Plan, which recognizes gender equality and women’s empowerment as a critical driver for the transformation and development of Africa in all the seven (7) Aspirations of Africa’s Agenda 2063;
33. Thank the Chairperson of the African Union Commission for convening this PreSummit, and the AfDB, UNDP, UN Women, and UNECA for their support and contribution, as well as the Government of the Federal Democratic Republic of Ethiopia for its hospitality.
Adopted in Addis Ababa, Ethiopia, on 20th January 2016
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Reforming the IIA Regime – a stocktaking
There is a pressing need for systematic reform of the international investment agreements (IIAs) regime to bring it in line with today’s sustainable development imperative. Today the question is not whether or not to reform, but about the what, how and extent of such reform.
A preliminary stocktaking of IIA reform suggests that efforts towards a more sustainable-development-friendly IIA regime are being undertaken at all levels of governance. UNCTAD’s latest IIA Issues Note on “Taking stock of IIA Reform” documents that:
At the national level, since the launch of UNCTAD’s Investment Policy Framework, at least 110 countries have reviewed their national and/or international investment policies. Many of those reviews resulted in the development of a new IIA model that is in line with new generation investment policymaking.
At the bilateral level, there is a clear shift in drafting practice. Recently signed IIAs contain a number of policy options preserving countries’ right to regulate or otherwise conducive to sustainable development.
At the regional level, megaregionals or regional IIA models include reform-oriented policy options. Some inputs into megaregional negotiations break new ground with respect to IIA and investment dispute settlement reform.
At the multilateral level, a number of forums touch upon issues related to IIA reform (e.g. transparency in ISDS, business and human rights, or financing for development). UNCTAD’s World Investment Forum and its Investment Commission provide a global platform for engaging policymakers and the investment and development community at the large.
IIA reform is a formidable challenge. Significant progress has been made, but much remains to be done. Comprehensive reform requires a two-pronged approach: modernizing existing treaties and treaty models and formulating new ones. Only a common approach, at all levels, bilateral, regional, multilateral as well as national will deliver an IIA regime, in which stability, clarity and predictability help achieve the objectives of all stakeholders: effectively harnessing international investment relations for the pursuit of sustainable development.
UNCTAD has been advocating for IIA reform since 2010. Based on UNCTAD’s long-standing experience with its Work Programme on IIAs, UNCTAD’s World Investment Report series 2010-2015 highlighted a myriad of challenges and options for reforming various aspects of the IIA regime.
UNCTAD’s mandate to continue this endeavor was recently confirmed in the Addis Ababa Action Agenda (AAAA) of the Third United Nations Financing for Development Conference, July 2015. UNCTAD stands ready to continue providing the investment and development community with the necessary backstopping in this regard.
The IIA Issues Note will serve as input into the deliberations at the forthcoming UNCTAD Expert Meeting on IIA Reform, on 16 March 2016 in Geneva, Switzerland.
The meeting will allow the investment and development community to improve our knowledge of IIA reform activities around the globe, share experiences of stakeholders’ approaches to IIA reform, identify lessons learned, and chart the way forward towards the IIA Conference at the 2016 World Investment Forum, scheduled for July 2016 in Nairobi, Kenya.