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FAO and WTO: Food safety and trade should improve nutrition and boost development
Small-scale producers in developing countries must access world markets says WTO’s Azevêdo
FAO and the World Trade Organization (WTO) agreed on 2 November 2015 to strengthen their cooperation to promote international food trade and safety in ways that improve peoples’ nutrition and allow small-scale producers to have better access to international agriculture markets.
“We look forward to ensuring fair trade of agricultural and food products through this stronger (FAO-WTO) cooperation,” FAO Director-General José Graziano da Silva said in remarks made to his WTO counterpart, Roberto Azevêdo during an event at the UN food agency’s headquarters.
“On the one hand trade is likely to play an increasing role in meeting the growing demand from food-deficit countries. On the other hand, greater trade openness may undermine the capacity of local people to produce their own food,” the FAO Director-General added.
Graziano da Silva warned that failure to reach a balanced solution on issues relating to production and trade of agricultural products could derail the international community’s recently agreed sustainable development goal to eradicate world hunger.
For his part Azevêdo stressed that at the WTO, “we seek to ensure that the global trading system works for all, that it is fair and balanced,” in a way “which supports growth and development and allows people to access the goods and services that they need” including food.
“When I visit developing countries, especially in Africa... business people tell me about the difficulties they face in meeting the required standards,” the WTO Director-General said, adding that it is essential to provide capacity building for producers in developing countries, an area of work where his Organization and FAO are seeking to deepen their collaboration.
Azevêdo referred to the 10th WTO Ministerial Conference in Nairobi on 15-18 December 2015, where the role of agriculture – especially in development and in improving the lives of people in least developed countries – is high on the agenda.
Issues for discussion include addressing trade restrictions that bear on imports, such as the lowering of tariffs, the need to minimize domestic agricultural subsidies and, the “distortions these programs produce,” Azevêdo said, as well as the need to eliminate export subsidies.
The WTO Director-General expressed hope that some agreement would be reached in Nairobi on the issue of export subsidies. This would mark “an extremely significant breakthrough,” and would be especially important for developing and least developed countries.
Strengthened cooperation, new report planned
Graziano da Silva and Azevêdo both underscored the increase in cooperation between FAO and the WTO. This includes deepening their collaboration on trade and food safety, including a joint publication in 2016 which would deal with sanitary and phyto-sanitary (SPS) measures that curb the spread of plant and animal diseases during the transport for trade of agricultural products.
“Our [WTO] agreement on the Application of Sanitary and Phytosanitary Measures names the FAO/WHO Codex Alimentarius and the FAO International Plant Protection Convention as standard-setting organizations in these matters,” underlined Azevêdo.
Other areas where the two organizations are seeking to reinforce their joint efforts include the Standards and Trade Development Facility (STDF), capacity development initiatives to assist countries in the implementation of the Codex Alimentarius or “Food Code” which develops harmonized international food standards that protect consumer health and promote fair practices in food trade, and country level assistance to facilitate trade in safe and nutritious food.
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Africa: Smart measures required to weather commodity boom-bust cycles
Economic diversification key for development in the long run, says UN development agency
Governments in Africa should put into place fiscal rules, sovereign wealth funds and other mechanisms to buffer their economies from the commodities roller-coaster, according to a new report issued by the United Nations Development Programme (UNDP).
“One third of Africa’s impressive growth rate is due to the huge demand of emerging economies and the ensuing surge of the prices of commodities. But heavy dependence on commodities often fail to generate development as commodity prices tend to be volatile. And busts follow booms. Governments must then seize the opportunity of commodity booms to structurally transform their economies and invest in human development,” said Abdoulaye Mar Dieye, Head UNDP’s Regional Bureau for Africa.
The UNDP report, Primary Commodity Booms and Busts: Emerging Lessons from sub-Saharan Africa, was launched at the 10th Africa Economic Conference, which opened on Monday in Kinshasa.
“It’s like the Cricket and the Ant tale, where one insect idles all summer while the other prepares for winter. If countries don’t save and manage their revenues adequately during periods of expansion, when commodity prices go down, there’s very little left other than austerity and development grinding to a halt,” said Ayodele Odusola, Chief Economist at UNDP’s Regional Bureau for Africa.
Africa’s export revenues increased six-fold between 2001 and 2011, thanks to strong demand from middle-income economies such as China, Brazil and India. Between 2011 and 2014, due to a sharp decline in commodity prices, per capita growth on the continent decreased by half as compared with the previous ten years.
“There has been the tendency to increase expenditures during booms and cut back during price declines, rather than ensuring smooth and sustainable levels of expenditures over the commodity price cycle,” Odusola added.
Further, the report shows, over-reliance on primary commodities, particularly minerals and fuel, is often associated with higher levels of corruption and even conflict, income inequality, as well as social indicators such as disease prevalence, higher mortality rates and uneven access to education.
In order to avoid such downturns, with potentially catastrophic implications for development, countries can initiate a number of options which can actually boost long-term economic growth and development over time. Sovereign wealth funds, for instance, can build savings for future generations and be used to manage investments rationally over time. To achieve this, sovereign wealth funds must target stabilization and long term-saving objectives simultaneously.
Other measures include fiscal, exchange rate, and monetary policies to improve savings so that adequate resources are available to sustain expenditures once commodity prices fall.
The report provides detailed analyses of the impact of the commodity price cycle on ten commodity-dependent African economies which successfully buffered the impact of lower commodity prices on their economies.
In Botswana, for example, the Pula sovereign wealth fund has led to better macroeconomic management and rapid growth, and appears to have been associated with better governance and institutional quality.
In Nigeria, the local content policy focuses on the capacity development of the country’s human resources and use of local firms to link the oil sector with the rest of the economy.
In Ethiopia, fiscal policy has led to an acceleration in the collection of taxes, while raising spending for the poor, including in physical infrastructure.
In Ghana, steps are being taken for the Ghana Cocoa Board (Cocobod) to issue energy and cocoa bonds to fund its long term capital and infrastructure needs.
Over the long run, the report shows, Africa’s economies should diversify so as to minimize risk. Primary commodities account for more than 60 percent of merchandise exports in 28 of the 38 African countries with recent data. Every African economy with data, except South Africa, has a higher export concentration index than the average for developing countries, excluding China.
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African Economic Conference presents plans to fight deepening poverty
Economists aim to strike Kinshasa Consensus on ending poverty in Africa
Increasing government spending on healthcare, education and support to vulnerable groups like the elderly has emerged at the top of the agenda for a new deal sought by experts attending the 10th African Economic Conference (AEC) from November 2-4 in Kinshasa, to address rising poverty and inequality in Africa.
Amid growing fears that policies to ensure economic growth for all are lacking, economists are seeking a “Kinshasa Consensus” to deal with the possible loss of Africa’s economic gains.
“We need to act. It is clear it is not enough to record growth. We have experienced double-digit economic growth but fair distribution of remains,” President Joseph Kabila said in a speech delivered for him by Senate President Leon Kendo Wa Dondo, at the opening session of the African Economic Conference on Monday.
The issues proposed for approval in the Kinshasa Consensus include an African Single Currency Federation to cushion the poor from local currency depreciation linked to foreign exchange markets.
Local currencies across Africa have weakened by up to 20 per cent against the world’s major currencies since early 2015. Fear is also rising drought and crop failure will spread food insecurity and poverty.
“Africa should get away from the business as usual and use aggressive industrial investments,” Carlos Lopes, the Executive Secretary of the UN Economic Commission for Africa (ECA), said Monday. “We should take advantage of these inequalities and modernize our cities for the future.”
The 10th African Economic Conference, which is being dedicated to “Addressing Poverty and Inequality in the Post-2015 Development Agenda,” is examining the reasons behind the failure of high growth rates in Africa to control poverty.
Policymakers, donor organizations and international economic policy planners agreed elements such as policy-specific approaches to increasing production of minerals were still required even if the prices were down by 14 per cent due to reduced demand from key importers in China and elsewhere.
President Kabila said efficient service delivery – such as increased access to water, education and progress in more areas – would enable the Democratic Republic of Congo to normalize relations with donors, grow its economy and continue to modernize key roads and electricity infrastructure.
Organized jointly by the African Development Bank (AfDB), the UN Development Programme (UNDP) and the UN Economic Commission for Africa (ECA), the conference is discussing how Africa could use focus its policies on industrialization.
Rampant poverty in Africa dropped drastically in 22 out of 29 countries, according to Bartholomew Armah, ECA’s Chief of Planning Section.
The return of poverty is mostly linked to the income inequality. At least 70 per cent of African countries reduced poverty due to rising incomes, but did not reduce income gaps.
In the Kinshasa Consensus, the economic experts have argued a re-examination is required to determine whether the use of traditional measurements such as the per capita income actually provided accurate measurements of the national income.
Armah said the new policies are required to help improve financial and human capital. This could be done by laying more emphasis on vocational training to improve the ability of the youth to find jobs.
To succeed in the job-creation venture, the economists proposed the use of financial policies to support economic growth. They also proposed effective policy responses that would support job-creation in industries that require more labourers. This would respond to the challenge of having economies growing without creating jobs.
Armah said studies by the World Bank have shown most African countries grew, but job-creation declined from 57.7 per cent to 44.4 per cent between 2000 and 2012.
To deal with this trend, it was proposed the governments should remove tax waivers. They also sought mechanisms to ensure all taxes are directed to the government. The government should also seek to direct revenue from taxes to sectors that can ensure steady growth as a way of escaping volatile international currency price fluctuation.
African Economic Conference presents plans to fight deepening poverty
During discussions on the “Determinants of Poverty and Inequalities,” on Day 1 of the conference, economic researchers said that evidence showed the right policies could address the causes of inequality and its impacts.
“The economic growth in the top-performing economies of Africa is not distributed evenly,” Ayodele Odusola, Chief Economist and Head of Strategy and Analysis at the UNDP Regional Bureau for Africa, said while presenting a research paper on Poverty, Inequality and Fiscal Space in Africa, on Monday, November 2.
With Africa home to seven of the world’s fastest-growing economies, recent economic research has shown income gaps between the rich and the poor remain wide. These gaps are worsened by a lack of social protection systems, such as the protection of the poor from job losses and promotion of efficient job markets.
The researchers presented papers showing how the over-concentration of investments in certain sectors in Africa, such as mining, affected economic growth whenever international prices of the key commodities such as oil and minerals dropped.
The researchers called for diversion of more economic resource allocation to the manufacturing sector to grow the value chains which would help create jobs. They also sought mechanisms to ensure income inequalities, such as those favouring men earning more than women for the same jobs, are addressed.
Abebe Shimeles, Acting Director of Development Research Department at the AfDB, while speaking on Why is inequality high in Africa?, said research pointed to ethnic biases in the distribution of key economic resources and means of production within most of Africa.
“Ethnicity is the most significant reason behind the numbers. There is moral inequality that is accompanied by the struggle for distributive justice by the people left behind by circumstances beyond their control and inequality caused by structural market forces,” Shimeles said.
The research shows countries which have been benefited from high rates of economic growth backed by heavy financial inflows from mining activity such as Botswana have managed to reduce poverty, but income inequalities and the gaps still persist.
However, countries in northern Africa have managed to balance economic growth with poverty reduction by spending more money in capital development. Capital development signifies the process of using public funds to provide business start-up capital to businesses that are already past the start-up stage to allow them to further stabilize.
To deal with the income gaps, the UNDP’s Odusola said financial policies, such as raising public expenditure, re-directing funds obtained from direct taxation measures and ensuring stable currency exchange rates, were amongst the most effective tools to enable financial resources to move to other sectors, such as training of the youth in new skills to keep economies vibrant.
Other measures proposed to deal with the rising income inequalities include opening up the preparation of national budgets to public participation, which has been implemented in Burkina Faso, Kenya and South Africa with good results in reducing the income gaps and redirecting taxes.
The African Economic Conference is discussing responses to the deepening inequality after a recent report by the World Bank showed a 20.8% decline in poverty in Africa from 1990 to 2015. The continent saw poverty drop from 56% to 35%, but those gains were marred by increased high school dropout rates and more job losses.
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Needs of communities near mines in poor countries must prevail in the mining lifecycle, says Global Policy Forum
The importance of going beyond environmental considerations when planning the lifecycle of mines to include socioeconomic considerations was among the topics raised at the Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development (IGF) at its annual general meeting, hosted by UNCTAD at the Palais des Nations, Geneva, on 27-29 October 2015.
While mining continues to play a key role in economic growth of several resource-rich developing countries, in several cases this has generated only very limited benefits in terms of sustainable development and reducing poverty. In some of these countries, mining activities also have adverse social and environmental consequences for the communities living next to extraction sites, and sometimes even at the national level.
IGF chair Glenn Gemerts of Suriname said that the multi-sectoral IGF meeting tackled a range of important issues, including mine closure practices and challenges; and the social impacts of mine closure; and has also overseen the emergence of a growing number of guidelines, standards, and certification schemes to guide the closure process.
“The vast majority of speakers, regardless of whether they represented government, civil society, academia or the private sector, agreed on the need to begin mine-closure planning as soon as processes for planning the mine commence,” Mr. Gemerts said. “There was an extraordinary level of consistency between all stakeholder groups in this regard.”
The Head of the Special Unit on Commodities, Samuel Gayi, made UNCTAD’s opening and closing statements. He said many of the issues discussed at the IGF were “taboo” a decade ago, dividing opinions between developed countries and transnational mining corporations on one side with host countries, usually developing countries, and non-governmental organisations on the other.
Such issues included the need to leave communities near mines with a better quality of life at the end of a project than at the start; the development of ancillary industries and activities surrounding mining; the need for an effective and honest dialogue between companies and communities; and the need to work with communities to ensure that their social fabric and livelihoods are not negatively unnecessarily affected.
“The fact that we can debate these today in a congenial environment [the IGF] attests to the significant progress that has been made in bringing all parties to the table to have a good understanding of these, sometimes, complex issues; and which policy instruments best address them,” Mr. Gayi said.
Integrating sustainable development into mining activities remains a major challenge, the IGF communiqué states. It says that given the mining industry’s significant role in local livelihoods, national economies and the global market, the better alignment of its practices and policies with the Sustainable Development Goals (SDGs) will be a key part of successfully achieving the development agenda between now and 2030.
A joint draft report by the World Economic Forum , the United Nations Development Programme (UNDP), UN Sustainable Development Solutions Network (SDSN), and the Columbia Center on Sustainable Investment (CCSI) concluded that mining impacts all 17 SDGs, and presents both challenges and opportunities in achieving them. The report is expected to be adopted at the 2016 Davos Forum.
The IGF is the institutional framework for the Global Dialogue on Mining/Metals and Sustainable Development which was one of a number of Partnership Initiatives launched at the World Summit on Sustainable Development in Johannesburg, South Africa, 2002. All its meetings, including two preparatory meetings of the Global Dialogue in 2003 and 2004, and the IGF inaugural meeting in 2005 have since been held in Geneva in collaboration with UNCTAD.
The 54-member IGF is unique global venue for discussions on practical issues related to the sustainable management and development of the mining sector and brings together a growing network of leaders seeking to enhance the contribution of the mining sector to sustainable development. The objective of the IGF is to enhance capacity for governance in the mining sector at all stages of the life cycle. One of the IGF’s major achievements to date has been the Mining Policy Framework (MPF), a document bringing together best practices to promote good governance in the mining sector. The MPF is implemented by the IGF.
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Global fight against corruption crucial to achieving sustainable development, UN forum told
Ending corruption is vital to efforts to achieve sustainable development, United Nations Secretary-General Ban Ki-moon told the world’s largest anti-corruption forum, which began on 2 November 2015 in St. Petersburg, Russia.
“The world counts on you to take bold decisions and act decisively to strengthen the global fight against corruption and bribery,” Mr. Ban told more than 1,000 participants gathered for the Sixth Session of the Conference of the States Parties to the UN Convention against Corruption.
In a message delivered by the Executive Director of the UN Office on Drugs and Crime (UNODC), Yury Fedotov, the Secretary-General underlined that ending corruption and bribery is crucial for achieving the 2030 Agenda for Sustainable Development, adopted in September by Member States to wipe out poverty, fight inequality and tackle climate over the next 15 years.
“The 17 Sustainable Development Goals contain the promise of a better collective future for people and planet, and they address the potential challenges that can impede our progress,” he stated. “One such threat is highlighted in Goal 16, which calls for substantial reductions in corruption and bribery in all its forms.”
He also noted that across the globe, corruption and bribery “devastates lives.”
“No country is immune; everyone suffers,” he stated, adding that the malicious impact of corruption makes people’s lives more expensive; it erodes consumer confidence and business credibility; it depletes public funds and destroys prospects for a fair society. Corruption also facilitates other crimes, including human and illegal wildlife trafficking, and terrorism.
“Our ultimate goal must be to turn hands thrust out in hope of payment into hands joined together against this pernicious crime,” he continued. “Let us forcefully convey the message that when bribes are paid, everyone counts the cost.”
Adopted in 2003, the UN Convention against Corruption is the only legally binding universal anti-corruption instrument. The treaty, which currently has 177 States Parties, covers five main areas: prevention, criminalization and law enforcement measures, international cooperation, asset recovery, and technical assistance and information exchange.
In his opening address, Mr. Fedotov stressed that there was need to ensure that public resources go where they are supposed to go. He also underscored the Convention’s strength as “a solid platform for engaging the private sector as a key partner in the fight against corruption and in global action to achieve sustainable development outcomes.”
Other speakers at the forum included the Chief of Staff of the Executive Office of the President of Russia, Sergey Ivanov, who delivered the statement of President Vladimir Putin, and Russian Minister of Justice Alexander Konovalov, as well as a number of other ministers and high-level delegates from across the world.
Over the course of this week, more than 30 side events are scheduled to be held on the margins of the conference on how to better tackle corruption.
Prior to the official opening of the conference, participants observed a moment of silence for those who died in Saturday’s plane crash in Egypt’s Sinai region. The plane was travelling between Sharm el-Sheikh and St. Petersburg when it went down.
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Global Forum on tax transparency pushes forward international co-operation against tax evasion
Major implementation milestones are being met by members of the world’s leading forum on tax transparency as the international community continues to move ahead towards greater tax transparency. The imminent shift to the automatic exchange of information will send a strong warning to tax evaders.
Significant strides towards a major increase in tax transparency have been made since last year when over 90 members of the Global Forum on Transparency and Exchange of Information for Tax Purposes committed to automatically exchange information, beginning in 2017 or 2018. Panama and the Cook Islands are the latest financial centers to join these commitments bringing the total number to 96. With these commitments, all major financial centers are now part of the efforts to enhance international tax cooperation. The timely and effective implementation of these commitments was a key theme during the Oct 29-30 meeting of the Global Forum held in Bridgetown, Barbados which brought together delegates from the Global Forum’s 128 member jurisdictions, as well as representatives of international organisations.
“The work of the Global Forum is key for Barbados and the Caribbean region,” said Donville Inniss, Barbados’ Minister of Industry, International Business, Commerce and Small Business Development, and Vice Chair of the Global Forum Steering Group. “Barbados was proud to host the 8th Global Forum meeting which is the kick-off to a new era of automatic exchange of information and tax compliance.”
With financial information set to begin to be collected from 1 January 2016 in around 50 jurisdictions, governments around the world are quickly changing their domestic laws to ensure financial institutions report information on financial assets held for non-residents.
The meeting marked 13 new signings of the Multilateral Competent Authority Agreement – Antigua and Barbuda, Barbados, Belize, Bulgaria, Cook Islands, Grenada, Japan, Marshall Islands, Niue, Saint Lucia, Saint Vincent and the Grenadines, Sint Maarten and Samoa – which strengthens the international operational framework for the exchanges and brings the total number of signatories to 74.
The Global Forum has already established a real-time monitoring process to keep track of the delivery of the commitments made and to identify areas where support is needed, as well as started to assess the confidentiality standards and data safeguards in all the committed jurisdictions. The Global Forum will continue work in the areas of monitoring, implementation assistance, and reviews. It will support developing countries – in cooperation with the World Bank Group and other international organisations – so they also receive the benefits the move to automatic exchange offers. As a reflection of the growing interest of developing countries to participate fully in the benefits of enhanced tax transparency, Ghana also announced its intention to engage in automatic exchange of information starting in 2018.
Underscoring the continued importance of the work on the standard of exchange of information on request, the Global Forum adopted changes in the standard to include a requirement for beneficial ownership for all legal entities for its new round of reviews scheduled to be launched in 2016.
As part of completion of the ongoing round of peer reviews, 16 new peer review reports were published. The Phase 1 reports on Azerbaijan, Gabon, Romania and Senegal which assessed their legal and regulatory frameworks concluded that these were in place to enable them to move to Phase 2 of the review process, which will assess exchange of information practices. Five Phase 2 reviews of exchange of information practices were also published concluding that the overall compliance rating assigned for Colombia is “Compliant”, for Latvia and Liechtenstein “Largely Compliant,” and for Costa Rica and Samoa “Partially Compliant.”
Jurisdictions continue to request supplementary reviews to demonstrate changes made following recommendations of the Global Forum. Supplementary reports of three jurisdictions – Brunei Darussalam, Dominica and Panama – that were originally blocked from Phase 2 concluded that they are now ready to move to the next stage. Supplementary reports were also approved for Cyprus, Luxembourg and the Seychelles that had been previously been rated as Non-Compliant and in each case, following significant changes to their legal frameworks or practices, the new overall rating of Largely Compliant was assigned.
The Global Forum has now completed 215 peer reviews and assigned compliance ratings to 86 jurisdictions that have undergone Phase 2 reviews.
Global Forum members resolved to intensify the ongoing efforts to ensure that developing countries are able to fully benefit from participation in the advances in transparency. Through its Africa Initiative, it will continue to focus on greater engagement with African countries and also work with other developing countries to build capacity to improve cross border taxation through effective use of exchange of information, both on request, and automatic.
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Treasury publishes Draft Carbon Tax Bill for public comment
The National Treasury on 2 November 2015 published the Draft Carbon Tax Bill for public comment, following on the announcement made by the Minister of Finance in the 2015 Budget. Cabinet approved the publication of the Bill and noted that the carbon tax forms an integral part of the system for implementing government policy on climate change as outlined in the 2011 National Climate Change Response Policy (NCCRP) and the National Development Plan.
South Africa has committed to reduce greenhouse gas (GHG) emissions below business as usual by 34 per cent by 2020 and 42 per cent by 2025, as well as adaptation measures, as outlined in South Africa’s Intended Nationally Determined Contributions (INDCs) recently submitted to the United Nations for the upcoming Conference of Parties (COP) 21 of the United Nations Framework Convention on Climate Change (UNFCCC) in Paris.
The carbon tax seeks to price carbon by obliging the polluter to internalise the external costs of emitting carbon, and contribute towards addressing the harm caused by such pollution.
The Draft Carbon Tax Bill marks the next step in the consultation process conducted over the past 5 years, starting with the 2010 discussion paper on carbon tax, the 2013 Carbon Tax Policy Paper and the 2014 Carbon Offsets Paper. It takes into account comments received in writing, and from meetings and workshops, from a wide range of stakeholders including business, NGOs, academia, civil society and labour.
The publication of the Draft Carbon Tax Bill provides an opportunity for further comments on the design and technical details of the carbon tax policy and administration. It should be noted that the final tax rate, exemptions, and the actual date of implementation will be determined by the Minister of Finance through the annual Budget process. The carbon tax will be implemented together with complementary measures like a reduction in the electricity levy and other measures to recycle revenue. Stakeholders are invited to provide comments on the environmental and socio-economic impact of the carbon tax (taking into account revenue recycling measures), as well as the design and legal wording of the Bill.
A revised Bill incorporating comments received will thereafter be submitted to Cabinet for approval for tabling in Parliament.
Impact of the carbon tax on the economy
The impact of any tax on the economy can only be assessed when taking into account both the direct impact of the tax, as well as the way the resulting revenue is spent. Hence, to assess the impact of the tax, the revenue recycling measures must be taken into account. The carbon tax will assist in reducing GHG emissions and ensure that South Africa is ready and better prepared to deal with future climate risks and challenges, and also be in a position to take advantage of new investment opportunities.
The carbon tax aims to change the behaviour of firms, incentivising them to shift towards cleaner technology when replacing/renewing machinery, technology or processes. To ensure that South Africa transitions to a low carbon, climate resilient economy in a cost effective and economically efficient manner, it is important that the objectives of inclusive economic growth, poverty alleviation, job creation and the lowering of our GHG emissions are appropriately balanced and the trade-offs effectively managed. Hence, given the developmental challenges that South Africa has to deal with and the internationally accepted common but differentiated responsibilities and respective capabilities principle (CBDR-RC) that requires more developed countries to make a greater effort to reduce global GHG emissions, South Africa’s carbon tax will be gradually phased-in.
Various economic modelling to estimate the impact of a carbon tax were previously undertaken. One of the modelling1 exercises initiated by the National Treasury indicates that a carbon tax with broad sector coverage implemented gradually and complemented by effective and efficient revenue recycling will contribute towards significant GHG emission reductions, and have only a marginal negative impact on economic growth over the shortterm. Over medium to long term, the carbon tax will support the transition to a more sustainable low carbon economy and green jobs. Additional modelling is being undertaken by various stakeholders.
The tax has been designed to ensure that its overall impact (when taking into account revenue recycling measures) will, in the initial phase, be revenue neutral, and also neutral on the price of electricity. Hence, taking into account the current state of the mining and other distressed sectors, the combined effect of the rates/exemptions in the carbon tax and the reduction in electricity levy will be designed to ensure that such sectors are not adversely affected when the tax is implemented. The tax and revenue recycling measures are also designed to be revenue neutral from a macroeconomic perspective, but will not necessarily be neutral for (scope one) companies with significant emissions.
Carbon tax design
The revised carbon tax design as contained in the Draft Carbon Tax Bill includes the following features:
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A basic 60 per cent tax-free threshold during the first phase of the carbon tax, from implementation date up to 2020;
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An additional 10 per cent per cent tax-free allowance for process emissions;
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Additional tax-free allowance for trade exposed sectors of up to 10 per cent;
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Recognition for early actions and/or efforts to reduce emissions that beat the industry average in the form of a tax-free allowance of up to 5 per cent;
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A carbon offsets tax-free allowance of 5 to 10 per cent;
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To recognise to role of carbon budgets, an additional 5 per cent tax free allowance for companies participating in phase 1 (up to 2020) of the carbon budgeting system;
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The combined effect of all of the above tax-free thresholds will be capped at 95 per cent; and
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An initial marginal carbon tax rate of R120 per ton CO2-e will apply. However taking into account all of the above tax-free thresholds, the effective carbon tax rate will vary between R6 and R48 per ton CO2-e.
These tax-free exemptions will range between 60 and 95 per cent of total emissions. This implies that the carbon tax will be imposed on only 5 to 40 per cent of actual emissions during this period. The Department of Environmental Affairs (DEA) and the National Treasury have embarked on a process to ensure that the carbon tax is aligned with the proposed carbon budget system. During the first phase of the carbon tax (up to 2020), companies participating in the carbon budgeting process will qualify for an additional tax-free allowance of 5 per cent.
The tax-free percentage thresholds will remain fixed during the first phase, until 2020. The percentage tax-free thresholds might be reduced thereafter or may be replaced with absolute emission thresholds. Both the tax-free percentage thresholds and their subsequent replacement with absolute emission thresholds will be aligned with the proposed carbon budgets.
The carbon tax in the case of GHG emissions from the use of petrol and diesel will be added to the current fuel tax regime. Fuels used by the international aviation and international maritime sectors will initially be excluded from the carbon tax as these are covered by international agreements. Greenhouse Gas resulting from the use of such fuels will be priced in terms of the international agreements that are currently being developed. However, domestic aviation will be subject to the domestic carbon-related fuel taxation.
The National Treasury is in the process of finalising Regulations to give effect to the carbon offset scheme and is engaging the Department of the Energy (DoE) and the DEA on the administration aspects of the offset scheme. Draft regulations will be published for public comment in early 2016. The Regulations with respect to the emissions intensity benchmark as required by the performance based tax-free allowance will be developed over the next six months based on inputs received from the respective industry associations. Such inputs should use as reference acceptable benchmark methodologies.
Revenue recycling and Administration
The effectiveness of the carbon tax to reduce GHG emissions and the socio-economic impact of the carbon tax will be determined by the carbon tax rate, tax-free allowances and the various revenue recycling measures.
These revenue recycling measures will include:
(i) funding for the energy efficiency tax incentive already being implemented;
(ii) a reduction in the electricity levy;
(iii) additional tax relief for roof top (embedded) solar photovoltaic (PV) energy as already provided for the in 2015 tax legislation;
(iv) a credit for the premium charged for renewable energy (wind, hydro and solar, as per the Integrated Resource Plan);
(iv) additional support for free basic electricity to low income households; and
(v) additional allocations for public transport. Measures to encourage the shift of some freight from road to rail will also be supported.
Investments in green technologies and the growth of some sectors will benefit from this intervention especially the renewable energy sector which will be able to compete on a more level playing field in comparison to fossil fuels. A carbon tax will also have health co-benefits by helping to reduce local air pollutants.
The carbon tax will be administered by the South African Revenue Service (SARS). SARS will liaise with the DEA and be able to access the National Atmospheric Emissions Information System (NAEIS) which will contain emissions information as reported by companies. Energy use data reported to the DoE will also be incorporated into the NAEIS which will strengthen the monitoring and verification system to support the implementation of the carbon tax.
tralac’s Daily News selection: 2 November 2015
The selection: Monday, 2 November
This week’s selected African trade and development events:
The African Ministerial Conference 2015: 'intellectual property for an emerging Africa'
African business in the world-class space (Initiative for Global Development)
The rapid development of Africa's private sector and emergence of a new class of leading African companies were highlighted at the Initiative for Global Development's Frontier 100 Forum, signaling a growing recognition that African businesses are moving beyond their local market to enter the world-class space. In a keynote address, Solomon Asamoah, AfDB’s Vice President of Infrastructure, Private Sector and Regional Integration, called for African governments to develop stronger business environments for companies to flourish. Asamoah said stronger business environments would involve government leaders putting in place consistent policies, increasing capacity and incentives for the government workforce, renovating airports, and transparency around the decision-making process to address corruption. "We need more transparency in government decisions. Corruption happens in darkness. Shining a light on it can help end the problem."
Africa’s Tripartite FTA, an opportunity for UAE businesses (Dubai Chamber)
Ahead of the 3nd Africa Global Business Forum which will take place on 17-18 November in Dubai, the Dubai Chamber of Commerce and Industry, has developed a research paper highlighting economic and investment potential in Eastern and Southern Africa and its potential to drive increased imports and exports through Dubai. The formation of Africa’s Tripartite Free Trade Area between 26 African states, is expected to benefit the economic cooperation between Africa and the UAE. Dubai represents the Africa gateway to Asian markets, Africa’s major trading partner. As a major trading partner, and with increased Africa-intra trade, more exports and imports will be transited through Dubai.
India: Commerce ministry firming up Africa-focused export strategy (Economic Times)
The commerce department is firming up an export strategy focused on Africa, giving a new dimension to the government's strategic push for ties with the continent that could offer a large market for Indian goods at a time of slowing global demand. Senior government officials led by commerce minister Nirmala Sitharaman will next week apprise Parliament's consultative committee on plans to address India's continuously falling exports, with a focus on Africa and the country's neighbours. [Evaluating India-Africa maritime relations (The Diplomat)]
Experts disagree on losses due to illicit financial flows (Business Day)
Karen Miller, chairwoman of the South African Institute of Tax Professionals international committee and Deloitte’s transfer pricing leader in the Western Cape, says multinationals have raised concerns about their struggle to even get a fair share of profits out of many African countries. "Africa needs to understand that MNE’s (multinational entities) are prepared to pay tax, but only the fair share," she says. Africa is holding multinationals hostage to higher taxation as nongovernmental organisations are quick to accuse multinationals of "tax dodging" based on unsubstantiated facts, says Ms Miller.
Standard Bank: 'FRC exceeded its powers' (ThisDay)
Standard Bank Group Limited, the South African lender that operates Stanbic IBTC Holdings Plc, has said the Financial Reporting Council of Nigeria exceeded its powers when it ruled that the bank’s West African unit had made material misstatements in its financial accounts and recommended a fine. Lawyers had advised the bank that the FRC’s notification and “an associated purported” fine against Stanbic of N1 billion don’t comply with proper processes, Bloomberg quoted the Johannesburg-based bank to have said in a statement Friday.
Nigeria/South Africa: breaking the cycle (The Africa Report)
Nigeria and South Africa should be playing that same locomotive role in Africa. They are the continent's top destinations for investment and have the market size to offer a solid economic platform: Nigeria is Africa's biggest economy with a gross domestic product of $568.5bn and South Africa is its second with $349.8bn. Commercial ties are on an upward course, albeit at a fraction of the pace that they should be. Compared to their transformative potential, Nigeria-South African relations are almost dysfunctional. What is the problem? [MTN calls in the big guns (TechCentral) Kidnap behind MTN’s woes (City Press)]
SADC's financial system stable - Angolan Central Bank (Angop)
The Angolan National Reserve Bank governor, José Pedro de Morais, last Friday in Luanda said that the financial system of the Southern Africa Development Community is stable, despite some uncertainty points. The BNA chief made this statement on the fringes of the 41st meeting of the Committee of Central Bank Governors in the SADC, having as basis a study on the financial stability of the region, made by the Angolan National Reserve Bank. José Pedro de Morais assured that the study - which may have been presented to the region’s central banks governors – is positive in spite of some uncertainty relating to a slowdown in demand and a fall in the prices of commodities.
Sources of economic growth in SADC: its likely impact on poverty and employment (Committee of Central Bankers)
The study attempted to investigate the key sources of economic growth in the region using different panel data techniques and make inference on poverty and employment. The empirical results of the paper indicated evidence of conditional convergence among the SADC countries, meaning that poorer countries tend to be growing faster and catching up with richer countries in the region. Furthermore, there was evidence that countries that are more open to international trade are likely to experience higher economic growth. The development of the financial sector also significantly promoted countries’ growth rates. Human capital was also found to significantly influence economic growth in the region.
Angola: IMF concludes 2015 Article IV Consultation (IMF)
Inflation is projected to reach close to 14% by end-2015, exceeding the National Bank of Angola’s 7–9% objective. The 2015 budget will allow the central government deficit to fall to 3.5% of GDP, compared to 6.4% last year. Public debt, however, is projected to increase significantly to 57.4% of GDP, of which 14.7% of GDP corresponds to the state-owned oil company Sonangol, by end-2015. The external current account deficit is expected to reach 7.6 percent of GDP in 2015; and international reserves to drop to US$22.3 billion (about 7 months of 2016 imports) by end-2015. Meanwhile, a wide spread emerged between the parallel and primary market exchange rates, pointing to an imbalance in the foreign exchange market.
SA's September 2015 trade data (SARS)
Africa region trade surplus: R19 960 million – a 30.5% increase in comparison to the R15 293 million surplus recorded in August 2015. BLNS: trade statistics September 2015 recorded a trade surplus of R9.23bn, with exports of R12.24bn and imports of R3bn.
Zambia–South Africa small business council launched (Lusaka Times)
The Zambia-South Africa Business Council has been launched in Johannesburg, South Africa. Formed under the auspices of the Zambian High Commission in South Africa, the body aims to promote investment and trade between the two countries and to advocate quick resolution of disputes and barriers. ZACCI and SACCI also signed a memorandum of understanding at the launch aimed at establishing closer and stronger ties in commerce and industry between the two nations.
Zimbabwe: Report spells out FDI constraints (The Herald)
Zimbabwe’s ability to attract foreign investors is badly frustrated by the high cost of labour, erratic electricity supplies, high taxes and a poor transport infrastructure, the inaugural Zimbabwe National Competitiveness Report released on Friday has revealed. Minister Chinamasa said countries bordering Zimbabwe attracted more FDI because they had investor-friendly policies. He said last year South Africa attracted about $5,7bn in foreign investment, Botswana $4,9bn, Zambia $2,5bn, while Zimbabwe only attracted about $550 million. "All the investors who come, it doesn’t matter where they are coming from whether it is China, Europe or America, the language is the same,” he said.
Zimbabwe: Textile industry operating below capacity (NewsDay)
Local textile industry has been operating at below 30% of capacity in the first-half of the year owing to an influx of cheap imports, an industry official has said. Zimbabwe Textile Manufacturers’ Association secretary-general Raymond Huni told NewsDay that the industry was still depressed at the moment as the government was yet to gazette Statutory Instruments (SIs) discouraging cheap imports of textile products into the country. “The government is in the process of gazetting the SIs enforcing the rebates introduced by the Finance minister. We hope that the SI would be gazetted in two weeks’ time and it’s when we will start realising some changes,” he said. [Zim relaxes visa regime for Chinese (NewsDay), Govt, diamond miners on collision course (The Herald)]
Botswana towers over peers in trade reforms (Mmegi)
Botswana’s leading role in ratifying the WTO's Trade Facilitation Agreement will reduce costs associated with trading of its goods and services by an estimated 13.2%. Speaking at the Cape Town workshop on Wednesday, WTO’s head of external relations, Bernard Kuiten praised Botswana’s early commitment towards the agreement, which is expected to increase global exports by between US$ 1.1trn and US$ 3.6trn depending on the timeframe and extent to which the provisions of the TFA are implemented.
Swaziland: Ngwenya to be converted to one stop border post (Swazi Observer)
SRA Commissioner General Dumisani Masilela said with the borders which were linked with South Africa, they were looking at converting Ngwenya to be a one stop border post. The CG explained that this was because Ngwenya was the country’s busiest border for commercial purposes.
Ethiopia: 2015 Article IV Consultation report (IMF)
Ethiopia's state-led development model has delivered rapid economic growth, reduced poverty, and improved social welfare. However, structural transformation has proceeded less quickly than planned, and slow export growth has increased external vulnerabilities. In addition, over the past year the economy has faced a sharp appreciation of the real exchange rate, a significant widening of the current account deficit, and (more recently) an increase in inflation. Large public borrowing from abroad, combined with weak exports, resulted in the risk of external debt distress increasing from “low” to “moderate”. [Ethiopia eager to sign trade agreements with Egypt (Daily News)]
Global tourism grew by more than 4% this year, Africa shows 5% decline (UN)
The number of tourists travelling the world during the first eight months of this year reached 810 million, a more than 4% increase from the same period in 2014, thanks to “robust” travel to Europe, according to the United Nations World Tourism Barometer. According to the barometer, Europe – the world’s most visited regional destination – recorded a robust 5% increase in international tourist arrivals, the highest across all regions and “notable” for a rather mature region. Asia and the Pacific, the Americas and the Middle East all enjoyed 4% growth, while limited data available for Africa points to an estimated 5% decrease, with North Africa decreasing by 10% and Sub-Saharan Africa by 3%.
Open Data Readiness: Mauritius well positioned to start implementing (Government of Mauritius)
The ODRA reveals that Mauritius is well poised to open up datasets. Some 15 datasets spanning budget data, expenditure data, labour statistics, education and health statistics and many more are ready to be made available in machine readable format and so released as open data, that is, data that can be used, reused and redistributed freely. Other main findings also show the following:
FDI continues to rise in the first half of 2015 (OECD)
Global FDI flows picked up in the first half of 2015, increasing by 13% compared to the second half of 2014. If we exclude the drop in the first half of 2014, global flows have been on a rising trend since the first half of 2013. FDI inflows to the G20 as a whole increased by 18% from USD 530 billion to USD 624 billion but the situation varies across G20 OECD and non OECD sub-groups: FDI flows to OECD-G20 economies increased by 49% but were offset by a 15% drop in FDI inflows received by the non-OECD G20 economies. FDI outflows for the G20 decreased by 17% to USD 441 billion with G20 sub-groups showing similar declines.
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2015 African Economic Conference to address poverty and inequality and give cause for more optimism to Africans
Delegates from across the continent and around the globe are converging in Kinshasa, Democratic Republic of Congo, where the African Development Bank (AfDB), the United Nations Economic Commission for Africa (ECA) and the United Nations Development Programme (UNDP), are co-organizing the 2015 African Economic Conference (AEC) from November 2 to 4, 2015, to address poverty and inequality in the region.
Africa is currently on the move, but inequality constitutes an impediment to its efforts to reduce poverty. Amongst others, the continent has made rapid progress in increasing the proportion of seats held by women in national parliament than in other regions. Women’s share of non-agricultural employment also rose modestly in recent years. This performance, however, lags behind other developing regions. Access to safe drinking water has improved, but sanitation is still a challenge.
The ratio of girls to boys enrolled in primary schools continues to improve in many African countries, but the transition of girls and boys between different levels of education requires urgent attention. Addressing these challenges is therefore critical to achieving inclusive growth and sustainable development.
The theme of the 10th edition of the conference, “Addressing Poverty and Inequality in the Post 2015 Development Agenda”, will provide an opportunity to researchers, policy-makers, development partners, civil society organizations and the private sector representatives, to critically analyze the impact of current inclusive growth strategies on poverty, inequality and human development in Africa. It will also provide room for critical thinking on the way forward, more importantly on how to plan and implement Post 2015 Development Agenda.
Since its inception in 2006, the AEC has served as a platform for knowledge-sharing among AfDB, ECA and UNDP. It is in recognition of the prominent role of knowledge, and the three institutions’ quest for contributing to reducing the proportion of Africans in extreme poverty, that this year’s edition will address poverty and inequality. An interesting part of the meeting will be high-level interactions and debates as well as presentation of papers.
Background
The theme for the 2015 African Economic Conference (AEC) is “Addressing Poverty and Inequality in the Post 2015 Development Agenda”. As outlined in the African Union’s (AU) Agenda 2063 and the Africa’s Common Position on the Post-2015 Development Agenda documents, the vision is for “an integrated, prosperous and peaceful Africa, driven by its own citizens and representing a dynamic force in the global arena.” Key among Africa’s aspirations is to achieve prosperity that is based on inclusive growth, and development that is people driven and that also unleashes the potential of women and youth. Given this stated goal of the Common Position and the central aim of Agenda 2063 to eradicate poverty in all its ramifications in one generation and to build shared prosperity through social and economic transformation; the theme of this conference is very timely.
The AEC will bring together policy-makers, researchers and development practitioners from Africa and from around the world to make a strategic contribution to the implementation of Africa’s vision and the identification of concrete actions necessary for poverty and inequality reduction in the context of the post-2015 development agenda. The Conference will provide an opportunity to assess the impact of current growth strategies on poverty, inequality and human development in Africa. In addition, the conference will discuss successes, lessons learned and identify remaining gaps, challenges and emerging issues on the topic. It will encompass in-depth presentations of policy-oriented research by both established academics and emerging researchers from the continent who will debate and recommend policy options on how to reduce poverty and inequality for Africa’s equitable, inclusive and environmentally sustainable development.
Achieving human development and the MDGs in Africa
Comparable to other regions of the world, African countries have made significant strides in all the dimensions of human development, including in education, health and income indicators. The 2014 UNDP Human Development Index (HDI) shows that 17 out of 52 African countries have achieved high and medium levels of human development. HDI values for countries in Central, East, Southern and West Africa increased by 26% from 1990 to 2013, making it the third fastest growing region after East Asia (36%) and South Asia (34%). In comparison, HDI levels in the Arab States and Latin America for the same period were 19% and 18% higher, respectively. Improvements in human development in Africa can be attributed to rapid economic growth based on increased resource flows from natural resource extraction, growth in agriculture and services, human capital development and improved governance.
However, recent MDG Progress Reports on Africa (e.g. African MDG Report 2014) show that the region is on track to meet only two out of the eight MDGs-the goals related to universal primary education and gender parity at primary level of education. In contrast, insufficient progress has been made with respect to the poverty and hunger goals. The limited inclusiveness of economic growth and low growth and inequality elasticity of poverty are key factors in explaining the slow progress on these particular goals. The environment and health goals are the least likely to be met even though some appreciable progress has been recorded in recent times. Moreover, progress achieved to date is vulnerable to reversals due to countries’ weak capacity to respond to various shocks that is compounded by inadequate and poorly funded social protection systems.
Addressing poverty and inequality in Africa
Africa’s GDP growth has been high and has remained robust since the mid-2000, with growth rates averaging 5% and well above the global average of 3% per annum (African Economic Outlook, 2014). Improved macroeconomic management, robust domestic demand, steady remittance flows, favourable commodity prices and increased export volumes have been supportive of the continent’s growth, such that midway through 2014, Africa was riding a high wave of growth whilst the rest of the world was still in recession. The high average continental growth rate nonetheless masks significant variation across sub-regions and various country typologies i.e. resource rich countries, land-locked countries, fragile states, as well as across low income countries (LICs) and middle income countries (MICs). While agriculture and services have been the main engines of growth, oil and mining activity in resource rich countries has weakened as a result of the fall in commodity prices, especially crude oil. Manufacturing production increased in a few countries but often declined or remained too small to boost growth. The service sector, including traditional services such as transport, trade, real estate and public and financial services, and new services, such as information and telecommunication technologies (ITC), are boosting growth in many countries. It is important to note that structural economic transformation in Africa has bypassed the manufacturing sector. Factors of production moved away from agriculture to services instead of into the manufacturing sector-value added in manufacturing fell from 14 percent to 10 percent of GDP between 2000 and 2008.
The past decade of relatively high growth has bred a new and optimistic narrative on Africa and its economic prospects. However, the continent continues to face many challenges. For instance, there is broad consensus among Africa’s leaders and development practitioners that structural transformation and progress in terms of equitable and sustainable development has been limited in Africa, despite the volume of wealth created from recent growth. The growth process has neither been inclusive nor equitable. It has also not been transformational enough to respond to challenges ushered by external and internal economic shocks, high unemployment rates, rapid urbanization and changing demographic patterns largely characterized by a youth bulge. Most importantly, countries have not succeeded in substantially reducing poverty and inequality across the continent so that in spite of the appreciable growth over the past decade, the fall in poverty (percentage of people below $1.25 a day) from 56.5 percent in 1990 to 48.5 percent in 2010 [2014 African MDG Report] was relatively small. The inescapable conclusion is that African growth has not been people-centered.
Africa’s socio-economic progress faces significant reversals due to weakening governance and institutional frameworks, lingering conflicts and growing radicalization, high unemployment rates-particularly for the youth and women; and environmental degradation and climate change. In addition, there is growing concern that the high levels of income inequality throughout Africa are holding back progress. Africa has the second highest unequal distribution of income and consumption within countries after Latin America and the Caribbean. But there is evidence that the Gini index fell from 0.458 to 0.439 between 1990-99 and 2000-09 - one of the most appreciable declines across developing groups (African MDG Report 2014). In addition, a large proportion of Africa’s population is living in countries where inequality is rising (UNDP forthcoming).
A post 2015 agenda for Africa
The Sustainable Development Goals (SDGs) currently under negotiation respond to Africa’s challenges and take on global issues that require a global partnership for sustainable development. The overarching objective of the SDGs is to eradicate poverty by 2030. These goals include a focus on the achievement of sustained and inclusive economic growth, full and productive employment as well as decent work for all. The agenda beyond the MDGs now focuses on a shared future with shared responsibilities and one universal and transformative agenda for sustainable human development. In this regard, African institutions and countries have a key role to play in meeting the unfinished agenda of the MDGs and accelerating equitable and sustainable development in Africa. Sustaining the momentum achieved by governments, civil society and private sector actors during national and regional consultations on the post-2015 development agenda, is vital to producing clear goals and developing implementation and monitoring frameworks that respond to new challenges including climate change and social protection.
The draft SDGs advocate for renewed action on poverty eradication at the global level and include transformational elements as outlined in the report of the High-Level Panel of Eminent Persons on the Post-2015 Development Agenda (UN, 2013). The five proposed transformational “shifts” include: (i) leave no one behind; (ii) put sustainable development at the core; (iii) transform economies for jobs and inclusive growth; (iv) build peace and effective, open and accountable institutions for all; and (v) forge a new global partnership.
African countries now have the opportunity to review policy options and implementation frameworks that would accelerate the economic and social transformation of the continent towards a more sustainable growth path that results in reduced inequalities and the eradication of poverty. As such, the AEC 2015 will contribute to the policy dialogue and advocacy on inclusive growth by presenting the latest empirical evidence on poverty and inequalities in Africa and provide critical thinking on how policy makers, development partners, the private sector, CSOs and academia should support the planning and implementation of the post-2015 agenda.
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Transnet: Ports still the best ‘Gateway into Africa’
He was positive about the organisation’s mid-financial year performance, Transnet Port Terminals (TPT) chief executive Karl Socikwa said, outlining in detail ways in which TPT could improve and grow its business in the context of changing economic, political and social climates, both at home and abroad.
The group’s mid-year results were to be released on 29 October 2015. Socikwa was speaking at an informative stakeholders engagement breakfast in Rosebank, Johannesburg on Wednesday.
Socikwa said he believed the work done by Transnet Port Terminals and its sister group advanced South African competitiveness in not only global markets, but more vitally, on the African continent. An efficient and responsive economic infrastructure network was being built with African trade partner countries, which were set to flourish despite uncertainty in the global economic environment, particularly in Asia.
Referring briefly to events in South Africa over the last few weeks, Socikwa summed up the marvel of the economic, political and social space in South Africa in a single word: “volatility”. These events included protests against corruption and university fees increases, as well as the Economic Freedom Fighters’ march on financial institutions on Tuesday.
He added “that while there is never a dull moment in South Africa today, and it is not for the faint-hearted, South Africans should not view these pessimistically, rather looking at the changes as an opportunity to do the right things”.
From a business perspective and organisational performance, Socikwa said that while some state-owned enterprises got “bashed, and some more deservedly than others”, they should never lose sight of the important role they played in aspiring growth and building the country.
“Financial health is important,” he said, “and TPT is looking to drive its financial sustainability around not being too reliant on the state for assistance.”
Transnet’s Market Demand Strategy is dedicated to aggressive investment in infrastructure and people. The focus is on upgrading port facilities with the most up-to-date technology and using the human element of operations more constructively.
“There are some exciting ideas and technologies in the industry,” Socikwa said, “not only for improving infrastructure and communications, but also (for) optimising how we as TPT can integrate more effectively with our sister divisions at Transnet.”
In an ever-changing global economy, particularly in the post-2008 downturn cycle, there had been a lot of sacrifice in investments, said the chief executive. The best way to counter the changes and uncertainty was to find new ideas, new ways of doing things in order to ensure vibrancy in the market.
One way to do this was to not only invest in hard assets, but in soft assets as well, namely the people of Transnet. “We have a lot of good people on the ground at this company, people who know, from experience, how things work and how they can be improved, finding practical solutions to practical problems.”
Africa was a market Transnet needed to penetrate as much as possible, he said, and South African ports, as far as moving trade and exchanging ideas was concerned, had an important role in connecting the continent. It was an effective “gateway” to these markets.
“We shouldn’t get despondent that the Chinese downturn affects our dependency; we should look for opportunities in regional Africa, working with other growing African economies,” he said.
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Intellectual property for an emerging Africa
The African Ministerial Conference 2015: Intellectual Property for an Emerging Africa co-organized by the Government of Senegal and WIPO in cooperation with the African Union (AU), and the Japan Patent Office in Dakar, Senegal from November 3 to 5, is an opportunity to explore the relevance of intellectual property (IP) to African economies and its role in supporting the development of vibrant innovation ecosystems and creative industries across the continent.
In the global knowledge economy, innovation, creativity and IP hold far-reaching promise for spurring economic growth, trade and employment in countries at all stages of development. Realizing this promise, however, is not automatic. Each nation must find the right mix of policies to mobilize the innate innovative and creative potential of its economy.
Today, the intellectual component of production is far greater than in the past and IP is an indispensable mechanism for translating that know-how into a tradeable commercial asset and capturing the competitive advantage that it represents.
IP rights establish a secure legal framework for investment in – and commercialization of – innovation and creativity, enabling firms, including innovative start-ups, to navigate the perilous process of transforming an idea into a commercially viable product and to compete with success in the global marketplace, while safeguarding the public interest. As such, IP is a key factor in creating an environment in which innovation and creativity can flourish and generate future growth and prosperity.
It can only deliver these benefits, however, when the IP system is based on an appropriate policy mix that balances the often competing interests of producers on the one hand and consumers on the other hand. This is the challenge that faces policy-makers in Africa and across the world.
Over the years, the main IP focus in Africa has been to establish and develop basic IP infrastructure, regulatory frameworks, capacity-building, and human capital. The goal now is to put these IP tools to work in support of the economic objectives of African economies.
Africa has a great tradition of innovation and creativity and has extraordinary creative resources but has often struggled to realize their full economic potential. That is changing. Increasingly, African economies are seeking to add value to their innovative and creative resources through the IP system.
Although African economies still face many competing and compelling policy priorities, innovation and IP are slowly but surely rising up the African policy agenda.
I believe that Africa is on the cusp of something new and exciting. Today, the continent is home to some of the world’s fastest growing economies and African nations are embracing the opportunities afforded by the knowledge economy and the digital revolution to reduce poverty, enhance agricultural productivity, and boost industrial competitiveness in their drive to secure sustainable and inclusive development.
The 2015 Global Innovation Index (GII) reveals positive developments in the African innovation landscape. Mauritius, South Africa and Senegal top the Sub-Saharan Africa rankings this year, and a growing number of African economies are punching above their economic weight in the area of innovation. For example, in Sub-Saharan Africa, low-income economies like Rwanda, Mozambique and Malawi are now performing on a par with middle-income economies. Similarly, Burkina Faso, Kenya, Mali, and Uganda are generally outperforming other economies with similar levels of development.
Despite limited means, these African economies are proving efficient in translating the investments they make in innovation and the creative economy into concrete outputs.
The African Ministerial Conference 2015 is an opportunity to explore with policy- and thought-leaders how IP can best support the scientific and technological transformation of African economies, and to deepen understanding of the strategic importance of IP as a driver of economic and social development and poverty reduction across the continent.
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Botswana towers over peers in trade reforms
Botswana’s leading role in ratifying the World Trade Organisation’s (WTO) Trade Facilitation Agreement (TFA) will reduce costs associated with trading of its goods and services by an estimated 13.2 percent.
This was said by an official of the Switzerland-based institution at a workshop held in Cape Town last week.
Parliament ratified Botswana’s commitment to the TFA in June this year to become the second African state to do so and the eighth country in the 161-member trade organisation.
The TFA is aimed at expediting the movement, release and clearance of goods, including goods in transit.
It also sets out measures for effective cooperation between customs and other appropriate authorities on trade facilitation and customs compliance issues.
Speaking at the workshop on Wednesday, WTO’s head of external relations, Bernard Kuiten praised Botswana’s early commitment towards the agreement, which is expected to increase global exports by between US$ 1.1 trillion and US$ 3.6 trillion depending on the timeframe and extent to which the provisions of the TFA are implemented.
“To take a leading role as Botswana did is very plausible, especially among developing countries that still face many challenges in enabling smooth trade.
We hope more African countries will follow in the same footsteps so that we can reach the two-thirds of the 161 members needed for the agreement to be enforced,” he said.
As at October, 52 countries had committed to the agreement.
Concluded at the WTO’s 2013 Bali Ministerial Conference, the TFA is the first multilateral trade agreement concluded since the establishment of the WTO in 1995.
“The TFA broke new ground for developing and least-developed countries in the way it will be implemented.
For the first time in WTO history, the requirement to implement the agreement was directly linked to the capacity of the country to do so.
In addition, the agreement states that assistance and support should be provided to help them achieve that capacity,” he added.
A Trade Facilitation Agreement Facility (TFAF) was also created at the request of developing and least-developed country members to help ensure that they receive the assistance needed. The facility will assist such countries to reap the full benefits of the TFA and to support the ultimate goal of full implementation of the new agreement by all members.
Presenting a paper on Trade Facilitation and Non-Tariff Barriers at the workshop, a researcher at the Trade Law Centre, Willemien Viljoen said the challenges faced by Southern African countries, if addressed, present an opportunity to increase benefits associated with trade liberalisation, which can contribute to economic growth, development and poverty alleviation.
Among some of the factors that Viljoen said usually contribute to high cost of doing business in the region include high transaction costs and complex trade procedures, high transportation costs, inadequate and inefficient infrastructure (including road, rail and ports), weighbridge calibrations and technical standards, roadblocks and checkpoints, corruption and excessive documentation requirements.
Although Botswana has outpaced its Southern African peers in implementing the trade reforms, Viljoen said the country still needs to improve in areas such as electronic payment, use of customs brokers, risk management and border agency coordination.
The workshop, which was organised in conjunction with the Friedrich-Ebert-Stiftung (FES), was held under the theme ‘Current and Future Challenges for the Multilateral Trading System – Perspectives from Southern Africa’.
Civil society and media delegates from Botswana, Lesotho, Madagascar, Mozambique, Namibia, South Africa, Swaziland, Zambia and Zimbabwe participated in the workshop.
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Africa’s Tripartite FTA, an opportunity for UAE businesses
Ahead of the 3rd Africa Global Business Forum (AGBF) which will take place on 17 and 18 November in Dubai, the Dubai Chamber of Commerce and Industry, has developed a research paper highlighting economic and investment potential in Eastern and Southern Africa and its potential to drive increased imports and exports through Dubai.
The formation of Africa’s Tripartite Free Trade Area between 26 African states, is expected to benefit the economic cooperation between Africa and the UAE. Dubai represents the Africa gateway to Asian markets, Africa’s major trading partner. As a major trading partner, and with increased Africa-intra trade, more exports and imports will be transited through Dubai.
H.E. Hamad Buamim, President and CEO, Dubai Chamber, stressed that while imports and exports had seen impressive growth at 10% and 11% respectively (2009-2014), he said that it is essential to create more space for the private sector to perpetuate the integration process. This creates potential opportunities for foreign investments to take place in Africa to help boost its productive capacity and to overcome other obstacles.
He added that the development of African trade would drive up the rate of per capita income, which in turn will lead to the growth of services such as schools, hospitals, banks, and transportation and other sectors. He also said that among the many investment opportunities posed by the continent, the UAE has competitive advantages in areas such as ports management, infrastructure, telecom, transportation, and hospitality.
The President and CEO of Dubai Chamber also flagged that Dubai has become one of the most important commercial, financial and logistics centers for many of the African countries on the back of Dubai’s strategic location, connectivity and world class infrastructure and attractive business environment.
In order to further facilitate exploring business opportunities for UAE and Dubai businesses in Africa, the Dubai Chamber has opened two representative offices in Ethiopia and Ghana and will soon another one in Mozambique. It is also organising the Africa Global Business Forum, for the third consecutive year, which will discuss growth potential in Africa – including technology, funding tools such as pension funds, as well as the impact of low oil and commodities prices on growth.
The research paper highlighted that the UAE was Africa’s 19th major export destination with 1.1% of Africa’s world total exports. Africa’s exports to UAE registered a cumulative annual growth rate of about 11% over the last 5 years 2009-2014. Moreover, the UAE is Africa’s 18th major import supplying market with a share of 1.6%. UAE exports to Africa have registered 9.6% cumulative annual growth rate over the same period.
The Chamber’s research paper highlights that the formation of the prospective Africa’s free trade area, in the medium term, will bring about major economic and structural reforms in most of the African economies. The projected increase in Africa’s private demand and government development expenditures are expected to encourage more investments in Africa. Over the last decade, Africa was considered among the most important investment destinations on the UAE investment map even before the announcement of the African free trade area. Furthermore, the establishment of a free zone of this size among Africa’s largest trade blocs requires solid infrastructure to increase Africa’s productive capacity, whether it be the establishment of land routes, rail or air, establishment of power stations, set up of warehouses and silos, refrigerators, expansion and enhancing operational efficiency of the African banking sector.
The three blocks to form the free trade area are the Southern African Development Community (SADC); the East African Community (EAC) and the Common Market for Eastern and Southern Africa (COMESA). The created free trade will encompass on average about 61% of Africa’s total GDP – about USD1.5 trillion and a number of big countries with huge growth potential, such as Ethiopia, Kenya and Mozambique. The agreement is expected to come into force by 2017.
AGBF is by invitation only and is expected to see more than 1,000 guests including heads of states, prime ministers and chairmen, as well as leading figures from banks and sovereign funds.
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Open Data Readiness: Mauritius well positioned to start implementing
Mauritius is well placed to implement an open data initiative and demonstrates strong top-level commitments to transparency and to innovation, reveals an Open Data Readiness Assessment (ODRA) conducted by the World Bank in June this year in the context of the Open Data programme for the country.
An Open Data Readiness validation workshop was held on Wednesday afternoon at the Rajiv Gandhi Science Centre, in Bell Village, during which the ODRA findings were presented to stakeholders. Organised by the Ministry of Technology, Communication and Innovation (MTCI), the event brought together stakeholders from several sectors to validate the World Bank’s assessment of the country’s situation on open data readiness.
The ODRA reveals that Mauritius is well poised to open up datasets. Some 15 datasets spanning budget data, expenditure data, labour statistics, education and health statistics and many more are ready to be made available in machine readable format and so released as open data, that is, data that can be used, reused and redistributed freely.
Other main findings also show the following: there is a strong demand for open data from developers, private sector and researchers; and, Government could move quickly with an open data since it already publishes statistical data, but needs to conform to requirements of open data (terms of use and format).
In order to implement a sustainable program, the ODRA recommends the importance of a strong and sustained leadership across Government. It also notes that the MTCI and Statistics Mauritius are well placed to lead change at operational level with the support from the Reforms Steering Council and Ministries.
The Open Data programme
It is recalled that Mauritius is moving forward with an Open Data programme conducted in partnership with the World Bank. Hence, in June 2015, a World Bank field mission was in the country to assist in the evaluation of its situation on open data readiness and provide valuable inputs to help come up with the right strategy to exploit open data initiatives as is the case in large democracies like India and the USA.
In the context of the assessment, a series of focused meetings/interviews were held with key stakeholders including government, citizens and businesses. Main themes addressed were: leadership, law, Government institutions, management of data, demand for data, capabilities of business, finance and national IT infrastructure.
Some benefits of open data include: transparency and accountability (civil society organisations and media will analyse the data and publish results feeding into policy); data exchange across government (obtaining datasets within government becomes easier); and data-informed policy making (policymakers base their decisions on applicable, relevant data).
Data has become the new oil in today’s world. By going through open data, economies across the world from Europe, America, Asia to Africa, have witnessed a boost in economic growth.
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FDI continues to rise in the first half of 2015
Global FDI flows picked up in the first half of 2015, increasing by 13% compared to the second half of 2014. If we exclude the drop in the first half of 2014, global flows have been on a rising trend since the first half of 2013.
In the first half of 2015 global FDI flows increased by 13% compared to the second half of 2014, to USD 883 billion. If we exclude the drop observed in the first half of 2014 due to Verizon buying out Vodafone’s investment in its US operations which reduced both inward investment in the United States and outward investment from the United Kingdom, global FDI flows have been on a rising trend since the first half of 2013. However, the increase observed in the first half of 2015 is largely due to FDI inflows to the United States and to Hong Kong, China hitting record-levels.
Press reports noted a number of United States corporations announcing that they intend to be involved in cross-border M&A deals that would reduce US their tax obligations, showing that the increase in inward investment in the United States is not just related to improving economic performance there. Figure 1 shows global FDI flows from Q1 2013 to Q2 2015. The measure was constructed using FDI statistics on a directional basis whenever available, supplemented by measures on an asset/liability basis when needed.
The analysis of trends for global FDI flows on a quarterly basis is not easy due to the high volatility of the flows which are often very much affected by a few very large deals which occurred during a specific quarter. Looking at FDI flows for each half year seems to offer more visibility on the trends: if we exclude the drop in the first half of 2014 due to the Vodafone Verizon deal, global flows have been on a rising trend since the first half of 2013, and remained above USD 300 billion in each quarter. Global FDI flows increased by 29% in the first quarter of 2015 as compared to the previous quarter, from USD 387 billion to USD 499 billion, due to inward FDI flows to the United States hitting a recordlevel (at USD 200 billion) and due to Hong Kong, China’s net incurrence of FDI liabilities of USD 71 billion. For Hong Kong, China the first half of 2015 (at USD 131 billion) exceeds annual levels recorded during the period 2005-2014. Global FDI flows decreased in the second quarter by 23% to USD 384 billion, a level which remains comparable to the last quarter of 2014. Global FDI flows would remain below the peak reached in 2007 even if the rapid pace of the 1st half of 2015 was maintained in the 2nd half of 2015.
In the first half of 2015, FDI flows into the OECD area increased by 50% as compared to the second half of 2014, from USD 375 billion to USD 564 billion, and FDI outflows were up 10% from USD 526 billion to USD 581 billion. FDI inflows to the OECD area accounted for around 55% of global FDI inflows, as compared to an average 45% in 2013 and 2014. FDI inflows received by the United States in the first quarter largely accounted for the increased share of the OECD as compared to the rest of the world. OECD FDI outflows accounted for around 75% of global FDI outflows, slightly higher than the average 70% in 2013-2014. This development was largely driven by high levels of FDI outflows from Ireland recorded in the first quarter of 2015 and to net disinvestments (negative outflows) from Hong-Kong, China in the second quarter of 2015 which reduced FDI outflows from the rest of the world. FDI flows into EU countries increased by 30% (from USD 136 billion to USD 177 billion) and outflows increased by 9% (from USD 205 billion to USD 224 billion); however, these levels remain below levels reached before the financial crisis. FDI inflows to the G20 as a whole increased by 18% from USD 530 billion to USD 624 billion but the situation varies across G20 OECD and non OECD sub-groups: FDI flows to OECD-G20 economies increased by 49% but were offset by a 15% drop in FDI inflows received by the non-OECD G20 economies. FDI outflows for the G20 decreased by 17% to USD 441 billion with G20 sub-groups showing similar declines.
OECD FDI inflows more than doubled in the first quarter of 2015 (to USD 368 billion) as compared to the previous quarter, then dropped by 47% in the second quarter (to USD 196 billion) but still remained above their levels observed in all quarters of 2013 and 2014 (except Q3 2014). Overall, they increased more than 50% in the first half of 2015 compared to the second half of 2014.
This development was largely due to record levels of FDI inflows in the United States in the first quarter of 2015 (USD 200 billion), of which USD 86 billion was in the chemical sector and USD 81 billion was in the ‘other manufacturing sector’. There were some large deals that could explain these inflows. 77% of the funds received by the United States came from Luxembourg: they were likely passed through Luxembourg SPEs before reaching the United States, and it is therefore difficult to identify the real sources of the funds. FDI inflows received by France and Germany recovered from net disinvestments observed in the second half of 2014 (to USD 13 billion and USD 3 billion respectively), and FDI flows in the Netherlands almost tripled (to USD 30 billion excluding flows received by SPE). FDI flows received by other major OECD recipients remained stable in the first half of 2015: the United Kingdom at around USD 40 billion, Australia at around 24 billion and Ireland at around 23 billion. In contrast, Canada received USD 24 billion as compared to USD 33 billion.
Within 17 economies as a whole who reported FDI instruments for the first half of 2015: total equity inflows and intercompany debt flows more than doubled, representing respectively 64% and 12% of total flows received by those economies, while reinvestment of earnings decreased by 11%, accounting for 23% of the total. The increase in equity capital was due to its role in the large M&A deals in the first half of 2015. However, the situation varies across countries. The increase of FDI equity flows was largely due to equity transactions in the United States which almost tripled (from USD 55 billion to USD 170 billion) and was slightly offset by decreases in Germany (from USD 20 billion to USD 7 billion). Intercompany debt inflows were boosted by increases in the United States (from USD 42 billion to USD 54 billion) but also in France and Germany where debt inflows were up from USD -8 billion and USD -26 billion respectively to USD 0.3 billion and USD -11 billion. Reinvestment of earnings went down driven by decreases in the United States (from USD 50 billion to USD 43 billion).
In the non-OECD G20 countries, FDI inflows declined in the first half of 2015 by 12% in China after very high levels at the end of 2014 (from USD 165 billion to USD 145 billion), by almost 40% in Brazil as the country officially entered a recession (from USD 51 billion to USD 31 billion), by 30% in Indonesia (from USD 13 billion to USD 9 billion) and by 36% in Argentina (from USD 4.6 billion to USD 3 billion). FDI flows received by India increased by 36% (from USD 16 billion to USD 22 billion) and almost tripled in Russia from very low levels in the second half of 2014 (from USD 4.7 billion to USD 12 billion). South Africa recorded negative FDI inflows (USD -1.4 billion).
FDI outflows from the OECD area increased by 10% in the first half of 2015 as compared to the second half of 2014 but the situation varies across countries. FDI outflows from Ireland more than doubled to USD 75 billion, of which USD 51 billion was equity capital recorded in the first quarter, mostly in the pharmaceutical sector. Outward FDI flows from the Netherlands, excluding resident SPEs, and net acquisition of FDI assets by Spain more than doubled: from USD 13 billion to USD 25 billion and from USD 14 billion to USD 30 billion respectively. FDI outflows from Canada, France, as well as net acquisition of FDI assets of Japan remained stable at around USD 43 billion, USD 24 billion and USD 62 billion respectively. Those developments were offset by decreases in outward investments from other major OECD investors: FDI outflows from the United States decreased from USD 192 billion to USD 177 billion; FDI outflows from Germany decreased from USD 59 billion to USD 35 billion. The United Kingdom recorded net disinvestments of USD -32 billion.
Within 17 economies as a whole who reported FDI instruments for the first half of 2015, total equity outflows increased by 17%, accounting for one third of the total outflows, while reinvestment of earnings remained stable (accounting for 55% of the total) and intercompany debt flows decreased (1% of the total). The increase in equity capital flows was largely due to its role in the large M&A deals in the first half of the year. As for FDI inflows, the situation varies across countries. The increase in FDI equity outflows was driven by increases from Ireland where equity outflows tripled (from USD 17 billion to USD 51 billion), and to a lesser extent from France where equity outflows also tripled from USD 4 billion to USD 13 billion. Those developments were partly offset by decreases recorded from the United States (from USD 37 billion to USD 9 billion). Reinvestment of earnings remained stable: they were slightly up in the United States, Germany and Sweden, but dropped in the other economies. The drop in intercompany debt flows was driven by negative intercompany debt outflows from Germany (at USD -7 billion as compared to USD 21 billion in the second half of 2014) and by decreases from France (from USD 15 billion to USD 5 billion) and Ireland (from USD 7 billion to USD 0.3 billion).
In the non-OECD G20 economies, FDI outflows of Argentina reached USD 2.8 billion of which USD 2.5 billion was recorded in the second quarter of 2015, which exceeds annual levels recorded during the period 2005-2014. FDI outflows of Brazil and China increased by 11% and 7% respectively (from USD 9 billion to USD 11 billion and from USD 49 billion to USD 53 billion), and FDI outflows of India doubled (from USD 0.9 billion to USD 2 billion). Those developments were offset by large decreases of FDI outflows from Russia (from USD 34 billion to USD 18 billion) and to a lesser extent from Indonesia (from USD 3.8 billion to USD 3 billion) and from South Africa (from USD 4.9 billion to USD 0.9 billion).
Due to the record levels of FDI flows received by the United States in the first quarter of 2015, they are the largest recipient of FDI inflows worldwide in the first half of 2015, followed by China (the largest recipient of FDI worldwide in 2010-2014), the United Kingdom and Brazil. The United States remained by far the largest source of FDI worldwide, followed by Ireland, Japan, China, Canada and Germany.
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East Africa close to having a commodities exchange
East African countries are inching closer to the establishment of a harmonised commodities exchange that will ensure food security and stabilise prices of non-perishable agricultural crops within the region.
The commodities exchange is also expected to foster regional integration and bolster the bloc’s negotiating power with the rest of the world in the pricing of key exports.
Kenya, Uganda and Rwanda, under the Northern Corridor Integration Projects initiative, have agreed on the need to run a joint commodities exchange and warehouse receipting system to ensure transparency in standards and pricing of farm produce.
The three countries agreed on a group of 18 commonly tradable commodities to be traded on the exchange, of which five – wheat, maize, beans, milled rice and dried soya beans – have been earmarked for initial trading.
The prices of the crops will be determined by the forces of supply and demand.
Standards of quality and quantity will be harmonised across the region.
The heads of state of Kenya, Uganda and Rwanda agreed that each country set up its own commodities exchange but harmonise trading regulations with the rest of the member states.
“Each country is going to establish its own exchange but will have to harmonise the standards, legal framework, institutional framework and warehouse receipting system,” said Richard Sindiga, director of economic affairs at Kenya’s Ministry of EAC Affairs, Commerce and Tourism.
Each country is expected to create its own private-sector-driven commodities exchange that will be linked electronically to facilitate interaction between buyers and sellers from all the partner states.
The establishment of a commodities exchange is part of the Northern Corridor Integration Projects of which Tanzania and Burundi are not members. The Northern Corridor is the transport strip linking the landlocked countries of Rwanda, Uganda, Kenya and South Sudan.
Among the projects under the initiative are the standard gauge railway line, development of an oil refinery, a crude oil pipeline, tourism and power generation, transmission and interconnectivity.
A commodities exchange is a market where commodities such as agricultural products and derivative products such as futures contracts are traded.
However, no contract based on commodities will be traded on the EAC’s commodities market in the beginning.
Rwanda already has a functional commodities exchange that is private sector-driven while Uganda’s Cabinet has approved the regulatory framework for the establishment of the market, which is now awaiting parliamentary approval.
Rwanda’s Commodity Exchange Bill is before parliament for approval while local shareholders are expected to acquire more shareholding in the exchange.
Kenya prepared a Cabinet memorandum for the creation of the commodities exchange after completing a feasibility study in June.
The Cabinet paper is still awaiting approval by the executive.
Once approved, Kenya will start putting in place the legal and regulatory framework for the commodities exchange.
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COMESA Central Banks propose to enshrine price stability in law
Delegates from Central Banks in COMESA member States have recommended to their institutions to enshrine price stability in law as one of their primary objectives.
This was one of the recommendations that emerged from a validation workshop on a study conducted by the Central Banks titled “Effects of Fiscal Policy on the Conduct and Transmission Mechanism of Monetary Policy in Selected COMESA Member Countries”.
The study identified the key challenges of implementing monetary and fiscal policies and made recommendations aimed at ensuring the effectiveness of fiscal and monetary policy coordination based on best international practices.
During the workshop hosted by the COMESA Monetary Institute (CMI) in Nairobi from 19th to 20th October 2015 the delegates also recommended the curtailing of fiscal dominance to contain uncertainties in the conduct of monetary policy.
Further, they proposed for the development of a robust financial market infrastructure to support the functioning of financial markets and monetary operations. Capacity building on liquidity forecasting and macro-modeling was also proposed.
CMI Director Mr. Ibrahim Zeidy underscored the significance of the studies in addressing daunting challenges in macroeconomic management in the region.
“The study will significantly contribute to policy advice that will ensure macroeconomic stability in member countries, and hence the achievement of macroeconomic convergence in COMESA region,” Mr Zeidy said.
Delegates from Central Banks of 11 Member States namely Burundi, Egypt, Kenya, Malawi, Mauritius, Rwanda, Swaziland, Sudan, Uganda, Zambia, and Zimbabwe attended the workshop.
The hosting of the workshop followed the decision of the COMESA Committee of Governors of Central Banks during their 20th Meeting which was held in Kinshasa, DR Congo in November 2014 that directed the CMI to conduct the study.
At the same time the COMESA Monetary and Exchange Rate Sub-Committee meeting was also held to consider the status of implementation of its work plan for 2015 and prepared the one for 2016. This is in readiness for the Governors meeting scheduled for November 2015.
The proceeding of the workshop will be published as a CMI knowledge product soon.
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tralac’s Daily News selection: 30 October 2015
The selection: Friday, 30 October
Just released: South Africa’s September 2015 trade statistics
The India-Africa Forum Summit: outcome documents, commentaries
Delhi Declaration: 'Partners in Progress: towards a dynamic and transformative development agenda'
On trade and Industry: Work closely together within the framework of the Tripartite Free Trade Agreement which brought together SADC, EAC and COMESA for the expansion of trade and investment linkages and extend the framework to other Regional Economic Communities
Support the establishment of the Continental Free Trade Area aimed at integrating Africa’s markets in line with the objectives and principles enunciated in the Abuja Treaty, establishing the African Economic Community and its resolve to support the work of the Continental Free Trade Area-Negotiating Forum towards concluding the negotiations by 2017;
Promote Public Private Partnership by encouraging Indian businesses to set up skills development units in African industrial zones with the aim to train African engineers, technicians, managers and workers as well as other experts in areas such as food security and solar energy;
India-Africa Framework for Strategic Cooperation
While underlying the importance of private investment in achieving sustainable and inclusive economic growth, the two sides decide to share experience and knowledge in this regard, and to:
Embark on sensitization efforts to create greater awareness of India's DFTP scheme among businesses in Africa and appeal for the extension of this duty free preference scheme to all African states; Accelerate trade between Africa and India through a coordination mechanism composed of representatives of the Government of India and the African diplomatic Missions represented in India to promote investment from Africa into India and facilitate the setting up of African-owned businesses in India;
Summit speeches and national statements can be accessed here
President Kenyatta calls for value addition (Daily Nation), Make in South Africa, says foreign minister Nkoana Mashabane (Economic Times), Frannie Leautier: 'Africa is facing new challenges' (IOL), More power to Indo-Africa partnership (editorial comment, Economic Times)
Continental Sanitary and Phytosanitary Committee for Africa (African Union)
The main aim of the Continental SPS Committee is to support the implementation of Comprehensive African Agriculture Development Programme through ensuring the coordination of SPS matters. The specific task of the Continental SPS Committee would be to mainstream SPS issues (food safety, plant and animal health) into CAADP implementation and other agriculture, trade-related, and environmental initiatives within its results framework. The meeting of the Continental SPS Committee, scheduled for October 28-30 2015 in Kampala, is to attain the following objectives:
Roberto Azevêdo: ‘More flexibility needed to achieve outcomes in Nairobi’ (WTO)
“While members have identified some important potential deliverables for Nairobi, they should not be taken for granted. I have always said that we need to work hard and show both flexibility and a willingness to contribute if we are going to make progress. But those elements have not materialised, and so the reality is that we are not moving forward. “We need two things for success at the Ministerial Conference. First we need serious engagement on substance in the Negotiating Groups. Second, members need to rethink the red lines that they have been drawing. We must see more flexibility and pragmatism in the handful of days and weeks remaining if we want to have positive outcomes in Nairobi.”
WTO MC10: Developing countries propose reforms on agriculture, cotton, safeguards (Bridges)
WTO publishes its annual suite of trade and tariff data (WTO)
The WTO has released new editions of its four key statistical publications: International trade statistics, Trade profiles, World tariff profiles and Services profiles. The four publications provide detailed breakdowns of the latest data on world trade.
OECD Global Forum on Competition: keynote address by ILO's Guy Ryder
The share of national income going to labour has declined in almost all G20 countries, with productivity rising much faster than real wages. Within the labour share, the highest earners have captured an increasingly large portion, while those at the bottom have seen their shares decline significantly. Many emerging G20 economies, despite having lifted millions of people out of absolute poverty over the past two decades, have seen sharp increases in income inequality. Overall, the reality for emerging markets and developing countries is more mixed than for the developed world. Inequality has been increasing in some – such as Indonesia and China – while falling in others – such as Brazil and Argentina.
Turning vision into reality: Namibia's long-term development outlook (ISS)
Using the International Futures forecasting system, this paper first presents a plausible long-term population forecast for Namibia. This forecast is then used to assess key targets from the National Development Plan (NDP4) and Vision 2030, Namibia’s long-term development strategy. The paper then plots three scenarios to chart Namibia’s potential progress. [The author: Steve Hedden]
Namibia: Urban migration will require massive capital investment (New Era)
With Namibia’s urban population projected to increase from the recorded 33% in 2001 to approximately 75% in 2030, the rural urban migration phenomenon will require major capital investments to provide access to water and sanitation services. This will especially apply to the very poor who cannot and will not be able to afford to pay for these absolutely essential services, says Minister of Agriculture, Water and Forestry John Mutorwa. Mutorwa sent out this warning on Tuesday when he addressed the SADC Future Challenges Forum on Food, Water and Energy Security at the Polytechnic of Namibia.
Strong El Niño presence does not bode well for Namibian farmers (New Era)
The Namibian agricultural sector is still reeling from the effects of the 2013 drought (the worst in 35 years) and the prolonged dry spell of 2014/15. Some 550 000 Namibians are in direct need of food aid now and government has rolled out a comprehensive drought food aid programme worth more than N$55 million.
Namibia: Solidarity tax compulsory (The Namibian)
The solidarity tax announced by President Hage Geingob this week will be compulsory for both individuals and corporate entities, State House confirmed yesterday. Aochamub said the tax will be a significant component of a complex set of measures to eradicate poverty by 2025.
Rovuma Basin Resources: update (Club of Mozambique)
The Mozambican state could gain as much as $212bn in taxes, dividends, bonuses and other payments over the lifetime of the liquefied natural gas project in Palma, in the northern province of Cabo Delgado, according to the chairperson of the National Hydrocarbon Company, Omar Mitha. Mitha’s calculations are that, if only two LNG trains are built, payments to the state will amount to $67bn dollars in the project’s lifetime (up to 2035). But if six trains are built, then payments will rise to $212bn dollars. With six trains, Mitha put the increase in Mozambican GDP by 2035 at $39bn dollars. Per capita GDP, he added, would rise from the 2014 figure of $650 to $4,500 in 2035, in real terms.
Mozambique: discussions on the 5th Review under the PSI (IMF)
“While medium-term prospects remain positive, short-term challenges have become more complex. As other countries in the region, Mozambique is currently experiencing an external shock associated with the drop in commodity prices, lower growth in trading partners, and delays in investment associated with large natural resource projects. Excessively expansionary policies in 2014 (especially on the fiscal side) also contributed to the current difficulties the country is facing. Imports have continued to grow at a fast pace at 17% year-on-year, while exports have stagnated. Capital inflows have also declined substantially compared to a year ago. This has created pressures in the foreign exchange market and has caused a sharp decline in international reserves and a depreciation of the metical."
90% of income in Africa used to fund imports (ThisDay)
Maritime experts have said ports in African countries are designed mostly for imports rather than export, noting that not less than 90% of the income accruing into the African continent is used to fund import. According to them, design and location of ports in African countries do not make room for export trade whereas in Western states ports are designed purposely for exports. The maritime experts stated this in a communiqué issued at the end of the just concluded inaugural edition of the international sea trade and investment convention 2015 with the theme “Exploring New Trade Frontiers.”
South Africa's Transnet: Ports still the best ‘Gateway into Africa’ (Shipping News), Transnet able to take on more debt to build infrastructure (Business Day), Higher volumes at ports lift Transnet (Business Day)
Mozambique: Quantifying spillover effects from large farm establishments (World Bank)
Almost a decade after large land-based investment for agriculture increased sharply, opinions on its impact continue to diverge, partly because (positive or negative) spillovers on neighbouring smallholders have never been rigorously assessed. Applying methods from the urban literature on Mozambican data suggests that changes in the number and area of large farms within 25 or 50 kilometers of these investments raised use of improved practices, animal traction, and inputs by small farmers without increasing cultivated area or participation in output, credit, and nonfarm labor markets; or, once these factors are controlled for, yields. The limited scope and modest size of the estimated benefits point toward considerable unrealized potential. The paper discusses ways to systematically explore the size of such potential and the extent to which it is realized.
Botswana, Zimbabwe explore trade opportunities (Mmegi)
Last week, business people from the Confederation of Zimbabwe Industry and Business Botswana met in a forum to strengthen trade ties between the two countries’ business communities and consider joint venture opportunities.
Health finance successes in SADC: service provider needed (FinMark Trust)
Standard Bank moves into Ethiopia (IOL)
Standard Bank Group has expanded its East African footprint with the official opening of a representative office in Ethiopia. The bank's chief executive, Ben Kruger, who opened the representative office in Addis Ababa, said on Friday the growth potential for the East African region continued to attract significant investment. “We are able to leverage our strong position on the continent, our strategic partnership with the Industrial and Commercial Bank of China (ICBC), and our sector expertise in natural resources to facilitate capital investment in support of growth, and to connect African markets to each other,” Kruger said.
A snapshot of China's service sector (OECD)
In the envisaged transition from “made in China” to “created in China”, the service sector is expected to play a prominent role. To that end, the service sector is gradually being provided a more even playing field as privileges for manufacturing industries are being withdrawn and a more equal treatment of producers across sectors is being adopted. This paper provides a snapshot of the service sector, its size, the ownership of its firms, and productivity across types of firms depending on ownership, sector, age, size and region.
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South Africa Merchandise Trade Statistics for September 2015
The South African Revenue Service (SARS) on 30 October released trade statistics for September 2015 that recorded a trade deficit of R0.89 billion. This figure includes trade data with Botswana, Lesotho, Namibia and Swaziland (BLNS).
Including trade data with Botswana, Lesotho, Namibia and Swaziland (BLNS)
The R0.89 billion deficit for September 2015 is due to exports of R92.28 billion and imports of R93.17 billion. Exports increased from August 2015 to September 2015 by R4.86 billion (5.6%) and imports decreased from August 2015 to September 2015 by R4.39 billion (4.5%).
The cumulative deficit for 2015 is R37.35 billion compared to R73.37 billion in 2014.
The month of August 2015 trade balance deficit was revised upwards by R0.19 billion from the previous month’s preliminary deficit of R9.95 billion to a revised deficit of R10.14 billion.
September 2015 Overview
EXPORTS | IMPORTS |
R 92,284,169,052 | R 93,169,251,211 |
Trade Deficit: R -885,082,159 | |
Top 5 countries we exported to: | Top 5 countries we imported from: |
|
|
Trade highlights by category
The month-on-month export movements (R’ million):
Section: | Excluding BLNS: | |
Mineral Products | + R2 627 | + 15.8% |
Vehicle & Transport Equipment | + R1 242 | + 10.9% |
Chemical Products | + R855 | + 16.4% |
Precious Metals & Stones | - R 421 | - 2.6% |
Vegetable Products | - R 614 | - 10.7% |
The month-on-month import movements (R’ million):
Section: | Excluding BLNS: | |
Mineral Products | - R 4 530 | - 27.8% |
Vehicle & Transport Equipment | - R3 107 | - 27.7% |
Chemical Products | - R1 184 | - 10.5% |
Vegetable Products | + R1 233 | + 62.3% |
Machinery & Electronics | + R1 028 | + 4.5% |
Trade highlights by world zone
The world zone results from August 2015 to September 2015 are given below.
Africa:
Trade surplus: R19 960 million – This is a 30.5% increase in comparison to the R15 293 million surplus recorded in August 2015.
America:
Trade deficit: R1 732 million – This is a 41.3% decrease in comparison to the R2 950 million deficit recorded in August 2015.
Asia:
Trade deficit: R18 624 million – This is a 2.6% decrease in comparison to the R19 114 million deficit recorded in August 2015.
Europe:
Trade deficit: R6 610 million – This is a 28.6% decrease in comparison to the R9 261 million deficit recorded in August 2015.
Oceania:
Trade surplus: R 79 million – This is an improvement compared to the R 136 million deficit recorded in August 2015.
Excluding trade data with Botswana, Lesotho, Namibia and Swaziland (BLNS)
The trade data excluding BLNS for September 2015 recorded a trade deficit of R10.12 billion, with exports of R80.05 billion and imports of R90.17 billion. Exports increased from August 2015 to September 2015 by R4.31 billion (5.7%) and imports decreased from August 2015 to September 2015 by R4.81 billion (5.1%).
The cumulative deficit for 2015 is R115.89 billion compared to R149.02 billion in 2014.
Trade highlights by category
The month-on-month export movements (R’ million):
Section: | Excluding BLNS: | |
Mineral Products | + R2 556 | + 17.3% |
Vehicles & Transport Equipment | + R1 163 | + 11.6% |
Chemical Products | + R 715 | + 16.7% |
Base Metals | + R 256 | + 2.8% |
Vegetable Product | - R 607 | - 11.7% |
The month-on-month import movements (R’ million):
Section: | Excluding BLNS: | |
Mineral Products | - R4 550 | - 28.0% |
Vehicles & Transport Equipment | - R3 129 | - 28.0% |
Chemical Products | - R1 428 | - 13.2% |
Vegetable Product | + R1 235 | + 63.7% |
Machinery & Electronics | + R1 006 | + 4.5% |
Trade highlights by world zone
The world zone results from August 2015 to September 2015 are given below.
Africa:
Trade surplus: R10 725 million – This is a 73.5% increase in comparison to the R6 183 million surplus recorded in August 2015.
Botswana, Lesotho, Namibia and Swaziland (Only)
Trade statistics with the BLNS for September 2015 recorded a trade surplus of R9.23 billion, with exports of R12.24 billion and imports of R3.00 billion. Exports increased from August 2015 to September 2015 by R0.55 billion (4.7%) and imports increased from August 2015 to September 2015 by R0.42 billion (16.4%).
The cumulative surplus for 2015 is R78.54 billion compared to R75.65 billion in 2014.
Trade Highlights by Category
The month-on-month export movements (R’ million):
Section: | BLNS: | |
Chemical Products | + R 140 | + 14.7% |
Prepared Foodstuff | + R 129 | + 12.8% |
Vehicles & Transport Equipment | + R 79 | + 5.8% |
Mineral Products | + R 71 | + 3.8% |
Precious Metals & Stones | - R 171 | - 20.0% |
The month-on-month import movements (R’ million):
Section: | BLNS: | |
Chemical Products | + R 244 | + 53.3% |
Precious Metals & Stones | + R 72 | + 24.6% |
Textiles | + R 69 | + 19.4% |
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Third India-Africa Forum Summit: Delhi Declaration 2015
Partners in Progress: Towards a Dynamic and Transformative Development Agenda
1. We, the Heads of State and Government and Heads of Delegation representing the continent of Africa, the African Union (AU) and its Institutions, and the Prime Minister of the Republic of India, met in New Delhi, India on 29 October 2015 for the Third India-Africa Forum Summit, under the theme: ‘Partners in Progress: Towards a Dynamic and Transformative Development Agenda’;
2. We recall the Declarations adopted during our First Summit in New Delhi (8-9 April 2008) and our Second Summit held in Addis Ababa (24-25 May 2011) and the Framework of Enhanced Cooperation and the associated plan agreed upon thereafter as providing a concrete foundation for the consolidation of our strategic partnership;
3. We note that Indians and Africans together comprise nearly one-third of humanity today. However, they continue to be excluded from appropriate representation in the institutions of global governance that were designed for an era since long past. This Summit takes place in the 70th anniversary year of the United Nations. It is also the first since the 50 years of establishment of the OAU/AU as a symbol of pan-Africanism and African Renaissance and the adoption of the 50th Anniversary Solemn Declaration and shortly following the landmark adoption of the Agenda 2063 by the African Union. This is also the first since the landmark 50th anniversary of the Group of 77 last year. We demand urgent collective action to put in place more democratic global governance structures that will assist in more equitable and just international security and development frameworks;
4. We also note that 2015 has been a landmark year as we, along with other partners, have defined a set of Sustainable Development Goals as part of the broader 2030 Agenda for Sustainable Development, adopted by the UN General Assembly, with a special emphasis on Financing for Development, on which the 3rd International Conference was hosted in Addis Ababa. The international community will gather in Paris in November 2015, to conclude an ambitious agreement to combat Climate Change. This will be closely followed by the 10th Ministerial Meeting of the WTO in Nairobi;
5. We look forward to finalizing within the forthcoming global climate change negotiations an ambitious and comprehensive climate change agreement based on the principles of equity and common but differentiated responsibility. The challenge of global warming can only be addressed adequately through technological solutions and the financial resources to manage the transition. The developing countries, while undertaking ambitious actions on their own, need to be assisted to mitigate climate change and to adapt and adjust to its impact;
6. We underscore the special concerns and priorities of the African countries relating to economic and development needs and that protection against vulnerabilities require collective action by the international community. The SDGs build on and strengthen our commitment to the MDGs, focus on economic growth, industrialization, infrastructure and employment as the fundamental drivers of sustainable development and contain an ambitious set of means of implementation to assist developing countries, a package that is being complemented by the Addis Ababa Action Agenda. The need for a supportive international economic environment, enhanced investment flows, a supportive multilateral trade regime and a strengthened framework for technology collaborations, has never been greater to foster and sustain economic growth, eradicate poverty and promote sustainable development. The reform of the international financial system to make it more democratic and more responsive to the needs of the developing countries must be pursued in a sustained manner;
7. We further recognize that the peoples of Africa and India have known each other and traded across the Indian Ocean for millennia. Our shared common experience of a colonial past and the solidarity of our resistance to it, have cemented our common yearning for a more just and fair international political and economic order in an increasingly globalized world. Africa and India represent rapidly growing economies with demographic advantages and are building on their longstanding development partnership including through the active participation of the Indian Diaspora across the African Continent ;
8. We acknowledge that our partnership is grounded in the core recognition that our people are our fundamental resources and that capable and skilled human resources are the foundation for building prosperity for all;
9. We reiterate our commitment to further enhance Africa-India relations in the political, economic and socio-cultural domains based on the principles of mutuality, complementarity and true sense of solidarity as well as the promotion of people to people interactions;
10. We recognize that cooperation in providing widespread access to quality education though scholarships for students and the reach of tele-education utilizing modern communication technology provides great strength to our peoples and institutions. Equally important is skills development to empower workers and enable the development of various economic sectors. This is another area of our ongoing cooperation through extensive programmes of training, capacity building, setting up of training centers and other institutions;
11. We are committed to promoting gender equality and empowerment of women more so since 2015 is designated by the African Union as the Year of Women’s Empowerment and Development. Harnessing talents and abilities of women will greatly help make poverty eradication irreversible, protect and promote human rights and build more nonviolent and environmentally sustainable societies;
12. We confirm our respect for the sovereignty and territorial integrity of States as well as for noninterference in their internal affairs;
13. We reaffirm our respect for human rights as well as the principles of equality and mutual benefit;
14. We believe that the United Nations should function in a transparent, efficient and effective manner and that the composition of the central organs must reflect contemporary realities in order to work towards the 2030 Agenda for Sustainable Development and tackle the challenges of a world shrunk by the modern forces of globalization, facing threats ranging from a vastly transformed security environment to climate change;
15. We reaffirm our strong commitment for a comprehensive Reform of the United Nations system, including its Security Council, to make it more regionally representative, democratic, accountable and effective;
16. We recognize that the longstanding and multifaceted Africa-India development partnership is based on equality, friendship and solidarity, represents South-South cooperation in all its dimensions, which encompass human resource development through scholarships, training, capacity building; financial assistance through grants and soft credit to implement various public goods projects, including for education, healthcare and infrastructure; trade preferences; technology collaborations; humanitarian, financial and in-kind assistance in emergency situations; maritime cooperation; deployment of peacekeeping troops who also conduct a range of development and humanitarian tasks; collective negotiations in multilateral fora for common causes and concerns, among others;
17. We acknowledge that terrorism and violent extremism have emerged as primary threats to nations and our societies and condemn them in all their forms and manifestations. The menace of non-state actors including armed groups has acquired a new dimension as they expanded geographically, acquired resources and new instruments to spread extremist ideology and draw recruits. Tackling this challenge requires global strategy and cooperation. We emphasize that no cause or grievance can justify acts of terror and resolve to maintain zero tolerance against terrorism. We call on all countries to ensure that their territories are not used for cross-border terrorist activities. We strongly condemn direct or indirect financial assistance given to terrorist groups or individual members thereof by States or their machinery, to pursue such activities;
18. We emphasize our strong obligation to fight drugs and human trafficking and other forms of transnational organized crimes such as hostage taking, piracy, and illicit proliferation of small arms and light weapons and reiterate our resolve and commitment to work together in this regard;
19. We recognize that the growing trade, investment and technology linkages provide a solid foundation to our engagement since our businesses, through such linkages, provide a strong dimension to our partnership. In this regard, we welcome the signing of the Tripartite Free Trade Agreement (TFTA) in Sharm El Sheikh, Egypt, by the leaders of 26 African countries belonging to the three Regional Economic Communities – Southern African Development Community (SADC), East African Community (EAC) and Common Market for East and Southern Africa (COMESA). India commends the African Union on the launching of the negotiation process for the establishment of the Continental Free Trade Area (CFTA) aimed at integrating Africa’s markets in line with the objectives and principles enunciated in the Abuja Treaty, establishing the African Economic Community (AEC) and its resolve to support the work of the Continental Free Trade Area-Negotiating Forum (CFTA-NF) towards concluding the negotiations by 2017. India looks forward to working closely together with these emerging economic architectures for the expansion of trade and investment linkages;
20. We further recognize the huge potential for expansion of trade and investment between Africa and India, and Africa appreciates the commitment of India to continue to contribute significantly to building African Institutions and capacities through supporting industrialization and enhancing beneficiation and value addition processing of raw materials in Africa;
21. We note that Africa and India, besides having large landmasses, have very long coastlines and a large number of island territories. We recognize the importance of the oceans and seas to the livelihoods of our peoples and that maritime security is a pre-requisite for the development of the Blue/Ocean economy. India would work to support Africa, as appropriate, in the implementation of the AU 2050 Africa’s Integrated Maritime (AIM) Strategy in accordance with International Maritime Law;
22. We take into account that new international security environment and the evolving nature of conflicts are posing new challenges on the effectiveness of the traditional peacekeeping missions;
23. We appreciate the connection between Africa’s Agenda 2063 with its First Ten Year Implementation Plan and the focused priorities being pursued by the Government of India which should help towards working to build peace and prosperity for our peoples through poverty eradication, provision of healthcare, education, employment, access to modern energy services, infrastructure, connectivity between resources and markets;
24. We recognize that healthy communities across gender and age are our moral responsibility and essential for people to contribute effectively to economic development. Providing universal access to primary healthcare and battling diseases are our common urgent priorities. In this regard, the access to quality and affordable medicines and treatment is a crucial area of our cooperation;
25. We note that the space technologies are instrumental in enabling long term development plans as well as managing short term emergencies; and that digital information and communication technologies are rapidly transforming our world. Connectivity and access to these technologies that permeate all sectors of economy including education, healthcare, manufacturing, trading, financial services; and society is greatly empowering for peoples;
26. We acknowledge that the Duty Free Tariff Preference scheme offered by India would play a significant role in increasing trade between Africa and India and underline the need to create a conducive environment for the extension of the scheme to all African countries;
27. We agree that improving the productivity of agriculture, with a sustainable and judicious use of inputs is vital to ensure food and nutritional security which represents a significant challenge and opportunity for all of us. In this regard, we appreciate Africa’s continental projects such as the Comprehensive Africa Agricultural Development Program (CAADP);
28. We support the Program for Infrastructure Development in Africa (PIDA) and underscore the importance of enhancing cooperation in the Blue/Ocean Economy due to its strategic importance to the two parties;
29. We commit to address bottlenecks that have slowed down the progress of the Africa-India Partnership and agree to put in place the necessary financing mechanism to ensure the full implementation of the Action Plans of the India-Africa Forum Summits;
30. We appreciate the need to further deepen our friendship and enhance our partnership focusing on more concrete and implementable areas of cooperation that would impact positively on the lives of the peoples of Africa and India.
31. We agree to cooperate in the following fields:
i) Economic
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Continue to work together in promoting investment exchanges and encourage establishment of direct trade relations through opening of new markets and raising the level of trade relations between the two sides in order to contribute to sustainable growth and economic development;
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Support long term capital flows to Africa to stimulate investment, especially in Infrastructure and in this regard, support the Program for Infrastructure Development in Africa (PIDA), particularly with regard to increasing financial flows to the program. Call equally upon all members of the international community to remove and cease imposing unilaterally motivated economic coercive measures jeopardizing the movement of funds, trade exchanges and socio-economic development;
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Call upon the international community to expedite the process of enabling African Heavily Indebted Poor Countries (HIPCs) to benefit from all initiatives aiming at alleviating the burden of debts for HIPCs, within the agreed concepts and principles of sustainable development;
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Enhance collaboration in the use and development of appropriate technologies as well as in emerging and high technology areas since technology provides solutions to many of our common challenges;
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Cooperate and coordinate in the field of women empowerment, enhancing women's economic, social and legal status, providing women with job opportunities and better chances to participate in the economic, social and political spheres and continue joint efforts aimed at eradicating discrimination against women;
ii) Trade and Industry
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Work closely together within the framework of the Tripartite Free Trade Agreement (TFTA) which brought together SADC, EAC and COMESA for the expansion of trade and investment linkages and extend the framework to other Regional Economic Communities;
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Support the establishment of the Continental Free Trade Area (CFTA) aimed at integrating Africa’s markets in line with the objectives and principles enunciated in the Abuja Treaty, establishing the African Economic Community (AEC) and its resolve to support the work of the Continental Free Trade Area-Negotiating Forum (CFTA-NF) towards concluding the negotiations by 2017;
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Fast track the implementation of the Duty Free Tariff Preference scheme offered by India since this would play a significant role in increasing trade between Africa and India;
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Work towards creating conducive environment for trade facilitation in accordance with the WTO Bali Trade Facilitation Agreement;
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Support establishment of Small and Medium Enterprises (SMEs) and Medium and Small Industries (MSIs) in order to promote employment creation and income generation for people of both sides;
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Promote Public Private Partnership (PPP) by encouraging Indian businesses to set up skills development units in African industrial zones with the aim to train African engineers, technicians, managers and workers as well as other experts in areas such as food security and solar energy;
iii) Agriculture
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Pursue joint cooperation in the agricultural and food security fields and support the implementation of the Comprehensive Africa Agricultural Development Program (CAADP) to increase productivity, conserve land and environment as well as ensure food and nutritional security;
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Further increase our cooperation in improving farming techniques through appropriate and affordable technology, appropriate use of irrigation, improving crop varieties and other measures;
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Promote investment in agribusinesses and food processing industries to generate employment and greater revenue
iv) Energy
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Intensify our ongoing cooperation in developing renewable energy generation including solar, wind, hydro, geo-thermal and bio-mass along with building power transmission systems;
v) Blue/Ocean Economy
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Promote cooperation in the Blue/Ocean economy, towards the sustainable development of marine resources; place special emphasis on closer collaboration in developing sustainable fisheries, combating illegal and unregulated fishing, managing the marine resources, exploring non-marine resources, conducting hydrography surveys, promoting eco-tourism, developing renewable energy, disaster risk reduction through modern early warning tools, pollution control and other coastal and ocean studies;
vi) Infrastructure
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Intensify ongoing cooperation in training, capacity building, consultancy and project implementation through concessional credit in infrastructure areas, including water supply management, maritime connectivity, road and railway construction and upgrading; vii) Education and Skills Development
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Provide and facilitate the access and enrollment of African students and academicians to India’s premier institutions of higher learning in an effort to boost Africa’s human resource capacity including in areas such as engineering, medical technology and agriculture;
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Collaborate in capacity building and the use of remote sensing technologies for natural resource mapping, including agriculture, water, forest cover, mineral and marine resources, disaster management and disaster risk reduction, including early warning of natural disasters;
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Foster cooperation among scientific and research centers in Africa and India to make use of ICT and modern technologies and geographic information systems;
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Cooperate in making technology and digital networks become effective tools in our fight against poverty, and ensure it benefits the needy, improves delivery of services, catalyzes development and increases citizen participation in governance, as well as promotes financial inclusion and empowerment through access to banks, credit and social insurance against diseases and accidents;
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Promote joint coordination and cooperation to improve the future of the youth through programs for capacity building and knowledge exchange among youths on the two sides and strengthen their capacities to meet the challenges of globalization and its repercussions;
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Continue to provide the necessary support for the establishment and operationalization of the institutions agreed by the two sides;
viii) Health
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Enhance joint cooperation in health and pharmaceutical development as well as telemedicine and traditional medicine, jointly combat diseases and pandemics and increase the efficiency of health institutes through comprehensive training programs and coordination at international level to harness modern scientific technologies for medicine and treatment;
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Cooperate in the training of doctors and healthcare personnel including through telemedicine, medical missions, development and utilization of modern technology, enhanced access to generic medicines, promotion of the use of traditional medicines and regulatory procedures as well as combating the challenges posed by pandemics;
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Cooperate in ensuring access to affordable medicines and foster innovation to address public health needs of developing countries by making full use of the flexibilities available under the WTO TRIPS Agreement;
ix) Peace and Security
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Continue collaboration in the fields of Peace and Security including conflict prevention, resolution, management and peace building through exchange of expertise and training programs; strengthening regional and continental early warning capacities and mechanisms; enhancing the role of women in peace keeping and propagating the culture of peace;
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Strengthen our cooperation in enhancing capacity to contribute to peacekeeping and peace-building efforts including support to the African Standby Force (ASF), and through the recent announcement by India to conduct a new training course at the Centre for UN Peacekeeping (CUNPK) in New Delhi; and by other Peacekeeping Training Centers in Africa dedicated for Training of Trainers from upcoming Troop Contributing Countries from Africa. Strengthen our cooperation for greater involvement of the Troop Contributing Countries in decision-making process;
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Promote the strengthening of the UN Counter-Terrorism mechanisms; call upon all States to ensure strict compliance with the UN Security Council sanctions regime on terrorism; and call on all countries to ensure that their territories are not used for crossborder terrorist activities. We urge the international community to cooperate with urgency to adopt the Comprehensive Convention on International Terrorism in the 70th Session of the UNGA;
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Promote peace and support post-conflict states to enhance their development priorities;
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Enhance cooperation and coordination between Africa and India to combat terrorism in all its forms and manifestations; confront transnational crime to further support international efforts in this regard;
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Increase our cooperation in securing sea lines of communication, preventing transnational crimes of piracy, trafficking of drugs, arms and humans through surveillance;
x) Multilateral Fora
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Demand urgent collective action to put in place a more representative global governance architecture, reflective of the contemporary geo-political realities, that will assist in more equitable and just international security and development frameworks;
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India notes the common African position and the aspirations of the African countries to get their rightful place in an expanded UN Security Council as new permanent members with full rights as contained in the Ezulwini Consensus and Sirte Declaration. Africa takes note of India’s position and its aspirations to become a permanent member with full rights in an expanded UN Security Council. We emphasize the need for an early implementation of the UNGA Decision 69/560, so as to make a decisive push for achieving concrete outcomes on the United Nations’ Security Council reform agenda;
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Recall and reaffirm the principles behind the fight against colonialism, xenophobia, Apartheid and violation of human rights in which India and Africa fought together;
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Support a negotiated solution recognizing the legitimate rights of the Palestinian people, resulting in a sovereign, independent State of Palestine living side by side at peace with Israel as endorsed in the Quartet Roadmap, relevant UN and AU Resolutions and in line with the provisions of international law;
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Intensify coordination of positions at the United Nations, G-77 and other global political, economic and commercial fora in order to jointly tackle issues of common interest in accordance with the spirit of the Africa-India Partnership;
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Urge the developed countries to undertake ambitious mitigation commitments to reduce their greenhouse gas emissions and honor their commitments under the United Nations Framework Convention on Climate Change (UNFCCC) to provide financial resources as well as transfer of technology and capacity building support to developing countries to enable them to effectively address the impacts of climate change;
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Enhance cooperation and coordination in finalizing an ambitious and comprehensive climate change agreement during the forthcoming COP 21 negotiations which will be held in Paris, France;
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Welcome that COP 22 on Climate Change will be held on African soil in Marrakesh, Morocco in 2016 and agree to work together to ensure that the concerns of developing countries are met;
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Commit to promote good governance to bring development to our peoples. We will further our cooperation in this regard through efficient use of information and communication technologies. We also look forward to deepening our cooperation and sharing of experiences in establishing fair and transparent electoral processes;
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Promote and enhance cultural interaction amongst peoples and media exchange programmes as well as interaction between intellectuals in Africa and India, and encourage private sector endeavours in cultural investments to better inform the peoples of two sides about the realities of their societies;
32. Monitoring Mechanism
We, the Heads of State and Government and Heads of Delegation from African countries and the Prime Minister of the Republic of India agree to adopt the 2015 India-Africa Framework for Strategic Cooperation and agree on the establishment of a regular formal monitoring mechanism to review the implementation of the 2015 India-Africa Framework for Strategic Cooperation and its Plan of Action within the agreed timeframe;
33. The next India-Africa Forum Summit will be held in the year 2020;
34. We, the Heads of State and Government and Heads of Delegation from African countries thank their Excellencies the President and Prime Minister of the Republic of India, the Government and people of India for hosting this Summit and the warm reception and hospitality extended to us. The Prime Minister of India, on behalf of the Government and people of India takes this opportunity to thank the Heads of State and Government and Heads of Delegation from Africa and the African Union for their participation in the Third India Africa Forum Summit and for their most useful suggestions to further intensify the India-Africa partnership.
Done in New Delhi on 29 October 2015