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New Unified Insolvency Act can help African SMEs improve access to finance in 17 countries
With support from the World Bank Group, 17 African countries, members of the Organization for the Harmonization of Business Law in Africa (OHADA), adopted a Unified Insolvency Act last week in Côte d’Ivoire.
This new law replaces the previous 1998 law which was widely believed to be lacking key features of a modern insolvency regime, particularly as regards reorganization proceedings and the treatment of creditors.
The World Bank and the International Finance Corporation worked with OHADA to provide technical assistance with respect to the Act. World Bank and IFC teams have worked closely with OHADA governments since 2011 to provide in-depth analysis on country experiences from around the world in insolvency and debt enforcement. The assistance also involved working closely with the OHADA legislative drafting team to assist them in their deliberations on key technical issues.
The new law will apply to all 17 OHADA member states and complements the previously adopted revised Uniform Act on Secured Transactions to provide a more modern credit infrastructure in OHADA.
These two laws will form the backbone of the legal framework for access to credit for businesses in OHADA and can be expected to play a crucial role in mitigating investor and creditor risk, reducing the instability that could be caused by high levels of non-performing loans. This, in turn, lowers the cost of credit.
The possibility of using reputational, traditional and non-traditional collateral helps individuals and MSMEs gain access to finance as well as more favorable and competitive financing options.
At the same time, the predictability of a sound insolvency system provides lenders with a higher degree of confidence that when a business is unable to pay its debts, appropriate procedures will be followed to maximize the value of the business.
Key features of the new OHADA legislation include:
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A conciliation procedure to encourage saving viable companies
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Simplified regulations for small enterprises
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A new cross-border insolvency regime based on the UNCITRAL Model Law
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Clarified order of priority of creditors
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Incentives for creditors who provide fresh money to troubled companies to facilitate their restructuring and recovery
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A common legal framework to oversee the activities of insolvency practitioners as well as trustees.
The simplified regulations for small businesses are particularly noteworthy as they were developed in recognition of the fact that the most businesses in OHADA are SMEs. Procedures for SMEs would need to be streamlined and related costs reduced for this new credit infrastructure environment to benefit all levels of the market.
The adoption of the UNCITRAL Model Law on cross-border insolvency by so many states that are highly linked through trade relationships promises a more efficient and streamlined process for dealing with business failures that cross borders within OHADA and beyond.
The new law leaves implementing regulations to be resolved at the local level by each national government. These will be crucial to ensuring that all of the benefits of the new legal framework can be maximized.
The World Bank Group offers structured, holistic and multifaceted credit infrastructure services (secured transactions, insolvency and credit reporting) to client countries around the world. The Bank’s Credit Infrastructure services includes advice on credit reporting; secured transactions & collateral registries; and insolvency, creditor rights & debt resolution.
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Produce quality country profiles that conform to international norms and standards
The Focal Points for the United Nations Economic Commission for Africa (UNECA) from Capo Verde, Côte d’Ivoire, Ghana, Gambia, Guinea, Niger, Nigeria and Senegal, countries for which the development of profiles is programmed for 2014-2015 as well as the Focal Points from the Economic Community of West African States (ECOWAS), from the West African Economic and Monetary Union (WAEMU) and from the Economic and Statistical Observatory for Sub-Saharan Africa (AFRISTAT), closed their meeting in Abidjan (Côte d’Ivoire) with the Sub-Regional Office for West Africa of the Economic Commission for Africa.
In their respective presentations, countries reviewed the changes and institutional organization of their statistical systems as well as the systems of production and dissemination of data currently in effect, with a special emphasis on the different actors involved, the nature of their operational relationships and outlooks. The economic and social situation in 2014 and the outlook for 2015 and 2016 were also discussed.
As for ECOWAS, WAEMU and AFRISTAT, they presented their respective mechanisms of collaboration with countries in terms of exchanges and transmission of data and the institutional and incentive systems set up as well as the constraints encountered.
On its part, the ECA presented the concept note for the country profiles, through the context, objectives, format and content, the calendar for production and the model of data required. Moreover, the ECA underlined the need for close collaboration with the Member states and the Regional Economic Communities to ensure the production of quality country profiles, based mainly on national source data that conforms to international norms and standards.
Discussions with the Focal Points revealed difficulties in the explicit definition of indicators as well as in the coordination at the national level with the different actors involved in the system of production and dissemination of data. In this regard, they underlined the imbalance of the ratio between the professionals in statistics and the total workforce of the National Statistical Institutes, the low level of resources allocated to the national statistical systems, the difficulties in institutional anchorage and the operationalization of the coordination and steering bodies.
At the end of the meeting, the participants formulated recommendations and commitments:
For the ECA, they recommended, among other things, a regular exchange of information with the Focal Points on the production of country profiles in order to enable best practices to be shared in the country, the dissemination and restoration at the national and regional levels the country profiles developed; the provision of technical assistance for the strengthening of the production and dissemination of data and advocacy with ministers in charge of the economy and finances and those in charge of planning and development to facilitate the mission of the Focal Points, notably in the collection, compilation and transmission of data to the ECA.
With regards to Member states, it was recommended notably to respond within the prescribed deadline to the requests for data by the ECA, to share regularly with the ECA the constraints and needs in terms of capacity strengthening, to participate regularly in the meetings organized by the ECA in the framework of the country profiles and to work towards setting up a centralized/coordinated statistical system in order to avoid multiple sources for an indicator for the same country.
As for the Regional Economic Communities, the participants recommended that they set up an institutional mechanism for sharing data with the ECA, strengthen collaboration with the ECA in the implementation of their statistical activities and programmes, participate regularly in the meetings organized by the ECA in the framework of the development of the country profiles and strengthen support for countries in upgrading their norms and standards in the production and dissemination of statistical data in order to improve the comparability of national data.
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tralac’s Daily News selection: 16 September 2015
The selection: Wednesday, 16 September
Tomorrow, in Maputo: National content as a means to achieve inclusive growth
CTA, the Confederation of Economic Associations of Mozambique, with the support of FAN - Fund for Business Environment - organises on Thursday September 17, its 1st International Conference on National Content under the motto: 'National Content as a Means to Achieve Inclusive Growth'. This conference aims to disseminate, improve and harmonize the national understanding of National Content, namely the monitoring of the implementation of its respective political and legal instruments, as well as debating how may Mozambique's Trade Policy support industrial development; and discussing SMEs certification and quality rules, their use and access.
Starting tomorrow, in Nairobi: COMESA transport industry regional dialogue
The convening of this event arises from a call from businesses to have direct dialogue with regional trade facilitators, in order to come up with common solutions to impediments to trade in areas of delays in transit time, cargo handling, multiple rules and requirements, cabotage rule, cargo tracking systems among others. The outcomes of the meeting are: to develop a common position on key policy, regulatory and practical recommendations that are to be presented to the Ministers of Infrastructure in October, 2015 for adoption and further implementation by the public and private sector and to formally establish a common platform for the private sector to engage policy makers on transport and trade logistics constraints in the COMESA region.
Transnet seeks to cross SA’s borders (IOL)
Transnet, the South African ports, rail and pipelines operator, is pursuing opportunities to expand on the continent and in the Middle East as the state-owned company seeks to redress an over-dependence on its home market. The utility wants 25% of revenue to come from outside South Africa by 2025, acting CEO Siyabonga Gama, 48, said in an interview at Bloomberg’s office in Johannesburg. That compares with 4.2% of its R61.2 billion ($4.5 billion) in the 12 months through March this year. The company has started a process to form a new unit, to be called Transnet International Holdings, which will oversee the foreign expansion, he said.
Roberto Azevêdo: 'Nairobi Ministerial must deliver on development' (WTO)
Director-General Roberto Azevêdo, at a joint meeting of the Africa, Least-developed (LDC) and African, Caribbean and Pacific countries (ACP) groups, on 14 September, said that the priority at the Ministerial Conference in Nairobi, in December, must be delivering on development. He assured them that their issues are at the forefront of his mind and “that I will do everything I can to support meaningful development and LDC outcomes in Nairobi”. This is what he said:
Amina C. Mohamed: report on an informal meeting of AU Trade Ministers (WTO)
Although there were questions raised on the definition of success, Ministers were unanimous that the Tenth WTO Ministerial Conference in Nairobi - the first to be held in Africa - must be successful. There was pragmatism in the range of views expressed by Ministers. Most noted that outcomes that could be harvested at MC10 should be harvested. Ministers were keen for the adequate number of ratification to enable the coming into force of the Trade Facilitation Agreement (TFA) and the Amendment to the TRIPS Agreement by MC10. There was positive acknowledgement of “new entrants” (accessions), as part of the deliverables for Nairobi. However, there were questions regarding the status of unresolved negotiating matters in the work programme after the Nairobi Ministerial Conference. Some felt that unresolved questions should be taken forward. Ministers agreed to deepen their exchange of views on this question.
Ministers reviewed the question of the development aspects of the rules-based Multilateral Trading System. There was a consensus that the ultimate goal of trade policy was welfare and development. It was imperative that trade contributes to growth of a healthy global economy from which individual members would derive benefits. Ministers reiterated the fact that development should remain at the heart of the outcomes of MC10. A number of Ministers took the position that development was not a standalone, but horizontal issue.
The high and low politics of trade: can the WTO's centrality be restored in a new multi-tiered global trading system? (World Economic Forum)
Developing countries should brace for possible tremors in upcoming US Federal Reserve tightening (World Bank)
The new research paper assesses the potential impact on developing economies if financial market reaction to Fed tightening mirrors the upheaval that occurred after the U.S. central bank signalled in May 2013 that it was poised to taper its pace of quantitative easing. “Financial stress in global markets tends to disproportionately affect emerging and frontier economies,” said Kaushik Basu, World Bank Chief Economist and Senior Vice President. “This paper explores how market volatility resulting from the upcoming tightening cycle could relay significant adverse implications for growth and financial stability. This would fall the most heavily on the most vulnerable countries.”
Continental Education Strategy for Africa 2016-2025 (African Union)
In the bid to “create” a new African citizen who will be an effective change agent for the continent’s sustainable development as envisioned by the AU and its 2063 Agenda, the African Union Commission has developed an Africa comprehensive ten-year continental education strategy. This strategy is driven by the desire to set up a "qualitative system of education and training to provide the African continent with efficient human resources adapted to African core values and therefore capable to achieve the vision and ambitions of the African Union. Those responsible for its implementation will be assigned to "reorient Africa’s education and training systems to meet the knowledge, competencies, skills, innovation and creativity required to nurture African core values and promote sustainable development at the national, sub-regional and continental levels". The guiding principles and pillars serve to guide the implementation of the Continental Strategy pursing twelve Strategic Objectives supported by specific areas of work. [Downloads in English, French]
Building capacity for a results-oriented engagement between the AUC and RECs on IDA-supported economic development (World Bank)
SA-AGOA: selected updates
Progress in talks on US-SA stalemate (Business Day): Talks between US and SA veterinary officials in Pretoria over the removal of SA’s health-related import bans on US chicken, beef and pork made "some progress", the office of the US trade representative said in a terse statement on Tuesday.
US and SA agree on poultry imports (Business Report), Media release by SA's DTI/DAFF (Agoa.info), Stefan Selig: 'US and Africa to make trade history' (Business Day), The US-SA Strategic Dialogue takes place today (GCIS)
South Africa's Promotion and Protection of Investment Bill: Local bodies add voice to investment bill worries (Business Day), Investors mull leaving over bill, says EU chamber (Business Day)
Jacob Zuma: International Relations Peace and Security briefing (The Presidency)
In January and April this year, our own country was forced to confront the difficulties of migration when foreign and African nationals were attacked. We have since then, been working hard with SADC sister countries to find solutions to this international challenge, especially the problem of illegal migration. South Africa experiences a mixed migration flow comprising people who are genuine asylum seekers and those who flee to the country in seek of economic relief. Another challenge within the SADC region exists where borders separate communities and families. In some instances, the borderline does not effectively act as a barrier to these communities, particularly those that conduct normal day-to-day activities such as schooling, trade and medical care as they will keep coming each day. This situation demands innovative solutions.
Migration priorities and normative and institutional frameworks in the IGAD region
Excluding pastoralist mobility and those displaced due to natural and man-made disasters and development projects, the IGAD region currently produces 6.5 million IDPs, 88 % in Sudan, South Sudan and Somalia. This constitutes more than 17% of the global and half of Africa’s IDPs are in the Horn of Africa. It also hosts 2.46 million refugees, while at the same time producing 3.12 million refugees. In relative terms, the region hosts 12% and produces 15% of the world’s refugees, carrying far more than its share of the global burden. As the fifth largest host, Ethiopia alone hosts 665,000 refugees. [The author: Mehari Tadelle Maru]
Botswana: Reserves, bonds to fund 2015/16 deficit (Mmegi)
The Ministry of Finance and Development Planning will finance this year’s projected P4.03bn deficit by drawing down on government’s reserves and bond issuance, a senior official has revealed. The deficit, which represents 2.6% of GDP, is the first in four years but secretary for economic and financial policy, Taufila Nyamadzabo said government would have no troubles funding the shortfall. Botswana may also have to pay R7 billion back to the South African treasury after an adjustment of the share the country was supposed to receive from the Southern African Customs Union (SACU).
Major breakthrough for Zimbabwe on debt (NewsDay)
Speaking at a media briefing in Harare yesterday, AfDB director Sibry Tapsoba, who is the head of a 12-member delegation currently in the country, said the financial institution had set aside some funds to assist Zimbabwe to clear its arrears. He said the amount was yet to be agreed as it required approval from the Abidjan-headquartered AfDB, “but at this point and time we have just reassured the [Finance] minister [Patrick Chinamasa] we have the resources available. The total amount of arrears for Zimbabwe to AfDB is $601 million and the resources that we are putting aside will clear the AfDB arrears, but we must clear the arrears of IMF and the World Bank,” Tapsoba said.
Batoka delays cost $45bn (The Herald)
Delayed construction of the Batoka Gorge Hydro Electric power plant has resulted in economic losses to Zimbabwe and Zambia of at least $45bn, the World Bank has said. Zimbabwe and Zambia are constructing a hydro-electricity generating plant on the Batoka Gorge of the Zambezi River at a cost of an estimated $3bn, which is expected to produce 1 600 megawatts to be shared equally between the two countries. The Batoka hydro project was conceived in 1972 out of a study that the Central African Power Corporation (the predecessor of the Zambezi River Authority) instituted but construction was delayed due to various issues including an impasse between the two states over an outstanding, colonial-era debt. The World Bank, through its organ, the Co-operation in International Waters in Africa assisted in resolving the impasse, paving way for the project to take off. [Cooperation in International Waters in Africa: an overview(pdf)]
Kenya unveils plans for Sh5.3bn power lines to Tanzania (Business Daily)
Kenya on Tuesday made clear its intention to sell excess electricity to Tanzania when it launched the construction of a Sh5.3 billion power transmission line to link the two countries. Kenyan officials said the construction of the 93-kilometre line will start in January and end in December 2017, coinciding with the planned generation of additional 5,000 megawatts (MW) of electricity to the grid.
Equatorial Guinea: 2015 Article IV Consultation (IMF)
A decade–long hydrocarbon boom has led to a fast rise of average incomes and spurred a large scaling up of investment spending on infrastructure, although progress on social indicators has been slow. With hydrocarbon extraction shifting into a trend decline in the context of weak oil prices outlook and still high capital spending, the fiscal position has weakened and fiscal buffers diminished.
Current reporting on private-sector instruments in DAC statistics (OECD)
Questions for discussion: How to encourage broader and more transparent reporting on private sector instruments (as a minimum, provision of descriptive information at project level for instruments classified as ODA)? What are the constraints/limitations that members experience in the reporting on private sector instruments? What are the main sensitivities? [ODA definition: how does the concept of concessionality apply to private-sector instruments?]
President Buhari assures French investors of favourable business environment (Premium Times)
African central bankers forge alliance to promote financial inclusion (ThisDay)
Uganda tops list of EAC open budgets (The Citizen)
India: Exports contract for ninth month in a row (LiveMint)
India: Assessment of state implementation of business reforms (World Bank)
C20 Summit 2015: draft communiqué
Gaborone Declaration on Sustainability in Africa: SA stakeholder’s meeting (GCIS)
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Azevêdo: Nairobi Ministerial must deliver on development
Director-General Roberto Azevêdo, at a joint meeting of the Africa, Least-developed (LDC) and African, Caribbean and Pacific countries (ACP) groups, on 14 September, said that the priority at the Ministerial Conference in Nairobi in December must be delivering on development. He assured them that their issues are at the forefront of his mind and “that I will do everything I can to support meaningful development and LDC outcomes in Nairobi”.
This is what he said:
Good afternoon.
I hope you have all had a good break. It is great to see everybody back in Geneva, looking rested, re-energized and – I hope – ready for the task ahead.
You will all recall the TNC meeting on the 31st of July.
I heard a clear, united message from members at that meeting. There was a real determination to hit the ground running in September with a single-minded focus on delivering substantive, meaningful outcomes in Nairobi.
That’s why I thought it was so important that we meet today. We need to start this work now.
And I wanted my first action to be getting these three groups together.
Our priority at MC10 must be delivering on development.
This will be our first ministerial conference in Africa, and it must deliver for Africa.
So, over the handful of weeks between now and Nairobi, we have to identify some clear potential outcomes in support of development, and particularly in support of the LDCs.
I think there is broad consensus around this – but we still have a long way to go if we are to define clear deliverables.
I want to work closely with all of you in this effort.
As usual, I will meet with you in a variety of different formats and configurations – and I will listen to you individually, as necessary. My door will remain open.
I will also be maintaining close dialogue with the three coordinators – both together and separately as I recognise, of course, that while there are many shared issues you also have different areas of focus
As before, I will aim to complement the work of the chairs.
And I will continue talking to capitals.
During the August break, I explored ideas with the Secretariat and with some delegations which were still in Geneva. I even spoke to some of your ministers and updated them on where things stood. I also invited ideas on the next steps. Everybody expressed their commitment for a successful MC10, and were keen to see meaningful development outcomes in Nairobi, particularly for LDCs.
I will also continue attending meetings convened by members – when I am requested to do so.
Australia has invited me to take part in a meeting of senior officials from a number of members later this week. I am pleased that no time is being wasted. I will take that opportunity to stress the importance of reaching meaningful development outcomes in Nairobi.
Across all of these meetings and during the entire process, please rest assured that transparency and inclusiveness will be maintained.
Indeed, I will be convening a meeting of Heads of Delegations in Room W on Thursday this week.
Now, as we all know, time is definitely not on our side. We have just 92 days left before the start of MC10. We must make each day count.
This can only be done if we focus our conversations on the substantive issues and work towards developing practical, doable outcomes.
We need to move our discussion on from issues of process, broad principles and restated positions to an actual exchange of concrete ideas.
I asked you to use the summer to talk to your capitals, test your red lines, reflect on the red lines of others, and come back with a broader sense of what might be doable from your perspective. Or, better still, I asked you to come back with proposals.
I hope you have done this.
I would like to see further written proposals submitted to the different negotiating groups. I think this will be crucial. And, in this regard, I would like to commend all of you here for putting forward the two proposals that were presented in July:
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First, the textual suggestions submitted by the G90 on Special and Differential Treatment in document JOB/TNC/51 and Corr.1. This proposal provides a solid basis to advance work in this very important area so that we can deliver a significant outcome on S&D for Nairobi. I understand that the Chair of the CTD-SS intends to begin substantive consideration of these proposals, and that she has prepared an intensive work plan for the coming weeks to this end.
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Second, there was the submission from the ACP Group putting forward proposals for bridging gaps on the remaining DDA issues and development outcomes for MC10. This was document JOB/TNC/50. This very comprehensive proposal is a positive signal of your commitment to this process.
We should now seek to build on this work. These proposals are important and very timely.
I hope that they are a sign that we are now shifting towards a results-oriented conversation. And I hope that these kinds of initiatives will proliferate in the weeks to come.
I also want to say a few words about LDC issues which will be a central element of all this work.
Looking at the Bali issues in turn:
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On rules of origin the LDC Group indicated during the July TNC meeting that they will prepare a submission. This will be an important document and I hope it can be brought forward in the next couple of weeks.
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On DFQF a dedicated discussion will be held next week in the CTD to help us find a way forward.
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On the services waiver there has been some progress. 14 members have so far responded as they pledged to do earlier in the year. And I have received assurances from a number of others regarding their intention to grant meaningful preferences.
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On cotton, I am looking forward to seeing concrete proposals from the cotton proponents. Again, this could be an important element of a meaningful development outcome in Nairobi.
In broader terms, we need to maintain and enhance all of our work in implementing the Bali decisions. If we need to tackle other DDA areas of interest to the LDCs it will be important that the LDCs spell that out to propel us closer towards our goal in Nairobi.
So there is a great deal still to do.
The only way of getting to where we need to be is to keep putting proposals on the table.
I say again that I want to work with you over the coming weeks.
I assure you that your issues are at the forefront of my mind – and that I will do everything I can to support meaningful development and LDC outcomes in Nairobi.
I look forward to hearing your thoughts on the practical outcomes that we should seek to deliver.
In closing, I have one additional point to make, which is about ratification.
In addition to urging developed members to take action on the LDC services waiver, I have been urging all members to take the necessary steps to ratify the Trade Facilitation Agreement, and to accept the TRIPS Amendment on Public Health.
It is crucial that we move forward on both of these elements.
They will deliver important gains, but they are also tests of our credibility.
It is a decade since ministers agreed to the TRIPS amendment to provide this unique flexibility. And the current deadline for its acceptance is this December.
So this is another area where we need to act.
If you have any technical questions about what steps need to be taken, then the Secretariat is here to help. Please don’t hesitate. Their doors are open, just like mine.
Thank you.
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Ahead of historic SDGs Summit, UNEP and CalPERS call for policy overhaul to align institutional investment with sustainable development
Only days ahead of the historic summit to adopt the Sustainable Development Goals (SDGs), a new UN study calls on regulators to implement proactive policies that build institutional investment frameworks, institutions and culture with sustainability at their core.
“Financial Reform, Institutional Investors and Sustainable Development: A review of current policy initiatives and proposals for further progress” was produced by the United Nations Environment Programme Inquiry into the Design of a Sustainable Financial System (UNEP Inquiry) and the California Public Employees’ Retirement System (CalPERS).
Henry Jones, Chair of Investment Committee, CalPERS, said: “At CalPERS we have no doubt that our focus on sustainability is entirely consistent with our fiduciary duty – indeed it is an essential part of it.”
“Where doubts on this score remain, they must be dispelled,” he added. “And we need institutions that have the knowledge, the skills and the ways of working that are required to embed sustainability in their investments – to manage the risks it brings, and to capitalize upon the opportunities if offers. We hope every country will reflect on how it can best address these challenges.”
With an estimated annual financing gap of up to US $7 trillion a year in infrastructure investments alone, the global financial system, worth more than US $300 trillion, has a potential to transform the international economic landscape to better serve the needs of humanity.
Nick Robins, Co-Director, UNEP Inquiry, said: “A package of measures is needed to deliver the full sustainability potential of institutional investors. Disclosure is important, but without effective governance frameworks and incentives, this will not drive sufficient change.”
The report advocates for systemic and dynamic policy reform that better aligns institutional investors with policy goals for sustainable development. It shows the evolution in policy intervention, from focusing on disclosure obligations and statements on investors’ core legal duties to a “second generation” approach, addressing the strong synergy between sustainability and other policy objectives.
These new policy instruments include improving prudential regulation to protect retirement incomes and ensure financial stability, regenerating the real economy, and strengthening public trust in the financial system. Making the connections among policy objectives explicit presents an opportunity to maximize benefits in multiple areas.
Seven critical policy objectives that hold the strongest potential for positive change are explored in the report together with fourteen policy tools to get us there.
Policy tools include:
Governments giving public sector pension funds, sovereign wealth funds and other state investment institutions formal sustainability obligations. Such is the case of the Government Pension Fund Global in Norway.
Governments incorporating sustainability into the mandate of prudential regulators, such as the Dutch regulator DNB mission statement including “safeguard[ing] financial stability and thus contribut[ing] to sustainable prosperity in the Netherlands.”
Requirements to disclose and report on policies on sustainability issues. For example, France requires investment institutions to disclose their carbon footprint.
The report charts a pathway to a sustainable investment chain, articulating that these areas will deliver four main outcomes: resilient and efficient portfolios, capital mobilization towards the low-carbon transition, increased economic welfare with more long-term investment and restored public trust in investors and the financial system.
CalPERS and UNEP Inquiry seek to provide new perspectives and proposals on the relationship between institutional investors and sustainable development in the context of a more sustainable financial system. The report’s author, Rob Lake, is an independent responsible investment advisor and expert, working with asset owners. The report is supported by the Principles for Responsible Investment (PRI) and the UNEP Finance Initiative (UNEP FI).
About The UNEP Inquiry
The Inquiry into the Design of a Sustainable Financial System has been initiated by the United Nations Environment Programme to advance policy options to improve the financial system’s effectiveness in mobilizing capital towards a green and inclusive economy - in other words, sustainable development. Established in January 2014, it will publish its final report in October 2015.
About CalPERS
For more than eight decades, CalPERS has built retirement and health security for State, school, and public agency members who invest their lifework in public service. CalPERS is a long-term investor and committed to sustainable investments, as outlined in its investment beliefs. CalPERS’ total fund market value currently stands at approximately $287 billion. Its pension fund serves more than 1.7 million members in the CalPERS retirement system and administers benefits for more than 1.4 million members and their families in its health program, making it the largest defined-benefit public pension in the US.
About the author
Rob Lake is an independent responsible investment advisor, working mainly with asset owners. He was previously Director of Responsible Investment at the UN-supported Principles for Responsible Investment, Head of Sustainability and Governance at APG, and Head of Corporate Engagement at Henderson Global Investors. He has worked as an advisor with investors in Australia, Canada, Iceland, the Netherlands, Singapore, Sweden, the UK and the US. He is an advisor to the OECD and the Investment Leaders Group at the University of Cambridge, and a former member of the Strategy Council to the Norwegian Government Pension Fund Global.
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Informal Meeting of AU Trade Ministers: Concluding Remarks by Ambassador Amina C. Mohamed, Kenya – July 2015
Concluding Remarks by Ambassador (Dr.) Amina C. Mohamed, Cabinet Secretary, Ministry of Foreign Affairs and International Trade, at the Informal Meeting of African Union (AU) Trade Ministers, 20 July 2015, Nairobi – Kenya
Ministers of Trade of the Member States of the African Union met in Nairobi, today, 20 July 2015. Our purpose was to sustain and deepen our substantive preparations for the Tenth WTO Ministerial Conference that will be held in Nairobi, Kenya, from 15 to 18 December 2015. Our Informal Meeting was chaired by Mr. Joshua Setipa, Minister of Trade of Lesotho and Coordinator of the WTO African Group and African Union Ministers responsible for Trade.
Our Informal Meeting was a valuable opportunity to take stock of the developments in the Doha Development Agenda (DDA) negotiations, review our preparatory work, ask questions on the process and, hold an open, healthy and constructive exchange of views on the directions to set for African Trade Policy in the “changed global landscape” of the 21st Century. Ministers agreed that this process of stocktaking amongst AU Trade Ministers responsible for Trade would be work in progress.
Ministers covered considerable grounds. Our conversations were extensive and rich. They reflected a range of views. Ministers were unanimous in reaffirming the strategic objectives for African Trade Policy, inter alia, to intensify the process underway of the structural transformation of African economies, so as to achieve industrialization, rapid economic growth and enhance welfare in order to respond to the demographic pressures of young teeming populations and the urgency for accelerated job creation.
Ministers welcomed the participation and contributions, at the start of our exchange of the presentations by the H.E. Mrs. Fatima Haram Acyl, Commissioner for Trade and Industry of the African Union, H.E. Mr. Mukhisa Khituyi, UNCTAD Secretary-General, Mr. David Shark, WTO Deputy Director-General and, Mrs. Dorothy Tembo, Deputy Executive Director of the International Trade Center.
Ministers noted the agreement, ad referendum, on Saturday, 18 July, by WTO Members, to eliminate tariffs on an expanded list of Information Technology Agreement (ITA) products. Ministers considered that this was good news and a win-win for all. The agreement should provide impetus and energy for recovery and stronger growth in the global economy. The agreement was a positive development as WTO Members prepared for the Tenth Ministerial Meeting here in Nairobi. African Union Trade Ministers were hopeful that the breakthrough in the ITA negotiations translates positively, with knock-on effects for other areas under negotiations. Ministers paid tribute to the leadership of Director-General Roberto Azevêdo for facilitating the negotiations in its critical last stages.
Ministers reaffirmed the value and critical importance of the Doha Development Agenda (DDA). The Decisions at the 9th WTO Ministerial Meeting in Bali represented progress. More work was now required for a successful conclusion of the Doha Round. Ministers underscored the necessity of constructive engagement and pragmatism to achieve economically beneficial results in agriculture, non-agricultural market access, services and a development package for LDCs.
Specifically, it was underlined that agriculture was a central and gateway in the Doha negotiations with implications for rural development, poverty reduction and job creation. Compromise outcomes were at the heart of the Doha negotiations. A negotiated and balanced outcome on the NAMA negotiations had a bearing, together with companion policies, on the industrialization process underway in Africa. The exchange of views made evident sensitivities on DFQF market access that would require further discussions amongst Ministers. Several Ministers reiterated the necessity to discipline fishery subsidies so as to reverse overcapacity in the industry, reverse depletion of fish stocks and ensure the conservation and sustainability of Africa’s maritime resources.
Ministers agreed that our exchange of views would be deepened, constructively, pragmatically, and with a view to engaging, intensively, with other WTO groupings and members to seek balanced compromise outcomes that would ensure WTO-consistent win-win outcomes for the rules-based Multilateral Trading System and contribute to global economic recovery and growth.
A singular point underlined by Ministers was their request that they be engaged in the consultations underway in Geneva and any process of textual development. They further requested that the negotiations on compromise outcomes take account of African Union positions. The position was taken that the outcome from the Nairobi Ministerial Conference should be feasible, meaningful, reflecting pragmatism, compromise and balance.
Although there were questions raised on the definition of success, Ministers were unanimous that the Tenth WTO Ministerial Conference in Nairobi - the first to be held in Africa - must be successful. There was pragmatism in the range of views expressed by Ministers. Most noted that outcomes that could be harvested at MC10 should be harvested. Ministers were keen for the adequate number of ratification to enable the coming into force of the Trade Facilitation Agreement (TFA) and the Amendment to the TRIPS Agreement by MC10. There was positive acknowledgement of “new entrants” (accessions), as part of the deliverables for Nairobi. However, there were questions regarding the status of unresolved negotiating matters in the work programme after the Nairobi Ministerial Conference. Some felt that unresolved questions should be taken forward. Ministers agreed to deepen their exchange of views on this question.
Ministers reviewed the question of the development aspects of the rules-based Multilateral Trading System. There was a consensus that the ultimate goal of trade policy was welfare and development. It was imperative that trade contributes to growth of a healthy global economy from which individual members would derive benefits. Ministers reiterated the fact that development should remain at the heart of the outcomes of MC10. A number of Ministers took the position that development was not a standalone, but horizontal issue.
Ministers were unanimous in underscoring the vital importance of the institutional role of WTO Director-General Roberto Azevêdo. It was felt that he should have scope to facilitate and lead the negotiations. The leadership of the Director-General was commended by Ministers. WTO Members should sustain their support for his efforts. There was understanding and support for the negotiating process in different formats and configurations.
The exchange of views provided an overdue opportunity to take a strategic view on the trade policy directions of African economies in the 21st Century, which would reflect the operational reality that had led to the upward re-basing of the GDP of a number of African economies. To this end, Ministers identified and stressed several points.
Africa was a major growth frontier. To maximize these opportunities, African economies should sustain a domestic agenda for reform, modernization and diversification so as to improve competitiveness. The agenda of reforms would entail economic law and policy, institutional and structural reforms within a framework of a well regulated market economy, the rule of law and good governance. African economies were now operating on the basis of a strong agenda for domestic reforms. These required deepening so as to ensure the dynamic shifts in resource allocation for rapid economic transformation.
To take advantage of economies of scale, efforts should be invested in developing regional value chains that would connect to global supply chains. This objective underscored the urgent necessity of ensuring the achievement of the two thirds majority required for the Trade Facilitation Agreement to come into force. In the context of references to the TFA ratification, Ministers also underscored the urgent need for African members to ratify the TRIPS Public Health Amendment. In doing so, it was noted that there was an achievable target of only 26 more members required for ratification to enable the Amendment to enter into force. It was considered that this was a critical element for a successful Nairobi Ministerial.
As an emerging market, African trade and economic engagement should be offensive and ambitious, based on improved competitiveness, a private sector orientation, with trade rules connected to commercial reality and, strong policy support for Small and Medium Enterprises (SMEs) to ensure job creation.
Ministers acknowledged the positive contribution that the multilateral trading system could have on the African Union’s agenda on boosting Intra-Africa Trade and the formulation of the Continental Free Trade Area.
Ministers were unanimous that LDCs – the most vulnerable amongst WTO Members – required special attention. The fundamental objective was to assist LDCs to achieve competitiveness and maximize the benefits of an open, rules-based multilateral trading system. Several measures were beneficial to this end, including Duty Free and Quota Free Market Access, Preferential Rules of Origin, Cotton, Services waivers, S&D treatment to facilitate the transition to competitiveness.
There was acknowledgement of the positive results from WTO Accessions over a twenty year period. Ministers noted that 33 Governments had acceded between 1995 and 2015. The Accession negotiations of the Republic of Kazakhstan had been successfully concluded and formal action would be taken at the 27 July General Council by Members. Ministers noted and welcomed the Accession of Seychelles on 26 April this year. Ministers also noted with satisfaction the imminence of the conclusion of the Accession of Liberia with formal action to be taken by Ministers in Nairobi at MC10. Ministers encouraged Afghanistan, an LDC, to decide, as soon as possible, on its draft Accession Package, which had been circulated to all WTO Members in 2014. Overall, Ministers acknowledged that the results from accession had strengthened the WTO in light of the strategic objective of achieving universality of membership. It was noted that the Director General’s Annual Reports on Accessions suggested that those Members that had negotiated their terms and conditions of membership, overall, had grown faster, had been more successful in attracting FDI and had shown greater resilience in recovery from external shocks. Ministers commended the Director-General for his work on accessions and urged him to engage deeper with other Acceding Governments in the remaining 22 Accession Working Parties. Ministers took note of the presentation by the WTO Secretariat on the relationship between WTO accession negotiations and domestic reforms for growth.
Ministers agreed that technical assistance and capacity remained core aspects of the development dimension of the rules-based Multilateral Trading System. The contributions of the WTO were acknowledged. The Secretariat was encouraged to continue in its on-going process of improving its targeting and adaptation of its technical assistance and capacity-building to improve value for money. The Enhanced Integrated Framework (EIF) and Aid for Trade were key components of the development dimension of the rules-based Multilateral Trading System.
A strong WTO and the strengthening of trade multilateralism were strategic components in Africa’s participation in an interdependent global economy.
As host Minister for MC10, I invited African Union Trade Ministers to the Nairobi Fourth China Round Table that I would host back-to-back with MC10. This Round Table is being jointly organized by the WTO Secretariat and the Government of Kenya and was sponsored by the Government of China. The thematic focus was on, “Domestic Reforms for Competitiveness and Deeper Integration into the Global Economy”.
Ministers agreed to re-convene for a follow-up meeting in Nairobi, in October this year. To prepare for this meeting, Mrs. Fatima Haram ACYL, Commissioner for Trade and Industry of the African Union, Mr. Joshua Setipa, Minister for Trade and Industry of Lesotho and, Ambassador Amina Mohamed, Cabinet Secretary for Foreign Affairs and International Trade shall coordinate, closely, directly and constantly, on timing and substance. When we meet, Ministers have agreed to continue with our stocktaking of the state-of-play in the consultations and negotiating engagement underway, in Geneva, led by the WTO Director-General; continue with our evaluation and refinement of our national and collective positions as a group; and intensify our constructive engagement for pragmatic outcomes that will ensure a successful Tenth WTO Ministerial Conference in Nairobi. At our meeting, we shall decide on Next Steps, as appropriate.
As host Minister for MC10, I believe that, confidently, we held a healthy, constructive and fruitful exchange of views. The range of views on several questions reflected the richness of the Continent and the complementarity of our economies. This was to be valued. The Government and People of Kenya are grateful to all African Ministers responsible for Trade. It is vital that Ministers maintain Ministerial-level engagement, directly, pragmatically and realistically, to ensure that the first Ministerial Conference of the WTO to be held in Africa enhances welfare and responds to the reality of the aspirations of African economies for competitive and meaningful integration in the global economy. We ask our WTO counterpart Members to engage with Africa, ambitiously and honestly, for growth in a stable, rules-based global trade and economic order on the basis of WTO core values.
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Regional Dialogue for COMESA Transport Industry: 17-18 September 2015, Nairobi
The 1st COMESA Transport and logistics services industry dialogue is set to take place on 17 and 18 September 2015 in Nairobi, Kenya. The dialogue organized by the COMESA Business Council will bring together transporters, shippers, port authorities, freight forwarders, customs and clearing agencies among others.
Transport and logistics costs are a huge cost and a crucial element on the competitiveness of enterprises in the region. Sub-Saharan Africa faces the highest transport costs in the world, with key examples of the Northern Corridor where logistic costs are as high as 30-45% of the total costs of imports in terms of cost, insurance and freight. Such costs impede on the competitiveness of industry and reduce the levels of trade and regional integration.
While COMESA has designed and implemented regional and international trade facilitation instruments to ease transport and facilitate trade in the region, these include – COMESA Yellow Card, Regional Customs Bond, Carrier License, Harmonized Axle Load and Virtual Trade Facilitation System. At national level, Member States have invested in a number of infrastructure and transport development plans. However, there is still a lot to be done to improve on a seamless mechanism that can respond to the needs of business in terms of cost, efficiency and reducing time loss in transport logistics .
As a strategic response to the interests of the private sector, the CBC has convened a High Level Public-Private Dialogue, which will have the participation of the COMESA Secretary General and his Directors, Government Authorities from the region and businesses in transport and trade logistics from the region, including key speakers such as Philips Lighting East Africa, Transit Transport Coordination Authority of the Northern Corridor (NC-TTCA), GECOTRANS – DRC, TRANSMIR Egypt – Egyptian Freight Forwarders Association, Emmage Freight Ltd – Federation of Clearing and Freight Forwarders of Southern Africa , Southern Africa Shippers Transport & Logistics Council, Federation of East and Southern African Road Transport Associations (FESARTA) and Velogic Ltd-Mauritius Transporters Association.
The convening of this event arises from a call from businesses to have direct dialogue with regional trade facilitators, inorder to come up with common solutions to impediments to trade in areas of delays in transit time, cargo handling, multiple rules and requirements, cabotage rule, cargo tracking systems among others. The dialogue will encourage debates and strategic solutions on contentious issues and constraints faced by industry when moving their goods along the transport corridors. The outcomes of the meeting are;
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To develop a common position on key policy, regulatory and practical recommendations that are to be presented to the Ministers of Infrastructure in October, 2015 – for adoption and further implementation by the public and private sector.
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To formally establish a common platform for the private sector to engage policy makers on transport and trade logistics constraints in the COMESA region.
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“Great potential for South-South cooperation to help improve the working lives of millions”
“There is a lot of room for scaling up South-South cooperation and for strengthening interregional cooperation in the global South. Workers and employers and their organizations along with governments all have a role to play in encouraging this expansion,” said ILO Director-General Guy Ryder on the occasion of United Nations Day for South-South Cooperation.
The international community prepares to formally adopt the Sustainable Development Goals (SDG) later this month. Today the International Labour Organization (ILO) highlights the role of South-South cooperation in helping to raise the living standards of millions of women and men through decent jobs as we confront the challenges of delivering the 2030 Development Agenda.
South-South cooperation allows developing countries to pursue their individual and/or shared national capacity development objectives through the exchange of knowledge, skills, resources and technical know-how. It fosters solidarity, equality among countries and peoples – both in the north-south and south-south dimensions – and democratizes international relations.
Countries attending the recent Addis Ababa Financing for Development Conference pledged to increase south-south cooperation. And we can already see the emergence of a new panorama for south-south multilateral financing through entities such as the Asian Infrastructure Investment Bank (AIIB), the Development Bank of Latin America (CAF) and the new multilateral development bank agreed by the BRICS states (Brazil, Russia, India, China and South Africa). We expect that the world of work will increasingly be taken into account in Financing for Development.
The ILO has been involved in supporting South-South cooperation for the past three decades. In March 2012, it adopted a strategy entitled “South–South and triangular cooperation: The way forward” with the aim of engaging an increasing number of governments, employers’ and workers’ organizations, UN agencies and non-state actors in pursuing decent work goals, especially through peer-to-peer cooperation and good practice exchanges.
We have forged partnerships with various regional groups and countries to support action in the world of work in a range of countries in Africa, Asia and Latin America. Developing countries have subscribed to the Decent Work Agenda. The experience of governments, workers and employers of developing countries in shaping and applying decent work policies in the areas of employment, social protection, fundamental rights at work, including freedom from child labour and forced labour, freedom from discrimination and freedom of association along with social dialogue, have proved to be a particularly valuable resource for promoting the application of the agenda. Their experience has been drawn upon in initiatives to develop capacity; share knowledge and good practices, to provide training and transfer of knowledge and normative approaches. South-South cooperation has been an ideal vehicle for such initiatives.
There is a lot of room for scaling up South-South cooperation and for strengthening interregional cooperation in the global South. Workers and employers and their organizations along with governments all have a role to play in encouraging this expansion.
The 2030 Development Agenda is a once-in-a-generation chance to improve the lives of billions and to respond to the universal demand for decent jobs. We must embrace the opportunity and encourage the solidarity – including the solidarity of South-South cooperation – that will help to make this goal a reality.
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Equatorial Guinea seeks to adjust to lower oil prices
Equatorial Guinea’s oil-dependent economy is set to contract through 2020, under pressure from low oil prices, falling hydrocarbon production, and reduced capital expenditures, IMF staff economists said.
In their regular review of the Central African nation’s economy, IMF staff said Equatorial Guinea’s decade-long hydrocarbon boom is ending and economic activity has stagnated since 2009, with oil and gas extraction having plateaued.
The report said Equatorial Guinea’s outlook for 2015 is dominated by the confluence of lower international oil prices, a high dependence on oil revenues, and a rapidly diminishing government savings buffer. Upfront and substantial fiscal consolidation is unavoidable, particularly on high investment spending.
As a result, the country’s economy is expected to contract by about 9½ percent in 2015, and further by about 2 percent per year during 2016-20 due to lower capital expenditures and falling hydrocarbon production.
Equatorial Guinea embarked upon a long hydrocarbon boom around the turn of the millennium that turned it into sub-Saharan Africa’s third largest oil exporter and its wealthiest country in terms of per capita income (see chart). It has also enabled a large scaling up of investment spending on infrastructure.
While extensive investment has helped to put in place substantial infrastructure, Equatorial Guinea’s social indicators are similar to those of low-income countries. Furthermore, hydrocarbon revenues are on the decline as oil and gas fields mature. These adverse trends have been aggravated by the price slump that is buffeting oil exporters around the world.
The report notes that Equatorial Guinea’s era of buoyant economic growth is now receding, and the overriding theme of the IMF’s recommendations is for policies to help navigate an environment of much lower anticipated revenue, and to allow Equatorial Guinea to better leverage its existing infrastructure to foster diversification and structural transformation.
Fiscal policy and the oil shock
The authorities have set out a tough 2015 budget that aims to more than halve capital spending and implement strong reductions in spending. For an effective adjustment, the country report stresses the importance of avoiding across-the-board cuts. Instead, it proposes allowing near-complete projects to be finished, while putting in place a rigorous process to evaluate the relative viability of new projects in terms of expected economic and social returns.
At the same time, the government should be looking at progressively shifting spending away from infrastructure toward public services and social projects, which would support human capital development that is essential for the competitiveness of the non-resource economy.
Reducing heavy dependence on the volatile hydrocarbons sector revenues should also be a priority. The authorities have already deployed a series of measures to eliminate widespread tax exemptions and modernize tax administration, and these efforts could be complemented by a comprehensive review of tax policies.
Leverage infrastructure
Equatorial Guinea’s multi-year public investment plan—dubbed Horizonte 2020—has considerably improved transportation infrastructure and the provision of public utilities. This infrastructure constitutes a considerable advantage relative to other sub-Saharan African economies. Nonetheless, economic diversification has remained elusive so far, with hydrocarbons still accounting for more than 90 percent of exports.
To leverage this infrastructure toward a more robust and diverse economy, the report recommends an ambitious structural reform agenda to boost competitiveness and attract potential investors, including
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Accelerating reforms to improve the business climate, in partnership with the World Bank;
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Supporting human capital development by promoting education, especially fully equipping and staffing newly built schools;
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Advocating for lower trade barriers among regional partners in the Economic Community of Central African States (CEMAC) and between CEMAC and other countries; and
- Seeking to partner with international financial institutions on investment opportunities.
Critical data weaknesses
The report urges priority efforts to improve Equatorial Guinea’s weak socioeconomic statistics. Good data are essential to effective decision making, and the cost of ill-informed decisions is especially high in an environment where revenue is constrained. A lack of readily available information could also deter potential investors.
While building statistical capacity takes time, several steps can be taken in the short term, including wider publication of existing statistics and subscription to the IMF’s General Data Dissemination Standards.
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tralac’s Daily News selection: 15 September 2015
The selection: Tuesday, 15 September
Forthcoming: UNECA/AU Dialogue on Conflict and Development
The UNECA will be hosting a High Level Policy Dialogue on Conflict and Development in Africa, in Accra, from 1-2 October 2015. At the request of the African Union, the Capacity Development Division of ECA, prepared three regional studies on the costs and consequences of conflict on development in the Sahel, Great Lakes, and the Horn of Africa. The three landmark regional studies focused on the costs and consequences of conflict on development in the Sahel, Great Lakes and the Horn of Africa region. The key messages and recommendations arising from the dialogue will feed into the processes of the African Union and other key regional organizations and provide the basis on which to design comprehensive strategies and policy responses for stakeholders.
In preparation: Political economy analyses of the African Union and regional economic communities in Africa (ecdpm), The first 'State of the IGAD Region' report (@meharitaddele)
Osinbajo calls for closer ties between AU and RECs (ThisDay)
Vice-President Yemi Osinbajo said on Monday if the African Union must deliver on the goals set out in the Constitutive Act, closer cooperation and synergy must be established with Regional Economic Communities. According to him, it is one requirement that is absolutely imperative. Osinbajo noted that Nigeria had always advocated for the proper conception and implementation of closer cooperation and collaboration between the AU and the RECs.
“With about the most successful example of regional cooperation in ECOWAS, we have always believed that the position of the RECs as the basis of our future development is long assured and no chance should be missed to further strengthen it. The Abuja retreat is timely as it is being convened in a season of conflicts on the continent. Today on an embarrassingly regular basis there is a fresh conflict situation, or a relapse of post-conflict situations. At the same time terrorism and violent extremism present fresh problems, including large numbers of IDPs and refugees going across the borders of neighbouring countries. The sheer variety and complexity of these challenges oblige the the PSC and the RECs to more effectively coordinate and harmonise their efforts in a complementary manner in order to address them more effectively,” the vice-president said.
Economic Community of Central African States: CAADP implementation status results report (World Bank)
In the long term, especially due to ECCAS current funding issues from member states and in the absence of a funding mechanism such as the CTF or other reliable funding sources, ECCAS faces a number of key challenges. These include: (i) a long term vision and internal resource mobilization for staffing and capacity building to carry forward the region’s agriculture agenda, especially in the context of the Malabo Declaration and country engagement in advancing the CAADP; (ii) sustainability of investments made at ECCAS, including institutional capacity building, retention of the technical staff capacity which has been built-up, as well as other investments made during the course of implementation of the CTF; and (iii) further development and capacity strengthening to implement and monitor the various regional agriculture policies and anticipated agriculture investment projects.
COMESA launches seed committee (COMESA)
The COMESA Seed Committee, whose aim is to strengthen regional cooperation in the agricultural sector, improve distribution of quality seed and achieve food security, was launched in Lusaka, Zambia on 10 September 2015. Among the key functions of the committee is the formulation of the necessary technical guidelines and procedures for the operation of the COMESA seed system and developing crop-specific requirements. The committee will be guided by the COMESA Harmonization Implementation Plan whose overall goal is to implement the gazetted COMESA Seed Trade Harmonization Regulations.
Liberia validates Charter on food crises prevention, management (In Profile Daily)
Several government ministries and international stakeholders have ended a two-day validation and assessment of the Charter to prevent and manage food crises in Liberia. Sponsored by ECOWAS and other UN partners, the workshop reviewed the 2010 revised Charter's regional and national processes including a desk review of Liberia's food and nutrition survey that exposed the country's capacity to establish a national framework on food insecurity.
Turn energy plans into action, ECOWAS countries told (AfDB)
“The finalisation of the sustainable energy plans is only the beginning of a long journey as the focus has to shift now decisively towards implementation and mobilization of the required investments to turn these plans into reality. This will help to improve living conditions, create opportunities, jobs and inclusive and sustainable growth for all citizens in West Africa,” said Alex Rugamba, the Bank’s Director for Energy, Environment and Climate Change. Rugamba was speaking at the opening of the ECOWAS Sustainable Energy Policy and Investment High Level Forum in Abidjan on September 14.
WAIFEM and the quest for new economic models for Nigeria, West Africa (Vanguard)
Beira Terminal poised to boost SADC energy chain (The Herald)
The recent launch of the Beira Terminal is poised to strategically boost the energy supply chain in the SADC region. “We’ve tested railway capabilities from Beira to Bulawayo in Zimbabwe and to Francistown in Botswana, which was very successful. In essence this means that we can take some pressure off of our Durban Refinery and supply Botswana and Zimbabwe directly from our new depot,” said Mr Drikus Kotze, General Manager of Engen’s International Business Division.
SA-AGOA: Zuma urged to intervene (Business Report)
US Senators Chris Coons and Johnny Isakson have again written to President Jacob Zuma, urging him to open up the South African market to US poultry “expeditiously” to avoid South Africa losing lucrative export benefits to the US. Coons of Delaware and Isakson of Georgia both represent major poultry-producing states. They wrote their latest urgent appeal to Zuma as agricultural and trade officials from the US and SA were meeting in Pretoria to try to resolve the protracted dispute over US meat imports. Dr Mark Davidson, also of the USDA, said: “We have 100 trading partners around the world that have taken no action against the US in regard to poultry trade and we have 38 partners who have implemented regionalisation. It is a worldwide standard that we have implemented, which has enabled us to safely trade poultry and poultry products.” [Access copy of the letter to Pres Zuma]
South African home affairs minister to discuss bilateral issues in Lesotho (StarAfrica)
The South African Minister of Home Affairs, Malusi Gigaba is scheduled to pay a two- day visit to Lesotho from September 21, APA learns here on Monday. The Lesotho Minister of Home Affairs Lekhetho Rakuoane said on Monday that he and his South African counterpart are going to discuss the problems that the Basotho living or working in South Africa are constantly experiencing. Rakuoane said since Lesotho is landlocked by South Africa, they want the Basotho to be given preferential treatment as compared to citizens of other SADC countries.
Rift Valley Railways gains support from Egyptian government officials (AMEinfo)
The one-day conference, 'Rift Valley Railways: an integrated logistics solution in East Africa', highlighted the competitive advantages of using rail as the most efficient, cost-effective and environmentally friendly mode of transporting goods in East Africa and introduced Rift Valley Railways (RVR) as a unique door-to-door transportation and customs-clearance service provider that can help local exporters from Egypt, Kenya, Uganda and South Sudan tap into new markets and grow the volume of intra-regional trade.
Mzembi retains UNWTO Africa chair (NewsDay)
Tourism minister Walter Mzembi has been overwhelmingly re-elected chairperson of the United Nations World Tourism Organisation (UNWTO) Commission for Africa with a call to build a just society in which “humanity co-exist with nature”. Cameroonian and Ivory Coast Tourism ministers became the new Africa vice-chairpersons. Mzembi’s re-election enhances his chances to land the powerful position of secretary-general of the UNWTO when the organisation’s six regions namely — Africa, the Americas, East Asia and the Pacific, Europe, the Middle East and South Asia — vote to replace incumbent Taleb Rifai in China in 2017. He becomes a member of the UNWTO executive council for the next two years.
Rwanda Poverty Profile Report: results of EICV 4 (Institute of Statistics)
This report provides an update on the level of poverty based on 2013/14 Integrated Household Living Conditions Survey (EICV4) focusing on poverty as measured in consumption terms. The report also highlights other trend dimensions of living conditions captured in other surveys that complement and provide a holistic understanding of poverty and living conditions. Rwanda’s economy has been growing steadily at about 8% since 2001 with GDP per capita more than tripling from US$ 211 in 2001 to US$ 718 in 2014. Food crop production growth was more than twice that of population growth between 2007 and 2014. [Various downloads available]
Financial reform, institutional investors and sustainable development (UNEP)
Only days ahead of the historic summit to adopt the SDGs, a new UN study calls on regulators to implement proactive policies that build institutional investment frameworks, institutions and culture with sustainability at their core. "Financial Reform, Institutional Investors and Sustainable Development: A review of current policy initiatives and proposals for further progress" was produced by the United Nations Environment Programme Inquiry into the Design of a Sustainable Financial System and the California Public Employees' Retirement System. Nick Robins, Co-Director, UNEP Inquiry, said: "A package of measures is needed to deliver the full sustainability potential of institutional investors. Disclosure is important, but without effective governance frameworks and incentives, this will not drive sufficient change."
The specific action lines where UNCTAD can and should make maximum contributions for the post-2015 era are four fold: building productive capacity to transform economies; more effective States and more efficient markets; tackling vulnerabilities, building resilience; strengthening multilateralism, finding common solutions. For these action lines to be transformative, and to contribute substantially to our pursuit for the sustainable development goals, they need to be pursued in tandem, in a coherent manner, and operate at all three levels of governance: national, regional and international. [Access Session documentation]
Access to financial services as a driver for the post-2015 development agenda (UNCTAD)
Insights from Brazil for skills development in rapidly transforming African countries (World Bank Blogs)
Brazil’s experience can yield valuable insights for newly industrializing economies. On the sidelines of the WorldSkills Competition, the World Bank facilitated a “South-South” knowledge sharing event for African countries that attracted delegates from Mali, Rwanda, Mozambique, Cameroon, and Nigeria. Participants were particularly interested in the strengths and challenges within Brazil’s TVET system as they develop solutions to serve growing numbers of youth. African delegates noted three main takeaways from the Brazilian TVET system:
Mine closures will slow Zambian growth, rating agency Moody's says (Reuters)
African exporters are staring at $15 oil forecasts, but they keep pumping — here's why (M&G Africa)
It’s time to ride the blue economy (Business Day)
Maritime security likely to be hot topic at India-Africa summit (The Financial Express)
The Trans-Pacific Partnership and the changing world of international trade: a Q&A with Mark Wu (Harvard Law)
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UNCTAD Secretary-General proposes four ‘action lines’ to help end poverty and meet new development goals
Dr. Mukhisa Kituyi unveils his report to the fourteenth session of the United Nations Conference on Trade and Development (UNCTAD 14) – the first United Nations ministerial conference of the post-2015 era.
As governments across the globe prepare to adopt 17 ambitious Sustainable Development Goals (SDGs), UNCTAD Secretary-General Mukhisa Kituyi presented to United Nations member States in Geneva his report to the fourteenth United Nations Conference on Trade and Development (UNCTAD XIV) taking place in Nairobi, Kenya, from 17-22 July 2016.
This event will be “the first UN ministerial conference of the post-2015 era,” Dr Kituyi said. As such “it will represent a starting point to translate the heightened ambitions of the international community into concrete plans of action”.
Called “From Decisions to Actions”, the report builds on lessons learned from impressive developmental advances in past decades and proposes detailed courses of action that tackle aspirations as yet unmet in order to deliver sustainable prosperity for all within the 15-year lifespan of the new Sustainable Development Goals.
“The last 25 years have set the stage for the final push in the eradication of extreme poverty within a generation,” Dr. Kituyi said. “They taught us that we can expand the boundaries of what we think is possible.”
Indeed, 1 billion people have been lifted out of extreme poverty in 20 years, the proportion of people living in destitution has been halved, hundreds of millions have joined the middle class, and a number of developing countries have become major engines of growth both for their region and the global economy.
Despite “the tremendous progress achieved,” Dr. Kituyi said, “poverty and inequality, both between and within nations, remain a pervasive challenge”. In the face of this, Dr. Kituyi said, the new global consensus on the Sustainable Development Goals “raises the bar and demands unprecedented actions and efforts”.
Achieving the Sustainable Development Goals will require resource mobilization on an unparalleled scale, he added. “Developing countries alone will need to invest $ 3.3 to 4.5 trillion per year in basic infrastructure, food security, climate change mitigation and adaptation, health and education,” leaving “a gap of $2.5 trillion annually in real terms”.
This also presupposes enhanced accountability, policy coherence and a stronger enabling environment at all levels, the report says, which puts forward a robust set of “action lines” to be followed by governments. These should form the basis for UNCTAD’s mandate and the way in which the institution will shoulder its responsibility in supporting and complementing the efforts of the international community.
The “action lines” detailed in the report are grouped into four broad policy areas:
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Building productive capacity to transform economies
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More effective States and more efficient markets
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Tackling vulnerabilities and building resilience
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Strengthening multilateralism and finding common solutions
FROM DECISIONS TO ACTIONS: BACKGROUND
A growing number of developing countries and countries transitioning to market economies have joined the world economy – boosting international trade from 9.4 per cent of global GDP in 1970 to 24.4 per cent in 2014, with exports from developing countries accounting for half the world total.
Developing countries are not only the chief recipients of foreign direct investment (FDI) whose global flows reached US$1.2 trillion last year, but a growing source of FDI accounting for over one-third of total global outward FDI, while Asia recently became the largest investor in the world.
Between 2003 and 2013, Africa doubled its services export, Latin America almost tripled and Asia more than tripled. Between 2000 and 2011, internet usage in Africa grew by 2,500 per cent (global usage grew 480 per cent) and mobile phones usage grew 12 times in developing countries (as against 2.5 times in rich countries) which now have 91 mobile subscriptions per 100 inhabitants.
Notwithstanding the halving of the world population living in extreme poverty, as achieved under the 2000-2015 Millennium Development Goals, more than 1 billion lived on less than US$1.25 per day and 10 per cent experienced chronic hunger in 2011.
Action to narrow gaps in inequality and prosperity collide with the reality of the world after the 2008 financial and economic crisis. Trade is now growing at a slower rate than global output, the recovery of global foreign direct investment remains bumpy, and financial instability as well as economic volatility pose a threat to the improvements in prosperity that have been so far achieved. Large, speculative capital flows put at risk the debt sustainability and macroeconomic stability of many developing countries. This is compounded by extreme weather events and climate change, as well as challenges to peace and security arising from conflicts and terrorism.
Putting the scale of the remaining challenge in perspective, the level of extreme poverty in China in 1994 was at, 46 per cent, about the same as the current level in least developed countries. In the fifteen years up to 2009 China had an annual per capita GDP growth of 9.4 per cent but was only able to reduce extreme poverty to 11.8 per cent. It follows that to eradicate extreme poverty, least developed countries will in the next fifteen needs to grow at a rate greater than China did during its boom years.
FROM DECISIONS TO ACTIONS: FOUR ‘ACTION LINES’
- Building productive capacity to transform economies
Investment, trade, technology and entrepreneurship, accompanied by complementary measures and as part of a broader industrial strategy, must be utilized more and better, and be put more fairly and equitably at the disposal of all countries. Tax bases must be broadened, collection strengthened, evasion and avoidance reduced and capital flight and illicit financial flows stemmed. Production must be diversified by exploiting the trade-investment nexus, technology must be leveraged and the private sector boosted.
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More effective States and more efficient markets
Governments must be competent in the provision of services, transparent and responsive. This means, for example, enhancing competition and consumer protection; scaling up infrastructure services; fostering an appropriate business environment, and investing in skills and leadership development.
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Tackling vulnerabilities and building resilience
The poor are often the most vulnerable to economic, social and environmental crisis. This means, for example that that the finacialization and its macroeoconmic effects must be better managed, including through the management of debt. “Green” jobs and industries meanwhile offer possibilities for investment and infrastructure modernization. Economic resilience can be built transforming rural economies and empowering women.
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Strengthening multilateralism and finding common solutions
The need for global collective action to tackle cross-border challenges is at an all-time high. The global and national economies can be strengthened by more inclusive and better coordinated institutions, regulations, reforms and policies. This means forming global partnerships for development cooperation and improving the effectiveness of the multilateral trading, investment, and financing systems, and for furthering the global digital and technology agenda.
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Turn energy plans into action, ECOWAS countries told
The African Development Bank has lauded the development of the Sustainable Energy for All (SE4All) Action Agendas, and the Renewable Energy and Energy Efficiency Action Plans by Economic Community of West African States (ECOWAS) member countries, and urged them to now turn those plans into action in order to improve the living conditions of their populations. The Bank has supported this process since its beginnings in its capacity as host of the SE4All Africa Hub.
“The finalisation of the sustainable energy plans is only the beginning of a long journey as the focus has to shift now decisively towards implementation and mobilization of the required investments to turn these plans into reality. This will help to improve living conditions, create opportunities, jobs and inclusive and sustainable growth for all citizens in West Africa,” said Alex Rugamba, the Bank’s Director for Energy, Environment and Climate Change.
Rugamba was speaking at the opening of the ECOWAS Sustainable Energy Policy and Investment High Level Forum in Abidjan on September 14. The event is organised by the ECOWAS Centre for Renewable Energy and Energy Efficiency (ECREEE), AfDB, the Climate Technology Initiative - Private Financing Advisory Network (CTI-PFAN), the United Nations Industrial Development Organization (UNIDO) and the German Corporation for International Cooperation (GIZ).
The event brings together top-level policy- and decision-makers in the energy sector, investors and international partners to explore ways of creating an enabling environment for financing energy in order to mitigate barriers to sustainable energy in the ECOWAS region (Benin, Burkina Faso, Cape Verde, Côte d’Ivoire, Gambia, Ghana, Guinea, Guinea-Bissau, Liberia, Mali, Niger, Nigeria, Senegal, Sierra Leone and Togo). Access to energy presents a huge challenge in the region, with about 178 million people lacking access to the electricity grid, according to the United Nations. The region intends to generate 2,000 megawatts by 2020, and achieve universal energy access by 2030, according to Morlaye Bangoura, the ECOWAS Commissioner for Energy. “This not only motivates the region, but calls for institutionalization of concrete measures to achieve this goal within member states,” he noted.
The ECOWAS Sustainable Energy Policy and Investment High Level Forum comes shortly before the UN Sustainable Development Summit to be held in New York on September 25-27. Sustainable Development Goal 7 (SDG 7) aims to “ensure access to affordable, reliable, sustainable and modern energy for all” by 2030. The Action Agendas developed by the ECOWAS countries effectively constitute a national implementation tool for SDG 7.
The Bank has consistently prioritised developing and implementing energy sector operations across Africa and specifically in the ECOWAS region, given the potential long-term benefits in contributing to poverty reduction. From 1998 to 2014, the Bank approved 40 energy operations from its public and private sector financing windows for ECOWAS member states, amounting to USD 1.45 billion. During this time frame, ECOWAS countries obtained 11% of the total amount the Bank approved for energy sector financing.
The forum will culminate in a high-level consultative meeting towards a New Deal on Energy for Africa, to be hosted by the AfDB on September 17 and 18 at the Bank headquarters.
Towards a New Deal on Energy for Africa
The African Development Bank (AfDB) is hosting a High Level Stakeholder Consultative Meeting on the theme “Towards a New Deal on Energy for Africa”, at the Bank’s Abidjan headquarters, on September 17-18, 2015, to review the Bank’s energy activities and chart the way for a transformative partnership on energy for Africa.
The event will bring together leaders in the energy sector to craft next steps towards a Transformative Partnership on Energy for Africa to provide a major platform for structured private sector, multilateral and bilateral partnerships and financing to solve Africa’s energy challenge.
The Meeting will also articulate implementation actions to inform the New Deal on Energy for Africa and identify opportunities for scaling up renewable energy on the continent.
The AfDB has an active role in Africa’s energy systems with a portfolio of around USD 10 billion, and investment in energy sector projects (public and private) in recent years exceeded, on average, USD 1 billion annually. These investments are geographically diversified across the continent in Southern Africa, North Africa, East Africa, and West Africa, representing a mix of generation, regional interconnections, and distribution projects. In addition, the Bank plays a leadership role in energy on the continent as host of the Secretariat to the African Energy Leaders Group (AELG), host of the Sustainable Energy for All (SE4ALL) Africa Hub, and architect of the Programme for Infrastructure Development in Africa (PIDA).
The Bank is committed to unlocking Africa’s enormous energy potential, and powering and lighting up the continent. “Africa is blessed with limitless potential for solar, wind, hydropower and geothermal energy resources,” AfDB President Akinwuma Adesina said in his inaugural address. “We must unlock Africa’s energy potential – both conventional and renewable. Unlocking the huge energy potential of Africa, for Africa, will be a major focus of the Bank.”
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Shortage of long-term finance blunts progress in developing countries
Long-term finance is essential for households, firms and sustainable development.
A shortage of long-term financing since the 2008 crisis is choking the investment-backed growth of companies in developing countries and hampering the ability of credit-worthy families to borrow for education and housing needs and escape poverty, a new World Bank report warned on 14 September.
At the global level, this shortage of long-term financing also means that despite appeals by the Group of Twenty (G-20) and other key international groups, developing countries are struggling to mobilize the billions of dollars in financing they need to build badly-needed infrastructure in order to grow their national and regional economies.
According to the new report, Global Financial Development Report 2015-2016: Long-term Financing, extending the maturity structure of finance is considered to be at the core of sustainable financial development.
Securing long-term financing, defined as investment funding that matures in a year or more, depends on the same fundamentals essential to tackling the current volatility in global capital markets: Policy makers need to focus on institutional reforms, such as promoting macroeconomic stability, establishing a regulated and legally enforceable banking and investment system that protects creditors and borrowers, and setting a framework for capital markets and institutional investors.
World Bank Group President Jim Yong Kim says, “It would be a challenge to achieve high and sustainable rates of economic growth if countries fail to invest in schools, roads, power generation, electricity distribution, railways and other modes of transport, and communications. Private sector construction of plants and investment in machinery and equipment are also important. Without long-term financing, households face great hurdles to raising income over their lives – for example by investing in housing or education – and may not benefit from higher long-term returns on their savings.”
While commercial banks remain the primary source of financing for firms and households around the world, capital markets have grown rapidly, especially in emerging market economies like China and India. Firms in developing countries saw a 15-fold increase in the amounts raised in equity, bond, and syndicated loan markets between 1991 and 2013. Although the majority of this finance originated in high-income countries, there are notable exceptions: more than 70 percent of India’s total syndicated loan market originates domestically.
“Long-term finance facilitates investment in infrastructure, durable goods, and people’s education and skills, and, as such, is the bedrock of sustained growth. Finance, however, needs good institutions and effective contract enforcement,” said Kaushik Basu, World Bank Senior Vice President and Chief Economist.
“Fortunately, a lot is happening to give us hope. Equity and bond markets, for instance, have grown from less than half the financial system in the 1980s to 53 percent in China and 65% in India, in 2005-10. A new distribution system for government securities using mobile phones has broadened the financial access of retail investors in Kenya. By bringing a wealth of information and analysis to the table, this year’s report greatly enhances our understanding of this critical sector.”
Long term housing finance is arguably the most important ingredient towards home ownership, yet the disparity across countries is stark: an average of 21 percent of individuals in high-income countries have an outstanding home loan, compared to a mere 2.4 percent in lower-middle and low-income countries. India is a typical case, with only 2.3 percent of individuals having a home loan.
Firms in developing countries also face substantial disparities. Loan durations to firms in low-income countries average 23.3 months, less than half of the average for firms in high-income countries at 58.7 months. Firms’ loans in Sierra Leone and Liberia have particularly low durations, with averages of 8 and 4.4 months respectively.
“The temptation to seek quick fixes is strong, but only a wholesale effort to reform the institutions that underpin the financial system will solve this problem,” said World Bank Director of Research Asli Demirguc-Kunt. “This report lays out a path that countries can follow to make available the kind of long-term finance that will support sustainable, equitable growth.”
The report highlights examples, as well as innovative approaches, that some countries have taken to win access to long-term financing:
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Too little credit information makes it difficult for lenders to assess risk reliably and pushes them towards shorter lending maturities. Bulgaria and Nicaragua sharply increased average loan maturities after private credit bureaus were established.
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Limited protection of investor rights leads lenders to prefer short-term contracts to discipline borrowers by threat of termination. India introduced debt recovery tribunals to speed up debt recovery cases, and as a result, firms made significant movements away from short-term debt toward longer-term instruments.
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Weak corporate governance leads to a weak contractual environment. A study of over 7,000 firms in 22 countries found that firms with strong corporate governance tended to use less short-term debt.
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Insufficient financial knowledge often means that people opt for expensive short-term debt. Effective financial education would allow households to make better decisions, along with consumer protection and financial disclosure rules.
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Development of local bond, equity markets and institutional investors may improve the availability of long-term financing and also serve as a “spare tire” when the banking system is adversely hit by shocks.
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In South Africa, pensions have helped ensure that families are able to invest more in their children by sending them to school longer and reducing their hours worked.
While explaining the scope for long-term finance, the report also cautions that long-term finance is not optimal or even necessary in all circumstances. Firms match the maturity structure of their assets with liabilities, and typically seek shorter-maturity debt to finance payroll and inventory, while seeking longer-maturity debt for fixed assets, says the report. In the United States, for example, the overextension of credit to non-creditworthy borrowers proved to be a key contributing factor to the subprime mortgage crisis.
The full report and supporting data are available at: www.worldbank.org/financialdevelopment.
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Access to financial services as a driver for the Post-2015 Development Agenda
Effective use and access of available, affordable, convenient, quality, and sustainable financial services contributes to poverty reduction and economic and social development, say UNCTAD in a new Policy Brief.
Financial inclusion – the effective access to and use of available, affordable, convenient, quality and sustainable financial services – central to poverty reduction and to inclusive and sustainable development, is an enabler of the post-2015 development agenda. Still, many remained without a bank account in 2014.
This Policy Brief aims to highlight several components of a best-fit policy mix to expand financial inclusion.
Key points:
- Innovative business models and new technologies have large potential in overcoming access barriers;
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Governments have an important role in setting up sound regulatory frameworks and conditions to expand the supply and affordability of financial services, to ensure that such services remain supportive of the real economy, and to create an expanded demand for them, such as through financial education and empowerment;
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Actions towards financial inclusion could contribute to facilitated, speedier, safer and less costly transfer of remittances, the importance of which is also recognized within the sustainable development goals (SDGs).
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1st German-Africa Business Summit concludes in Berlin
The 1st German Africa Business Summit held from Monday 7th – 8th September 2015 attended by the Secretary General of the East African Community, H.E. Amb. Dr. Richard Sezibera concluded in Berlin, Germany.
The summit brought together over 500 German businesses and Federal Government senior officials that wish to prospect and facilitate acquisition of business opportunities in Africa.
Delivering a key note address Dr. Frank-Walter Steinmeier Federal Minister for Foreign Affairs emphasized the need to improve the cooperation with African Governments towards economic cooperation from the traditional development cooperation.
He said economic cooperation will create jobs, reduce illegal migration, poverty levels and increase the market share of German businesses operating in Sub Saharan Africa. The Minister noted and commended the reforms achieved by the EAC within a short period of time that included the Customs Union, Common Market and the path towards the Monetary Union.
Participating at the “Panel of Honour” EAC Secretary General stated that Africa had contributed to European Growth through importation of manufactured goods and it was now time for Europe to contribute to Africa’s Growth through Strong economic partnerships.
While hosting the heads of delegations from the African Regional Economic Communities that included H.E. Amb. Dr. Richard Sezibera, EAC Secretary General, H.E. Erastus Mwencha Deputy Chairperson of African Union, H.E. Kadre Quedraogo President of ECOWAS and Dr. Mbinkosi Mhlongo, Deputy Executive Secretary of Southern African Development Community, Dr. Steinmeier highlighted the importance of including Digital Agenda in the current Development cooperation frameworks.
Amb. Sezibera expressed appreciation for the financial and technical assistance accorded to the EAC through the yearly contribution to the partnership fund, construction of the EAC headquarters in Arusha and visit by the President of the Federal Republic of Germany H.E. Joanchim Gauck to EAC headquarters earlier this year.
The Africa Regional Economic communities’ heads of delegations discussed how to combat illegal immigration, terrorism and how to improve governance with Dr. Steinmeier.
Courtesy call to the former President of German
Speaking with the former President of the Federal Republic of Germany, Dr. Horst Kohler when he paid a courtesy visit, the EAC Secretary General Amb. Dr. Richard Sezibera expressed his appreciation for the extensive work done by the former president to support German businesses to set up operations in the EAC region and also his contribution to development work.
Dr. Sezibera extended an invitation to Dr. Kohler to deliver a keynote address during the upcoming Academia Public Private Partnership Forum organized by the Inter-University Council of East Africa that will be held from October 22nd – 23rd in Kampala, an invitation which the former President accepted.
On his part, the former President of the Federal Republic of Germany, Dr. Horst Kohler Dr. Koher hailed the reforms done by EAC to improve the business climate and to make it easier for German business community to enter the market. H.E. Dr. Horst Kohler noted that EAC region has to improve its vocational training for the young people, as the region gears up to became the manufacturing hub for Africa.
Dr. Kohler emphasized that the German-Africa Business Summit was a noble initiative and he is looking forward to the Summit bridging the information gap that exist between German entrepreneurs and potential African business partners.
New Strategic Partnership between EAC-EABC and German Africa Business Association
EAC Secretary General held a consultative meeting with the Chairman of German Africa Business Association Dr. Stefan Liebing and Manager for Eastern Africa Asmau Nitardy. During the discussion Amb. Sezibera noted that EAC region has a positive perception of German made products and the German business community should take advantage and set up operations in the region.
He added that the region offers some of the best incentives through preferential trade agreements for exports to European markets and US market.
Dr. Liebing expressed an interest in setting up a business information exchange portal between German and East Africa Businesses. The portal will exchange information on tenders available in the region and any new infrastructure projects.
He disclosed that German small and medium enterprises that employ between 1,500 – 5,000 staff members lacked information about business opportunities available in East Africa.
Dr. Liebing also informed the EAC delegation of their strategic plan to start offering bundled solutions to private and public sector organizations in East Africa. This will allow them to compete with their counter parts from Asia.
EAC and the German Africa Business Association delegation agreed to set up a steering team that will conclude on a memorandum of understanding for creating a solid partnership in three core areas i.e. renewable energy, agro chemicals and fertilizer, and Pharmaceuticals.
East Africa Community investor’s forum
The EAC Secretary General also attended an exceptional East Africa Community investor’s forum held at the closing of the Summit attended by 50 high net worth investors, hosted by the Regional Director for Sub Saharan Africa for the Federal Republic of German Government Mr. Georg Schmidt.
Mr. Schmidt noted that the EAC is a shining example of a successful regional economic community in Africa and his conception of the expanded region would either include Somalia, Ethiopia, Southern Sudan or Madagascar.
Amb. Sezibera highlighted many attractive investment features but emphasized on two key areas which any serious investor would consider when scouting for the most attractive regional economic community, these include; a growing population of about 150m people and the highest level of economic integration achieved in Africa.
According to the investors EAC needs to sort out 4 key challenges to become the most attractive regional economic community in Africa among German investors; streamline border operations, regular engagement with German investors, improve ranking on the ease of doing-business report and fast truck full implementation of the Common Market Protocol.
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tralac’s Daily News selection: 14 September 2015
The selection: Monday, 14 September
Important SA-US AGOA discussions resume today: selected updates
SA denies restricting US meat imports (Business Day)
South Africa was not restricting poultry imports from the US, but wanted imports to meet global health safety standards and not put consumers at risk, deputy director-general of international trade at the Department of Trade and Industry Xolelwa Mlumbi-Peter said on Sunday. On Monday, SA and US veterinarian experts meet amid threats by US politicians to reimpose tariffs on a range of SA goods unless Pretoria lifts restrictions on US chicken, beef and pork imports.
Crucial AGOA meeting on Monday (IOL)
Poultry dispute threatens South African trade with US (Wall Street Journal, subscription)
This week, in Abidjan: Towards a new deal on energy for Africa (AfDB)
The event will bring together leaders in the energy sector to craft next steps towards a Transformative Partnership on Energy for Africa to provide a major platform for structured private sector, multilateral and bilateral partnerships and financing to solve Africa’s energy challenge.
Next month, in Addis: Addressing structural transformation in Africa within the New Global Landscape (OECD/UNECA)
Relevant parliamentary documentation has been prepared and will be shared with CRCI prior to the meeting (22-23 October) in the three key areas of the subprogramme - reports on international and intra-African trade and related negotiations in support of regional integration; reports on food security, farming and land management in Africa; reports on industrialization, infrastructure and investment in Africa. [Aide-memoire]
Durban Declaration: 2050 vision for forests and forestry (FAO)
Nearly 4000 participants from 142 countries met at the XIV World Forestry Congress on 7–11 September 2015 in Durban, South Africa – for the first time on the African continent – in a spirit of inclusiveness and with a willingness to learn from each other, share diverse points of view and gain new perspectives. The Congress offers the following vision for forests and forestry as a way of contributing to achieving the 2030 Agenda for Sustainable Development, and a sustainable future to 2050 and beyond: [Download]
SADC-ICP Dialogue Platform: remarks by Dr Stergomena Lawrence Tax (SADC)
In the same vein the role of Private Sector in the implementation of SADC industrialization strategy cannot be over-emphasized. We need to work with the Private Sector with a view to empowering and enabling the private sector to drive SADC regional integration. SADC regional integration agenda must be private sector driven and beneficial to SADC Member States in particular SADC citizens.
Mauritius: Trade Obstacle Alert Mechanism launched (Government of Mauritius)
We need to put in place a system which will allow operators to report such Non-Tariff Barriers on a timely basis so that we can seek to have them addressed either bilaterally or on a regional or multilateral basis, as the case may be. While we have travelled a long way already in improving the business environment, the momentum has to be maintained until Mauritius is positioned among the very top performers and becomes one of the most attractive and uncontested business platforms, especially for Africa. This is where the Trade Obstacle Alert Mechanism comes into play. It will be operated, using the trade pPortal of my Ministry and will enable Government, through its various agencies to:
Namibia subsidises Botswana's diamond industry (The Namibian)
From the perspective of the government revenue Namibia should be opposed to any exports to its SACU neighbours - whether it is weaners to South Africa or diamonds - because this decreases Namibia's SACU revenue, which encourages imports rather than production to sell to outsiders. One way to deal with this is simply by modifying the SACU revenue sharing formula. SACCU members should agree to a modification of revenue sharing that excludes the intra-SCACU trade, especially of items such as diamonds. Otherwise, the country is caught up in a trap. [The author: Roman Grynberg]
Namibia: GDP grew by 6,4% in 2014 (The Namibian)
The domestic economy is estimated to have registered a strong growth of 6,4% in 2014 compared to 5,7% recorded in 2013, the Namibia Statistics Agency said on Friday in its final National Accounts. The main drivers behind this strong growth were the secondary and tertiary industries that recorded growths of 9,4% and 7,4% compared to 8,6% and 7,2% in 2013, respectively.
Industry in Angola occupies 0.6% of the workforce (MacauHub)
The manufacturing industry in Angola has just 45,100 employees, a number that accounts for 0.6% of the workforce, said Thursday in Luanda the secretary of State for Industry, Kiala Gabriel. In first place is retail, banking, insurance and services, which together account for 7.7 percent of the working population, followed by public works and construction with 4.7 percent, said the secretary of state, cited by Angolan news agency Angop.
Angola’s border towns will have logistics platforms (MacauHub)
The Angolan border towns of Massabi (Cabinda), Luvo (Zaire) and Santa Clara (Cunene) in the next few years will have logistics platforms, which will be managed under concessions, said Thursday in Luanda the Minister of Transport, Augusto Tomás.
Tata slates SA’s visa policy (Fin24)
The chairperson of Tata International, a subsidiary of the Indian multinational company responsible for managing its business in Africa, has slated South Africa’s immigration policy, saying it was taking too long to obtain visas and work permits for the company to deploy skilled managers to run its operations in Africa. Speaking at the company’s headquarters in Mumbai, India, Noel Tata said they were increasingly frustrated by the amount of time it took for the company to obtain the necessary documents to allow it to assign employees from outside South Africa to its offices in Joburg. “It is increasingly time-consuming to get visas for our business. We believe that, as a supervisory business, we ought to be granted a faster, quicker employment of visas to get into South Africa. We had to post people to Tanzania because it is easier to get visas and work permits there than in South Africa,” said Tata.
Malusi Gigaba: 'How SA can help solve migration crisis' (Sunday Independent)
Finding an empathic way to deal with refugees (IOL)
DRC: IMF concludes 2015 Article IV Consultation (IMF)
The authorities are urged to move swiftly to meet these challenges in order to preserve the hard-won gains and address rising inequality. In particular, they need to: (i) step up domestic revenue mobilization, (ii) accumulate more international reserves; (iii) remove bottlenecks to private sector activity, and (iv) strengthen governance and enhance transparency in the management of natural resources.
Tripartite meeting analyzes situation in DRC (AngolaPress) [Background]
Zambezi River Basin Programme: update (World Bank)
The engagement with ZAMCOM has already helped establish a permanent ZAMCOM Secretariat following the 2011 agreement. The program will also help revitalize the functionality of the Zambezi Water Information Management System (ZAMWIS) to improve information sharing on key aspects of the basin. Direct financial support to regional bodies and the riparian states is complemented by strategic analytical work, including a political economy assessment.
Ghana to cooperate with neighbours on trans-boundary water management (GBC)
East Africa: Region’s exports to EU face tough conditions (The EastAfrican)
Mistrust has emerged among the East African Community partner states over Tanzania’s commitment to the Economic Partnership Agreement that would give the region’s goods duty-free access to European markets. Tanzania is likely to delay the signing and ratification of the EPA document on the grounds that it was rushed through. Dar es Salaam has threatened not to sign the deal before its concerns on contentious issues are addressed. “If there are concerns being raised by a partner state under EPAs, shall be discussed and resolved at the regional level, as the countries are discussing the EPAs as a bloc and not individually,” said Tanzanian EAC Minister Harrison Mwakyembe.
Kenya: Importers oppose new port levies plan by Mombasa County government (Daily Nation)
Importers have threatened to move to court to block the Mombasa County government from introducing a raft of port levies. The Association of Importers of Kenya's national chairman, Mr Peter Mambembe, opposed the proposed levies, calling them illegal.
Bribery allegations delay works at Rubavu-Goma OSBP (New Times)
Construction of the Rubavu-Goma one-stop border post which should have begun in April will, instead, start in October, officials at Rwanda Transport Development Agency (RTDA) say, but a Rwf200 million bribery scandal, The New Times has established, could be behind that delay. The one-stop border post, which is supposed to link Rubavu town in Rwanda’s Western Province to Goma, the capital city of DR Congo’s North Kivu Province, is a hot spot for trade with daily traffic flows of close to 50,000 people generating millions of dollars annually. Howard G. Buffet Foundation, founded by American philanthropist Buffet, signed up to fund the project estimated to cost about $9 million.
Searching for the ‘Grail’: can Uganda’s land support its prosperity drive? (World Bank)
The latest and sixth edition of the Uganda Economic Update published by the World Bank, writes that with the falling global prices of oil, the delay in oil production in Uganda could benefit the country as government uses more time to strengthen the policy framework for oil management. Tightening of monetary policy will minimize inflation and ensure stability, but will increase the cost of borrowing and hence reduce the rate of investment by the private sector. Titled: “Searching for the ‘Grail’ - Can Uganda’s Land Support its Prosperity Drive?”, the update argues that alongside much needed infrastructure development, a more effective system of land governance, including for registering land, strengthening institutions for resolving disputes and urban planning, will boost productivity and transform livelihoods in Uganda. [Download]
ECOWAS partners FG on a regional automotive policy (Daily Independent)
According to the statement, Traore said that as a follow-up, the commission was planning to host a regional workshop of experts to holistically discuss matters relating to auto industry development with a view to having a common regulated market for increased flow of investments and trade transactions among West African countries. He listed issues for discussion at the proposed regional workshop to include common regulations and standards, rule of origin, components parts manufacturing, maintenance garages and vehicle credit financing.
Zimbabwe's Eve Gadzikwa lands ARSO presidency (The Chronicle)
Eve Gadzikwa, the director-general of the Standards Association of Zimbabwe has been elected the first female president of the African Organisation for Standardisation. She was elected president of the continental body at the 21st Arso general assembly meeting in Ethiopia last month. Gadzikwa said her three year tenure will start next year.
Tanzania: Disaster managers ready to face El-Nino (IPPMedia)
Tanzania: Lowassa promises 30% proceeds from foreign investors (The Citizen)
Illegal wildlife trade now ‘industrial-scale’ (IOL)
AERC Annual Report for 2014/2015
Shekhar Shah, Rajesh Chadha: 'Why India’s policymakers need to fire on all cylinders' (East Asia Forum)
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Foreign Affairs Minister reiterates Government’s commitment to facilitate business
The vision of the Government is to position Mauritius as a business hub for the region. It is therefore committed to facilitate business by eliminating obstacles to trade and investment. In this regard a number of trade facilitation measures are also being implemented, such as paperless customs and online tracking system, amongst others.
This statement was made on 10 September 2015 by Minister of Foreign Affairs, Regional Integration and International Trade, Mr E. Sinatambou, during the launching of the Trade Obstacles Alert Mechanism (TOAM) at The Westin Turtle Bay Resort and Spa, Balaclava. The launching was followed by the signature of the Inter-Agency Cooperation Protocol for the Trade Obstacles Alert Mechanism.
Minister Sinatambou underlined that the TOAM will play a crucial role in the building up of trade and will encourage investment as it will develop a platform to exchange ideas and will act on the confidence of entrepreneurs and business leaders. He added that this will be a new platform to improve public-private sector interaction.
The TOAM is an online platform which aims at facilitating the resolution of trade obstacles by favouring an exchange of information between commercial operators and public institutions. Commercial operators will, through this platform, have the possibility to report to ministries and organisations concerned trade obstacles which they may be facing in Mauritius or on foreign markets, through an alert system. Government agencies and organisations concerned will then be expected to respond to these trade alerts and take remedial measures, where required.
The TOAM has been developed with technical and financial assistance from the International Trade Centre and will be operated by using the existing Mauritius Trade Portal. Its objective is to identify and eliminate trade barriers, enhance transparency in the decision making process and improve public and private sector dialogue.
While the Mauritius Chamber of Commerce and Industry will act as the focal point, the Ministry of Foreign Affairs, Regional Integration and International Trade will be the National Coordinator.
The TOAM can be assessed at: www.tradeobstacles.org/mauritius
Speech of Hon. E. Sinatambou, Minister of Foreign Affairs, Regional Integration and International Trade at the launching of the Trade Obstacle Alert Mechanism, 10th September 2015
I am pleased to welcome you all this morning at the launching of the Trade Obstacle Alert Mechanism which we have developed with technical and financial assistance from the International Trade Centre.
Let me extend a special welcome to our guest from the International Trade Centre, Mr Mathieu Loridan.
I wish to avail of this opportunity to thank the International Trade Centre for its continued support to Mauritius. We have been collaborating with the Centre on several projects, the latest one being on the WTO Trade Facilitation Agreement. We are also in the process of finalising a more comprehensive project aimed at strengthening the export competitiveness of Mauritius.
Regarding the Trade Obstacle Alert Mechanism per se, a first workshop was held in October last year to introduce the mechanism to the stakeholders. Since then, my Ministry has been working with the International Trade Centre to finalise the project which we are launching today.
The vision of Government is to position Mauritius as a business hub for the region. Government is therefore committed to facilitate business by eliminating obstacles to trade and investment. In this regard, substantial progress has been made over the years to eliminate tariff barriers. Mauritius has thus registered the highest tariff cut from an average of 26.5% in 1995 to 0.85% in 2015 from among the WTO Members.
A number of trade facilitation measures are also being implemented, such as paperless customs and online tracking system, amongst others, which have contributed to improving trade competitiveness.
The results of these initiatives are best reflected in the various international and regional rankings of Mauritius. We are ranked the 10th freest economy in the world with an economic freedom score of 76.4, well above the world and regional averages of 60.4 and 54.9 respectively. Mauritius out-performs many developed countries on several indices, namely Business freedom with a score of 78, Trade Freedom-88.4, fiscal freedom-91.9, investment freedom-85.0 and monetary freedom 77.6.
Mauritius ranks 29th globally (out of 138 countries) in terms of trade facilitation and remains the best performer in Africa according to the Enabling Trade Report 2014 (World Economic Forum, 2014). The country scores highly in terms of market access, availability and quality of transport infrastructure and the operating environment.
The World Bank Ease of Doing Business Report 2014 has further ranked Mauritius 20th as the most attractive place to do business worldwide.
In some areas, though, namely on Property Rights, among others, and on some other forms of Non-Tariff Barrierssuch as cumbersome licensing requirements, additional efforts will have to be made to improve performance.
We are also constrained by Non Tariff Barriers on many of our export markets. A study carried out in 2013 on the impact of tariff and non-tariff barriers in some sampled export markets such as India, China and Russia has revealed some interesting findings.
Indeed, in the absence of tariffs, the value of exports would have increased by USD 1.45 billion over a period of three years on these sampled markets. However, the impact is far higher by USD 1.84 billion as a result of existing Non-Tariff Barriers which in 2012 would have amounted to 5.32% of our GDP. The impact is obviously huge.
We need to put in place a system which will allow operators to report such Non-Tariff Barriers on a timely basis so that we can seek to have them addressed either bilaterally or on a regional or multilateral basis, as the case may be.
While we have travelled a long way already in improving the business environment, the momentum has to be maintained until Mauritius is positioned among the verytop performers and becomes one of the most attractive and uncontested business platforms, especially for Africa.
This is where the Trade Obstacle Alert Mechanism comes into play. It will be operated, using the Trade Portal of my Ministry and will enable Government, through its various agencies to:
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Take stock of, and address where appropriate,obstacles to trade and investment as they ariseon the local front and on international markets.
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Ensure an all-inclusive approach towards problem solving in trade matters.
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Improve public and private sector dialogue as well as promote inter agency dialogue.
The building up of trade and encouraging investment is vital for development, but it depends on confidence and collaboration: confidence of entrepreneurs and business leaders, confidence of investors and consumers. To build such confidence, we need to develop a platform to exchange ideas and to act on the confidence expressed by all these important actors. The Trade Obstacle Alert Mechanism will play a crucial role in this regard.
This mechanism will however only live up to expectationsif all the agencies concerned with implementation of trade and investment related policies participate effectively in the process. Some of the important Agencies, without whose collaboration the system will not deliver, include the MRA, Customs, the Ministry of Industry, Commerce and Consumer Protection, the Ministry of Agro-Industry and Food Security, the Ministry of Health and Quality of Life, the Ministry of Business, Enterprise and Cooperatives and the Board of Investment. We look forward to working with them to ensure the success of the Alert Mechanism. The International Trade Centre will provide training on how to use the Mechanism and how to act on the Alerts received.
To ensure that the Mechanism is jointly operated by the public and the private sectors, the Mauritius Chamber of Commerce and Industry will act as the focal point to receive Alerts from the operators and my Ministry will spearhead the National Monitoring Committee to coordinate between the focal point and the Agencies concerned.
We are therefore embarking on a new platform to improve public-private sector interaction. Success will depend on our determination to make sure that the Trade Obstacle Alert Mechanism delivers on the objectives we have set to reduce, if not eliminate trade obstacles and to create a more conducive environment for business to thrive. We remain hopeful that we will achieve this objective.
With these words, I now have the pleasure to officially launch the Trade Obstacles Alert Mechanism.
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Crucial Agoa meeting on Monday
South African and US officials are to hold a crucial, urgent, last-ditch meeting on Monday to try to resolve outstanding trade issues before SA risks losing some or all of its R21 billion a year duty-free access to the lucrative US market.
If the issues cannot be resolved by September 30, SA could be denied – either partly or completely – the benefits of its participation in the African Growth and Opportunity Act (Agoa).
Agoa was to expire on September 30. The US Congress recently extended it for ten years but it singled out SA, making its continued participation mainly conditional on SA giving greater access to its market for US poultry, beef, and pork imports.
The US administration, legislators, and security industry are also demanding that SA amend proposed legislation that would require foreign security companies to sell off at least 51 percent of their ownership to South Africans.
Congress gave SA until September 30 – less than three weeks away – to do all of this.
Under pressure from the US, SA has promised concessions on most of these issues, particularly in January where it agreed to a quota of 65 000 tons of US poultry imports a year.
But the US believes that SA is putting up new barriers to replace old ones. So it is still not letting in poultry because of concerns about an outbreak of avian flu in the US. It has raised similar concerns about diseases in beef and pork.
The US side suggests SA is prevaricating and doesn’t understand the urgency in opening up its markets.
US Trade Representative Michael Froman evidently made this very clear to South African Trade and Industry Minister Rob Davies when he met him at the Agoa Forum in Gabon last month.
He “underscored the urgency of finding a resolution to the remaining issues in order to avoid a reduction of Agoa benefits for SA,” according to a statement issued by Froman’s office.
This week Trevor Kincaid, the deputy assistant US Trade Representative, underscored the point, telling ANA that: “Without swift action, SA risks losing important tariff benefits under Agoa.”
And US Senator Chris Coons, who represents the important chicken-producing state of Delaware, this week told ANA that: “US poultry representatives negotiated an agreement on exports with their South African counterparts in good faith, and while I remain hopeful that this agreement will be implemented, I am concerned that we are not seeing enough progress and that market barriers persist.
“I know the US Trade Representative takes this seriously and Congress has made clear that the United States should not allow other countries to enjoy trade benefits under Agoa while actively undermining our trading interests.”
Last year about R21 billion of South African exports entered the US duty free under Agoa. By far the largest category was autos – $1.3 billion; followed by ferromanganese $183 million; industrial fatty alcohols (a chemical) $46 million; oranges $41 million; and wine $33 million.
The US could deny either all or some of these specific benefits to SA.
On Monday veterinary experts and scientists, as well as senior trade policy officials from several different departments of both governments, will take part in the biggest meeting to date on the disputes, talking by telephone from Pretoria and Washington.
The main issue will be poultry imports. Because of an outbreak of avian flu in some US states, SA has banned all US poultry imports. The US believes that SA should “regionalise” by accepting poultry from states or areas not affected by avian flu. It says this is what many other states do and that SA does this for other regions, such as the European Union and parts of Asia.
But South African trade and industry department deputy director general Xolelwe Mlumbi-Peter said on Friday it was unfortunate that the US had experienced an outbreak of avian flu just after the quota agreement. The flu had spread quickly to 20 US states and so SA would need assurances from the US that it had put in place controls to prevent it spreading. She added that avian flu was a hazard not only to birds, but also to humans.
Similar issues surround imports of beef and pork. South African officials recently told the US that Cabinet has rescinded the South African ban on US beef because of concerns about mad cow disease. But then South African officials told them they would have to do their own audits of US beef facilities before imports could begin.
The US evidently saw this as moving the goalposts but Mlumbi-Peter insisted it was “standard practice” internationally to insist on audits.
And with pork, the US complains that SA is only letting in a very small number of cuts and on top of that is requiring time-consuming and costly special processing.
Mlumbi-Peter presented SA’s demands as reasonable, saying SA had agreed to let in low-risk pork cuts but was insisting on extra processing for higher risk cuts.
The US says that over 100 other countries accept all its meat products without the same severe restrictions and additional processes which SA demands. So it doesn’t see why SA can’t.
Mlumbi-Peter said she was confident about a successful outcome of Monday’s meeting – “but both sides have to find a solution. The US will have to assure us it can control the spread of avian flu”.
The US is also demanding that SA scrap a clause in the controversial Private Security Industry Regulation Amendment Bill which would prevent foreign owners from having a controlling stake in private security companies by forcing them to sell at least 51 percent of the companies to South Africans.
The bill was passed by Parliament more than a year ago but President Jacob Zuma has still not signed it. US officials had been told by their South African counterparts that Zuma had already sent the bill back to Parliament to make these changes.
But that does not seem to be true as Zuma told journalists this week he was still considering it thoroughly because the bill deals with “very complex” issues.
“You’d not want to disadvantage business on one hand, but on the other, you’d not want to hand over the security of the country,” he said.
Davies said on Saturday that SA was taking the risk of losing Agoa benefits seriously which was why it had negotiated the 65 000 ton poultry quota.
He did not want to say, before talking to SA’s veterinary experts, if SA was prepared to regionalise imports of US poultry. But he would be meeting the veterinary experts before their meeting “to communicate the consequences” of their decisions – a clear reference to the risk of losing Agoa benefits. Not everything depended upon the outcome of Monday’s meeting because there could be further discussions this month, “but it certainly is an important meeting,, Davies said.
He had gathered from his meeting with Froman in Gabon that the three meats would be the critical issues at Monday’s meeting and not so much the private security bill.
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Region’s exports to EU face tough conditions
Mistrust has emerged among the East African Community partner states over Tanzania’s commitment to the Economic Partnership Agreement that would give the region’s goods duty-free access to European markets.
Tanzania is likely to delay the signing and ratification of the EPA document on the grounds that it was rushed through. Dar es Salaam has threatened not to sign the deal before its concerns on contentious issues are addressed.
The region has until December 31 to sign the deal with the European Union or go back to the negotiating table.
Initial document
A source at the EAC Secretariat, who is privy to the matter, said Tanzania was forced to sign the initial document on the eve of October 14 after the EU threatened to withdraw its funding for agriculture under the European Development Fund (EDF).
“At the time when Tanzania had refused to sign the initial document, discussions on when to release the EDF funds to member countries were ongoing in Italy. So Tanzania was given an option of either signing or forgoing the EDF funds. The same night they agreed to sign the EPA document,” said the official.
Of concern to Tanzania is liberalisation of imports from the EU where the EAC has committed to liberalise up to 82.6 per cent of all its imports from the EU.
The area of concern is the export duties where the EAC partner states will not be allowed to impose new export taxes or increase existing ones unless they can justify special needs with regard to revenue, food security and environmental protection.
“Tanzania is concerned to ensure the country is not turned into source of raw materials and markets for European goods,” said the EPA official.
“The country is also concerned that its domestic production for exports could be put at risk due to EU competitiveness and the EPA requirement to eliminate tariffs on these lines.”
The five East African countries and the EU Commission are expected to sign the EPA before the end of this year and ratify it by October 2016.
“If all does not go as scheduled, only Kenyan exporters to the EU will be expected to pay full duty for the products to access the market,” said the official.
Burundi, Rwanda, Uganda and Tanzania have to rely on the Everything But Arms trade regime where they have duty-free market access to the EU.
However, it is not clear whether Kenya will trade under the less preferential EU generalised system of preferences (GSP), meaning Kenyan exporters would be subjected to import duties of between 5 per cent and 8.5 per cent.
Addressing concerns
“If there are concerns being raised by a partner state under EPAs, shall be discussed and resolved at the regional level, as the countries are discussing the EPAs as a bloc and not individually,” said Tanzanian EAC Minister Harrison Mwakyembe.
Kenya Flower Council chief executive Jane Ngige confirmed that Tanzania had raised the concerns.
EPA experts were last week meeting in Brussels to scrutinise the document and add the legal text.
The EAC has committed to liberalise up to 82.6 per cent of all its imports from the EU by 2033.
This extensive liberalisation is based on the argument that the region needs cheap intermediate goods to be used as inputs in production processes, thus enhancing competitiveness; and finished products whose availability at lower costs is deemed to have consumer welfare-enhancing effects.
However, permanent removal of tariffs on the products makes it difficult for EAC to produce them in future.
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SADC and International Cooperating Partners meet in Gaborone
SADC and its International Cooperating Partners (ICPs) convened a SADC/ICP Dialogue Platform Meeting on 11th September, 2015 in Gaborone, Botswana. The meeting was co-chaired by the Executive Secretary H.E. Dr Stergomena Lawrence Tax representing SADC, and the Head of the European Union Delegation to Botswana and to SADC, Ambassador Alexander Baum representing the ICPs.
The objective of the meeting was to engage on how to cooperate in implementing the SADC priorities for Regional Integration outlined in the Revised Regional Indicative Strategic Development Plan (RISDP) 2015-2020, and supported by the SADC industrialization Strategy and Road Map 2015-2063, SADC Regional Infrastructure Development Plan, and SADC Regional Agricultural Policy.
SADC presented to its Partners, the sequenced priority milestones to be achieved during the period 2015-2020 and the estimated indicative public coordination costs for the SADC Secretariat and for the Member States. The indicative public coordination costs of the SADC Secretariat are estimated to be over US$364.5 million, while the indicative available resources from both the SADC Member States and the ICPs are estimated at US$206.7 million leaving an indicative funding gap of USD109.1 million. A significant part of this gap falls under the priority area of infrastructure development.
The meeting agreed on the importance of aligning the support from ICPs with SADC approved priorities, and noted the need to simplify, harmonize and mainstream ICPs support in line with SADC planing, monitoring, and financial systems and procedures. The importance of aligning ICPs support towards SADC approved priorities, in particular the identified financing gaps in priority areas A and B, namely industrialization and Market Integration; and Infrastructure Development was emphasized. It was also noted that the indicative public coordination costs for the Member States are currently estimated at US$ 330.4 million, and SADC is seriously exploring alternative financing mechanism with a view of financing SADC priorities adequately and sustainably.
The SADC/ICP Dialogue Platform Meeting was attended by the Representatives of the International Cooperating Partners, the SADC Double Troika Member States (Botswana, Mozambique, South Africa, Swaziland, the United Republic of Tanzania and Zimbabwe), and representatives of the SADC Ambassadors in Gaborone. The SADC Double Troika Member States and the SADC Secretariat convened on Thursday 10th September in preparation for the meeting with ICPs.