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tralac’s Daily News selection: 27 May 2015
The selection: Wednesday, 27 May
50 years at the service of Africa 1964-2014 - AfDB Golden Book
This Golden Jubilee is an important landmark for the African Development Bank and the rest of the continent. The Bank grew out of Africa’s quest for solidarity and cooperation during the 1960s, and has become the pre-eminent development finance institution on the continent. It has gone through various stages in its life cycle. Still, the Bank remained faithful to the objectives set by its founders – promoting economic integration, reducing poverty and raising Africa’s standing in the world.
Participants at AfDB seminar say open borders necessary for integration (AfDB)
Discussants at the meeting argued that simplifying visas to unlock the movement of talent would play a significant role in boosting Africa’s competitiveness and integration. Data from research on the subject entitled, “Unlocking Africa: Simplifying visas to allow the free flow of talent,” a collaboration between the World Economic Forum's Network of Global Agenda Councils, AfDB and McKinsey, presented at the seminar revealed that Africans require visas to travel to half of the countries on the continent. The statistics also show that only 14 African countries offer liberal access to all African citizens.
@AfricanBizMag: The best passports for getting around Africa without visas are those of Gambia, Cote D'Ivoire and Kenya
@achaleke: Somalis require the most visas to travel across Africa...
@achaleke: Kenyans Ivorians Gambians need visas to visit 41% of African countries. Cameroonians need visas for 59%!!!
Africa brings huge benefits for SA: Patel (Business Report)
Xenophobia must be countered by spreading the message to ordinary South Africans about the huge benefits which the rest of Africa brought to this country, Minister of Economic Development Ebrahim Patel said on Monday. He said 244 000 direct jobs in South Africa were sustained by exports to the rest of the Africa. And if one added the indirect effect through those direct workers paying taxes and buying goods the total number of direct and indirect jobs rose to 885 000. The largest export market for South African plastic products was Zimbabwe, for TVs it was Zambia and for clothing it was Mozambique, he said, focusing on countries where many immigrants had come from.
Impact of migration felt by many countries (Ghana Business News)
The seminar was held to assess the economic contribution of labour migration in developing countries as well as nations of destination including Ghana, La Cote d’Ivoire, Rwanda, South Africa, Kyrgzyz Republic, Nepal, Thailand, Dominican Republic, Costa Rica and Argentina. The four-year project, which began in 2014 was co-funded and jointly implemented by the European Commission, the OEDC Development Centre and the International Labour Organisation. It was aimed at arriving at a reliable and evidence-based understanding of the economic impact of immigration in low and middle-income countries.
Meet Mozambique's new visa rules (Club of Mozambique)
Tony Leon: 'How Gigaba has killed tourism in four easy steps' (RDM)
Zambia: Open borders for maize exports – Koch
AGRI-Wes managing director Nico De Koch has urged Government to consider opening up borders for maize export to enable more people venture into agriculture as a business. “If Government can offer a free market for agricultural products, prevent the dumping [of goods] from outside into the Zambian market, and open up the borders for us to trade with the Democratic Republic of Congo, we can supply them with maize instead of that country getting maize from South Africa as the case is,” he said.
Highlights from the #MegaTradingBlocs conference in Nairobi:
Regional trade blocs threat to WTO, CS Amina Mohamed warns (Daily Nation)
“It is therefore imperative to critically interrogate the potential impact of mega-regions in a view to formulating an appropriate response on how the agreements are likely to affect the excluded countries’ defensive and offensive trade interests. “We need (WTO) to strengthen the role and maintain and importance of the world trade organization in the trading system. We should not allow that role to be diluted,” she added.
@commonwealthsec: An Africa-wide Continental FTA could increase intra-African trade by $55.1 billion
@commonwealthsec: Megatradingblocs could lead to a $2.7bn reduction of Africa's exports
APEC and the WTO: 'Where are we heading?' (Jakarta Post)
Developing countries’ trade envoys in Geneva have become more concerned these days that discussions on such important issues have been kept behind closed doors in meetings among the so-called G5-Plus countries — namely the US, the EU, China, India, Brazil, Australia and Japan, with the director-general as the chair. To make things even worse, the rest of the WTO members could get information on what has been discussed only from some publications such as the Washington Trade Daily and more recently, the Third World Network’s journal SUNS. [The author, Iman Pambagyo, is the Indonesian ambassador in charge of the WTO]
Zimbabwe proposes legislation to fight ‘rampant’ illicit financial flows (The Source)
The government is crafting legislation to compel mining firms to release production data to the fiscus to help curb illicit financial flows (IFFs) and transfer pricing which is costing African countries at least $50 billion annually, finance minister Patrick Chinamasa said on Friday.
Slowdown fears as imports set for tighter screening (Business Daily)
Kenya is set to introduce tight screening measures on imports, sparking fears of slow down of cargo clearance at the Mombasa port. Treasury secretary Henry Rotich said measures to be implemented from as early as July, will see nearly 50 per cent of import cargo scanned. At the moment, only five per cent of the imported consignment is scanned.
KRA tightens cargo scrutiny to curb smuggling (Business Daily)
After the Vietnam seizure, the Kenya Revenue Authority said it would henceforth subject Kenya’s Sh100 billion a year tea export to tough security checks in a move that could further hurt the country’s top foreign exchange earner. The taxman’s Southern Region manager George Muia said tea will no longer be treated as low risk consignment because it had become an easy target for concealing contraband.
Botswana dry port a white elephant (New Era)
Botswana High Commissioner to Namibia Tshenolo Modise says the Botswana dry port is underutilised and has become an embarrassment. The High Commissioner was speaking at a two-day business forum organised by the Botswana Investment and Trade Centre in an effort to market and promote the Botswana dry port to businesses from both Namibia and Botswana. Construction of the Botswana dry port started in 2013 and was completed mid-2014.
China set to extend Nairobi-Naivasha railway (Business Daily)
Kenya has started talks with the Chinese contractor building the new Mombasa-Nairobi railway to extend the line to Naivasha from 2017. The extension of 120 kilometres will link special industrial zones that would be established at Naivasha to Nairobi and Mombasa, according to a statement from State House.
How China will drive Dar’s plan for industrialisation (The Citizen)
The government’s goal to turn Tanzania into a semi-industrialized nation is officially starting this year, with a number of high-profile projects on the cards. If what the minister for Industry and Trade, Dr Abddallah Kigoda, told Parliament in Dodoma yesterday is anything to by, then construction of the Sh5-trillion twin Mchuchuma coal and Liganga iron-ore mining projects will officially kick off before the end of this year. Mchuchuma is estimated to bear 540 million tonnes of coal deposits, which is enough to produce 600MW for a period of over 100 years. Out of the megawatts, said Dr Kigoda, 250MW will be at Liganga iron-ore mining project while the remaining 350MW will be injected into the national grid.
Government, Arab states to sign labour export deals (Daily Monitor)
To stop the abuse of Ugandans searching for greener pastures, the Ministry of Gender, Labour and Social Development is in the final stages of signing bilateral labour deals with eight Arab countries. The countries include the United Arab Emirates, Qatar, Saudi Arabia, Bahrain, Iraq, Kuwait, Somalia and Afghanistan. Mr Bigirimana said: “We also want to manage irregular migration and regulate recruitment by private firms exporting labour.”
Future scenarios for energy in SA and SADC (CUSP Consulting)
This paper explores the current trends in energy sustainability in South Africa and the Southern African Development Community. An exploration is made of the current factors affecting energy supply, production, consumption and security and these are forecast into a baseline scenario for energy in SA. Alternative scenarios have been constructed considering the policy approach and private sector strategy that would be required, to ensure energy sustainability through an integrated regional approach. The authors demonstrate that opportunities exist regionally in the energy sector, through new partnerships and investments, and explore the antecedents required to unlock their implementation.
NANTS urges implementation of ECOWAS Common Tariff to boost regional trade
The National Association of Nigerian Traders (NANTS) has called for the implementation of the ECOWAS Common External Tariff to boost regional trade among member countries. “There must be some level of carefulness in the implementation of the CET, the enforcement of the laws, because we are porous, so that we do not allow third parties to benefit, while we lose and then we become a dumping ground, our industries will stifled and die away. There must be constant monitoring of the impact of the CET on the economy; the future is watching, history is waiting.”
5-year import ban on rice could earn Nigeria $2.6bn annually’ (ThisDay)
Former minister of commerce and industry, Charles Ugwuh at the weekend called on Nigeria to place a five-year import embargo on rice, saying within such timeframe, the country could concentrate efforts on in-country production, displace imports and save $2.6 billion spent annually on rice imports.
Ghana and the new African Growth and Opportunity Act (GhanaWeb)
Ghana can take advantage of AGOA by focusing on a few carefully selected products and rapidly building our capability to effectively produce, process and export such products. Ghana can also take advantage of the capability development programmes that will be promoted by the various US agencies. [The author is the Executive Secretary of the American Chamber of Commerce, Ghana]
Latest credit ratings: Nigeria, Angola and Gabon downgraded; Kenya, Uganda stable; Rwanda improves (M7G Africa)
Zim, Nigeria urged to sign BIPA (Southern Times)
Building a Mozambican agriculture powerhouse: just join up the dots - with finance, preferably
Ethiopian Airlines to fly to Cape Town (ETNW)
George Wachira: 'IMF regional economic outlook report highlights ways to increase trade, jobs' (Business Daily)
Poorest nations, not just richest, must act to end extreme poverty: campaigners (Thomson Reuters Foundation)
@akin_adesina: We must share the risk AND the reward, particularly in fragile states, in order to realize Africa's true potential.
The Annual World Bank Conference on Africa: confronting conflict and fragility in Africa (8-9 June)
The 2015 Natural Resource Governance Institute Conference (25-26 June)
China and UK hold consultations on African Affairs (China MFA)
This post has been sourced on behalf of tralac and disseminated to enhance trade policy knowledge and debate. It is distributed to over 300 recipients across Africa and internationally, serving in the AU, RECS, national government trade departments and research and development agencies. Your feedback is most welcome. Any suggestions that our recipients might have of items for inclusion are most welcome. Richard Humphries (Email: This email address is being protected from spambots. You need JavaScript enabled to view it.; Twitter: @richardhumphri1)
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Participants at AfDB seminar say open borders necessary for integration
Saddled with 54 national markets and tight migration policies, the idea of an integrated and prosperous Africa would remain a pipe dream if African countries fail to open their borders to free movement of people, goods and service.
This was the central theme of a seminar titled “Africa without Borders: What will it take?” held in Abidjan on Monday, May 25, 2015 as part of the Annual Meetings of the African Development Bank Group (AfDB).
Discussants at the meeting argued that simplifying visas to unlock the movement of talent would play a significant role in boosting Africa’s competitiveness and integration.
Data from research on the subject entitled, “Unlocking Africa: Simplifying visas to allow the free flow of talent,” a collaboration between the World Economic Forum's Network of Global Agenda Councils, AfDB and McKinsey, presented at the seminar revealed that Africans require visas to travel to half of the countries on the continent.
The statistics also show that only 14 African countries offer liberal access to all African citizens.
Issues related to national security, impact of the influx of foreigners on the local economy and financial returns from visa fees are among the reasons cited to justify expensive visa requirements for Africans to visit African countries, according to the presentation made by Acha Leke, Director, McKinsey & Company, South Africa.
Some of the recommended solutions include ensuring positive reciprocity between countries, encouraging more visa-free regional blocks, scaling up visa-on-arrival programmes for African citizens, or launching regional block visas.
Others include offering multi-year visas after assessing the applicant, simplifying the visa application process and the possibility of offering an ‘Africa passport’ to Africans who meet a set of key requirements (e.g., businessmen and -women who travel extensively across the continent).
The Bank’s Vice-President for Infrastructure, Private Sector and Regional Integration, Solomon Asamoah, spoke about the institution’s regional trade policy and the efforts being made to encourage the free movement of people across the continent. He said the seminar at the Bank’s Annual Meetings was organized with a view to informing the Bank’s efforts to promote integration.
Nkosana Moyo, Director of the Mandela Institute for Development Studies and former AfDB Vice-President and Chief Operations Officer, spoke on the need to facilitate travel for African businessmen and -women across the continent in the same way African politicians use diplomatic passports to facilitate travel across the continent with relative ease.
He also emphasized the need to be more objective on African immigration by trying to understand and manage people’s movements and expectations across borders. Conducting reliable skills audits, for example, would make it possible to determine with some certainty the job openings that can be filled by migrants.
The Director General of Rwanda’s Directorate of Immigration and Emigration, Anaclet Kalibata, briefed the seminar on how his country has been able to manage its open borders scheme for visiting Africans. The success of the scheme, he said, derives from the confidence in the belief that most immigrants are not bad people as well as the government’s ability to manage the process efficiently.
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Poorest nations, not just richest, must act to end extreme poverty: campaigners
The world’s rich donor nations must increase their overseas aid budgets and reverse the trend of declining funding for the poorest countries in order to meet a global goal of ending poverty by 2030, an advocacy group said on Tuesday.
Yet governments of the least-developed countries must also contribute by committing to a minimum level of spending to provide basic services, including health and education, for everyone within five years, the ONE Campaign said in a report.
As world leaders prepare to meet at a development finance summit in Addis Ababa in July, ahead of agreeing a new set of development goals later this year, ONE said 2015 could be a pivotal year for the world’s most vulnerable people.
The United Nations is expected to adopt 17 Sustainable Development Goals (SDGs) in September, which will replace the eight existing Millennium Development Goals and address issues such as healthcare, education, water, energy and climate change.
“Despite multiple summits to debate these issues, there’s a shocking lack of global leadership to deliver genuine, life changing commitments for the world’s poorest and hardest to reach,” said Eloise Todd, ONE’s global policy director.
“New global goals which could set out the roadmap to end extreme poverty will be worth little if leaders fail to back them with an ambitious financing plan,” she said.
Official development aid (ODA) from the 28 member countries of the OECD Development Assistance Committee (DAC) was stable in 2014, after hitting an all-time high in 2013, but aid to the poorest countries continued to fall, according to the DAC.
Less than a third went to the least developed countries, most of which are in sub-Saharan Africa, where almost half of the population live in extreme poverty on less than $1.25 a day, said ONE, which was co-founded by Irish rocker Bono.
Increasing that share of the aid to 50 percent would have made an extra $26.5 billion available last year for the world’s poorest people, the report found.
ONE also urged the DAC countries to meet the United Nations target of spending 0.7 percent of their national wealth on ODA by 2020. Only Britain, Denmark, Norway, Sweden and Luxembourg have met the target to date, according to the DAC.
Governments of the least-developed countries should increase domestic revenues, by implementing fair tax policies and curbing corruption, to help them address a funding gap of $34.5 billion to deliver basic social services to everyone by 2020, ONE said.
They should also invest in agriculture and energy to support sustainable growth, and focus on investments in women and girls, who are more effective at lifting communities out of poverty than men, the report said.
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Slowdown fears as imports set for tighter screening
Kenya is set to introduce tight screening measures on imports, sparking fears of slow down of cargo clearance at the Mombasa port.
Treasury secretary Henry Rotich said measures to be implemented from as early as July, will see nearly 50 per cent of import cargo scanned. At the moment, only five per cent of the imported consignment is scanned.
“We have made plans to acquire state-of-the-art scanners to be stalled at the port of Mombasa,” Mr Rotich said.
“We know goods have to move fast, but the issue of security has also become very important to us,” he said.
A rigorous scanning is likely to lengthen the time it takes to clear imports at the port. Kenya currently beats most of its East African neighbours by the faster pace at which it clears imports and exports at its ports and borders.
The World Bank’s Doing Business 2015 indicates that it takes only 26 days at a cost of Sh226,000 per container to clear imports in Kenya.
By comparison, it takes 27 days at a cost of Sh480,000 per container to clear imports in Rwanda and 31 days at a cost of Sh324,000 to clear goods coming into Uganda.
“Mombasa port is headed for big changes. A lot of activities will also be taking place around here to ease traffic congestion and improve transport link with other East African markets,” Mr Rotich said last week.
He was speaking at a donors’ conference organised in Mombasa to mobilise Sh46.5 billion funding for projects “that will transform the port into a word-class facility.”
The conference was organised by TradeMark East Africa (TMEA). The World Bank estimates that an efficiently working port of Mombasa would unlock an additional two per cent of the gross domestic product (GDP).
Mobilising funds
Among other projects, the TMEA is mobilising funds that the Kenya Ports Authority (KPA) requires to relocate Kipevu oil terminal at a cost of Sh14.4 billion ($150 million) to a more spacious area where larger vessels of up to 200,000 tonnes can dock.
Development of a lighter wharf at a cost of Sh66.7 billion to store more motor vehicles and project cargo and the deepening of first five berths, at a cost of Sh24.3 billion, to accommodate larger vessels also rank high among the projects.
The KPA is also expected to deepen the berths number six to 10 to improve general cargo uptake as well as to undertake second phase of dredging at a cost of Sh14.4 billion to create access to the Dongo Kundu free port and special economic zone.
“A number of youths will get jobs when the projects start. Once the facilities are expanded, the benefit will extend beyond Mombasa to the whole of East Africa”, said Infrastructure principal secretary John Mosonik.
The conference was attended by representatives from Japan International Cooperation Agency, World Bank, European Union delegation to Kenya, Development Bank of South Africa, African Development Bank (AfDB) and UK’s DfID.
The DfID took the lead, pledging Sh3.5 billion last week to finance the port projects.
As at the start of the donors’ conference, the TMEA said it had mobilised just about $50 million out of the $484 million that it requires to expand Mombasa Airport Road and improve the Mombasa Port facilities.
Out of the funds, $20 million (Sh2 billion) will be invested in the expanding the 6.4 kilometres Moi International Airport/Port Reitz access road to a dual carriage way.
Another $36 million (Sh3.24 billion) has also been mobilised to finance the port infrastructure facility programme which seeks to cut time that cargo takes to pass through the Mombasa port by two days.
“We are focusing on the entire transport system so that our port can fully play its role,” Mr Mosonik.
On Friday, Mr Rotich also signed a Sh10.4 billion concessionary loan with the AfDB to finance the expansion of Mombasa-Mariakani Road to dual carriageway.
It is estimated that about 4,000 trucks use the road per day, causing massive traffic jam in Mombasa and delaying shipment to Nairobi and the region’s landlocked states.
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Africa seeks super banker to manage economic frontier
Eight candidates are vying to become the next head of the strategic African Development Bank as the continent is undergoing an economic transformation.
With 80 shareholders – 54 African states and 26 non-African countries – set to vote on Thursday, it is difficult to predict who will succeed Rwandan Donald Kaberuka, bank chief for two consecutive terms since 2005.
The new super banker will take over an AfDB seeking to diversify beyond its traditional role as a development bank, which lends money for major projects – a total of $6.8 billion for 317 operations in 2013.
Today despite multiple conflicts, health crises such as Ebola, and staggering poverty, Africa is seen as “a new frontier in world economic growth,” Amethis investment fund founder Luc Rigouzzo told AFP.
He noted that the continent’s gross domestic product had doubled since the year 2000 to $2 trillion (1.8 trillion euros). In an OECD-led report released Monday, economists predicted the overall African economy would expand by 4.5 per cent this year.
In this new frontier, shareholders in the Abidjan-based bank might, for the first time pick a woman, Cristina Duarte, Cape Verde’s finance minister, who would also be the first Portuguese speaker to run the bank.
Other contenders include Akinwumi Adesina from Nigeria, which rivals South Africa as an investors’ favourite despite fighting a six-year insurgency by Boko Haram Islamists in the country’s north.
However, a win by Adesina, Nigeria’s outgoing agriculture minister, would break an unwritten rule that regional heavyweight countries should not run the AfDB.
PLAY KEY ROLE
The candidates from Francophone African countries are Mali’s Birama Sidibe, an expert in development, Tunisia’s ex-finance chief Jalloul Ayed and Bedoumra Kordje, current finance minister in Chad, who if chosen would become the AfDB’s first president from central Africa.
Ethiopian finance minister Sufian Ahmed, Sierra Leone’s foreign minister Samura Kamara and former AfDB vice president Thomas Sakala of Zimbabwe round out the list.
Foreign investors will likely play the role of kingmaker in choosing the next AfDB chief.
The United States – the AfDB’s second-biggest shareholder after Nigeria – will have a central role in the vote, as will Japan and China.
France wants a bank president who is “more concerned about the interests” of Francophone Africa, says the finance ministry.
But analysts say Western powers need to take a new view of Africa.
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Association urges implementation of ECOWAS Common Tariff to boost regional trade
The National Association of Nigerian Traders (NANTS) has called for the implementation of the ECOWAS Common External Tariff (CET) to boost regional trade among member countries.
Its National Secretary, Mr Ken Ukaoha, made the call in an interview with the News Agency of Nigeria (NAN) on Tuesday in Abuja.
He said that the non-implementation of the common tariff could lead to the disorganisation of the region.
Ukaoha stressed the need to put necessary measures to ensure its implementation.
“The Common External Tariff, if implemented, can help the region to grow; it can also help in achieving the distribution and redistribution of wealth across the region.
”It can also work towards fast tracking poverty reduction, because you are creating jobs for the people.
“It can also guarantee and help or assist consumer choice; and most importantly, it will help member countries come together and do things as one; it is an open door to common market operations in the region.
“However, if you don’t implemented very well, it can also lead to disorganisation of the region and disappearance of ECOWAS.
“There must be some level of carefulness in the implementation of the CET, the enforcement of the laws, because we are porous, so that we do not allow third parties to benefit, while we lose and then we become a dumping ground, our industries will stifled and die away.
“There must be constant monitoring of the impact of the CET on the economy; the future is watching, history is waiting.”
According to him, before CET, there have been laws and other protocols which have not been able to promote trade in the region.
“ECOWAS has all the necessary legal tools for trade and integration; talking about these laws and protocols, you will find out that we have, before the CET, laws that are able to move businesses round and laws that are able to facilitate business transactions within and across the region.
“Unfortunately, West Africa has still been revolving between 10 per cent and 12 per cent of internal trade.
“CET was adopted last year and implementation started from that year, it is not clear yet how many countries have implemented this and to what extent they are implementing now as it is.
“But I would say that ECOWAS has done a good job by promoting the Common External Tariff adoption because we need to look inwards.’’
The CET was inaugurated by Heads of States and Governments of ECOWAS member countries for West African nations in 2014.
It is a basic feature of the customs union as a form of economic integration whereby all countries are expected to discard their individual tariff structure with which they trade with third countries.
With CET, the same customs duties, import quotas, preferences or other non-tariff barriers to trade apply to all goods entering the area, regardless of which country within the area they are entering.
All 16 countries within the ECOWAS are expected to commence the implementation of a uniformed tariff on imports which was expected to take effect from January, 2015.
The tariff, set at 35 per cent at most, is expected to modify the rights and obligations of ECOWAS member countries under the CET.
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tralac’s Daily News selection: 26 May 2015
The selection: Tuesday, 26 May
Featured report: African Economic Outlook 2015
Economic Outlook - five thematic chapters
The chapter, Trade policies and regional integration in Africa, also examines the link between regional integration and spatial economic development, highlighting the impact of integration on industry location in Africa. Regional integration also generates spatial development, and regional institutions play a key role promoting spatial development and inclusion. Regional integration should help spread the gains from closer ties to a wider number of countries and regions. The key observations are intended to help policy makers focus on this, especially the need to help least developed and landlocked countries.
Regional development and spatial inclusion - three thematic chapters
Adopting a place-based approach will help policy makers articulate sectoral policies more effectively for structural transformation. This chapter proposes a seven-step methodology to crafting development strategies, stressing four main areas of improvement: designing informed policies through better statistics; defining integrated strategic priorities through regional foresight studies; building capacity at multiple levels of government; and mobilising adequate financing for regional economic development at both local and national levels.
Country notes: Each profile includes synopses of the overall state of the country, recent economic developments, macroeconomic policy, structural issues, the political and social context, human development, one sector relevant to development and vital country statistics. [Statistics]
Gender Equality Index for Africa: launched yesterday in Abidjan (AfDB)
The @AfDB_Group has invested $32bn across Africa (@AfDB_Dominic)
Intra African trade as % of total trade by that regional grouping (@prepaid_africa)
Ethiopia, Nigeria, Zimbabwe in tight race to become new AfDB chief; battle could break 'unwritten' rules (Mail & Guardian Africa)
Bank to the future: new era at the AfDB (Africa Research Institute)
India signs replenishment of technical cooperation agreement with African Development Bank Group
On Africa Day, UN chief spotlights continents’ achievements, reflects on challenges of 2015 (UN News Centre)
African countries to stand up to mega-trading blocs (Commonwealth Secretariat)
Senior officials and experts will meet to consider the future of African trade in light of the emergence of mega-trading blocs which exclude more than 160 countries from regional trade negotiations. The meeting organised by the Commonwealth Secretariat in collaboration with the International Institute for Sustainable Development will take place in Nairobi from 26 to 27 May 2015. Participants will look at ways to ensure the trade interests of African countries are taken into account at global and regional levels. The Commonwealth Secretariat will present the first draft of its Policymakers Handbook on Regionalism and Mega-Trading Blocs at the meeting.
Kenya: Business reforms key to new Africa growth (Business Daily)
Africa enters its 20th consecutive year of economic expansion, with the World Bank forecasting that the region’s GDP growth will remain steady at 5.1% through to 2016. Africa’s collective GDP is now roughly equal to Brazil’s or Russia’s, and the continent is among the world’s most rapidly growing economic regions. While today we are one of the fastest growing economies in the world, others are apprehensive about whether our steadily expanding economy is sustainable and inclusive. Creating an enabling environment for business through instituting legal and regulatory reforms is critical to realising Kenya’s goal of sustainable industrialisation and inclusive growth. [Commentary by Adan Mohamed, Kenya’s Cabinet Secretary of Industrialisation, Enterprise and Development]
Kenya: Budget office differs with State on 2015 economic growth projections (The Standard)
The Parliamentary Budget Office has dismissed the Government’s projections on this year’s economic growth, becoming the first public body to poke holes in Kenya’s prospects. “A GDP growth estimate of 7.0 per cent in 2015 is unlikely to be met due to exogenous shocks, such as inadequate rainfall and the weak outlook of global economy. It is our considered opinion that the economy will grow by 5.6 per cent in 2015, rising to 6.0 per cent in the medium term,” the report notes.
Kenya: Import costs set to rise as shilling hits new three-year low (Business Daily)
AfDB 2015 economic outlook gives East Africa best growth prospects (New Times)
Regional body tips Tanzania as next EA economic powerhouse (Daily News)
Tanzania has high potential to become the economic powerhouse in the East African region given her natural wealth and strategic geographical positioning, but there are challenges to overcome before it can realise its potential. This is the observation of the TradeMark East Africa, Chief Executive Officer, Frank Matsaert whose organisation is assisting East African Community (EAC) member states, Tanzania, Kenya, Uganda, Rwanda and Burundi to promote trade and integration.
TMEA’s second country programme is expected to begin in 2017 after the expiry of the current programme, whose main highlights include the 593 million US dollar modernisation project of the Dar es Salaam port it partnered with the World Bank and the British Department of International Development. He said they would also focus on activities to improve cross border trade and continue with improving capacity of institutions dealing with regional integration.
Zimbabwe: Platinum weighs down trade figures (The Herald)
Zimbabwe’s trade deficit with key trading partners continues to grow after the country’s exports for April declined to $185,9 million from $188,7 million recorded in the prior month, latest Zimstat data has shown. The drop was mainly due to the decline in mineral exports after mining companies’ suspended exports in April following the introduction of the 15 percent levy on un-beneficiated minerals. For April 2015, Zimbabwe’s total exports were valued at $185,9m, while the country’s imports were $465,8m leading to a deficit of $279,9m. Total imports for the first four months of the year stood at $2,03bn against exports for the same period of $902,4 million.
South Africa GDP growth slows to 1.3% as manufacturing slumps (Bloomberg)
South Africa’s economy, the continent’s second-largest, grew at a slower pace in the first quarter as power outages curbed manufacturing output and farming output contracted. Gross domestic product rose an annualized 1.3% from the previous quarter, when it expanded 4.1%, the statistics office said in a report released in Cape Town on Tuesday. The median estimate of 19 economists in a Bloomberg survey was 1.5%. Manufacturing fell an annualized 2.4% in the first quarter and agricultural output contracted 16.6%, the statistics office said. Mining rose 10.2%, while financial services expanded 3.8%.
Trading in chaos (Greenpeace Africa)
In its new report published today, Trading in Chaos, Greenpeace Africa reveals the findings of two years of investigations into the operations both at home and abroad of one of the key players in the DRC logging chaos, Lebanese-owned Cotrefor. The results are a depressing cocktail of unpaid taxes, shocking mistreatment of employees, rampant irregularities in operational procedure and exceeding allocated quotas of the endangered tree species Afrormosia that are permitted to be logged.
High freight and storage costs hurting regional trade, say shippers (Daily Nation)
An audit conducted by the Shippers Council of Eastern Africa on companies drawn from a cross-section of segments has revealed where the traders go wrong in logistics leading them to incur huge losses that could otherwise be easily avoided. According to the Pilot logistics survey report, most companies have not implemented a fully integrated logistics system. The firms mostly focus more on third-party agencies to run their transportation and warehousing necessities.
UK pledges further support towards port of Mombasa (TradeMark East Africa)
DHA grants reprieve for SADC direct-transit pax (SA Tourism Update)
South Africa’s neighbouring countries have breathed a “cautious” sigh of relief as the Department of Home Affairs has revealed that no supporting documents – including an unabridged birth certificate – will be needed for travellers under 18, who are in direct international transit, passing through SA’s international airports. Neighbouring countries have been bracing for the impact that the new South African immigration regulations for minors could have on their tourism industries, as South Africa is an important feeder hub into the SADC region.
Mozambique is African Number 5 in FDI: most of the US$9bn went to real estate projects
In Mozambique, where the International Monetary Fund estimates a 7% growth this year, US$9bn in capital investments was received last year, the majority of which was devoted to real estate, a sector driven by the plans to build over a dozen shopping centres by Belgian company Pylos and by the investment projects of African company Atterbury Property Developments in the cities of Beira, Pemba and Nacala
Botswana: Millers warn phasing out wheat import levy will flood market with imports (Sunday Standard)
Government is bracing for a backlash following the announcement of a reduction in wheat levy, which local millers believe will contribute to dumping and in the long run kill the domestic economic diversification drive. The Ministry of Trade has decided to phase out the 15 percent wheat levy over a period of 10 years—a move that has irked the Maize and Wheat Millers Association (MWMA) and Botswana Bakers Association. The position of the two is that the levy should be retained to protect local millers from dumping.
Nigeria loses over $2bn annually to smuggled poultry products (ThisDay)
The national president of the Poultry Association of Nigeria, Dr. Ayoola Oduntan, explained that over 1.2m tonnes of smuggled poultry products, which are mainly frozen chicken and turkey, has continued to impact negatively on poultry farmers in the country. He warned that the industry is also threatened by the negative of the Economic Partnership Agreement (EPA) and the introduction of the Common External Tariff discouraging local production.
Tunisian, Nigerian manufacturers to explore trade opportunities (ThisDay)
Regional co-operation on taxation: avoiding harmful tax competition (New Era)
Recently, SADC drafted guidelines for tax incentives and indirect taxes that are expected to be presented at the next Committee of Ministers’ meeting scheduled for next month. If adopted by the committee, it will be in the discretion of member states to implement these guidelines domestically.
It was noted that the current initiatives to ensure that ex-miners received their benefits involved a number of countries in the SADC region. As such it was important to establish a regional mechanism at the SADC level for cross border remittances of benefits for migrant workers. Furthermore, stakeholders were encouraged to explore areas of synergy on other regional processes and initiatives such as the SADC TB programme in Mining. At a regional level, Ms Phiri noted that, the Regional Indicative Strategic Development Plan (2015-2020) recognised ex-miners challenges and as a result it was hoped that the SADC Cross Border Portability Instrument for Social Protection will be implemented by 2018.
Safety nets in Africa (World Bank)
Safety Nets in Africa presents the rationale for targeting safety net programs to households that are chronically food insecure or vulnerable to food insecurity. Seven case studies (Cameroon, Ghana, Kenya, Malawi, Mozambique, Niger, and Senegal) are then presented that document a variety of approaches and experiences in country targeting efforts, taking into account country needs and existing programs. [Download]
The politics of redistributive transfers (GIGA)
JK reconvenes EAC summit on Burundi (The Citizen)
Joint statement by EAC-COMESA, ICGLR, AU and UN on the situation in Burundi
Burundi crisis threat to EA stability, says COTU boss
High hopes on GM maize targeted at Mozambique's droughts, diseases (Club of Mozambique)
Trade lobby warns horticulture sector under threat over new EU rules (The Standard)
Reliance on trade makes food systems vulnerable (ScviDev)
Tanzania: Noni retires as chair of continental financing body, AADFI (Daily News)
TRA clears South African firm of misconduct (Daily News)
This post has been sourced on behalf of tralac and disseminated to enhance trade policy knowledge and debate. It is distributed to over 300 recipients across Africa and internationally, serving in the AU, RECS, national government trade departments and research and development agencies. Your feedback is most welcome. Any suggestions that our recipients might have of items for inclusion are most welcome. Richard Humphries (Email: This email address is being protected from spambots. You need JavaScript enabled to view it.; Twitter: @richardhumphri1)
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Africa: making growth more inclusive hinges on unlocking potential of local economies, says the African Economic Outlook 2015
Continent should capitalise on youth, develop rural-urban trade corridors
With Africa’s population set to triple by 2050, modernising local economies will be vital to make the continent more competitive and to increase people’s living standards, according to the African Economic Outlook 2015, released at the African Development Bank Group’s 50th Annual Meetings.
Surpassing most regions in spite of the global financial crisis, African economies will grow by 4.5 per cent in 2015 and may reach 5 per cent in 2016, converging with Asia’s current growth rates. However, lower oil and commodity prices, uncertain global conditions, the consequences of the Ebola outbreak in West Africa and domestic political uncertainties could delay an expected return to pre-2008 levels of growth.
Foreign direct investment (FDI) is forecasted to reach USD 73.5 billion in 2015, underpinned by increasing greenfield investment from China – which remains Africa’s largest trade partner after the European Union. The report also shows an increase in intra-African and outward FDI flows. South African companies are the leading investors on the continent.
“African countries have shown considerable resilience in the face of global economic adversity. For future growth to be sustainable and transformative will require that its benefits are shared more equitably among the population and that governments continue to pursue policies that promote economic stability,” stated Steve Kayizzi-Mugerwa, Acting Chief Economist and Vice-President of the African Development Bank.
Human development levels in Africa have increased since 2000, with 17 out of 52 countries reaching middle or high levels of development. But the region’s poverty rates remain stubbornly high while progress in health, education and income are uneven. Huge inequalities persist between and within countries, and between women and men. In many areas, low productivity and investment, the absence of infrastructure and rural-urban networks and too few jobs outside of the agricultural sector are holding back economic and development progress.
The continent’s demographic boom is exacerbating these challenges. By 2050, both cities and rural communities in Africa will see their population grow drastically, with the countryside gaining an estimated 400 million people.
For instance, the report states that over the next 15 years, 370 million youth will enter sub-Saharan Africa’s labour markets, making it necessary to create many more jobs and opportunities for savings and investment. In addition, that population growth, combined with climate change, will exert increasing pressure on natural resources, such as food, water and land.
The report argues that past efforts to promote regional development through territorial management, infrastructure development and decentralisation have been scattered and had limited impact. As a result, the potential of Africa’s regions, which includes river basins, border areas and key rural-urban corridors, remains unfulfilled.
“African economies could benefit from mobilising the wide and extraordinary untapped potential of their diverse regions. Putting people and places at the centre of policy-making may improve Africa’s competitiveness and the well-being of Africans” said Mario Pezzini, Director of the OECD Development Centre.
Transforming economies will require exploring more productive sectors, through promoting manufacturing, developing services, creating strategies for green growth or modernising the agricultural sector.
In addition, tackling spatial inequalities would require implementing policies that cut across sectors. These include diversifying rural economies and linking them with cities, through the promotion of value chains and trade corridors. They also include unlocking domestic financing, developing transport and communication and investing in basic social services.
“Inclusive and sustainable growth is a fundamental aspect of Africa’s post-2015 development agenda for economic and social transformation,” said Abdoulaye Mar Dieye, the Director of the Regional Bureau at the United Nations Development Programme (UNDP). “We need to invest in building economic opportunities, including at the local level. And especially those of young women and men who are the architects of tomorrow’s Africa.”
The report calls for strengthening skills and education, addressing exclusion through the development of targeted social protection measures, and promoting universal access to sustainable energy and technology.
Chapter 3: Trade policies and regional integration in Africa
Africa has long sought deeper economic integration, and this chapter looks at trends and issues in trade and politics with an impact on progress being made at regional and continental levels. The chapter also examines the link between regional integration and spatial economic development, highlighting the impact of integration on industry location in Africa. Regional integration also generates spatial development, and regional institutions play a key role promoting spatial development and inclusion. Regional integration should help spread the gains from closer ties to a wider number of countries and regions. The key observations are intended to help policy makers focus on this, especially the need to help least developed and landlocked countries.
About the report
The African Economic Outlook is produced annually by the African Development Bank (AfDB), the OECD Development Centre and the United Nations Development Programme (UNDP).
For the full report, including statistics and 54 individual country notes, please visit the African Economic Outlook website. For more information on the African Development Bank’s 2015 Annual Meetings, visit www.afdb.org/am.
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African countries to stand up to mega-trading blocs
Senior officials and experts will meet to consider the future of African trade in light of the emergence of mega-trading blocs which exclude more than 160 countries from regional trade negotiations.
The meeting organised by the Commonwealth Secretariat in collaboration with the International Institute for Sustainable Development will take place in Nairobi from 26 to 27 May 2015. Participants will look at ways to ensure the trade interests of African countries are taken into account at global and regional levels.
The advent of mega-trading blocs – the Trans-Pacific Partnership, the Trans-Atlantic Trade and Investment Partnership and the Regional Comprehensive Economic Partnership in Asia – has significant implications for regions such as Sub-Saharan Africa, which, so far, has been bypassed by negotiations.
Deodat Maharaj, Deputy Secretary-General of the Commonwealth Secretariat, described the conference as ‘essential’ to amplify the concerns and interests of member countries excluded from key trade talks.
He said: “The world economy has seen a seismic shift in the trading environment with the rise of regional giants dominating the landscape. More than 160 countries are excluded from these mega-regional negotiations, including the entire Sub-Saharan Africa. The Commonwealth, therefore, has taken a leading role in raising global awareness of the implications of mega-trading blocs for countries squeezed out of deals.
“With the next World Trade Organisation conference to take place in Nairobi later in the year, this meeting is both timely and essential to bring together experts to advocate for the trade interests of excluded countries. It will be an opportunity to ensure member states do not lose out, and to find ways to boost trade in the region, vital for sustainable economic growth.”
The conference will provide a unique platform for policymakers, standard-setting bodies, experts and researchers to assess the impact of mega-trading blocs on Sub-Saharan Africa, share expertise and explore strategic responses. The keynote address will be delivered by Dr Amina Mohamed, Cabinet Secretary of the Kenyan Ministry of Foreign Affairs and International Trade.
“These mega-regionals could be major game-changers for world trade,” said Mohammad Razzaque, Acting Director of the Commonwealth Secretariat’s Trade Division.
Describing the possible negative consequences the region could face, Dr Razzaque added: “Sub-Saharan African countries could face greater competition in their key export markets, while investment may be diverted when countries cannot meet the stricter rules and standards introduced by these major new agreements.”
The Commonwealth Secretariat will present the first draft of its Policymakers Handbook on Regionalism and Mega-Trading Blocs at the meeting. Outcomes of discussions will inform the Secretariat’s ongoing programme of work to maximise the trading capacity of member countries.
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UK pledges further support towards port of Mombasa
The UK’s Department for International Development (DFID) and TradeMark East Africa (TMEA) have signed a £23million (KES3.5 billion) grant agreement.
The funding is targeted towards modernization work at the port of Mombasa including infrastructure investments aimed at addressing energy efficiency, speed up import and export trade handling, and minimise environmental impacts at the port of Mombasa. This additional support now brings total DFID funding towards the port to £63 million (KES 10 billion), further demonstrating UK’s support to Kenya’s development.
Speaking at the event, the Deputy Head of Department for International Development (DFID), Tony Gardner said: “The expansion of the port modernization work at the port of Mombasa will take into account environmental and social aspects and this will go a long way in complementing existing projects, and in expanding the flow of benefits to stakeholders, including the population of Mombasa and the wider East Africa Community residents”.
The port of Mombasa is the gateway to East and Central Africa, serving close to 250 million people along the Northern Corridor. The funding will add to the cost reductions targets under the current Mombasa port improvement programme and will contribute to reducing carbon emissions, increasing energy technologies within the port thereby improving workforce productivity. The additional support is in response to a recent study that was conducted by the Kenya Ports Authority which recommended the need for mainstreaming of climate change and renewable energy into port operations.
TradeMark East Africa Director General David Stanton added: “The UK government is TMEAs largest investor and continues to be a key ally in promoting regional and economic integration in East Africa. This project aims at minimising environmental impacts whilst addressing energy efficiencies. This investment is among many projects that TMEA is spearheading through the UK government support at the Mombasa Port to enhance trade environment in the region since East Africa has amongst the highest freight and transport costs in the world. These costs seriously erode the marginal competitiveness of goods exported by East African countries, reducing trade, economic growth, job creation and poverty reduction.”
Through TMEA, UK and its seven other development partners are currently spending about US$700m (Kshs 51 billion) on reducing barriers to trade and accelerating regional economic integration in the East African Community (EAC). Improvements at the port of Mombasa are critical to increasing regional trade in the EAC with benefits that include reductions in the cost of goods of up 40%.
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On Africa Day, UN chief spotlights continents’ achievements, reflects on challenges of 2015
Each year, Africa Day is an opportunity to celebrate the continent’s achievements and to reflect on its challenges, United Nations Secretary-General Ban Ki-Moon said on Monday, highlighting the courage and determination it took to make remarkable progress to end the Ebola outbreak and urging leaders to commit to ending violence against women and empower them.
“The dominant story of the year has been the Ebola crisis that swept West Africa, claiming at least 11,000 lives and threatening hard-won social, economic and political achievements,” Mr. Ban said in his remarks on the Day, which is celebrated worldwide on 25 May.
Now, we have to intensify efforts to get to zero and stay at zero cases, repair the damage and strengthen social and institutional resilience throughout the continent, Mr. Ban urged.
To help mobilize support for this important task, the UN chief will convene an International Ebola Recovery Conference at the United Nations in New York in July.
Overall, the continent’s economy grew by roughly four per cent in 2014, creating one of the longest stretches of uninterrupted positive economic expansion in Africa's history.
“As a result, a growing number of Africans have joined the middle class each year. With investment in education, health and infrastructure increasing, the prospects for much of Africa are bright,” the Secretary-General added.
The challenge now is to spread these benefits of Africa's progress more broadly and deeply, particularly to the women and girls who represent Africa’s future. Empowering women will help build better, more equal and more prosperous societies, Mr. Ban said, commending the commitment of the African Union to gender equality and the empowerment of women.
“While we work to break down the social, economic, environmental and cultural obstacles that women and girls face, let us also recognize the gains that have been made,” he emphasized.
“Africa leads the world in female representation in parliaments and the continent has one of the highest rates of female entrepreneurship. Let us be inspired by these successes and intensify efforts to provide Africa’s women with better access to education, work and health care and, by doing so, accelerate Africa's transformation,” the Secretary-General said.
He called on the international community to do more to end violence against women and girls while strengthening their role in all fields, including peacebuilding.
Despite an overall decline in the number of conflicts, too many Africans still experience violent conflict. Women and girls bear the brunt and are frequent targets of sexual violence and abuse.
“We know that conflicts breed where people suffer from poor governance, human rights violations, exclusion and poverty,” the UN chief said, applauding Africa’s vision to build, by 2063, a peaceful and prosperous continent where democracy, human rights and the rule of law are entrenched and flourishing, starting with the aim to silence all guns by 2020.
“I reaffirm the commitment of the United Nations to work with the African Union, the regional economic communities and African countries and their citizens to make this vision a reality,” he added.
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Women’s empowerment at top of agenda as AfDB launches Gender Equality Index for Africa
Are women and men on a level playing field? That was the question of debate on Monday, May 25 as the African Development Bank (AfDB) unveiled its first-ever Gender Equality Index for Africa in Abidjan, on Day 1 of the Bank’s 50th Annual Meetings.
The index, titled the Empowering African Women: An Agenda for Action, was launched as part of the opening events at the week-long AfDB meetings, in a session called “Gender Equality: Where are we?”
Geraldine Fraser-Moleketi, AfDB’s Special Envoy on Gender, said at the index’s unveiling ceremony that it’s expected to provide African governments with a benchmark to evaluate the effectiveness of their policies to advance gender equality.
The index, which covers 52 of Africa’s 54 countries, examines the role of women as producers, in human development, as active citizens and leaders and also provides maps for each area.
Its launch comes at a time when women’s empowerment is on the top of the African agenda with the African Union having declared 2015 the year of Women’s Empowerment and Progress towards Agenda 2063, to optimize resources to the benefit of all Africans.
In a brief comment about the index, AfDB President Donald Kaberuka said the Bank has decided to be at the forefront of gender equality efforts: and for this reason the position of Special Envoy on Gender was created.
“At the time of creating the position, the AfDB was great at so many things, but falling short on many others. By creating the position of Special Envoy on Gender, it was a signal that the subject meant a great deal to the Bank’s business and I hope my successor will continue with this trend,” he said.
The index lauds African countries such as Rwanda, which, with 64 percent female representation in public service, including Parliament, has the best gender representation globally, a feat that the AfDB encourages other African countries to emulate.
During a high-level panel to discuss the new index, Frannie Leautier, CEO of the Mkoba Private Equity Fund in Tanzania, said men and boys have a great role to play in ensuring inclusivity for women and girls.
“Without good gender policies in place, women can still make it, but they would have to grow muscles to navigate in the unlevel playing field and I hope stories of successful women can help inspire other women to make it,” said Leautier.
Also on the panel was Ashish Thakkar, founder of Mara Group and Mara Foundation, who said that there’s a need to celebrate more successful women who have made it in spite of the current challenges in many countries in Africa.
Thakkar said, at Mara, the organization has a gender inclusive approach in choosing which start-up entrepreneurs to work with although he said women applicants are still few.
“Out of the over 500 young entrepreneurs we are currently working with, only about 30 percent of them are women. The figure is low. We still have to do a lot to encourage young women that they can make it,” he said.
Saran Daraba Kaba, Executive Secretary of Mano River Union based in Sierra Leone, said helping women achieve higher success should start with enabling them to attain basic level education to set their foundation for bigger achievements.
Members of the panel agreed that African governments must work towards achieving inclusive growth that leaves no one behind including women.
However, the AfDB’s Special Envoy on Gender, Fraser-Moleketi, also challenged women and girls to stand up and claim their rights and space.
“Women must make an effort to claim the space and fill the space because what men can do, they can do too,” she said.
Reliance on trade makes food systems vulnerable
Boosting international trade may not be the best way to improve food security, as it makes many countries vulnerable to food shortages caused by market fluctuations, according to new research.
A study published on 11 May in Proceedings of the National Academy of Sciences found that countries heavily reliant on importing their food – including many in the Arab world and Latin America – are more exposed to environmental and market shocks than those where at least half of all food is home-grown.
As the global population grows and agricultural production reaches the planet’s maximum capacity, food trade systems can destabilise more easily as small shocks in food supply will impact more people, the study warns.
“It challenges the idea that all trade is good,” says Paolo D’Odorico, environmental scientist at the University of Virginia in the United States, and one of the study’s authors. “We depend on trade but at the same time we need to be aware that it makes the whole food system vulnerable to crisis.”
D’Odorico and his team analysed trade and food production data from 140 countries between 1986-2010. They used computer modelling to simulate how small changes in population affect the quantity of food that is available through a combination of local production and trade.
Countries that rely on imports are much more vulnerable to food pressures caused by population growth and they find it harder to secure their food supply than exporting countries or those where imports and exports are roughly equal, the researchers found. Much of North Africa, the Middle East and Latin America fall into this vulnerable category, they say.
“We depend on trade but at the same time we need to be aware that it makes the whole food system vulnerable to crisis.” Paolo D’Odorico, University of Virginia
Also, the number of countries deemed at risk of food shortages has ballooned during the last 25 years – whilst at the same time the planet witnessed an explosion in international trade, the paper states.
This increase in global food trade was caused in part by innovations in agriculture that allow for more food production and preservation.
David Debucquet, a senior research fellow at the International Food Policy Research Institute in Washington, United States, says trade can be a help, not a hindrance, to food security, as it triggers the development of technology.
The potential for companies to recoup the cost of developing innovations through global expansion helps drive their research and attracts foreign investment in national food systems, he says.
D’Odorico, on the other hand, believes that creating sufficient stockpiles of food in import countries is the most effective safeguard against shocks in food availability, such as natural disasters and bad harvests. Global grain stocks have fallen by ten per cent since 1990 as a result of easier access through trade, and are now only able to fulfil a fifth of annual demand, according to the paper. Rebuilding these stocks must be a top priority for governments to safeguard against food shortages, says D’Odorico.
However, existing food stocks around the world are not well monitored, the paper states, and it is uncertain if these reserves would be maintained through trade.
But Debucquet says that, despite such misgivings, trade has an overall positive effect on stabilising food prices and mitigating extreme weather events.
“From time to time you have a big accident that is often linked to bad policies but there is nothing wrong with trade itself,” he says.
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tralac’s Daily News selection: 25 May 2015
The selection: Monday, 25 May
Africa and the New Global Landscape: AfDB 2015 Annual Meetings start today in Abidjan
Bank Governors, usually Finance and Economy Ministers or Central Bank Governors representing the Group’s 80 member countries, will lead over 2,500 delegates and confirmed participants at the meetings which are taking place on the central theme, “Africa and the New Global Landscape.” The gathering will review the Bank’s 2014 operations and its 2015 development funding portfolio, as well as challenges facing the African region in key areas such as climate change, infrastructure, private sector and governance.
Just launched: The African Economic Outlook 2015 and 54 country notes is posted
@AfDB_Dominic: Big week coming up for @AfDB_Group as it chooses a new President at its Annual Meeting in Abidjan, follow hashtags #afdbdecides #AFDBAM2015
Sakala carries SADC's hopes (The Standard)
Why you should care who’s in line to run Africa’s development bank (Quartz)
Oil slump, slow growth greets new African Development Bank Chief (Bloomberg)
How much has African Development Bank impacted on Africa’s economies? (Daily Monitor)
Establishment of a natural resources management centre: concept note (AfDB)
The Bank has been working with countries in the management of natural resources to find paths to development that ease pressure on natural assets while better managing environmental, social and economic risks. Given the existing demand, for the Bank to play this role effectively and meet the expectations of RMCs, there is it needs to scale up its work on NRM. This paper outlines the challenges in NR management, the role of the Bank and a proposal for the establishment of a Natural Resource Centre as a way to consolidate and reinvigorate the support to the sector.
Nkosazana Dlamini-Zuma: ‘Africa is world’s biggest exporter of jobs’ (IOL)
Accounting for natural resources, green economy key for Africa’s devt (New Times)
Adan Mohamed: 'Why Kenya textile sector needs new and expanded AGOA trade pact' (Business Daily)
Finally, the ongoing US-Kenya private sector engagement is now more robust than before, something that we must aggressively take advantage of to create an inclusive growth agenda in trade and investments. Kenya is committed to make major policy shifts, including strides made in reducing the cost of doing business, mitigation of non-tariff barriers and development of value chains, key to seizing the opportunity. [The author is the Cabinet Secretary for Industrialization, Enterprise and Development]
South Africa and the United States push for resolution of the chicken issue (the dti)
Simon Freemantle: 'Trade patterns underline Africa’s shifting role' (Business Day)
We have known for some time that Africa’s commercial relationship with the world is changing. Two correlated features explain this. [Standard Bank: Africa's re-pivoting trade portrait: 2014]
Trade ministers to meet next month in Paris on WTO (Zee News)
Trade ministers of about 15 countries including India, the US, EU, Australia, Brazil, South Africa and China are expected to attend this crucial meeting. India will present its views on bringing back issues related to the long-stalled Doha Round including agriculture (export subsidies, cotton and fishery subsidies), market access and services, the official said. The ministers will finalise the agenda for the Ministerial Conference, which is the highest decision making body of the World Trade Organisation, scheduled from December 15-18 in Nairobi, Kenya.
EIF steering committee endorses the scope and modalities for 2016-2022 second phase
"The second phase of the EIF Programme will produce a more dynamic and result-driven EIF, demonstrating increased efficiency, effectiveness, sustainability and value for money," said Ambassador Yvette Stevens of Sierra Leone and Chair of the EIF Board. The new measures will ensure the success of the EIF as a unique global trade partnership for LDCs, as was highlighted by Supriya Kumar Kundu on behalf of Bangladesh as the LDC Coordinator:
Kampala–Juba–Addis Ababa–Djibouti Corridor: trade and transport facilitation study
Part of the grant is intended to cover the Consultancy Services for Trade and Transport Facilitation Study which comprises (i) trade and transport facilitation study for the Kampala–Juba–Addis Ababa-Djibouti Road Corridor, (ii) feasibility studies, architectural and detailed engineering design and preparation of bidding documents for one stop border posts at the South Sudan–Ethiopia order and Ethiopia–Djibouti border. The scope of services included under this project among others are:
Djibouti dreams of being ‘new Dubai’ (Daily Nation)
Uganda: SGR project to start next month (Daily Monitor)
Construction of the Standard Gauge Railway in Uganda is set to commence next month in Kampala, Works minister John Byabagambi has revealed. He said construction of the railway line, which will connect Uganda, Kenya, Rwanda and South Sudan, is expected to be complete in 36 months. The project will commence with the Kampala-Tororo axis.
Kenya, AfDB ink Sh10.4bn deal for dual carriageway for Mombasa-Mariakani road
South Africa: competition issues in liner shipping (OECD)
Most of the abovementioned exemption and cartel investigations seem to have mainly been triggered by exemptions granted in other jurisdictions such as Europe. The Competition Commission has also received and considered mergers in the liner shipping industry. This paper therefore reflects the experience of the Commission and highlights the challenges it has encountered in its approach to the liner shipping industry from the different enforcement and merger cases it has handled.
Zimbabwe to develop new mining fiscal regime (The Herald)
Government is working with the Royal Norwegian Embassy and the World Bank to develop a new Mining Fiscal Regime network which will create an efficient transparent and productive tax system. Finance and Economic Development Minister Patrick Chinamasa told delegates at the Chamber of Mines 76th annual general meeting last week that the current mining fiscal regime had its challenges which have created a host of distortions and administrative challenges.
Rwanda: Forum seeks to enhance supply of professional services to EAC (New Times)
Policymakers and professionals will Tuesday meet at a consultative forum in Kigali to review the state of matters in regard to regulation of professional services committed by Rwanda under the EAC Common Market Protocol. The meeting will look into challenges encountered in the process, as well as assess the rate of cross-border practice by Rwandan professionals.
Barclays win over KRA saves banks hefty tax demand (Business Daily)
Barclays Kenya has won a protracted legal battle with the Kenya Revenue Authority, which was demanding tax payments on fees remitted to Visa, Mastercard and American Express for electronic money transfer services. Justice George Odunga last week ruled that the taxman’s classification of withholding tax on the royalty fees is vague and cannot be used to demand levies from the bank. There are 12,552,312 debit cards in the country, according to statistics released by the Financial Sector Deepening in February, and the number is likely to continue increasing. Currently, 27% of retail transactions are done electronically.
Let market forces determine sugar imports: Wassira (The Citizen)
Requesting the National Assembly to endorse Sh353.14 billion for his ministry during the 2015/2016 financial year, Mr Wassira said Tanzania produces an average of 300,000 tonnes of sugar for domestic use annually. The country’s demand stands at 420,000 tonnes of sugar for domestic consumption plus other 170,000 tonnes of sugar for industrial use yearly.
Botswana: Local businesses seek opportunities at Namibian dry port (Mmegi)
The Botswana Investment and Trade Centre will [this week] take 15 local business people to Namibia, on a trade mission to expose them to opportunities that exist at the recently opened Dry Port in Walvis Bay.
BOCCIM changes name to ‘Business Botswana’ (Mmegi)
Zambia: IMF concludes 2015 Article IV Consultation (IMF)
Key risks to the outlook are delayed fiscal adjustment in the lead-up to general elections in 2016, persistent low copper prices, and policy uncertainties that could undermine investment in the economy. On the upside, steps taken by the government to resolve mining taxation problems by easing documentation for VAT refund claims by exporters and the decision to rescind the new fiscal regime for mining introduced in January 2015 could lead to higher copper production and growth.
Roberto Azevedo: 'For global cities, the global trading system works best' (Straits Times)
Some have suggested that the proliferation of regional agreements may, in some way, constitute a threat to the WTO and the multilateral trading system. I disagree. Trade liberalisation is contagious, and when countries agree to open markets in a regional setting, they are more inclined to do so globally as well.
Out of African opportunities (Sydney Morning Herald)
Australian businesses are continuously being informed of the opportunities in neighboring Asia but we have a neighbor to the West that is equally worthy of our attention. Australia's bilateral merchandise trade with Africa grew to almost $12 billion in 2013, more than double the value in 2009, which is indicative of the positive changes taking place in the region and the growing opportunities for trade and investment. So where do the opportunities exist for Australian small businesses in Africa? [The author, Stacey Mills-Smith, is the trade policy and research manager for the Export Council of Australia]
The Coming Financial Climate (UNEP)
Harnessing the global financial system to deliver climate security, reduce the risks of high carbon assets, and scale up capital for the low carbon transition is possible, but will only happen with a comprehensive, system-wide approach to financing - including the $37 trillion of energy infrastructure - in the next two decades. Drawing from an array of policy innovations, some of which are already taking place at the country level, 'The Coming Financial Climate', a new report by UNEP, identifies measures that can make climate security an integral part of a sustainable financial system.
Malusi Gigaba: 'Africa is central to SA's future' (IOL)
Perceptions that bog down EAC integration (Business Daily)
What treaty? Anger, delay at EA borders (Daily Nation)
Citizens wait on Buhari as Nigeria’s economy shuts down (BusinessDay)
ECA and UMA assess progress made in joint cooperation (UNECA)
EALA wants speedy implementation of peace and security decisions (EALA)
Kenya punching below its weight in battle for FDI (Business Daily)
This post has been sourced on behalf of tralac and disseminated to enhance trade policy knowledge and debate. It is distributed to over 300 recipients across Africa and internationally, serving in the AU, RECS, national government trade departments and research and development agencies. Your feedback is most welcome. Any suggestions that our recipients might have of items for inclusion are most welcome. Richard Humphries (Email: This email address is being protected from spambots. You need JavaScript enabled to view it.; Twitter: @richardhumphri1)
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Free trade area to link Cape and Cairo
The Tripartite Free Trade Area stretching from Cape to Cairo – which has been in the works since 2008 – will be launched on 10 June in Sharm el-Sheikh, in Egypt.
Trade and Industry Minister Rob Davies gave the date in a media briefing ahead of his budget vote in the National Assembly, in parliament, Cape Town, on 21 May.
The zone will stretch from Egypt to South Africa and will connect consumers in the 26-member countries of three existing trade blocs: the Common Market for Eastern and Southern Africa (Comesa), the East African Community (EAC), and the South African Development Community (SADC).
“The Tripartite Free Trade Area… will signal that we are on track to create a market of over 600 million people with a combined gross domestic product [GDP] of over $1-trillion,” he said in his budget vote.
“Later in the same month, in South Africa, negotiations will be launched for the establishment of a Continental FTA that will embrace the entire continent – a market of 1.3 billion people with a combined GDP of over $2-trillion.”
Those negotiations will be launched at the 25th AU Summit, taking place in South Africa from 7 to 15 June.
In announcing these moves, Davies said South Africa had been playing a prominent role in championing developmental integration in the regional economic communities of which it was a member, and in the African Union.
“These developments follow the extraordinary SADC Summit held last month which approved a SADC Regional Industrialisation Strategy and Roadmap. South Africa strongly supports regional and continental efforts to build more industrialised and diversified economies and reduce member states’ overdependence on primary products.”
Speaking to the media on the sidelines of his budget vote, Davies said South Africa supported the T-FTA because it believed that such a zone could contribute to the regional value chain. While it would be launched officially next month, he admitted there were still some “tariff schedule agreements” that needed to be finalised.
These were unpacked in his budget vote delivered to the National Council of Provinces a day earlier, on 20 May.
“There has been a concerted effort to enhance access for South African products, especially value-added exports in international markets. Africa remains at the centre of our efforts, where we have been actively championing continent-wide industrialisation and an ambitious development integration programme,” he said in explaining South Africa’s involvement in the T-FTA.
“[Its] launch signifies the conclusion of negotiations on the legal instrument and will be followed by a process to finalise negotiations on tariffs and Rules of Origin, the key elements of a functional free trade area. This is an important milestone in the implementation of the development integration agenda in Africa aimed at promoting market integration, based on industrial and infrastructure development.”
The African market was crucial for South Africa’s industrialisation and job creation efforts as one of the key destinations for its value-added exports, Davies explained to the council of provinces.
The T-FTA will account for half of the membership of the African Union and 58% of the continent’s GDP, according to a statement issued following the Tripartite Sectoral Committee of Ministers in Bujumbura, Burundi, on 25 October 2014.
“The Tripartite FTA, popularly known as the Grand Free Trade Area, will be the largest economic bloc on the continent and the launching pad for the establishment of the Continental Free Trade Area (CFTA) in 2017,” reads part of the statement.
“It offers significant opportunities for business and investment within the Tripartite and will act as a magnet for attracting foreign direct investment into the tripartite region. The business community, in particular, will benefit from an improved and harmonised trade regime that reduces the cost of doing business.”
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South Africa and the United States push for resolution of the chicken issue
South Africa and the United States have agreed to facilitate deliberations between the South Africa Poultry Association (SAPA) and the US Poultry and Egg Export Council towards finalisation of discussions on market access for US chicken bone-in cuts into South Africa. The meeting will take place on 4-5 June 2015 in Paris, France, on the margins on the OECD Ministerial Council Meeting to be attended by Minister Davies and Ambassador Froman.
Both governments’ remain committed to work with their respective poultry industry to find an amicable solution. A bilateral engagement between Minister Davies and Ambassador Froman is scheduled for 5 June 2015 to brief them on developments.
The meeting is a follow-up to the Trade and Investment Framework Agreement Council meeting co-chaired by the Minister of Trade and Industry, Dr. Rob Davies and the United States Trade Representative, Ambassador Michael Froman on 16 April 2015 in Washington D.C.
Meanwhile, Minister Davies told Members of Parliament during his Budget Vote on Thursday, that he had been concerned about the terms of the US on South Africa’s re-entry into Agoa. He said he had always argued that “why fix it, when it ain’t broken”.
This follows the US Senate decision of passing a Bill that provides for the African Growth and Opportunity Act (AGOA) to be extended for a period of 10 years with South Africa included.
“New provisions in the Bill however strengthen the conditionalities that will apply and clearly seek to chart a course “to transform the relationship between the US and Africa from non-reciprocal concessions to reciprocal agreements,” said Minister Davies.
However, Davies said despite these challenges he is optimistic that next month meeting in Paris could resolve the chicken impasse between the South Africa Poultry Association (SAPA) and the US Poultry and Egg Export Council.
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Continent is central to SA’s future
Malusi Gigaba writes that our socio-economic development is and must be linked with the rest of Africa for the AU’s Agenda 2063 to be realised.
Africa Day presents a chance for South Africans to reflect on our great continent’s shared destiny. Our enduring Pan-African unity is based on unbreakable ties of history, culture and shared struggle, and an awareness that our socio-economic development is and must be linked for the AU’s Agenda 2063 to be realised.
Africa’s support for our struggle was steadfast, principled and costly: When the apartheid regime tightened its noose around the necks of the oppressed, and banned the national liberation movements in 1960 following the Sharpeville protests, Africa opened her arms to receive our freedom fighters as exiles. They extended their unconditional warmth, friendship, solidarity and hospitality to our freedom fighters. Even the poorest of African states gave their all in support of the South African liberation struggle.
For this support, innocent citizens of Lesotho, Botswana and Mozambique were butchered in their sleep by the apartheid army, and Zimbabwean and Angolan territories were violated by a regime that had no respect for human life, let alone the national sovereignty, territorial integrity and stability of its neighbours.
South Africa’s liberation in 1994 guaranteed Africa’s long-term stability and development. It meant the country ceased to be what Hendrik Verwoerd had called “a piece of Europe on the tip of the African continent”.
The struggle bore a Pan-African identity with historic responsibilities that stretched far beyond South Africa’s borders. During the past two decades, the liberated South Africa has contributed towards the new African renaissance by supplying the materials requisite towards this all-encompassing effort.
South Africa was among the foremost advocates for the development and adoption of the New Partnership for Africa’s Development (Nepad). We invested time and resources towards uniting the continent, helping to forge a united global political and economic agenda at a time when imperialism and the neo-liberal globalisation was further marginalising and ruthlessly exploiting the continent.
For Africa to develop on a sustainable basis, we need to entrench peace, democracy and good governance, and advance major economic growth strategies, including infrastructure investments; beneficiation of mineral wealth; industrialising and diversifying of economies to free ourselves from the resource curse and drastically improving intra-African trade and trade with other emerging economies.
Only these programmes can radically alter Africa’s relations with itself and the world, and place it on a footing for sustained growth, job creation and enhanced political power in the global arena.
South Africa needs Africa: It has integrated itself into the continent not only through political and peace efforts, but increasingly through growing investment, trade and tourism.
While the country remains largely an exporter of primary commodities and an importer of manufactured goods, during the past 20 years sub-Saharan Africa, including Nigeria, Ghana and most of the Southern African Development Community (SADC), has emerged as the largest importer of South African-manufactured goods. It has been estimated South Africa exported about R300 billion worth of goods last year. Trade, investment and tourism with the rest of the continent has created and sustained 160 000 jobs in South Africa.
While we celebrate the growth of South African trade and investment in Africa, there is an obvious imbalance in favour of South Africa. So, if Africa is so vital for the South African economy, it should stand to reason that African integration, intra-African trade and the overall growth and development of the African economy should be equally as important.
We cannot do this alone! Our global political and economic aspirations are interconnected with, and not separate from, the continent as a whole.
We are one! We cannot fulfil our historic role and responsibility to raise Africa’s position in global affairs if the people of the continent think we have a condescending attitude towards them or want their support, but do not want to help them in their hours of need.
The recent violence against African migrants is inexcusable and has cost us. The attacks set back our African agenda. We must not take this for granted, or be naive as to the cost we incurred.
While fellow Africans may understand they have a responsibility to address the “root causes” of migration, to fix their economies and minimise the incentives for their nationals to travel to South Africa at all costs, they also know we have a responsibility, out of an African solidarity, to help build their economies because they supported our struggle to defeat apartheid.
Agenda 2063 can only be achieved by sustained, co-ordinated actions between increasingly integrated African countries.
South Africa has made critical contributions in this regard and will continue to do so in a quest for a better life for all.
Gigaba is Minister of Home Affairs and member of the ANC NEC. A version of this article appeared in the ANC Today. The views expressed here are not necessarily those of Independent Media.
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Forum seeks to enhance supply of professional services to EAC
Policymakers and professionals will Tuesday meet at a consultative forum in Kigali to review the state of matters in regard to regulation of professional services committed by Rwanda under the EAC Common Market Protocol.
The meeting will look into challenges encountered in the process, as well as assess the rate of cross-border practice by Rwandan professionals.
According to the Ministry of East African Community Affairs (MINEAC), the forum will also assess the effect of non-recognition of academic and professional qualifications granted by EAC partner states, which deters cross-border practice.
Denis Karera, vice president of East African Business Council, told The New Times that the forum is timely as Rwandan professionals need to self-evaluate and see how to best push further into the open EAC market.
“We need to evaluate ourselves as professionals and know where we are in the regional market. Are we fitting in it, compared to other regional professionals? We shall then be able to consider where we need to upgrade,” Karera said.
Professional services committed by Rwanda under the protocol comprise medical, legal, accounting, auditing, book keeping and taxation, education, veterinary services; in addition to construction, architectural, quantity surveyors, urban planners, and engineers’ services.
Karera added: “We have been crawling so the forum is a test for us. It’s not too late.”
The Private Sector Federation (PSF) director of advocacy, trade and labour relations, Antoine Manzi Rutayisire, said there are many challenges encountered, especially in Tanzania.
Everything revolves around the principle of mutual recognition of professionals in EAC partner states, he said.
“I am optimistic the meeting’s resolutions will be acted upon,” Rutayisire said.
The first ever such national consultative forum will also examine successes and challenges faced in the implementation of existing mutual recognition agreements (MRAs) between professionals in EAC; and review the status of negotiation on harmonisation and mutual recognition of academic and professional qualifications in the East African Community.
Increasingly common since the formation of the World Trade Organisation in 1995, MRAs are international agreements by which two or more countries agree to recognise one another’s conformity assessments.
Outcomes of the forum
Expected outcomes include the identification of policy actions to facilitate full regulation of professional services committed by Rwanda under the Common Market Protocol; and identification of other restrictions hampering free movement of professional services from Rwanda to other partner states.
MINEAC says regional integration continues to play a significant role in Rwanda’s development through opening up new markets, reduced cost in hiring professionals, and an increased skills base.
From 2010 to 2014, about 400 regional companies opened shop in the country, employing about 2,500 Rwandans.
The Services Sector Review Report on Rwanda, issued by UNCTAD (2013), says the sector is now the largest and most dynamic in the Rwandan economy.
In 2014, the GDP share of the services sector in Rwanda was 47 per cent.
Under the Common Market Protocol, partner states undertook to mutually recognise the academic and professional qualifications granted, experience obtained, requirements met, licences or certificates granted across EAC.
Partner states are supposed to harmonise their curricula, examinations, standards, certification and accreditation of educational and training institutions.
But, as per the forum’s concept note by the ministry, non-recognition of academic and professional qualifications granted by partner states continues to deter cross-border practice for professionals that constitute the critical mass of the labour force that drive the integration agenda.
The ministry says the rationale for the forthcoming national consultative forum is to unlock existing challenges that impede the development of professional services in Rwanda.
The forum will also examine difficulties faced by professionals from other EAC partners that need to practice in Rwanda.
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Customs Experts gather for the 2nd time in Harare, Zimbabwe to discuss Coordinated Border Management in Africa
A three day African Union Customs Experts meeting organized by the Department of Trade and industry of the African Union Commission, in collaboration with the Zimbabwe Revenue Authority commenced on 20 May at the Holiday Inn Hotel in Harare, Zimbabwe. The meeting is held with the objective of contributing to the development of an African Union Border Management Strategy; provide a platform for exchange of views and experiences on issues of trade facilitation in line with the WTO Trade Facilitation Agreement and movement of people across borders.
“The objective of this meeting on which we are going to exchange views and ideas for the next three days on implementation of Coordinated Border Management in Africa is not new, the practice is based on the need for agencies and international community to work together to achieve common goals,” said Mrs. Treasure Maphanga, Director, Trade and Industry in her remarks at the opening.
In recalling further the various challenges that agencies face with border management responsibilities, ranging from health, product safety, quarantine, immigration controls, vehicle inspections, insurance, road access tolls, security as well as revenue and other customs concerns, the fundamental nature of the defies that each agency confronts is how to facilitate the legitimate trade. “But for all this to make impact on African economies, we need to involve the private sector that conduct business and trade across borders,” appeals Mrs. Maphanga. She later concluded by encouraging the experts to come up with sound recommendations on implementation of Coordinated Border Management so as to boost intra African trade which in turn improves the lives of the African People.
Before officially opening the meeting, the Commissioner for Customs and Excise of the Zimbabwe Revenue Authority Mr. Happias Kuzvinzwa welcomed the delegates to Zimbabwe and emphasized that “the customs Border Management topic and all issues related to trade facilitation are pertinent to the African Continent in view of enhanced public service delivery and increased efficiency in customs and border operations”. Mr. Kuzvinzwa highlighted the Zimbabwe’s positive experience with the Chirundu One Stop Border Post and informed the meeting that plans are already underway to establish another OSBP at Victoria Falls primarily targeting tourists and business persons. Full speeches will be available on: http://ti.au.int/en/
Customs Experts from Customs Departments of the Regional Economic Communities (RECs), the Bureau of the African Union Sub-Committee of Directors General of Customs, some African Union Member States and Experts International organizations such as the International Organization on Migration, World Customs Organization and Private Sector Organizations, are attending this meeting.
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Accounting for natural resources, green economy key for Africa’s devt
African countries are at a critical juncture in their development trajectories. Confronted with internal challenges of poverty and unemployment, the resource basis of many productive sectors is facing threats of environmental degradation, including deforestation, soil erosion, desertification, and loss of biodiversity, depletion of fish stocks compounded byeffects of climate change.
At the same time, these challenges represent opportunities for change. A green economy offers considerable opportunities for mobilising resources towards an economic growth pathway that is low-emission in terms of carbon-dioxide and other so-called greenhouse gases released in the atmosphere during economic production activities.
A green economy also builds a culture of resource efficiency in economic activities and of sustainable consumption among the population as well as climate-resilient housing, infrastructure and other economic installations, while at the same time adapting to different approaches to promote, among others, resilient agricultural production, diversification into off-farm livelihoods and other diversification innovations for the local and export markets.
However, the combination of tackling poverty, accelerating growth and development, and addressing climate change, is likely to involve trade-offs and policy choices between mutually supportive, but equally important priorities toward the improvement of welfare and quality of life for Africa’s citizens.
Natural capital accounting and natural resource wealth valuation are not a fringe activity but a cornerstone of wealth upon which sustainable, equitable and prosperous Africa will be built.
Natural resources are thus critical to the economic activities and the livelihood of millions of African people who depend on water, fertile soil, forest, fishery and other resources from nature.
The exploitation of these resources fosters high rates of economic growth, which in recent years have been among the strongest in the world. Notwithstanding such contributions, African countries continue to face persistent poverty and unemployment and underemployment, particularly among the continent’s fast growing young population.
At the same time, the potential for future economic growth and development itself is put at risk, as a result of environmental degradation, climate change, desertification, and other environmental risks and resource scarcities, which are driven by internal and external factors.
The natural capital, an essential basis for wealth creation, faces mounting pressure at a time when African countries need to meet the growing demand for water, food and health, whilst reducing poverty and stimulating economic activity to create employment and raise income levels.
African economies are highly dependent on their natural resources which, in many countries, form the basis of economic activity. While the exploitation of such resources generates economic benefits in the short run, resource depletion decreases the potential for economic growth and development in the long term.
Recent years have seen a growing recognition that a new system of resource valuation and accounting is urgently needed, in particular to help countries more accurately assess the wealth accruing from these natural resources.
Natural resources and minerals appear in numerous forms throughout Africa, ranging from forestry to minerals including gold, oil, and copper. Other minerals, such as nickel and bauxite, are used in rechargeable batteries and represent the world’s primary source of aluminum. Not only are these minerals vital to products and standard technologies around the globe, but also to African growth.
An inclusive green economy has the potential to improve human well-being and social equity, while significantly reducing environmental risks and ecological scarcities in the continent.
In a green economy, growth in income and employment is driven by public and private investment that reduces carbon emissions and pollution, enhances energy and resource efficiency, and prevents the loss biodiversity.
These investments need to be catalyzed and supported by targeted public expenditure, policy reforms and regulation changes.
Some improvements have been seen. Over the past century, pollution controls and other measures have reduced the environmental impacts of economic growth. And, thanks to innovations in manufacturing, product design and energy use – aided by the rising number of people living more efficient lifestyles in cities – the global economy has grown faster than resource consumption growth.
Rwanda is one of the leading countries in terms of promoting green growth. A national “Green Growth and Climate Resilience Strategy” proposes ways to integrate resource efficiency, adaptation and mitigation actions across all sectors of the economy, focusing on the socio-economic development and future prosperity of Rwandans.
FONERWA, the largest demand-based climate fund in Africa, is a national fund through which international and domestic climate finance can be managed and it is intended to be the primary vehicle through which Rwanda’s climate and environment finance is channeled, disbursed and monitored.
In addition, Rwanda has an international track record in pursuing good governance, sustainable growth on the basis of prudent economic management, sound investment of mineral revenues in human and physical capital including health and education infrastructure, establishment of social safety nets, and the wise use and conservation of natural resources and biodiversity in and outside of protected areas.
To date, the country continues in her endeavors to diversify the green economy initiative which is mirrored to bring more gains as far as economic transformation is concerned. Green village pilot project has, for instance, brought great potential to mobilise additional private and domestic resources required to achieve sustainable development goals.
This proves what Mr Achim Steiner, an expert in environmental issues and Executive Director of the United Nations Environment Programme, who once said that inclusive green economy has the potential to improve human well-being and social equity, while significantly reducing environmental risks and ecological scarcities.