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tralac’s Daily News selection: 10 December 2015
The selection: Thursday, 10 December
WTO report finds no acceleration in trade restrictions but slow pace for barrier removal
During the period under review, the rate at which new trade-restrictive measures were introduced was stable at roughly 15 new measures per month, comparable to the previous period. Members also implemented 222 new trade-facilitating measures over this period or an average of almost 19 measures per month, the second-highest number since the beginning of the monitoring exercise in 2008. Nevertheless, only 25% of the restrictive measures recorded since October 2008 have been eliminated. Thus, the stockpile of restrictions has now risen to 2,557 as of October 2015, up 17% from the previous period. [Download]
MC10: Briefing note on cotton negotiations (WTO)
State of Agricultural Commodity Markets (FAO)
This edition of The State of Agricultural Commodity Markets aims to reduce the current polarization of views on the impacts of agricultural trade on food security and on the manner in which agricultural trade should be governed to ensure that increased trade openness is beneficial to all countries. By providing evidence and clarity on a range of topics, the report seeks to contribute to a more informed debate on policy choices and to identify required improvements in the policy processes within which these choices are made. Eight key messages: [Download the report, background papers, technical notes]
Book alert: Growth and poverty in Sub-Saharan Africa (UNU-WIDER)
The book includes 16 country case studies which collectively represent nearly three-quarters of the sub-Saharan African population. Contributions from local and international experts identify and explain trends in monetary and non-monetary poverty and their links to growth. [The editors: Channing Arndt, Andrew McKay, Finn Tarp] [Some chapters available as working paper downloads]
Zambia Economic Brief: Powering the Zambian economy (World Bank)
These external and domestic challenges, will affect GDP growth which is expected to be 3 to 3.5% in 2016, before bouncing back to potential of 5 to 6% by 2018 as copper prices stabilize and domestic pressures ease. Strengthening the fiscal position and restoring fiscal buffers will be necessary to increase confidence in the economy, reduce the need for costly borrowing and build resilience against further exogenous shocks. The power sector is pivotal to Zambia’s growth in the future. Zambia’s economy has expanded by an average of 6.4% and 7.4% over the last decade increasing the demand for electricity. The prospect of solar and thermal generation in the next few years will help diversify Zambia’s power generation to complement its hydro resources.
Nigeria Economic Report: Special Edition 2015 (AfDB)
Nigeria faces several challenges that limit its ability to deploy PPP as a strategy for infrastructure development. These include: weak regulatory and enforcement powers of ICRC; limited capacity to drive PPP process in Nigeria; weak capacity of MDAs in project preparation through thorough financial, economic and risk analysis; poor negotiation skills; poor planning and coordination between public and private partners involved in PPP projects; risks on return on investment for prospective private sector partner; existence of weak long-term finance for infrastructure; mismatch between PPP transaction life cycle and national budget cycle; and weak cooperation and collaboration among MDAs on PPP-related activities. To evolve an effective PPP strategy for infrastructure development, the following policy actions are imperative:
NCIP: Uhuru Kenyatta in Rwanda for integration summit (Daily Nation)
President Uhuru Kenyatta arrived in Kigali, Rwanda Thursday morning to attend the 12th Northern Corridor Integration Projects Summit. The NCIP Summit will review the progress in the 14 earmarked projects, emerging issues, challenges as well as the way forward. Among the observers present at the summit include, Burundi, Ethiopia, DR Congo, Tanzania and Djibouti. The summit will also see the regional private sector present a memorandum of understanding that will guide their engagement with governments in the implementation of the earmarked projects.
Burundi's political and security crisis: submissions to the US Senate's subcommittee on Africa and Global Health Policy hearing
COMESA’s policy organs meeting closes (COMESA)
The 35th COMESA Policy organs meetings ended on Tuesday with the adoption of the report of the Council of Ministers. The report which contains major policy decisions will guide the implementation of regional integration programmes for the Member States and the Secretariat, in the year 2016.
ECOWAS ministers call for more budgetary allocation to water sector
The ministers adopted 17 resolutions including the consideration of the report of the 10th session of the IWRM Technical Experts’ Committee. Desirous of enhancing the current water resources situation in the region, the ministers also adopted a resolution on the Implementation Action Plan of West Africa’s Water Resources Policy as well as on capacity building of the Water Resources Coordination Centre. In this regard, they called for the implementation of an institutional study for a structural reform of the WRCC including the need to strengthen it in partnership with research structures and degree training centres.
President Edgar Lundu: 'Zambia-South Africa business council to benefit all' (Daily Mail)
The Zambia-South Africa Business Council will be expected to act as a business information portal on trade and investment, particularly in providing information on export and investment opportunities existing in the two countries. The business council is further expected to facilitate interactions and also provide information on regulatory, labour and immigration issues. It is in this regard that I appeal to the business council to promote my Government’s agenda of fostering inclusive business models that ensure integrating local communities in the supply chains and support the growth of local industries in all sectors of the economy.
Tanzania: Shilling gains on strong dollar inflows from exports (Daily News)
The shilling gained on the back of strong US dollars inflows from agro-exports when the public was celebrating Uhuru Day by cleaning their surroundings yesterday. The Bank of Tanzania data showed that the shilling depreciated from 1,723/- in January to 2,175/- of Tuesday but hopes are lingering since the coming to power of President, John Magufuli a month ago. The shilling has gone down by some 20% since the beginning of this year, as demand from importers continued to outpace foreign currencies inflow. The shilling appreciation came at a time the inflation in November gone up by 0.3 percentage point to 6.6 per cent pushed by raising food prices.
DRC loses up to $15bn per year to fraud - official (Reuters)
Luzolo Bambi, a counselor to President Joseph Kabila on graft and money laundering, did not give any specifics during an interview with local radio but said corruption existed at some of the highest levels of government.
Zimbabwe: ‘High taxes hinder economic growth’ (The Herald)
Government should reduce taxes and licensing fees as part of the process of internal devaluation in order to improve the ease of doing business and to enhance competitiveness of local industry in the country. Competition and Tariff Commission chairman Dumisani Sibanda told a Confederation of Zimbabwe Industries symposium on internal devaluation yesterday that Government should urgently align its pricing structure to affordability.
Trade, tourism boost aviation traffic between Uganda, SA (Daily Monitor)
Trade statistics from Bank of Uganda indicate that trade between South Africa and Uganda as of 2014 was valued at $253m (Shs836b), up from $233m (Shs770b) in 2013. The trade, however, remains largely one sided as Uganda imported goods worth $244m (Shs806b) in 2014 up from $226m (Shs747b) in 2013. However, Uganda only exported goods worth $9m (Shs30b) in 2014, up from $7.3m (Shs24b) in 2013.
The urgent need to expand and improve Africa’s ports to meet rising demand (AfDB)
“Port capacity and logistics cannot handle the increasing traffic across most of Africa, causing congestion,” said Admou Saley Abdourahamane, the Secretary General of Union of African Shippers Council. His organization represents 18 countries in Central and West Africa. He added that the congestion was due to factors such as deficient physical infrastructure (inadequate capacity particularly in terminal storage and maintenance), weak regulatory systems and poor management, all which amounted to poor port efficiency. This has led to high trading costs in Africa. “What this situation does is to contribute to the marginalization of the continent from international markets,” noted Abdourahamane. Africa has 66 ports, 28 of them in West Africa.
Ghana: Shippers discuss trade barriers (Ghana Times)
Does firm size matter for productivity?: the case of informal firms in Africa (World Bank Blogs)
We explored the relationship between size and productivity of informal firms using surveys of informal or unregistered firms conducted by the World Bank’s Enterprise Surveys (ES) in seven countries in Africa between 2009 and 2011. The countries covered (survey year in brackets) are Angola (2010), Botswana (2010), Burkina Faso (2009), Cameroon (2009), Cabo Verde (2009), Mali (2010) and Rwanda (2011). In the sample, approximately 28 percent of firms have a single employee, 21 percent have 2 employees, 15.3 percent have 3 employees, 11.8 percent have 4 employees, and the remaining 23.9 percent have 5 to 25 employees.
Africa Facility for Climate-Resilient Investment: update (World Bank)
The World Bank’s Senior Regional Advisor for the African Region, Jamal Saghir, promises it will be a knowledge hub for decision makers and “a different way for us at the World Bank to do financing.” With a fundraising target of US $50 million by 2020, the new facility hopes to spur more climate-smart investments and lead the way to a more climate-resilient future for this continent that is home to more than one billion people.
When the tide goes out: capital flows and financial shocks in emerging markets (UNCTAD)
What does this suggest about the economic prospects in emerging economies? With economic activity slowing sharply and surveys of private sector companies now indicating contraction even for manufacturing sectors, the omens are not good. Predicting where the next crisis will be is best left to those with a more speculative bent, but the emerging corporate debt market, where there are already strong indications that the leverage ratio in several countries has reached the peak seen in developed countries just before the 2008 crisis, needs to be carefully monitored. If history is any guide, and as the current situation in Europe illustrates, a prolonged shock to that market could quickly lead to sovereign debt crises.
Public debt vulnerabilities in low-income countries: the evolving landscape (IMF)
This is the first joint IMF/World Bank report on public debt vulnerabilities in low income countries. It examines debt-related developments and their underlying causes since the onset of the global financial crisis. The findings will inform the upcoming review of the IMF/WB debt sustainability framework for LICs.
Taylor visits Africa (IMF)
Estimations of small-scale models for Kenya, Uganda and Tanzania suggest that these self-styled "monetary targeters" are respecting the Taylor Principle, that is are on average increasing nominal interest rates more than proportionally to inflation. Nevertheless, steep deviations from the Taylor Rule have taken place in Kenya and Tanzania. In Uganda, these errors are much smaller, in fact similar in size to Taylor Rule deviations found for Brazil. More surprisingly, they are smaller than South Africa’s, the continent’s sole long-term inflation targeter.
Mozambique: Strategic plan for tourism development 2015/2024 (Club of Mozambique)
Kenya: New law to ensure firms are fined 10% of turnover if they engage in price fixing (Daily Nation)
East Africa: Regional tea sales grow by 6.4% (Daily Monitor)
Rwanda: Nyagatare-Rukomo road project gets Rwf11bn Kuwaiti funding (New Times)
Ethiopia: Maternal and child health inequalities (World Bank)
Italy's foreign trade: focus on Africa, Iran and ASEAN countries (Antara)
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This post has been sourced on behalf of tralac and disseminated to enhance trade policy knowledge and debate. It is distributed to over 300 recipients across Africa and internationally, serving in the AU, RECS, national government trade departments and research and development agencies. Your feedback is most welcome. Any suggestions that our recipients might have of items for inclusion are most welcome. Richard Humphries (Email: This email address is being protected from spambots. You need JavaScript enabled to view it.; Twitter: @richardhumphri1)
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Align trade and agricultural development policies better to achieve food security
Expansion in food trade must support national and global food security objectives, FAO report says
Rules governing international trade of food and agricultural products should be crafted with an eye to improving countries’ food security and other development objectives. For this, a pragmatic approach that would align agricultural and trade policies at the national level is needed, a new FAO report argues.
The expected increase in global trade of farm products along with shifting patterns of trade and multiples sources of risks to global supplies will give trade and its governance a heightened influence over the extent and nature of food security everywhere. As a result, the challenge for policy makers has evolved into one of ensuring that its expansion “works for, and not against, the elimination of hunger, food insecurity and malnutrition,” according to The State of Agricultural Commodity Markets (SOCO).
The new edition of this flagship FAO report aims to reduce the current polarization of views on agricultural trade, wherein some insist that free trade leads to more available and accessible food while others, noting the recent bout of volatile food prices, insist on the need for a more cautious approach to trade, including a variety of safeguards for developing countries.
Subtitled “Achieving a better balance between national priorities and the collective good,” the SOCO report emphasizes that the role of trade varies enormously with country characteristics, such as income, economic and landholding structure, the stage of agricultural development and the degree of integration of farmers in global value chains. Amid such variety in country conditions, international rules for formulating national trade policies should be supportive of efforts to mitigate disruptions that affect any of the four dimensions of food security: availability, access, utilization and stability.
Balancing short-run and long-run objectives is becoming vitally important considering that the nature of disruptions varies enormously and that market shocks will likely become more frequent due to geopolitical, weather and policy-induced uncertainties. While efforts to intervene and shield domestic markets from global price volatility could in fact lead to increased domestic price volatility, agricultural incentives play an important role in in boosting agricultural production and efficiency and fostering broader economic growth.
A decade of dramatic change
The global trade arena has changed notably in the past decade, with trade in food alone nearly tripling in value terms, driven in particular by fruits, vegetables, fish, meat and dairy products – all high-value categories where standards are typically more important than in staple commodities such as cereal grains.
On top of that, there are changes in economic geography. Latin America has become the largest net exporter of food, replacing North America, and ushering in a new political map of South-South trade flows. Meanwhile, regional trade agreements have proliferated, and while agricultural commodity imports tend to be dispersed among many countries, exports are concentrated in a few – such as Brazil with sugar, or the United States with coarse grains – which makes supply more vulnerable to sudden disruptions.
At the same time, new and subtler dynamics are increasingly driving trade patterns, including the emergence of global value chains and vertical integration within agricultural production and marketing. Such developments, wherein market power and standardization may matter as much as price, raise questions about the assumption of competitive markets and traditional efforts to harness comparative advantages, although participation in value chains also offer important income-generating opportunities to smallholder farmers.
The “supermarket revolution” in many developing countries is also changing the balance of opportunities and risks. On the one hand, retail chains often procure goods directly, shaking up habits as shown by the rapid halving of the market share of the top three banana-trading multinational companies from 70 percent in 2002 to 37 percent today. On the other hand, while supermarkets tend to benefit lower-income urban consumers, producers may suffer if they lack the ability to make investments necessary to meet volume, cost, quality and consistency standards.
Focus on facts and flexibility
The SOCO report offers a nuanced counterpoint to the often ideological clash between advocates of protected and open markets, which often stem from differences in the definitions of trade and food security. In reality, countries may seek to follow different strategies along the policy continuum from prioritizing own production towards relying on more open markets at different times in their development trajectory, depending on how their circumstances change over time.
Moreover, the distinction between formally protected and liberal markets often fades due to the way trade rules are actually implemented. For example, while least-developed countries (LDCs) have reserved the right to apply the highest import tariffs (the so-called “bound tariff rates”), followed by developing countries, with the lowest tariffs in developed countries, in reality there is almost no difference in the tariffs actually applied by the three groups
Appropriate policies often depend on the extent to which national markets are developed and behave competitively and offer participants tools to manage risk. Where these conditions do not yet apply, “domestic support policies should not be rejected out of hand,” SOCO argues.
Mainstreaming food security – itself a function of multiple sectors of economies that change over time – into the trade policy decision-making process is a way to make trade an “enabler” of sustainable development and the core goal of eradicating hunger.
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tralac’s Daily News selection: 9 December 2015
The selection: Wednesday, 9 December
This week in Kigali: the 12th Summit of the Northern Corridor Integration Projects
NCIP Summit: 'Involve private sector in integration projects' (editorial comment, New Times)
Monitoring Regional Integration in Southern Africa Yearbook 2015/16: call for papers (tralac)
Asian Economic Integration Report 2015 (ADB)
The Asian Economic Integration Report 2015, examines current trends in trade, finance, migration, remittances and other economic activities in the region, with a special chapter on the role of special economic zones. “The expansion in the number of SEZs from about 500 in 1995 to over 4,300 in 2015 shows the strong and rising interest to this form of policy experiment, though the success record is somewhat mixed,” said ADB Chief Economist Shang-Jin Wei.
FOCAC 2015 Summit: The Johannesburg Action Plan (2016-2018)
On trade: The two sides will scale up trade and try to elevate the China-Africa trade volume to US$400bn in 2020, from US$220 in 2014, ensuring that the rate of growth is maintained in overall figures and that balance in trade is the desired outcome.
Pointers: China to conduct e-commerce cooperation, introduce e-certificates of origin, paperless customs clearance processes; Both sides to jointly formulate the China-Africa Railway Cooperation Plan for 2016-2020 and associated transnational highway networks; China will support African countries in establishing 5 transportation universities; China-Africa industrial partnering and industrial capacity cooperation will be undertaken in a 'comprehensive and orderly fashion'
Namibia-China: Govt approves N$7b airport (The Namibian)
South Africa: IDC to drive empowerment with Chinese cars (Business Day)
Review business ethics laws, US firms urge Kenya (Daily Nation)
American business owners based in Kenya on Monday urged the government to take action against companies that bribe public officials to win contracts. The American Chamber of Commerce-Kenya Chapter offered to assist the government to redraft the Business Code of Ethics to create a level playing field for all. “Immediate and coordinated action must be taken to implement the Joint Commitment as agreed upon between President Uhuru (Kenyatta) and the business community as corruption is a major hindrance to the growth of the private sector and (denies the) government revenue,” AmCham-Kenya Chapter President Mr Peter Njonjo said.
Geoff Pigman: 'New perspectives on trade from the Commonwealth' (EconoMonitor)
Botswana: poverty assessment (World Bank)
Botswana's progress toward reduction of extreme poverty and inequality was among the world’s strongest in the second half of 2000s. During this period, the economic growth has been strongly pro-poor. Botswana is one of the top performers in Africa when measured by annual consumption distribution growth for the bottom 40 percentile. However, despite these noteworthy improvements, inequality remains high. The study concludes that with adequate macro and social policies, and a strong focus on improving equity, Botswana has a historical opportunity to build on recent achievements and move towards eradicating extreme poverty within one generation.
Recent 'Doing business 2016' country reports - on the theme 'measuring regulatory quality and efficiency': Angola, Botswana, DRC, Ethiopia, Lesotho, Malawi, Namibia, Nigeria, South Africa, Swaziland, Uganda, Zimbabwe
International trade in services was main driver of growth in global trade in 2014 (UNCTAD)
International service exports accounted for 21% of total global exports (valued at just over $5trn) in 2014, a growth of almost 5% compared with the previous year, while merchandise exports (valued at $19trn), increased by only 0.3% in the year, as measured in current prices, UNCTAD's Handbook of Statistics 2015 reveals. Total global exports for 2014 were valued at $24trn, up by 1.2% compared with the previous year. Services exports from both developed and developing economies grew strongly in 2014, at 5.3% and 4.8% respectively.
EAC govts urged to fast-track integration of regional exchanges (New Times)
Regional governments should take advantage of automation across the East African Community stock markets to fast-track the integration of the bloc’s exchanges. The call was made by a capital markets stakeholders’ consultative meeting in Kigali on Friday. The meeting also discussed the terms of reference, and reviewed progress on the implementation of the EAC capital markets infrastructure integration project that were presented by the EAC’s Financial Sector Development and Regionalisation Project (EAC-FSDRP), and the system’s Pakistani vendors, Intotec Limited.
IGAD to enhance border fish trade (IGAD)
The Intergovernmental Authority on Development together with fish experts from the IGAD Member States met in Addis Ababa this week to share experiences as well as review and assess a trade agreement study for enhanced and facilitated fish trade between Ethiopia and Djibouti that can later be replicated to other IGAD Member States.
Kenya: Mumias share price up on COMESA safeguards extension (Business Daily)
Mumias Sugar Company shares at the Nairobi Securities Exchange rose 6.7% Tuesday following the extension of the Common Market for Eastern and Southern Africa quantitative safeguards that give a lifeline to the industry for the next one year. The decision to grant Kenya the sixth extension was made during the 35th Comesa Council of Ministers meeting in Zambia.
Tanzania: Govt urged to rethink privatisation of industries (The Citizen)
The government has been told that in order to revive failed privatised entities, it should work towards improving cost structures, access to technology and markets. The recommendation comes from the private sector a few days before the expiry of a 30 day ultimatum issued by the government to individuals and companies furnished with the formerly public-owned firms. Official statistics show that some 274 state firms had been privatized by 2012. Among these, 95 were in the agricultural sector, 94 in industry, 23 in infrastructure, 34 in natural resources and tourism, 15 in the energy and minerals sector and 13 in other sectors.
KWFT eyes Rwanda, Sudan Sudan expansion (Business Daily)
Kenya Women Microfinance Bank is targeting Rwanda and South Sudan markets as it seeks to be the first local micro-financier to branch out in the region. The micro-financier, which is the largest such operator in Kenya, said it will be targeting small and medium enterprises for lending in the two regional economies over the next two years.
SA, Botswana ease travelling for cross-border community (SANews)
South Africa and Botswana have officially introduced a pilot project that will make travelling much easier for the cross-border community of Tshidilamolomo. The village straddles South Africa and Botswana due to what Minister Gigaba described as the “irrational borderlines” drawn by colonialists.
The cost of investment incentives: the case for Zimbabwe (NewsDay)
The African Forum and Network on Debt and Development (Afrodad) will today hold a validation workshop on preliminary results of the Cost of Investment Incentives in Zimbabwe study. The study is being conducted by Afrodad and ActionAid International Zimbabwe and seeks to influence the government to develop and implement transparent, accountable and efficient mechanisms for the mobilisation and utilisation of domestic resources.
Mozambique is Zimbabwe’s second largest regional trading partner (NewsDay)
Special economic zones in fragile situations: a useful policy tool? (AfDB)
The report contrasts the theory of developing SEZs with evidence from existing experience (more often than not of unfulfilled promises), identifying problems of weak governance and instability as particular constraints. Seeing as though issues of institutional capacity and volatility are characteristic of fragile situations, implementing an SEZ programme is all the more challenging in those contexts. The risks of pursuing an SEZ approach for the wrong reasons, based on political rather than economic considerations, is more prevalent in fragile situations where policymakers under enormous pressure to show quick results. However, the resulting risk that SEZs thus disappoint raised expectations in the population and damage investor confidence is often overlooked. The main lessons emanating from this study are that i) SEZs require a minimum level of state capacity, ii) SEZ policy design and implementation is a lengthy and difficult process, iii) there is an increased threat that SEZs in fragile situations may fall captive to vested interests, iv) meaningful private sector participation is even more important in fragile situations.
Yesterday's UNGA debate: sustainable fisheries, draft text on oceans and the Law of the Sea
Kaswamu Katota (Zambia), speaking for the Group of Landlocked Developing Countries, said that the overall socioeconomic development of the Group’s countries was constrained by their lack of direct territorial access to the sea, remoteness and isolation from world markets and high transit costs. Although he noted that UNCLOS acknowledged some of those factors, he reviewed its specific wording pertaining to landlocked States, observing that only a little over half the Group’s membership had ratified it. He called upon the International Seabed Authority and other stakeholders to help landlocked developing countries not only in the accession process, but with technical assistance towards ratifying, implementing and effectively utilizing the provisions of the Convention, as well.
Yesterday's UNSC debates: Central Africa, Sahel region
At COP21: Caring for Climate (C4C) Business Forum, EU and 79 African, Caribbean and Pacific countries join forces for ambitious global climate deal
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This post has been sourced on behalf of tralac and disseminated to enhance trade policy knowledge and debate. It is distributed to over 300 recipients across Africa and internationally, serving in the AU, RECS, national government trade departments and research and development agencies. Your feedback is most welcome. Any suggestions that our recipients might have of items for inclusion are most welcome. Richard Humphries (Email: This email address is being protected from spambots. You need JavaScript enabled to view it.; Twitter: @richardhumphri1)
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Incomes growth in rural Botswana lifts thousands out of poverty and decreases inequality
Thousands of Batswana rose out of poverty thanks to increased growth in rural areas driven in part by rising agricultural incomes and welfare improvements, according to a World Bank Study released on 8 December 2015 in Gaborone.
The Botswana Poverty Assessment report, found that the number of poor people in the country declined by nearly 180 000 between 2002/3 and 2009/10. This denotes a poverty rate decrease of 19.4% from 30.6% when using the national poverty line. In this period, 87 percent of the decrease in poverty occurred in rural areas, where 158,000 people rose out of poverty.
“Tackling poverty is at the heart of our National Development Plan. We are pleased to see that our welfare programs have improved the lives of many and made a dent in poverty levels, says Mr. Olebile Gaborone, the Permanent Secretary for Poverty Eradication, in the Office of the President of Botswana.
Based on two nationally representative household income and expenditure surveys conducted by Statistics Botswana in 2002/2003 and 2009/10, the report analyzes recent trends in the monetary and nonmonetary aspects of poverty in Botswana. It examines the drivers of poverty reduction by systematically looking at the demographic, labor, and human capital dimensions of poverty.
The report shows that increased agriculture incomes strongly supported by government subsidies and substantial changes in the demographic structure including the reductions in household sizes and dependency ratios were responsible for Botswana’s poverty reduction.
It found that the decrease in the incidence of poverty was accompanied by a significant decline in both the depth and severity of poverty. Furthermore, the poverty gap eased from 11.7 percent in 2002/03 to 6.2 percent in 2009/10, indicating that consumption has improved among the poor. Real consumption per capita rose 47.6 percent in rural areas compared to a nationwide real consumption per capita increase of 13.3 percent during the same period.
“Botswana has made much progress in its fight to end poverty. We will continue to support the Government efforts to make investments in a broad variety of areas to grow the economy, increase employment and eradicate extreme poverty,” says World Bank Country Director to Botswana, Guang Zhe Chen. “This is aligned with the World Bank’s mission to help end extreme poverty by 2030 and to boost prosperity among the poorest 40 percent in low- and middle-income countries”.
The study also revealed a decrease in inequality although with a Gini coefficient of 60.5 percent, Botswana remains one of the world’s most unequal countries. The level of inequality in Botswana is the world’s third highest, after South Africa and Seychelles. But between 2002/03 and 2009/10, inequality, the Gini fell from 64.7 percent to 60.5 percent. Most of the decline occurred due to welfare improvements in rural areas, while inequality in cities increased.
It also found that large numbers of people still live just marginally above the poverty line and at risk of falling back into poverty. Vulnerability was significantly reduced between 2002/03 and 2009/10. However, half of Botswana’s population remains either poor or vulnerable, with close to 31 percent classified as vulnerable.
“We see from our research that agricultural support programs were clearly a big part of the progress achieved during the period under review,” says World Bank Senior Economist Victor Sulla. “Going forwards, investments in human capital and efficient safety-net targeting will be critical to accelerating poverty reduction and reducing inequality further”.
The study also shows that the combined effect of labor, education and social protection improvements could help halve projected poverty by 2018 and eradicate it by 2030. It projects a fall in poverty levels of below 12% by 2018 and below 6% by 2030. However, inequality is not expected to fall significantly unless there is continued, broad-based employment growth.
The report recommends improving the quality of education and raising skills levels in order to close the skills gaps that dampen labor demand. It also recommends the development of a dynamic and productive private sector which is fundamental to creating more and better jobs and a greater focus on the most disadvantaged populations.
» Botswana Poverty Assessment (PDF, 7.21 MB)
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Business leaders show support for international climate agreement, showcase solutions at Caring for Climate Business Forum
Unprecedented corporate engagement on key climate issues including carbon pricing, finance, responsible policy engagement and science-based targets were announced on 8 December 2015 at the conclusion of the Caring for Climate (C4C) Business Forum, the official avenue for business at the Conference of Parties (COP) event in Paris.
The UN Global Compact, UN Environment Programme (UNEP) and the secretariat of UN Framework Convention on Climate Change (UNFCCC) came together under the banner of Caring for Climate – the world’s largest business coalition for climate change – to convene more than 700 participants over two-days from business, finance, Government, civil society and the United Nations to discuss the integral role of the private sector in advancing the climate agenda.
The event was attended by UN Secretary-General Ban Ki-moon; Minister of Environment, Sustainable Development and Energy, Ségolène Royal; and Secretary of State of the United States John Kerry.
In his opening remarks, UN Secretary-General Ban Ki-moon noted the key role of business in the global effort to keep global temperature increase below 2°C. “The collective momentum among the private sector for climate action is growing daily. More companies and investors are leading on climate action than at any time in history,” he remarked in his opening address. “But to limit global temperature rise to less than 2 degrees we must go much further and faster. We need 100 percent participation from the business community.”
“The private sector can help to fill the gap between what has been committed by Governments through the INDCs and what is needed to reach a carbon neutral economy by mid-century,” said Lise Kingo, Executive Director of the UN Global Compact. “Our job coming out of Paris is to mobilize the great majority of companies that are not yet part of this movement.”
Over the course of the Forum – held as part of COP21/CMP11 and the Lima-Paris Action Agenda (LPAA) – participants reported on progress on the development and diffusion of low-carbon and climate-resilient solutions, shared targets, and met with policymakers on how to better collaborate to drive climate action. In addition, business and investors shared commitments and contributions, discussed pricing the cost of carbon emissions, and made key recommendations for Government actions that would help bring greater scale and quality to corporate climate leadership globally.
U.S. Secretary of State John Kerry highlighted the support of over 154 U.S. companies for action on climate change through their commitment to the American Business Act on Climate Pledge: “As you leave Paris, carry a clear message that how we do business today will determine if we do business in the future,” said Kerry. “In the end, its business – the choices you make and the products you make that will make the difference.”
In addition, CEOs presented a number of commitments around concrete solutions, including:
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Over 450 CEOs from 65 countries across 30 sectors committed to set targets, report on progress and work with policymakers to drive climate action through the Caring for Climate initiative;
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65 CEOs with a total market capitalization of USD 1.9 trillion across 20 sectors have integrated carbon pricing into corporate long-term strategies and investment decisions, taking on the triple challenge of setting an internal carbon price, reporting publicly, and calling for carbon markets through the Business Leadership Criteria on Carbon Pricing;
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114 companies have committed to engage responsibly on climate policy. As part of their commitment, these companies have agreed to: (1) set up processes to internally audit all activities that a company takes part in that influences climate policy; (2) work to ensure that all of this activity is consistent; and (3) communicate on policy positions, actions and outcomes;
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114 companies from around the world committed to align their emissions reductions targets in line with the level of decarbonization required to keep global temperature increase below 2°C through the Science-Based Targets initiative;
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79 chief executives, representing USD 2.13 trillion in revenue announced that their companies would be taking steps to reduce environmental and carbon footprints, set targets to reduce their emissions, and collaborate with supply chains and across sectors;
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140 companies with a total market capitalization of over USD 100 billion and nearly 30 institutional investment firms with assets estimated at USD 2.5 trillion committed to producing climate change-related information in their mainstream reports; and
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39 major French companies made a firm pledge to combat climate change, committing at least 45 billion euros over the next 5 years for investments and financing in renewable energies, energy efficiency and other technologies accelerating the transition to a clean energy, low carbon future.
Since 2007, the Caring for Climate initiative has brought over 450 companies together to call for a robust international agreement, recognizing that this is essential for providing predictability, unlocking capital and advancing the power of sustainable business. Through their individual commitments and actions, these companies have shown that they are ready to fill the gap between what has been committed by Governments though the INDCs and what is needed to reach a carbon neutral economy by mid-century:
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In their annual analysis, Deloitte found that since 2013, Caring for Climate signatories have reduced their carbon footprints by 12%. The new targets announced at COP, if achieved, will generate an estimated annual emissions savings of 93.6 million metric tons CO2e or more than the annual carbon emissions of Peru.
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Further, this group of signatories reported that 749 discreet projects had been implemented in their operations in the previous year to reduce carbon emissions. These projects are estimated to have a combined annual savings of just over 160 million metric tonnes of CO2e; this is equivalent to the consumption of 372 million barrels of oil per the US EPA.
In its third year, the Caring for Climate Business Forum has gained increasing prominence as the private sector has emerged as an essential part of the climate change solution. Led by the UN Global Compact in partnership with UNEP and UNFCCC, Caring for Climate is the world’s largest voluntary business and climate initiative with over 450 companies from 65 countries. It helps to forge stronger alliances between companies and Governments, speed up the delivery of green solutions, scale up climate finance, create jobs and deliver sustainable energy systems on a massive scale.
About Caring for Climate
Launched by UN Secretary-General Ban Ki-moon in 2007, Caring for Climate is the UN Global Compact, UN Environment Programme and the secretariat of the UN Framework Convention on Climate Change’s initiative to advance the role of business in addressing climate change. It provides a framework for business leaders to implement practical climate change solutions and help shape public policy. Chief executive officers who endorse the initiative are prepared to set goals, develop and expand strategies and practices, and to publicly disclose emissions. The Caring for Climate Business Forum is held every year at the UN Climate Change Conference (COP/CMP), providing a platform for dialogue and action among business, investors, civil society, the UN and Government officials. Caring for Climate is endorsed by over 450 companies from 65 countries.
About the UN Global Compact
The United Nations Global Compact is a call to companies everywhere to voluntarily align their operations and strategies with ten universally accepted principles in the areas of human rights, labour, environment and anti-corruption, and to take action in support of UN goals and issues. The UN Global Compact is a leadership platform for the development, implementation and disclosure of responsible corporate policies and practices. Launched in 2000, it is the largest corporate sustainability initiative in the world, with over 8,000 companies and 4,000 non-business signatories based in 170 countries.
About UNFCCC
With 195 Parties, the United Nations Framework Convention on Climate Change (UNFCCC) has near universal membership and is the parent treaty of the 1997 Kyoto Protocol. The Kyoto Protocol has been ratified by 192 of the UNFCCC Parties. For the first commitment period of the Kyoto Protocol, 37 States, consisting of highly industrialized countries and countries undergoing the process of transition to a market economy, have legally binding emission limitation and reduction commitments. In Doha in 2012, the Conference of the Parties serving as the meeting of the Parties to the Kyoto Protocol adopted an amendment to the Kyoto Protocol, which establishes the second commitment period under the Protocol. The ultimate objective of both treaties is to stabilize greenhouse gas concentrations in the atmosphere at a level that will prevent dangerous human interference with the climate system.
About United Nations Environment Programme
The United Nations Environment Programme (UNEP), established in 1972, is the voice for the environment within the United Nations system. UNEP acts as a catalyst, advocate, educator and facilitator to promote the wise use and sustainable development of the global environment. To accomplish this, UNEP works with a wide range of partners, including United Nations entities, international organizations, national governments, non-governmental organizations, the private sector and civil society.
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Special Economic Zones in Fragile Situations – a useful policy tool?
Africa has witnessed impressive growth rates over the past decade. The continent has also become the world’s fastest-growing region for foreign direct investment (FDI). While global FDI fell by 16 per cent in 2014, foreign investment to Africa remained stable at US $54 billion. Maintaining the continent-wide level of investment is all the more remarkable, as North Africa experienced a 15 per cent decline that was offset by Sub-Saharan Africa, notably thanks to significant FDI increases in Central and East Africa.
In general, trends in FDI flows tend to reflect the level of confidence investors have in political and economic conditions within countries. Within limits, it can therefore serve as a barometer of a country’s perceived stability, both in political, economic and social terms, and to what extent it is believed that governments and investors have the capacity to manage potential risks. The surge in violent conflict in West Africa and the Ebola outbreak exposed the capacity weaknesses of several states to effectively confront these challenges, and contributed to a decline in the sub-region’s foreign investments of 10 per cent in 2014.
The prevalence of peace and stability is, therefore, a key driver for investment and economic growth. The concentration of FDI inflows in a small number of countries – in 2014, the top five recipients received about as much FDI as the remaining 49 countries together – is testament to the selectivity and rationale of investors. Infrastructure and the regulatory environment are often cited as main challenges in this regard.
In view of these challenges, African policy-makers are increasingly set on solutions that hold the promise to address these challenges. In this context, the establishment of Special Economic Zones (SEZs) is gaining increasing attention and consideration across the continent as a policy tool, notably in countries facing fragile situations. The promise of a separate set of rules in a demarcated geographic area is particularly appealing for countries with big infrastructure deficits and a complex policy arena where progress on the business environment is slow.
However, setting up such zones is a complex endeavour and Africa’s own experience has shown the risks and costs of failure – even in rather stable environments. It is therefore timely to assess the opportunities and risks associated with this approach and analyze to what extent and under which conditions SEZs can live up to their promise and become a catalyst for private sector development and foreign investment in these environments.
The report contrasts the theory of developing SEZs with evidence from existing experience (more often than not of unfulfilled promises), identifying problems of weak governance and instability as particular constraints. Seeing as though issues of institutional capacity and volatility are characteristic of fragile situations, implementing an SEZ programme is all the more challenging in those contexts. The risks of pursuing an SEZ approach for the wrong reasons, based on political rather than economic considerations, is more prevalent in fragile situations where policymakers under enormous pressure to show quick results. However, the resulting risk that SEZs thus disappoint raised expectations in the population and damage investor confidence is often overlooked.
The main lessons emanating from this study are that i) SEZs require a minimum level of state capacity, ii) SEZ policy design and implementation is a lengthy and difficult process, iii) there is an increased threat that SEZs in fragile situations may fall captive to vested interests, iv) meaningful private sector participation is even more important in fragile situations.
Building on its comparative advantage as a “trusted advisor and honest broker”, the study urges the African Development Bank to systematically advise and support governments, notably when in fragile situations, as to whether or not, and how, to establish SEZs. This topic should be high on our agenda for policy dialogue with concerned governments, private sector and development partners from the initial stages to avoid pitfalls from the past. SEZs can present significant opportunities to support economic growth and create jobs in fragile situations, but only if the business case is strong and the political economy supportive.
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International trade in services was main driver of growth in global trade in 2014
UNCTAD’s Handbook of Statistics 2015 reveals that global trade in services grew by 5 per cent as merchandise trade stagnates and foreign direct investment falls.
International service exports accounted for 21 per cent of total global exports (valued at just over $5 trillion) in 2014, a growth of almost 5 per cent compared with the previous year, while merchandise exports (valued at $19 trillion), increased by only 0.3 per cent in the year, as measured in current prices, UNCTAD's Handbook of Statistics 2015 reveals. Total global exports for 2014 were valued at $24 trillion, up by 1.2 per cent compared with the previous year.
Services exports from both developed and developing economies grew strongly in 2014, at 5.3 per cent and 4.8 per cent respectively. But services exports from the transition economies of South-East Europe and the Commonwealth of Independent States (CIS), as well as Georgia, declined sharply in 2014, falling by almost $10 billion or 7 per cent compared with 2013 (chart 1).
Chart 1: Merchandise and Services Exports – developed, developing and transition economies:1995–2014 (Billion dollars and current prices)
Source: UNCTADstat
While growth in merchandise trade was significantly weaker, a similar pattern was evident – merchandise exports for developed economies grew by 0.4 per cent and by 0.6 per cent for developing economies year-on-year, whereas exports from the transition economies fell by 5.5 per cent or approximately $44 billion.
Total exports from developed economies accounted for 55 per cent ($13.2 trillion) of total global trade. Developing economies accounted for 41 per cent ($10 trillion) of total exports with transition economies accounting for the residual $890 million, or 4 per cent, of exports.
Sectoral patterns were evident in trade exports for 2014. For example, in both developed and developing economies across Africa, Asia and the Americas, exports of food, agricultural raw materials and manufactured goods grew. Growth in exports of food and agricultural raw materials from Africa and Asia, in particular, were strong (4.8 per cent and 3.7 per cent respectively), as was the export of manufactured goods from these regions (2.6 per cent and 4.6 per cent respectively). In contrast, the value of exports of minerals, ores, metals and fuels fell sharply across countries in all regions irrespective of development status. The most significant declines were in the value of fuel exports from Africa (down by 13 per cent) and minerals, ores and metals (including gold) from Asia (down by almost 11 per cent).
The continued fall in commodity prices continued to be significant in 2014 (chart 2). There were notable falls in many commodity prices, including food (down by13 per cent), agricultural raw materials (down by 12 per cent), minerals, ores and metals (down by 18 per cent), crude petroleum (down by 43 per cent ) and gold (down by 6 per cent).
Chart 2: UNCTAD Commodity Prices (Base: Year 2000 = 100): 2005–2015
Source: UNCTADstat
The UNCTAD Handbook of Statistics 2015 also shows that total foreign direct investment (FDI) inflows, valued at $1.2 trillion, fell by 16 per cent in 2014 compared with the previous year (chart 3). Declines in FDI flows into transition economies more than halved (down by 52 per cent) but also fell markedly in developed economies (down by 28 per cent). While inward FDI flows to developing economies increased slightly (up by 1.6 per cent), this increase was driven by increases in FDI to developing economies in Asia (up by 9 per cent) which was however offset by declines in FDI to developing American economies (down by 14.4 per cent). There was no change in FDI to developing African economies.
Chart 3: Inward Foreign Direct Investment (flows) – developed, developing and transition economies: 1995–2014 (Billion dollars and current prices)
Source: UNCTADstat
Along with detailed statistical tables on international merchandise and services trade, commodity prices and foreign direct investment, the 2015 handbook also provides maritime transport data, other economic and social data, and a range of trade related indicators for all individual economies for which data are available. In addition, the handbook includes figures for geographical regions, various economic groupings and world totals. Each year, the handbook aims to provide data for the analysis and evaluation of world trade, investment, international financial flows and development. To the extent possible, UNCTAD fills in data gaps with estimates in order to furnish the most complete data sets.
UNCTADstat, a rich online database detailing key economic statistics by region and country, including indicators on international trade, economic trends, foreign direct investment, external financial resources, population and labour force, information economy and maritime transport is also available. UNCTAD publishes country profiles which provide a summary overview of the data described above for each county.
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African Ministers insist on a legally binding agreement in Paris
African Ministers for the Environment held a high-level meeting at the Africa Pavilion at the ongoing United Nations climate change conference in Paris, France.
The Ministers from Africa’s 54 nations were briefed on the status of the Conference of Parties (COP21) and key points which they should focus on in the penultimate session of the discussions.
Speaking to the Ministers, UN Secretary General Ban Ki-moon stressed that Africa is particularly vulnerable to the effects of climate change. Much of its economy depends on a climate-sensitive natural resource base, including rain-fed subsistence agriculture.
“In July, we adopted the Addis Ababa Action Agenda on Financing for Development. At the historic gathering in New York in September, we adopted the 2030 Agenda for Sustainable Development and the 17 Sustainable Development Goals (SDGs),” Ban Ki-moon said.
“Now, here in Paris, Governments have the opportunity to secure a global climate change agreement that can pave the way towards a safer, healthier, more prosperous and sustainable future.”
The UN Secretary General noted that climate change may be just one of the 17 SDGs, but without addressing it properly, all remaining 16 goals cannot be fully implemented.
“Africa has a great opportunity for adaptation and mitigation. Africa has launched the African Adaptation Initiative and the African Renewable Energy Initiative. These two initiatives clearly demonstrate Africa’s leadership by example,” he said.
“Through cooperative action, countries and regions can accelerate the transformation to low-emissions climate-resilient economies that meet the development needs of citizens in a sustainable manner.”
The COP21 agreement is scheduled to be signed on Friday, December 11. The African Group of Negotiators (AGN), led by its lead negotiator Xolisa Ngwadla from South Africa, has identified five priority areas which need political backing for a fruitful outcome.
The key political and cross-cutting issues include adaptation, ambition, differentiation, flexibility for Africa and finance.
The AGN team also pointed out that the Paris agreement should be in the form of a protocol or another legal instrument with legally binding form as a matter of international law.
“The legal instrument should encompass all issues in a balanced manner with progression above the existing obligations of the Convention on mitigation, adaptation, loss and damage, finance, technology, capacity and transparency,” said Selam Kidane of AGN.
Ngwadla echoed her sentiments. “We should take the first step towards achieving material parity between mitigation and adaptation. Parity for adaptation should be operationalised in the 2015 agreement through a definition of the global goal for adaptation (GGA),” Ngwadla noted.
He is of the view that the Paris agreement must deliver on the promise to keep Africa safe, and demonstrating feasibility of keeping global temperature increases below 1.5 degrees Celsius.
“The Convention provides for all countries to act, outlines further obligations for developed and rich developed countries to take the lead in emission reductions and providing support to developing countries, respectively. It includes specific provisions for countries with specific needs such as Africa, least developed countries (LDCs) and small island developing states. This should be achieved,” Ngwadla stressed.
He cautioned Ministers to realise that Africa has above-global temperature increases, deep development challenges and chronic poverty and can’t be expected to divert resources away from development or be excluded as a block from receiving climate finance.
“The Paris agreement should address transparency and adequacy of the financial support by developed countries based on analysis of the funding gap. Rich countries should continue to provide support to developing countries based on clearly defined obligations. We need to double the Green Climate Fund (GCF) and triple it by 2020,” said Seyni Safo, the AGN’s spokesman.
Khaled Fahmy, Minister of Environment of Egypt, and President of the AMCEN, called for a united African voice so that Africa wins as a continent.
“Statistics paint a bleak future for Africa. The sea level has risen. People and animals are dying. The stakes are high for us. We need a coherent voice to get solutions to these problems,” Fahmy said.
Patience Tumusiime of the African Union Commission (AUC) noted that in the coming few years, 200 million Africans will be exposed to water scarcity calling for a political backing to solve the problem.
Kenya’s Cabinet Secretary for Environment, Water and Natural Resources Judi Wakhungu said Ministers are determined to find a lasting solution to the effects of climate change
“Agriculture yields are projected to reduce by 50%. This will lead to malnutrition and deaths due to malaria in East and South Africa. We need to come up with solutions to climate change,” she said.
Fatima Denton, Director, African Climate Policy Center at the UN Economic Commission for Africa (ECA), called for international support.
“Let us implement sustainable development programmes to save our continent. We are leading the way as a continent and our partners should support us financially because we know that Africa’s global emission percentage is negligible,” Denton said.
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Kenya and Ethiopia vow to turn conflict-ridden border into trade hub
The leaders of Kenya and Ethiopia promised on Monday to create jobs, reduce poverty and foster trade in their restive borderlands, where conflict has intensified in recent years.
The $200 million project aims to create a trade and investment hub along the remote 860 km (530 mile) border where human, arms and drug trafficking are rife, the head of the United Nations in Kenya, Nardos Bekele-Thomas, said.
“The problem here is poverty,” she told the Thomson Reuters Foundation. “It’s just hopelessness that creates insecurity.”
Clashes between herding communities over grazing land, water and cattle have become increasingly deadly due to an influx of guns, as well as political power struggles and fast-growing populations.
Kenya’s army was sent to restore order to the border town of Moyale, 800km (500 miles) north of the capital Nairobi, in 2013 after dozens were killed and villages were burned to the ground in a jostle for power between rival clan militias.
Around two-thirds of the population of Kenya’s Marsabit County – more than 70,000 people – fled, mostly to Ethiopia’s Borana Zone where many have relatives, the U.N. said.
“We can exchange conflict and insecurity for peace and prosperity,” Kenya’s President Uhuru Kenyatta told dignitaries seated in a white tent decorated with the two countries’ national colours.
“We shall work together to ensure that Moyale becomes the Dubai of the Horn of Africa,” he added, referring to the Middle Eastern trade hub.
A tarmac road linking Nairobi and the Ethiopian capital Addis Ababa is due to be completed by September 2016, he said.
Restoring peace will be a challenge. The arid region is awash with guns due to its proximity to unstable Somalia where al Qaeda-linked militants have been fighting to topple the government.
Ethiopian soldiers also make sporadic incursions into Kenya in pursuit of Oromo Liberation Front rebels.
Many homesteads have guns to deter invaders, while herders often carry firearms to protect their animals because there is little police presence.
With the support of Western donors and the World Bank, the governments plan to diversify the livestock-dominated local economies and improve access to water, education and healthcare.
Eight in ten residents of Marsabit County live below the poverty line, government data shows.
Security officials held back large crowds who lined the road to watch the lengthy convoy of officials speed through the town.
Among them, 18-year-old Abdi Aden Adow said governments should boost cross-border trade as frequent droughts have pushed his family, who keep goats and camels, into poverty.
“There is no rain,” he said. “Life is very hard.”
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Adapting from the ground up: 6 ways to make small businesses more resilient to climate change
Small businesses are critical yet often overlooked players in climate change adaptation. A new report from WRI and UNDP, Adapting from the Ground Up, offers specific policy interventions for policymakers, climate finance providers, and large corporations to engage small businesses in adaptation efforts, enabling them to build their own resilience as well as the resilience of their communities.
The consequences of a warming planet are already being felt by communities around the world, especially poor and vulnerable populations living in developing countries. Mobilizing financial support to boost adaptation among those already, and soon to be, suffering from climate change is a major goal for the countries negotiating a binding international agreement at the COP21 climate summit. UNEP estimates the gap between available resources and those needed to be $115 billion. Public funding will likely address a large part of this need, but ultimately, filling this gap will require involvement of businesses.
Harnessing the private sector’s role in developing countries can help communities become resilient to climate change. In most countries, the private sector generates more than 60 percent of gross domestic product, and micro and small enterprises (MSEs) in developing countries provide around 60 percent of all jobs. Many of these jobs are in the agriculture sector, which is especially vulnerable to extreme weather changes. Moreover, since billions of people rely on MSEs for their livelihoods, supporting this economic segment is crucial to help communities adapt to climate change.
This report highlights creative, low-cost and sustainable actions national governments, donors and others can take to engage MSEs in poor, rural areas and increase investment in adaptation.
Taking six steps can help boost the resiliency of MSEs:
1. Business-relevant climate information and risk analysis
MSEs typically lack adequate resources to access information needed to guide their decision-making under new climate conditions, but targeted weather and climate information can help them understand particular business risks and opportunities. For example, businesses in rural communities can benefit greatly from early warning systems. In Cambodia, 52 villages including 11,073 households started receiving timely weather forecasts to help them cope with extreme events, enabling them to better plan for extreme weather and to change farming practices to increase and protect their yields.
2. Technical assistance and training
The public sector can help MSEs through sharing information, conducting research and development, and building skills to understand adaptation options that help their businesses become more resilient. In Tanzania, BBC Media Action partnered with local radio stations to broadcast talks on program management and climate-smart agricultural planning. BBC’s research shows that many people have taken action as a result of listening to the broadcasts, improving their livelihoods as a result.
3. Government policies enabling adaptation investments
Governments can integrate adaptation into their development planning across agencies to conserve resources, improve productivity, and strengthen community resilience, with far-ranging impacts for MSEs across countries. To ensure climate change is tackled across multiple sectors, the Government of Rwanda designed a National Strategy for Climate Change and Low Carbon Development incorporating the country’s climate change development projects and policies into one document to guide resilience-building. This integrated approach can benefit MSEs through infrastructure, government programs, and other national or regional adaptation projects supporting the private sector.
4. Market and business development
MSEs have the opportunity to provide products and services to meet consumer demand in a changing climate. Finding and producing products and services that help consumers build resilience, plus finding ways to better access new markets in general, can greatly help MSEs become more resilient and prosperous. In Tajikistan, local farmers received support from the United Nations to plant climate-resilient Tajik fruit species in a nursery. They then sold seedlings of these species at local markets and fairs. The farmers became very successful and built a great reputation for selling sustainable and well-adapted fruit species in the region.
5. Partnerships and cooperatives
Partnering with other businesses or public entities is a cost-effective way for MSEs to overcome having limited resources to invest in adaptation. This can enable them to pool resources and funding and to self-insure against weather-related shocks. In Nepal, members of the Garima Farmers’ Cooperative expanded their variety of crops that grow well in shortened seasons. They then developed a saving mechanism to invest in other products to further diversify their incomes.
6. Financial instruments
A lack of available financing options is the biggest barrier facing MSEs trying to invest in adaptation. However, more and more options are becoming available to provide low-risk financial instruments and support MSE adaptation investment, including insurance, loans and seed capital. The African Risk Capacity, for example, is an agency within the African Union using weather data to estimate how many people will be affected by a poor harvest due to weather. These people receive a payout to help them bounce back.
MSEs must adapt to climate change for developing countries to become more resilient, but part of this change needs to come from public support. The success of COP21 depends not only on the high-level agreement among negotiating parties, but also on the implementation of this agreement on the ground, and how well it serves and engages MSEs. By learning from the successes highlighted in Adapting from the Ground Up, all sides of the equation can efficiently adapt to a changing climate.
Key findings
Small businesses are well positioned to build resilience to climate change. They are embedded in communities and have exceptional ability to reach the world’s most vulnerable populations.
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Small businesses are the key to sustainable development and building resilient communities because nearly 60% of employment in developing countries rely on small businesses.
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In the developing world, many small businesses work in agriculture, which is especially vulnerable to climate change because of floods and droughts.
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If small businesses are more resilient, then the communities that rely on them are better able to recover from floods, storms, droughts and other extreme events.
Governments have practical, low-cost options for engaging small businesses to adapt to climate change. This report outlines six steps decision-makers can use to select the policy options that will work for their business community. The six steps are:
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Engage stakeholders
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Prioritize vulnerable sectors
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Identify drivers to invest in adaptation
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Identify barriers preventing investment in adaptation
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Design interventions to catalyze MSE investment in adaptation
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Implement and scale up
The report also offers a menu of interventions that policy makers can choose from to help small businesses build resilience. The menu includes, among others:
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Programs to provide businesses with relevant climate risk information
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Technical assistance and training on managing climate risk
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Regulatory and fiscal incentives to stimulate risk reduction
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Subsidies and tax relief
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Research and development or pilots on climate-related products and services
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Public spending on infrastructure
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Incentives or support for partnerships and cooperatives
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Public risk transfer or risk compensation instruments
Recommendations
Developing country governments should:
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Maintain the development paths of their countries by supporting the resilience of vulnerable communities, including by building up innovation
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Develop policies, processes, and activities to engage MSEs in their countries’ adaptation planning, while making sure to:
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Be inclusive and transparent with national adaptation planning
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Involve the private sector, especially MSEs and their investors and regulators, from the beginning
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Educate MSEs about climate risks and about the potential assistance they can receive from public institutions with the support of policymakers
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Work with multilateral development banks and NGOs with the capacity to provide support and knowledge, in order to:
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Encourage multinational corporations, financial institutions, and investors to engage MSEs
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Delegate responsibility to the city and local levels, where public officials have more direct contact with MSEs
Large private sector actors should:
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Support MSEs in the supply chain by providing financing and technical assistance to strengthen their resilience
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Provide MSEs in low-income countries with better access to finance for adaptation efforts
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Form strong partnerships with public actors to effectively scale up adaptation efforts, given proper planning, implementation, and monitoring
Multilateral and bilateral partners should:
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Provide financial and technical support for national
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Act as knowledge banks and facilitate the transfer of information about successful business practices, initiatives, and pilots to other appropriate contexts
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Support the process of catalyzing engagement in adaptation by ensuring market access for products developed by MSEs in developing countries.
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Work with their own companies that operate in developing countries and provide financial incentives for them to invest in building resilience of small-scale suppliers in their supply chain
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Serve as communicators to inform the global community about the multiplier effect of investing in MSEs for climate change adaptation
Special climate funds should:
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Play a catalyzing role by funding programs for MSEs
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Act as matchmaker and clearing house for private sector adaptation ideas
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Support and complement national efforts by creating regional or national networks that:
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Help MSEs develop product ideas into bankable projects
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Support capacity development for implementation
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Link businesses to possible investors
» Adapting from the Ground Up: Enabling Small Businesses in Developing Countries to Adapt to Climate Change (PDF, 6.18 MB)
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African Union puts India’s free trade pact proposal on hold
New Delhi to explore potential trade pacts with individual countries
India’s proposal for a free trade agreement (FTA) with the African Union – made at the recent Indo-Africa Summit in New Delhi – has been rejected by the group for the time being as it wants to form its own union first and then negotiate as a bloc.
“We will wait for it the countries to form a bloc, as suggested by the African Union, so that we can get into a pact with the entire region. Meanwhile we will explore independent FTAs with specific countries,” a Commerce Ministry official told BusinessLine.
The African Union, which comprises 54 countries in the continent, accounted for almost 11 per cent of India’s total exports in 2014-15 with shipments growing at 5.17 per cent to $32.84 billion even as exports to India’s top markets in the EU and the US declined.
However, there is immense untapped potential for India’s exporters and investors. India’s total trade with Africa worth $71 billion in 2014-15 in insignificant when compared with China’s total trade with the region worth over $200 billion.
“Africa is experiencing steady growth and offers Indian exporters an excellent opportunity to diversify. With the developed world failing to get out of the economic uncertainty gripping it, we have to make greater in-roads into the continent,” the official said.
New Delhi will have to wait for at least two years to get into FTA talks with the African Union as the Continental Free Trade Area (CFTA) Forum, which aims to integrate Africa’s markets and establish an African Economic Community, will conclude its negotiations at the earliest by 2017.
At the same time, the Commerce Ministry will examine individual countries in the African continent that hold reasonable export interest for India so that it could initiate FTA negotiations with them, the official added.
“We are already engaged in FTA talks with the South Africa Customs Union which includes South Africa, Botswana, Lesotho, Namibia and Swaziland. We will identify more countries to explore potential FTAs,” the official said.
Kenya, Tanzania, Egypt and Algeria are some of the other African countries which account for exports over $2 billion from India.
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tralac’s Daily News selection: 8 December 2015
The selection: Tuesday, 8 December
Key message from the AU-CFTA workshop: ‘Africa’s potential lies in trade in services’ (AU)
Despite the success stories services exports in Africa, Mr Batanai Chikwenehe indicated that there is a big gap between the awareness of government in public sector and services operators and firms in the private sector, where integration in services is happening. “Raising awareness to overcome this “perception gap” in Africa is critical at the continental level as well as at the sub-regional and national levels, where the incorporation of service sector development into mainstream economic planning and development priorities remains lagging,” he emphasized.
Key message from the CRCI workshop: 'Modernise, diversify and integrate' - African regional economies are urged (UNECA)
Using the example of agriculture, where “production and productivity is far below their potential given the richness of the land and resources”, Mr Karingi urged African countries to learn from South East Asian countries. “They turned their farmers into manufacturing workers, diversified their economies and exported a range of increasingly sophisticated goods.”
Foreign and domestic investments are needed if Africa is to achieve product integration. Mr. Karingi pointed out that investor’s perception of Africa is improving. “Africa is the second most attractive investment destination,” he said. Mr Karingi warned though “the development of regional supply chains in production will only be possible if the integration agenda is pushed forward and remaining barriers to intra-regional trade are removed.”
COMESA Council of Ministers meeting underway in Zambia
In his opening address, Hon. Shide said the meeting was taking place at a time when the global economy was experiencing slow growth that have impacted negatively on economies. “Our major exports are decreasing by more than 40%,” he said. “This has resulted in companies laying-off workers with resultant reduction in government revenues and other taxes.” He said the global economic downturn is a sharp reminder that the countries can mitigate the effects and impacts through deepening regional integration.
Regional integration workshop: ‘integration, connectivity and cohesion policies’ (SSATP)
The objective of the workshop is to seek the participants' opinion and contribution on draft concept notes for several activities of the work programme of the pillar that had been identified during the last REC TCC meeting in Nairobi and during subsequent bilateral consultations. More globally, we are expecting to collect different areas of interest where the SSATP could help improve trade logistics, especially in corridors. Input will also be required to further increase the potential development of identified development corridors. Finally, this meeting will be an opportunity to strengthen the institutionalization of REC-TCCs and corridor management groups represented.
An ODI workshop: Promoting growth and reducing poverty through regional infrastructure
Ethiopia, Kenya launch a five-year cross-border integrated programme (Horn Affairs)
The governments of Ethiopia and Kenya, in partnership with the Intergovernmental Authority on Development and the United Nations today launched an innovative, comprehensive and integrated cross-border initiative to foster peace and sustainable development in the northern Marsabit county of Kenya and the southern Borana Zone in Ethiopia. The $200m five year Cross-border Integrated Programme for Sustainable Peace and Socio-economic Transformation: Marsabit County of Kenya and Borana Zone, Ethiopia, was launched by Kenya’s President Uhuru Kenyatta and Ethiopia’s Prime Minister Hailemariam Dessalegn, as part of an agreement between the two countries to foster, environmental protection, trade, development and peaceful coexistence in their border regions.
Nigeria’s booming borders: the drivers and consequences of unrecorded trade (Chatham House)
According to one estimate, informal activity accounts for up to 64% of Nigeria’s GDP. This report finds that this is a result of obstacles that impede trading through formal channels. Among the key drivers of informality are bureaucratic burdens and other factors, such as:
The need for Nigerian businesses to produce at least nine documents in order to send an export shipment and at least 13 in order to bring in an import consignment; Rigid and dysfunctional foreign-exchange regulations that push most smaller traders into the incompletely regulated parallel exchange market; Corruption and unofficial ‘taxation’, especially on major border highways, which delegitimize formal channels and encourage the use of smuggling routes.
This report makes a number of recommendations for how Nigeria could encourage more formal trade, including:
Scarce dollar scuppers Uganda/South Sudan trade (The Independent)
Agenda 2063 First Ten-Year Plan: reviewing the indicators (AU)
Profiled Enterprise Survey results, infographics:
Namibia: On average, in 2013 it takes a firm about 8 days to clear direct exports through customs, more than in 2006 (2 days). Despite this increase, the average time to clear customs is still about the same as in the upper middle income economies and lower than in Africa (10 days). However, there is a wide variation across firms’ size. It takes on average 17 days for small firms to clear exports through customs, compared to around 6 days for medium sized firms and about 2 days for large firms. Clearing imports through customs is considerably faster in Namibia (5 days) than the average for upper middle income economies (11 days) and Africa as a whole (17 days).
Tanzania: A higher proportion of firms in Tanzania are exporting (directly or indirectly) in 2012 than in 2006 (14% vs 5% respectively). The proportion of total sales exported by a firm on average grew as well during the same period, from 2% in 2006 to 7% in 2012, which is close to the average for low income economies and all countries with ES data. At the same time, a higher share of firms in Tanzania are using inputs of foreign origin than previously (48% in 2006 vs. 63% in 2012). For a typical Tanzanian firm, the proportion of inputs that are of foreign origin also increased from 26% in 2006 to 33% in 2012, higher than the low income country average of 30%. [Ghana Enterprise Survey]
Companies report 1 in 7 transactions with government involves a bribe (World Bank Blogs)
In 5 charts: how corruption affects businesses around the world (World Bank Blogs)
Madagascar seeks to improve its attractiveness to foreign investors (UNCTAD)
Specific policies, targeted sectoral strategies and effective institutions to implement them are instrumental to meeting Madagascar’s development objectives, according to the Investment Policy Review of the country which was discussed at an intergovernmental meeting at the United Nations in Geneva on 3 December. The event brought together high-level representatives from the Government of Madagascar, the international community and local and foreign investors.
ECOWAS: review of e-commerce legislation harmonization (UNCTAD)
The strong growth of electronic transactions within the Economic Community of West African States has made harmonizing e-commerce legislation a priority for the region and its vision of creating a borderless, peaceful, prosperous and cohesive community built on good governance. In 2013, ECOWAS asked UNCTAD to support it in its efforts to create a harmonized legal framework. In response to this request, UNCTAD trained 315 lawmakers from the region on the legal aspects of e-commerce. And it gathered 69 ECOWAS government representatives during 3 regional workshops in 2014 and 2015 to assess the state of e-commerce legislation in the region. The results of the assessment were published on 30 November 2015 in the Review of E-Commerce Legislation Harmonization in the Economic Community of West African States.
Structural transformation and productivity growth in Africa: Uganda in the 2000s (World Bank)
The key questions motivating the analysis reported in the paper include the following. Is there evidence that there was significant and sustained reallocation of labor to sectors of the economy where labor is more productive on average and at the margin? If there is, which were (the less productive) sectors of origin of the reallocation and which were the (more productive) destination sectors? What has triggered the reallocation? And what would make us think that the reallocation would be sustained long enough, or that it signaled the economy was taking off into a process of self‐sustaining growth? Or could it be that Uganda’s economy did not undergo any significant structural change after all, or did so, but the change was not productivity enhancing?
COP21 updates:
Carlos Lopes: 'Africa will negotiate for a new era of green industrialisation' (UNECA)
“Africa is industrialising in an environment where achieving growth is more challenging. Windows that were open for other continents, enabling them to industrialise quickly and easily, are now closed for Africa.” However, in these seemingly adverse conditions lie clear opportunities which Africa can readily harness. As a latecomer, Africa can take immediate advantage of the new technologies that have been put in place over the last ten years. Africa has, for example, asserted itself as the leader in mobile banking technologies. In the same way, the continent is well placed to capitalise on new advances in renewable energy infrastructure and technologies.
Africa pavilion at COP21 (UNECA), INDCs: Absence of data, means of implementation may affect Africa (AfDB), Financing water is key to Africa’s transformation, experts say (AfDB), Africa grasps renewable energy and adaptation financing at the COP21 (Bridges Africa, ICTSD), African Ministerial Conference on Environment: remarks by UNSG Ban Ki-Moon (UN), Emissions Gap Report (UNEP), Africa ties its agricultural transformation agenda to COP21 climate outcome (AfDB)
Nairobi MC10 update by Roberto Azevêdo (WTO)
In his report to the General Council on 7 December about the potential outcomes of the Nairobi Ministerial Conference, Director-General Roberto Azevêdo urged WTO members to “seize the last opportunity to show the flexibility and political will that we need” for a successful Ministerial Conference that is “essential to support growth and development for all members”. This is what he said:
South Africa: Deficit widens to R14bn (IOL)
South Africa’s current-account deficit widened to 4.1% of gross domestic product in the third quarter as consumers boosted imports of mobile phones and cars and dividend payments to foreign investors increased. The gap on the current account, the broadest measure of trade in goods and services, increased from 3.1% in the previous three months, the Reserve Bank said in its Quarterly Bulletin released on Tuesday in the capital, Pretoria.
African Union puts India's free trade proposal on hold (The Hindu)
India’s proposal for a free trade agreement with the African Union – made at the recent Indo-Africa Summit in New Delhi – has been rejected by the group for the time being as it wants to form its own union first and then negotiate as a bloc. “We will wait for it the countries to form a bloc, as suggested by the African Union, so that we can get into a pact with the entire region. Meanwhile we will explore independent FTAs with specific countries,” a Commerce Ministry official told BusinessLine.
Modeling the impact of large infrastructure projects: a case study from Niger (World Bank)
Evidence illustrates that investment in infrastructure is essential to accelerate inclusive growth. Indeed, a number of Sub-Saharan African countries have begun to devote greater resources to large-scale public investment projects. Nevertheless, while massive projects can potentially generate large benefits there are considerable risks. This paper proposes a simple, but more user-friendly model. By inputting information on the project’s construction, operation, and anticipated returns, the user is able to assess the project’s net impact on the economy and weigh up the costs and benefits of different approaches.
Kenya: Uhuru faults SGR contractor on 40% procurement quota (Daily Nation)
Direct and indirect effects of Malawi’s public works program on food security (World Bank)
Labour-intensive public works programs are important social protection tools in low-income settings, intended to supplement income of poor households and improve public infrastructure. In this evaluation of the Malawi Social Action Fund, an at-scale, government-operated program, across- and within-village randomization is used to estimate effects on food security and use of fertilizer. There is no evidence that the program improves food security, and some negative spillovers to untreated households.
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Africa’s potential lies in trade in services
The Training Workshop on Trade in Services Negotiations for AU-CFTA Negotiators kicked off on Monday, 7 December 2015 and has been attended by H.E. Mr. Oumar Sarr, the Minister of Trade in Senegal as well as by the partners of the African Union (AU).
The General Objective is to build the capacity of services negotiators in Africa to effectively benefit from trade in services opportunities at bi-lateral, regional and multilateral levels but most importantly to prepare for the CFTA negotiations on Services that were launched in June 2015 in Johannesburg, South Africa. The Workshop will also provide a forum to share experiences of successful services exports and brain storm on a strategy for CFTA Services Negotiations
On behalf of the Commissioner of Trade and Industry H.E Fatima Haram Acyl, Mr. Batanai Chikwene welcomed all participants to the Training Workshop on Trade in Services Negotiations for AU-CFTA Negotiators in Dakar, Senegal from 7 to 11 December 2015 and thanked the Government of Senegal and the Ministry of Trade for the key role played in this event and for their commitment in supporting the private sector in services exports in particular in the areas of ITO and Business Processing Outsourcing.
Mr. Chikwene noted that the service sector could provide an alternative engine of growth, enabling some latecomers to development to “leapfrog” what has been seen as the traditional manufacturing route to development. The Services sector accounts for an average 49% of GDP in the low income countries and 47% in the LDCs. A competitive manufacturing and agricultural sectors is based on an efficient Services sector which is key to the Africa’s participation in global value chains.
Despite the success stories services exports in Africa, he indicated that there is a big gap between the awareness of government in public sector and services operators and firms in the private sector, where integration in services is happening. “Raising awareness to overcome this “perception gap” in Africa is critical at the continental level as well as at the sub-regional and national levels, where the incorporation of Service Sector development into mainstream economic planning and development priorities remains lagging,” he emphasized
“The CFTA seeks to bring the dreams of our fore-leaders as enshrined in the Abuja Treaty to have a single African Market with movement of Goods, Services, Capital and Persons,” added the Director.
In his opening remarks, the Minister of Trade H.E Mr. Oumar Sarr welcomed the participants of the workshop and thanked the African Union for the training workshop and for choosing Senegal as a venue for it. The Minister stressed on the importance of creation of areas dedicated to services and he underlined the timely capacity building training initiated by trade and industry department in the African Union Commission (AUC).
The Minister also underlined that it is imperative for African countries to process and add value to their raw materials, as this will have a direct impact on the growth of services sectors and also contribute to the growth of in trade in services. The establishment of the CFTA is a major opportunity to boost trade within the continent. Minister Sarr also emphasized the importance of African countries speaking with one voice during the 10th Ministerial Conference of the World Trade Organisation (WTO) that will be held in Nairobi, Kenya on 15-18 December 2015.
The urgency of this capacity building initiative stems from the mandate to negotiate a Continental Free Trade Area for Goods and Services by the indicative date of 2017. The AU Heads of State and Government during their Twenty Fifth Ordinary Session in June in Johannesburg South Africa Adopted the Objectives and Guiding Principles for the CFTA negotiations, wherein Trade in Services and Trade in Goods are to be negotiated concurrently. Beyond the CFTA Services Negotiations, African Countries are still engaged in Trade in services negotiations at the multilateral level, regional and bi-lateral level which require expertise.
During this training workshop presentations will be delivered from different institutions related to services in the economy, and in the African region, WTO General Agreement on Trade in Services (GATS) and services in Doha round of negotiations, schedules of commitments for services, Trade in Services Agreement (TISA), as well as overview of various approaches of services liberalization.
Opening Remarks by Mrs. Treasure Maphanga, Director of the Department of Trade and Industry of the African Union Commission, delivered during the Training Workshop on Trade in Services Negotiations for AU-CFTA Negotiators, 7 December 2015, Dakar
I warmly welcome you all to the Training Workshop on Trade in Services Negotiations for AU-CFTA Negotiators here in Dakar, Senegal. On behalf of the Commissioner for Trade and Industry, I also wish to extend the Commissions sincere appreciation to all our collaborating partners who have contributed to this training. Special thanks go to our partners UNCTAD, ITCSD, ILEAP, USAID, WTO and TRALAC whose support for the work on Trade in Services on the Continent has been tremendous, and without whom, this training would have been a challenge. I would like to thank the Government of Senegal for the key role played in this event and for your commitment in supporting the private sector in services exports in particular in the areas of ITO and Business Processing Outsourcing. Minister we appreciate your time with us this morning.
I would also like to welcome and thank our esteemed facilitators and moderators for taking time off your busy schedules to share with us your expertise on the different aspects of trade in Services pertinent to Africa. Distinguished participants your presence is evidence that Africa is ready and committed to explore further opportunities embedded in Trade in Services for the development of our Continent but most importantly the commitment to the successful establishment of the CFTA.
With Trade in Services expertise present today, it is like preaching to the converted when you ask the question: Why Trade in Services and Why Now? The urgency of this capacity building initiative, stems from the mandate to negotiate a Continental Free Trade Area for Goods and Services by the indicative date of 2017. The AU Heads of State and Government during their Twenty Fifth Ordinary Session in June in Johannesburg South Africa Adopted the Objectives and Guiding Principles for the CFTA negotiations, wherein Trade in Services and Trade in Goods are to be negotiated concurrently. Beyond the CFTA Services Negotiations, African Countries are still engaged in Trade in services negotiations at the multilateral level, regional and bi-lateral level which require expertise.
The capacity building is to explore trade in services potential that lies within our Continent. The UNCTAD report on “Unlocking the Potential of Africa’s Services Trade for Growth and development” confirms once again that Africa‘s potential lies in Trade in Services. The Services Sector contributes almost half of the Africa’s output, a third (1/3) of formal employment and its growth has been at more than twice the average rate for the world during 2009-2012. What has also become very clear is the linkage between Services and Industry and the need to prioritize those services and industries that are relevant for a value chain. We now know that services are almost 50% of the value of goods, and “reducing supply chain barriers like Customs Administration, Transport, Communication infrastructure and services could increase world GDP over 6 times more than the removal of all tariffs”. The evidence is overwhelming to prove that a competitive manufacturing/industry and Agricultural sector is based on the efficiency of the services sector.
Deficits of infrastructure and infrastructure services have a clear impact on African competitiveness and this has been found to sap growth by as much as 2% a year. The lack of adequate transport infrastructure undoubtedly reduces Africa’s ability to participate in the world economy. Most African countries also find it hard to compete in the world market owing to inadequate, inefficient and very expensive telecommunication services. Research indicates that high transport costs in West Africa present a greater barrier to trade than regional import tariffs.
The emergence of Global Value Chains reveals the direct link between services and the creation of value in the exchange of intermediary products. The trade in value-added data recently developed by the Organization for Economic Cooperation and Development (OECD) and suggests that the value of trade in services, when taken from a value added perspective, may be approaching half of world trade exports (45%). Services have been termed the “glue” of the value chains without which the chains can’t stick.
What does Services Trade Mean for the African Woman?
With Majority of African population being female; their role in the services sector is paramount. In Africa, the majority of small farmers are women who produce crops such as maize, cassava, cotton, and rice that have enormous potential for increased trade between African countries and with the global market. But most importantly it is the same women providing services across borders, such as education, health, hotels and restaurants, wholesale and retail trade, professional services and ICT among others. For instance, the contribution of women informal traders to national GDP amounts to 64 % of value added in trade in Benin, 46 % in Mali and 41 % in Chad. The World Bank reports that Africa’s share of female services employment is significantly higher than that recorded in the Middle East and North Africa and South Asia regions. Hence any steps to develop the services sector will have an impact on women empowerment.
Where are we in the Services Integration Agenda?
As will be presented in this training, the Regional Economic Communities have embarked on services integration agenda at different levels and using different approaches from which we can draw both positive and negative lessons while designing the CFTA Service Agenda. Beyond regional Approaches, the African Union has taken steps to integrate the Telecommunications Sector, Education Sector and Air transport Sectors at the continental level. The CFTA seeks to bring the dreams of our fore-leaders as enshrined in the Abuja Treaty to have a single African Market with movement of Goods, Services, Capital and Persons.
The objective of this the Workshop is to build the capacity of services negotiators in Africa to effectively benefit from trade in services opportunities at bi-lateral, regional and multilateral levels but most importantly to prepare for the CFTA negotiations on Services which were launched in June 2015. The Workshop will also provide a forum to share experiences of successful services exports and brainstorm on a strategy for CFTA Services Negotiations as well as establish a network of services experts on the continent.
In conclusion, while experts engage on various models and techniques for liberalisation of trade in services, this training will also provide a forum to discuss possible recommendations on the possible modalities for trade in Services for the CFTA. In the research the Commission has undertaken with the support of partners, it has come clear that there’s no one size fits all for the continental service liberalisation hence a busy schedule awaits the experts on services on the Continent to design a suitable model for African Services Liberalisation.
I thank you fro your kind attention.
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DG Azevêdo urges flexibility and political will for a successful Ministerial Conference
In his report to the General Council on 7 December about the potential outcomes of the Nairobi Ministerial Conference, Director-General Roberto Azevêdo urged WTO members to “seize the last opportunity to show the flexibility and political will that we need” for a successful Ministerial Conference that is “essential to support growth and development for all members”. This is what he said:
Thank you, Mr Chairman.
As I outlined at our Room W meeting yesterday, I foresee this being a very short meeting.
We have a lot of work still to do. In a moment I will give you my report, and I will try to keep it short and factual. I suggest that we do not have a lengthy discussion. The key task for us now is to keep advancing our work on the potential Nairobi deliverables and on the text of the Ministerial Declaration.
So with that in mind, here is my report.
The last time I addressed the General Council under this item was on the 8th of October. At that meeting, I reported that progress on some key issues, namely domestic support and market access in agriculture, NAMA and services, continued to prove extremely difficult.
I therefore suggested that it was time for members to start working intensely on issues where there appeared to be more convergence and which could provide potential deliverables for MC10.
Since that report to the General Council, a range of meetings and consultations have taken place in respective negotiating bodies, by Chairs in different configurations or through Friends of the TNC Chair. In addition, members have continued to convene meetings themselves, and I have continued to hold my own consultations.
Before I provide you with brief highlights on the state of play in this work, I wish to mention that written reports on these issues have been circulated by respective Chairs or Friends of the TNC Chair, which you can consult for more details. I will come back to this in a moment.
On the issue of written reports, the TNC has reported obligations to the General Council – and through the General Council to the Ministerial Conference. Therefore written reports have been circulated by all Chairs of bodies established by the TNC, under their own responsibilities.
The reports have been circulated in the following official documents that I will read for the record:
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The Special Session of the Committee on Agriculture, which is document TN/AG/32
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The Negotiating Group on Market Access, in document TN/MA/28
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The Special Session of the Council for Trade in Services, in document TN/S/40
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The Negotiating Group on Rules in document TN/RL/27
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The Special Session of the Committee on Trade and Development in document TN/CTD/31
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The Special Session of the Council for TRIPS in document TN/IP/23
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The Special Session of the Committee on Trade and Environment in document TN/TE/23
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And the Special Session of the Dispute Settlement Body in document TN/DS/28
In addition, written reports have been circulated on LDC issues by Friends of the TNC Chair in the following official documents:
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A Report on Preferential Rules of Origin for LDCs by Ambassador Steffen Smidt in document TN/C/17
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A Report by Ambassador Eyjólfsson on the LDC Services Waiver in document TN/C/18
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And I have circulated a report on Duty Free and Quota Free Market Access for LDCs in document TN/C/16.
I will not be inviting the Chairs and Friends to introduce these reports, but would encourage delegations to read them carefully as they prepare to brief their ministers.
I will just say a word now on each of the potential deliverables, as that work is still going on. I will start with Agriculture, where a range of issues are under consideration for Nairobi.
The Chair of the Special Session of the Committee on Agriculture has held several consultations on the issue of the SSM, on which the G33 has circulated two proposals. The consultations on the most recent of these have continued to show entrenched and widely divergent positions. Proponents of the SSM have stressed that they consider the SSM to be a balancing element in relation to other potential outcomes for Nairobi.
Other members have maintained their position that an outcome on SSM was not possible in the absence of a broader outcome on agriculture market access. Given these sustained divergent views, the negotiations on this issue have reached an impasse, but work in various formats continues.
The Chair has also held several consultations on the separate issue of public stockholding. There has been a new submission from the G33 and also one from Australia, Paraguay and Canada. G33 members have called for a permanent solution to be adopted this year in Nairobi, citing the General Council Decision of 28 November 2014. They have noted that the recent G33 proposal seeks to address the systemic concerns of members.
Others consider that the proposal still does not adequately address a variety of concerns, both systemic and trade-related. The latest consultations, based on the proposed texts, have not so far taken us much closer to convergence, but as with the SSM, work continues in various formats.
On export competition, the Chair has initiated a text-based negotiation process using the Rev. 4 text as a basis and taking also into account textual proposals by members. So far these consultations have not led to significant convergence either. Among other issues, specific substantive concerns continue to be expressed about the timeframes and conditions envisaged for the elimination of export subsidies, repayment terms in the area of export finance, coverage of self-financing provisions, special and differential treatment, transparency provisions, monetisation in food aid – it’s a large list of issues which are still unresolved. Intensive work is continuing on export competition, as on the other issues.
On cotton, the C4 circulated a proposal which was introduced in the Special Session. Delegations have moved into a text-based negotiation based on this proposal, including its list of products of interest, as well as on written inputs from members. On the basis of these negotiations, a draft text has been circulated by the Chair on his own responsibility. This is close to being finalised for consideration at Nairobi, leaving options open on the most controversial issues for ministers to consider and decide upon.
In addition, as you know, paragraph 11 of the Bali Decision on Cotton says that a progress report on the implementation of the trade-related components of cotton should be submitted by the Director-General at each Ministerial Conference. I will therefore shortly be circulating this report, which will be concise and factual.
Now let me turn to transparency issues. I will start with services, where I understand that the Council for Trade in Services in Special Session is taking into consideration two recently submitted proposals on possible outcomes regarding transparency in services. These consist of a submission by Australia and Canada on transparency in domestic regulation and a submission by India on services transparency in measures relating to temporary entry of natural persons. An informal meeting to discuss these proposals is scheduled to take place tomorrow.
In the rules area, I understand that the Group has continued to work intensively, with efforts to sharpen and consolidate proposals for outcomes, notably in fisheries subsidies and in anti-dumping and countervailing measures. The Group received new proposals last week and is continuing to discuss them. However, I also understand that the Group so far has not seen convergence on the proposals, and that the environment has not so far contributed to a high level of engagement.
Turning to the S&D Agreement-Specific Proposals, work is continuing on the basis of the most recent submission made by the G90.
I have been given to understand that on some proposals the text-based negotiations have advanced somewhat, although a lot more work is still required – while, on others, more significant gaps remain. Members will need to continue their efforts with an open mind and a sense of flexibility and accommodation in order to make progress.
The Chair of the CTD Special Session intends to continue meeting in a small group format up to and including tomorrow, with the aim of further fine-tuning text and endeavouring to finalize a potential package for Nairobi.
On DFQF, as I indicated in my written report, some progress has been made during the past few months in taking forward this issue. But we will have to find common ground on this issue in case it is to be part of the developmental outcomes we are striving for at MC10. As of today, no specific textual proposal has been tabled either by the LDC Group, or by any of its members. This would be a crucial step.
With regard to LDCs and services, you will recall that Bangladesh on behalf of the LDC Group circulated a draft Ministerial Decision. I asked Ambassador Eyjólfsson to facilitate discussions on this item on my behalf. During informal consultations, delegations representing the LDCs as well as preference-granting members asked Ambassador Eyjólfsson to facilitate discussions by preparing a draft based on the LDC Group’s proposal, with a view to bridging gaps between delegations’ positions and advancing the process.
This draft was issued in a document dated 1 December 2015. Open-ended informal consultations on the text took place on the 3rd of December, where members agreed that the Chairman’s draft presented an acceptable basis for further work. On this basis, Ambassador Eyjólfsson is continuing his consultations.
On LDC rules of origin, I understand the delegations are close to reaching an agreement on a draft ministerial decision, but that some additional consultations are still needed to get there.
It is encouraging that there are potential outcomes on the table for some of these issues. But, again, in all areas, there is a long way still to go.
Work will be continuing on a number of these issues after this meeting, and I hope we can resume those conversations as soon as possible so that we can go to Nairobi in better shape.
Turning to the work on the Ministerial Declaration for Nairobi, as members will recall, at the last General Council, there was a discussion about the urgent need to address this issue – specifically what the declaration should cover, and how we should arrive at a text.
I appointed Ambassadors Gabriel Duque, of Colombia; Harald Neple, of Norway; and Stephen Karau of Kenya, as my facilitators on the Ministerial Declaration.
The facilitators consulted extensively with delegations. Their report on these consultations set out the views across the membership on the structure, elements and process to lead members to a consensual text.
There was convergence early in this process on a “Bali-like” declaration in three parts.
The facilitators’ report highlighted the urgent need to move to a text-based discussion.
It was also clear that textual proposals for the Declaration would come from members themselves – and so this is the approach we took.
Over 20 written proposals were submitted by members individually or in groups. The facilitators’ compilation of texts reflecting proposals submitted was circulated to members.
This was followed by a heading-by-heading consideration of the compilation in order to have a clear understanding of members’ reactions to other members’ proposals – and importantly where convergence could be possible and where more work would be required to bridge differences.
The facilitators were then requested to present a draft consolidated text to facilitate their discussions towards a consensual Ministerial Declaration.
As instructed by members, the text did not provide language on the most contentious issues that had been identified by members earlier in the process, particularly the reaffirmation of the DDA and instructions on the way forward, and new issues.
The full membership has been meeting over recent days, including over the weekend, to try to further streamline the text. This process will also continue after this meeting.
I am also beginning to engage with members, in different configurations, on the more contentious issues, as I outlined a moment ago. My consultations will also continue after this meeting.
So that’s where we stand today.
We have only three outcomes from our regular work – on small economies, non-violation and situation complaints, and on e-commerce.
And we have three working days left until members start leaving Geneva to travel to the Ministerial Conference.
We currently, today, have no deliverables for Nairobi – either on the potential outcomes that we identified, or on the Ministerial Declaration.
Beyond the written reports I listed earlier, the General Council has nothing to transmit for the consideration of our ministers in Nairobi.
Nevertheless, we do still have the chance of delivering some significant elements in the extremely limited time available.
So I would urge you to seize this last opportunity to show the flexibility and political will that we need.
I have been asked about the process ahead of us – both here in Geneva and in Nairobi.
In Geneva we are going to have a very busy few days. The negotiating process will continue, including through the work of the chairs and through my work as Chair of the TNC – on the Ministerial Declaration in particular, and regarding other deliverables to try to help the chairs find convergence. Meetings will be held as necessary as things develop, in a range of configurations, and sometimes at very short notice.
In Nairobi, a lot will depend on what we leave Geneva with. We have three days to finalise our work here, and on that basis we will have to see what is ready for ministerial engagement. We should aim to present ministers with documents for a yes/no decision – or if necessary with only a couple of outstanding issues to resolve. So, as I have said, all of this depends on the progress we make over the next three days.
A successful Ministerial Conference is essential to support growth and development for all members, and for the strength and credibility of the multilateral trading system. Therefore I suggest that we close this meeting as soon as possible and get back to work.
Thank you Mr Chairman.
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Africa grasps renewable energy and adaptation financing at the COP21
From the opening of the 2015 United Nations Climate Change Conference (COP21), African leaders have made strong stands for their continent’s need for energy expansion, and the minimisation of the detrimental effects of climate change. Matching responses were received from the international community in the form of substantial commitments made to a renewable energy initiative and adaptation fund.
The COP21 or the twenty-first session of the Conference of the Parties, has brought together negotiators of 200 countries in Paris to finalise a legally binding international climate agreement. The overarching goal of the agreement is to reduce greenhouse gas emissions to limit the global temperature increase to two degrees Celsius above pre-industrial levels.
During previous climate negotiations, countries agreed to outline their Intended Nationally Determined Contributions (INDCs), the actions they intend to take within a global agreement, by 1 October 2015.
According to some observers, Africa’s contribution to global greenhouse gas emissions is negligible, and yet, Africa faces the most immediate consequences of climate change and is severely vulnerable. The World Bank estimates suggest that the rise of global average temperatures will reduce total crop production by as much as 10 percent in the wake of droughts and floods.
Many African nations have been implementing strategies to adapt to the approaching effects of climate change, but, according to estimates by a 2013 UN Environment Program study, meeting adaptation costs in Africa by the 2020s will require a steep 10-20 percent annual increase in funding.
“Africa’s message for this Summit is clear: we need a legally binding agreement […] that covers the issues of adaptation, mitigation, financing as well as technology development and transfer; we must commit to reduction of greenhouse emissions to achieve the adaptation goal of well below two degree Celsius,” said African Union (AU) Commission Chairperson, Nkosazana Dlamini Zuma at the launch of the African Pavilion at the conference centre – the hub of African events and discussions critical to Africa’s negotiating process during the COP21.
Heads of power get behind renewable energy
At the opening of the conference, a high level panel brought together key parties of the African policy community at the invitation of French President Francois Hollande. The panel looked at African solutions to climate change mitigation and adaptation and initiatives to implement the new climate agreement. Participants to that panel included UN Secretary-General Ban Ki-moon, the President of the AU Commission Nkosazana Dlamini-Zuma, and representatives of several governments and international institutions, including the World Bank and the African Development Bank (AfDB).
Participants agreed that Africa’s limited access to climate finance needs to be extended if renewable energy programmes and climate resilience are to be effectively scaled up, with the best results achievable if finance is accompanied by capacity-building and technology. This could be a low-carbon answer to Africa’s dire lack of electrification, as 645 million Africans remain without electricity.
Africa is well endowed with renewable energy resources, “yet, […] the energy mix of the continent is still dominated by fossil fuels, with renewables making only 22 percent of the installed capacity, dominated by hydropower,” said Executive Secretary of the UN Economic Commission for Africa (UNECA) Carlos Lopes.
During the event, the African Renewable Energy Initiative was also announced as part as a comprehensive and inclusive effort to radically expand the continent’s use of renewable energy. The initiative is set to achieve at least 10 GW of new and additional renewable energy generation capacity by 2020, and mobilise the African potential to generate at least 300 GW by 2030, under the mandate of the African Union, and endorsed by the Committee of African Heads of State and Government on Climate Change.
In response to the initiative, the French President Hollande announced that his government would spend €6 billion between 2016 and 2020 on the electrification of the African continent, with €2 billion dedicated to renewable energy.
In his speech, Hollande recalled that Africa, despite the fact that it is not responsible for most emissions, already suffers the most serious consequences of climate change.
"There is an ecological debt that the world, particularly the developed world, must settle with the African continent," he said.
The AfDB also announced at another COP21 side event that it will spend US$12 billion between 2016 and 2020 on energy programs in Africa. The majority of this will be invested in renewable energy and is expected to leverage an additional US$50 billion.
Though the event made great strides towards the integration of renewable energy in Africa, participants in the high level panel on African solutions to climate changed also agreed that a lack of priority has been put on adaptation.
Considerable investments in adaptation
The AfDB also points out in its position paper that the continent is already suffering from extensive effects of climate change and is facing further risks in the future.
“According to the second Africa Adaptation Gap Report, […] Africa is already facing adaptation costs of US$7-15 billion per year by 2020,” said Zuma at the opening of the African Pavilion.
In response to the consequences of climate change that have already arisen, US$250 million has been pledged to the Least Developed Countries Fund (LDCF), a fund for adaptation to climate change hosted by the Global Environment Facility (GEF), by 11 donors – Canada, Denmark, Finland, France, Germany, Ireland, Italy, Sweden, Switzerland, United Kingdom, and the United States – at the start of the COP21 on Monday.
The new financing will enable the GEF to respond to existing requests for support ranging from investments in new approaches to agriculture to national adaptation planning and building resilience against climate change variability and disasters.
Developed countries have announced to date a total of US$3 billion for multilateral funds dedicated to adaptation. Most of the funds approved for the benefit of adaptation projects come from the Pilot Program for Climate Resilience under the Climate Investment Funds of the World Bank.
Critics noted however at a special session discussing adaptation financing that developed country contributions to these funds remain less than optimal and, globally, adaptation remains underfunded. Luc Gnacadja, a former head of the UN Convention to Combat Desertification, noted that the means to adapt to climate change must be made available to local communities, municipalities and regional and local authorities rather than just to nation states, in order for adaptation measures to be effectively implemented.
The COP21 climate conference continues until 11 December.
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Modernise, diversify and integrate – African regional economies urged
It is without doubt that African countries are proud of their economic achievements in the past decade. The blight on this 5-6 percent growth achieved during this time is the absence of transformation of these economies. This growth, though impressive, has not been inclusive and poverty levels have not been reduced.
“The majority of our economies are monolithic and remain predominantly natural resource and primary commodity driven, where little value addition takes place. Agricultural productivity is low,” said Mr. Stephen Karingi, the Director of Regional Integration and Trade Division at the Economic Commission for Africa in his opening address to the Ninth Session of the Committee on Regional Cooperation and Integration (CRCI).
The session, themed ‘Enhancing productive integration for Africa’s structural transformation’, opened on Monday in Addis Ababa and will review and deliberate on developments in specific sectorial areas and make recommendations on regional integration and trade.
The ECA has on various occasions, through its reports on regional economies and development, pointed out the significant advantage to be gained from trading within Africa. As Mr. Karingi explained “productive integration means developing and linking regional production and value chains in Africa.”
When developed, these regional linkages will boost intra-continental trade affecting several industries such as agriculture, infrastructure, telecommunications, energy and investments.
Using the example of agriculture, where “production and productivity is far below their potential given the richness of the land and resources,” Mr. Karingi urged African countries to learn from South East Asian countries. “They turned their farmers into manufacturing workers, diversified their economies and exported a range of increasingly sophisticated goods.”
Foreign and domestic investments are needed if Africa is to achieve product integration. Mr. Karingi pointed out that investor’s perception of Africa is improving. “Africa is the second most attractive investment destination,” he said.
Mr. Karingi warned though “the development of regional supply chains in production will only be possible if the integration agenda is pushed forward and remaining barriers to intra-regional trade are removed.”
ECA recommends investments in infrastructure connectivity such as in transport and logistics because it is “an important vehicle for the creation of regional value chains.”
Established by the ECA Conference of Ministers, the Committee on Regional Cooperation and Integration (CRCI) meets on a biannual basis to review the work undertaken on regional integration and trade such as food security, agriculture, industrialisation, infrastructure and investment in Africa. This ninth session convenes from 7 to 9 December 2015.
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Madagascar seeks to improve its attractiveness to foreign investors
Specific policies, targeted sectoral strategies and effective institutions to implement them are instrumental to meeting Madagascar’s development objectives, according to the Investment Policy Review (IPR) of the country which was discussed at an intergovernmental meeting at the United Nations in Geneva on 3 December.
The event brought together high-level representatives from the Government of Madagascar, the international community and local and foreign investors.
“Madagascar has promising opportunities for foreign direct investment (FDI), but to transform this potential we need investors and infrastructure. The positive results of FDI are far from automatic, especially with regards to achieving sustainable development goals and improving quality of life,” said Madagascar’s Minister of Industry and Private Sector Development Narison Rafidimanana, who led his country's delegation to Geneva. He highlighted the role of the IPR in helping to achieve the country’s investment objectives, and reiterated his commitment to implementing its recommendations, saying “we are taking the IPR recommendations [to] heart and we ask UNCTAD for support in the next phase of technical cooperation”.
“Madagascar has extraordinary potential to attract and benefit from FDI as it is endowed with rich natural resources, a young population and vast tracts of fertile land,” UNCTAD Secretary-General Mukhisa Kituyi said. Such potential, however, contrasts with its disappointing performance in attracting FDI, with inflows below the regional average and declining in the last 10 years. Dr. Kituyi said that UNCTAD’s IPR aims to provide guidance on investment policies for development and to support the country’s full economic recovery.
Focused on the need to restore investor confidence, the review recommends greater clarity and security in Madagascar’s regulatory framework, including with regard to the definition of FDI across legal texts, land security, the possibility of foreigners acquiring land, taxation, as well as criteria for adhesion to special economic zones and regimes by enterprises. The IPR also features creative and pragmatic approaches to attracting and benefitting from FDI, which include how to better leverage Madagascar’s natural resources through targeted sectoral strategies in line with its development objectives.
The Director of UNCTAD’s Division on Investment and Enterprise, James Zhan, said that Madagascar needed targeted policies that can have an impact on increasing FDI inflows and on maximizing its impact in boosting fiscal revenues, reducing poverty, creating jobs, and building its entrepreneurial capabilities which together determine the capacity of Madagascar to produce goods and services.
Presenting the role of FDI in the Government of Madagascar's investment policy, Harison Randriarimanana, Economic Counsellor of the President of the Republic of Madagascar and Chairman of the Economic Development Board of Madagascar said that “attracting FDI and building the appropriate legal framework are priorities for the Government. We are in the process of amending legislation to improve predictability, including in such areas as mining, access to land and public administration among others. The recommendations of the IPR will be instrumental to successfully implementing these amendments in a context of political stability”.
The meeting was well attended and featured lively discussions on the investment challenges and opportunities of Madagascar. Representatives of member States and international organizations commended Madagascar for undergoing the review. Private sector representatives established in the country highlighted the validity of the IPR’s findings and recommendations. They also underlined the timeliness of the IPR in light of the need to improve infrastructure to increase national competitiveness.
UNCTAD IPRs are conducted at request and provide concrete and action-driven recommendations aimed at attracting higher levels of FDI to foster economic and social development in recipient countries. The programme spans several phases, commencing with the preparation of the report, followed by the implementation of the recommendations contained therein through technical assistance and follow up, and ultimately the conduct of an implementation review. The IPR of Madagascar, presented in draft version in Antananarivo on 10 September 2015, is the 40th IPR published by UNCTAD.
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Actions on renewable energy and energy efficiency in developing countries could reduce emissions by 1.7 gt/year by 2020
First report of 1 Gigaton Coalition finds potential for further reductions
Initial analysis of almost 6,000 projects targeting renewable energy and energy efficiency in developing countries has revealed that the projects could reduce CO2 emissions by about 1.7 gigatons a year by 2020.
The findings, released on 7 December 2015 at COP21 in Paris by the 1 Gigaton Coalition in its first annual report, entitled Narrowing the Emissions Gap: Contributions from renewable energy and energy efficiency activities, are based on projects implemented between 2005 and 2012.
They show the potential for further emissions reductions if programmes and initiatives are supported further to replicate successful projects more widely.
The report is based on the current level of activities in renewable energy and energy efficiency in the energy sector.
However, after the COP21 negotiations, the level of green energy financing is likely to increase, and the 1.7 gigaton figure would be expected to grow in the future. This would assist in closing the emissions gap, which the UNEP Emissions Gap Report 2014 estimated at 8-10 Gt CO2 equivalent by 2020.
Børge Brende, Norway’s Minister of Foreign Affairs, said, “This first report of the 1 Gigaton Coalition is an important step towards quantifying emissions savings from the energy sector. It shows governments and initiatives what could be achieved and encourages them to build on the momentum of the Paris COP to continue to increase their ambitions to promote renewable energy and energy efficiency.”
UNEP Executive Director Achim Steiner said, “The potential of increasing renewable energy and energy efficiency in developing countries to tackling climate change cannot be underestimated. But not only do these energy projects move us toward closing the emissions gap, they are also vital for many countries’ social and economic development. The 1 Gigaton Coalition is playing a crucial role bringing support to these projects. As we accelerate climate action in Paris, I hope to see all parties work together to increase the ambition of what can be achieved.”
About the 1 Gigaton Coalition
The 1 Gigaton Coalition is a voluntary international framework that was initiated and is supported by the Kingdom of Norway, and is coordinated by the United Nations Environment Programme (UNEP). The 1 Gigaton Coalition aims to support countries to measure and report reductions of greenhouse gas emissions savings from renewable energy and energy efficiency activities and initiatives in the energy sector, most of which have not been quantified. It does so by collecting data on activities and initiatives, and creating a methodology to attribute the emissions saved from these projects.
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tralac’s Daily News selection: 7 December 2015
The selection: Monday, 7 December
This week, in Dakar: training workshop on trade in services negotiations for AU-CFTA negotiators
In spite of the task of negotiating and rule-making activity, at regional, continental and multilateral level, experience with services policy reforms is still young in Africa. Significant challenges exist in building the regulatory institutions that are needed to remedy market failures, appropriately sequence service sector reforms, and establish mechanism that promote the availability of essential services among poor people. Trade rules are complex and services negotiations are information and resource-intensive. Capacity building in services negotiations in key for African countries in order to effectively benefit from trade in services opportunities at bilateral, regional and multilateral levels but most importantly to prepare for CFTA Services negotiations.
Released today, in Harare: Capacity imperatives for domestic resource mobilization (ACBF)
The Africa Capacity Report 2015 sends a very clear message: with official development assistance to Africa diminishing, the continent will have to rely more on mobilizing domestic resources if it is to implement its development agenda. The ACR 2015 shows that this is possible, with a good number of African countries providing practical success stories based on strategies and initiatives that can easily be adapted to other countries. However, the capacity gaps to generate savings and taxes from domestic resources and allocate them to economically and socially productive activities remain glaring. [Download the report]
ADF12 & 13: is the AfDB delivering on its commitments? (IDEV)
The first of the three new evaluations, the Overarching Review, seeks to assess whether the commitments are being implemented fully and effectively. It distinguishes between “delivery”, such as producing an agreed document, and full “implementation” in practice. On delivery, the picture is largely positive, despite some delays. On implementation the journey is still ongoing. [Various downloads available]
Thirty years in Africa’s development: from structural adjustment to structural transformation? (UNU-WIDER)
Today’s policy agenda is subtle. Raising farm productivity; creating clusters of high value-added manufacturing and services; managing natural resource wealth in the public interest; making the right infrastructure choices; constructing financial systems that facilitate diversified economies; achieving inclusive urbanization; and adapting to climate change are challenges that have no easy (ideological) answers. [The author: Tony Addison]
Reminder: the Committee on Regional Cooperation and Integration meets today in Addis on the theme 'Enhancing productive integration for Africa’s structural transformation' (UNECA)
The African Cities Growth Index 2015 (Mastercard)
And Africa’s dynamic and fast growing cities are the strategic nodes where such an economic transformation could happen. Cities powerfully concentrate human resources and capability to create the necessary critical mass to support business investment and operations, and at the same time they are gateways for reaching out to the global market. Getting the basics right therefore also means making sure that cities in Africa can function effectively as centres of commerce, productive hubs for industries, and vibrant markets for consumers. This new edition of African Cities Growth Index provides a timely assessment of their potential. It is a roadmap to Africa’s future. [Download]
South Africa: Our cities are falling behind (TimesLive)
Nairobi lands position nine in African cities growth potential list (Daily Nation)
Lagos ranked among top three African cities (Leadership)
Nairobi tops Africa in financial services (Business Daily)
The State of City Climate Finance report (CCFLA)
The report is the first issued by the Cities Climate Finance Leadership Alliance, a coalition of over 40 banks, national governments and civil society organizations launched by the UN Secretary-General at the Climate Summit he convened in September 2014. The aim of the Alliance is to accelerate investment in low-emission, climate resilient infrastructure in cities, and to close the investment gap in urban areas over the next fifteen years. The report recommends five innovative routes for mobilizing investment in low-emission, climate-resilient urban infrastructure:
COMESA: 96% of all reported Non-Tariff Barriers resolved
In an effort to reinforce the current initiatives to eliminate the remaining NTBs, COMESA has now developed NTB Regulations to provide an efficient mechanism to address these barriers. The Regulations which have been circulated to Member States outlines the steps that concerned parties should go through. Specifically the Regulations require Member States to establish National Focal Points as well as National Monitoring Committee on NTBs. According to the Regulations, the initial stage of resolving the NTB is the exchange of information regarding an NTB between the imposing and recipient Member State. If the parties fail to resolve the NTB at this stage, they will engage a facilitator to provide factual information aimed at resolving the matter. The outcome of these proceeding will be enforced under article 171 of the COMESA Treaty that provides for sanctions.
EABC plans law on local sourcing (The East African)
The East African Business Council is now preparing a proposal to the EAC for introduction of the requirements that will compel foreign firms to provide opportunities for local businesses to participate in the projects. The EABC will ask for the EAC to develop local content framework and guidelines as a matter of urgency to enhance local firms’ role in the value-chain.
Kenya: MPs overrule Kebs in Sh4bn fertiliser import deal probe (Business Daily)
Members of Parliament have cleared a controversial Sh4 billion subsidised fertiliser supply contract, overruling the Kenya Bureau of Standards’ assessment that found impurities in some products imported through the port of Mombasa early this year. The National Assembly’s Agriculture Committee endorsed the three-year contract for the supply of assorted types of fertiliser citing submissions by Agriculture ministry and procurement officials.
Mombasa port raises red flag on excessive imports (Daily Monitor)
More than one million Twenty Foot Equivalent Unit—containers (TEUs) were handled in 2014. Latest traffic forecast indicate that the container traffic will rise from 1.1 million TEUs handled in 2014 to 3 million by 2015 and beyond, against current capacity of 1.1 million estimated in 2013/14; the port has to do more to cope.
One year later, Single Customs Territory drives growth in trade (The East African)
Rift Valley Railways begins revamp programme (Daily Nation)
AfDB gives Dar $348m to upgrade transport in Tanzania (The East African)
Johannesburg Summit of the Forum on China-Africa Cooperation: the declaration (GCIS)
We oppose trade protectionism in all its forms and are in favour of advancing the World Trade Organization (WTO) Doha Development Round negotiations and safeguarding and developing an open world economy. We further welcome the first hosting of the 10th WTO Ministerial Conference in Africa, taking place from 15 to 18 December 2015 in Nairobi, Kenya, and stress the importance of a successful meeting in Nairobi that brings tangible results and meaningful outcomes on the developmental agenda for Developing and Least Developed Countries.
UNIDO and CCPIT will conduct market research on developing countries to provide information on investment environment and policies, and UNIDO will assist CCPIT in arranging the visits of Chinese experts to Africa to promote China’s experience in the construction of its industrial parks. CCPIT will also facilitate the participation of Chinese enterprises in the construction of industrial parks in Ethiopia and Senegal, the two countries where UNIDO’s new Programme for Country Partnership is currently being piloted. A separate memorandum of understanding was signed between CAD Fund and UNIDO. The parties agreed to initiate their cooperation in the following areas: promotion in Africa of industrial zones, railways, roads, airports, seaports, manufacturing, and agriculture and agro-business; as well as food safety and quality infrastructure development; sustainable SMEs; investment and technology, infrastructure development and private sector development. They will also focus on building partnerships for South-South and Triangular cooperation.
China’s One Belt One Road Initiative: what we know thus far (World Bank Blogs)
OBOR can be big, indeed. In its largest definition, OBOR would include 65 countries, 4.4 billion people and about 4% of global GDP. China is backing the plan with considerable resources, setting up a New Silk Road Fund of $40bn to promote private investment along OBOR. The New Silk Road Fund is sponsored by China’s foreign exchange reserves, as well as government investment and lending arms. In addition, the Asia Infrastructure Investment Bank is widely expected to support the initiative with a considerable share of its $100bn in lending, and the China Development Bank reportedly said it would invest almost $900bn into more than 900 projects involving 60 countries to bolster the initiative. The Economist magazine reported that $1trn in “government money” would be spent on the initiative. [The author: Bert Hofman]
Deborah Brautigam: Highlights of Xi Jinping's pledges at the Johannesburg China Africa Summit
SADC's ES embarks on High-Level Policy Dialogue with Japan (SADC)
The Vice-Minister expressed Japan’s commitment to deepening its relations with the SADC Region, and affirmed that Japan intends to utilise TICAD VI as a vehicle for making its support to Africa more visible. “Among other things, Japan is considering ways of increasing the participation of public and private sectors, focusing on, among other things: Transport and Energy and the Development of Agriculture through agro-processing for value-addition”. Dr Tax presented the SADC priority regional infrastructure projects which are ready for investment. She emphasised the need to deepen SADC-JICA collaboration at the regional level through TICAD VI, and expressed the importance of regional projects to the investors. “Regional projects enable investors to benefit from economies of scale, a bigger market and achieve greater returns on investment. They are easier to implement due to multi-country participation and ownership", she said.
Harry Broadman: 'Can Japan jump-start growth by re-engaging in Africa?' (Forbes)
Zimbabwe: Grace's threatened border blockade slammed (The Standard)
South Africa: Leaky borders must be plugged (TimesLive)
Trade and Industry hosts discussion on South African economy (GCIS)
Where did the demographers in Africa go? (World Bank Blogs)
The demographic transition and labour markets in Sub-Saharan Africa (World Bank Blogs)
Illegal to pay wages in dollars in Mozambique from now on - lawyer (Club of Mozambique)
Adapting Central Africa’s agriculture to climate change, costly (UNECA)
Making trade policies more gender sensitive in the Caribbean (UNCTAD)
Diversification to Asia now weighs on India’s exports (Livemint)
Caroline Freund: 'Ex-Im Bank reauthorization...it’s about time' (PIE)
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New report identifies innovative ways to mobilize investment in low-emission, climate-resilient urban infrastructure
Mechanisms to boost large-scale capital for climate action in cities set out in study by Alliance initiated by UN Secretary-General
Proven innovative policies and mechanisms are unlocking investment for much-needed climate-smart infrastructure in cities, according to a new report, and need to be scaled up globally. The State of City Climate Finance report is being launched today by UN Secretary-General Ban Ki-moon and international partners at the Climate Summit for Local Leaders at Paris City Hall, taking place on the margins of the UN Climate Conference in Paris.
The report is the first issued by the Cities Climate Finance Leadership Alliance (CCFLA), a coalition of over 40 banks, national governments and civil society organizations launched by the UN Secretary-General at the Climate Summit he convened in September 2014. The aim of the Alliance is to accelerate investment in low-emission, climate resilient infrastructure in cities, and to close the investment gap in urban areas over the next fifteen years. Alliance members are working on a plan to help translate the report recommendations into action.
“Major investment is urgently needed for climate action in cities,” said the UN Secretary-General, “and the recommendations in this report, if put into place, can help unlock the capital needed. We know these solutions can work – they just need to be scaled up. I urge governments, banks and the international community to act on these practical recommendations.”
Five transformative recommendations
The State of City Climate Finance report recommends five innovative routes for mobilizing investment in low-emission, climate-resilient urban infrastructure:
1. Urge national governments to adopt policies and incentives that encourage cities to invest in low-emission and climate-resilient infrastructure.
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In Brazil, a fiscal transfer mechanism known as ICMS-Ecológico allows participating states to transfer part of their sales tax revenues to cities based on the creation of protected conservation areas. In Paraná state, some US$200 million was redistributed under the scheme from 1992- 2001, and protected areas grew by more than 165 per cent.
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Rwanda’s Environment and Climate Change Fund (FONERWA), which finances projects that promote climate resilience and green growth, targets 10 per cent of its funding to go to districts and cities. The government has committed $4.2 million, and mobilized $80 million from external sources.
2. Support cities in adopting frameworks that put a price on climate externalities, such as cap-and-trade
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Washington, DC launched a credit-trading facility in 2014 by which participants receive stormwater retention credits for exceeding regulatory requirements or making voluntary investments in green roofs, rain gardens or other infrastructure projects that reduce stormwater runoff, making the city more resilient to climate change.
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As of September 2015, 23 cities, states, and provinces have employed carbon-pricing instruments, mostly in the form of carbon taxes or emissions-trading systems, depending on local contexts. By the fourth year of Tokyo’s successful cap-and-trade programme, emissions have been reduced by 23 per cent.
3. Strengthen facilities that can support cities in developing investment-worthy climate action projects.
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The Cities Development Initiative for Asia (CDIA), led by the Asian Development Bank with a number of donors, has completed pre-feasibility studies for 85 infrastructure investment projects for medium-sized cities in developing Asia, of which 49 projects have attracted $5.9 billion in financing.
4. Direct international development finance through local financial institutions, which are well positioned to help cities finance climate-smart infrastructure solutions.
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Mexico’s EcoCasa programme has channeled more than $50 million in sub-commercial loans from the Clean Technology Fund, Inter-American Development Bank and Germany’s KfW Development Bank through a federal mortgage society, which in turn, has issued concessionary loans to local housing developers to use energy efficient and renewable technologies. Its local presence makes it well suited to identifying eligible local builders, offering credit and mortgages to local borrowers and managing risks. Since 2013, EcoCasa is already half way to its goal of financing 27,600 sustainable homes by 2019, which would prevent a total of 1 million tonnes of C02 emissions.
5. Create a network of labs to innovate new financial instruments and funding models.
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A number of effective labs exist for this purpose, including Climate-KIC’s new Low Carbon City Lab. The Global Innovation Lab for Climate Finance, established by a group of climate-finance donor countries, has piloted several initiatives that have attracted more than $170 million in funding. Expanded or additional labs are needed to scale up funding. Labs could also serve to establish standards and lend credibility to help the green bond market grow, as the Climate Bonds Initiative, World Bank and others have been doing.
Climate action in cities crucial, finance needed
Climate action in cities is crucial to addressing the global climate threat. Urban areas account for over 70% of energy-related CO2 emissions, and the world’s cities produce almost half (37-49%) of all global greenhouse gas emissions, according to the Intergovernmental Panel on Climate Change. Cities are also on the front lines of climate impacts and urgently need to build resilience. More than 80% of the overall annual global costs of adaption to climate change are estimated to be borne by urban areas, according to the World Bank.
Roughly $4.1-4.3 trillion will already need to be spent on urban infrastructure annually over the next 15 years, just to keep up with projected growth in a business-as-usual scenario, according to analysis done for this report. It will only cost an estimated $0.4-$1.1 trillion more in upfront investment to make this urban infrastructure low-emission and climate-resilient, which will pay dividends in decreased air pollution and increased efficiency and quality of life. The scale of urban investment needed is a critical opportunity to create better growth for cities.
The report analyzes the obstacles that many cities face in obtaining the financing they need, including uncertainty over regulatory and tax policies, lack of expertise in project development, lack of control over infrastructure planning, high transaction costs and lack of proven funding models at the city and regional level. Cities in developing countries in particular have difficulty obtaining commercial financing: of the 500 largest cities in emerging economies, only 4 per cent are deemed creditworthy in international markets, according to the World Bank.
The McKinsey Center for Business and Environment provided research and analysis to inform the report. Financial support for the report was provided by the Children’s Investment Fund Foundation (CIFF) and Agence Française de Développement (AFD).