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Kenya’s Mombasa port expects to handle 14 pct more cargo in 2014
East Africa’s biggest port, Mombasa, expects to handle at least 14 percent more cargo this year, helped by its expanded capacity and a marketing drive, its management said on Thursday.
The Indian Ocean port handles fuel, consumer goods and other imports for Uganda, Burundi, Rwanda, South Sudan, Democratic Republic of Congo and Somalia, and exports of tea and coffee from the region.
Gichiri Ndua, the port’s managing director, said in a statement that they expected a cargo throughput of 25.5 million tonnes this year, up from 22.31 million handled in 2013.
Between January and October this year, cargo volumes at the port rose 8.3 percent to 15.8 million tonnes compared with the same period in 2013, Ndua said.
“Operational performance continues to paint a positive trend and by the end of December, indications are that we shall handle more cargo than we did last year,” said Ndua.
He said the port expected the number of containers handled at the port to rise to 980,000 TEUs (Twenty-Foot Equivalent units) this year from 945,000 TEUs.
Uganda remained the leading destination with cargo destined to the country increasing by 14 percent to 2.8 million tonnes in the January-October period.
Top imports in the region remained motor vehicles and industrial products including steel.
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Small island developing states remain marginalized from key transport networks, UNCTAD report reveals
Small island developing states (SIDS) face severe and complex transport challenges, UNCTAD’s Review of Maritime Transport 2014 reports. For UNCTAD, the way forward requires a portfolio of measures spanning a range of areas, including trade logistics, climate change and resilience-building, energy, and the financing of sustainable and resilient transport systems.
In this International Year of SIDS, the special chapter of the Review of Maritime Transport sheds light on the transport and trade logistics challenges faced by SIDS worldwide.
”SIDS pay more for their transport, and their shipping connectivity is lower than that of any other country group,” UNCTAD’s Secretary-General Mukhisa Kituyi said. “As documented by the Review of Maritime Transport, the situation of SIDS is challenging due to, in particular, their small size, remoteness, trade imbalances and at times oligopolistic shipping markets. Lower volumes of trade will empirically lead to higher freight costs. Smaller vessels are less fuel efficient per unit carried, smaller ports have higher operating costs per ton of cargo, and investments in infrastructure take longer to pay off for smaller volumes of business.”
The average SIDS has during the last decade paid 2 percentage points more for the international transport of their imports than the world average of 8.1 per cent. The highest values are estimated for the Comoros (20.2 per cent), followed by Seychelles (17.9 per cent), Solomon Islands (17.4 per cent) and Grenada (17.0 per cent).
The maritime transport services connecting SIDS to global trade networks face severe structural, operational and development obstacles. Remoteness from main global trade routes constitutes a major disadvantage in terms of cost and time, but also quality and frequency of services that access international markets.
As open small economies, SIDS are vulnerable to global economic and financial shocks and are in many cases located unfavourably in relation to global weather systems and in areas prone to natural disasters and climate change factors.
In response to the special challenges faced by SIDS, the Review of Maritime Transport 2014 recommends a range of measures the States can adopt, such as deriving gains from operating at a small scale by making use of local resources and catering for local needs, adapting to unavoidable climate-change impacts on transport, in particular seaport and airport infrastructure, by investing in disaster-risk reduction, and strengthening national planning as well as public policy and financial systems for climate response (for example, using climate-change finance assessment tools).
Background
Maritime transport is the backbone of international trade and the global economy. Around 80 per cent of global trade by volume and over 70 per cent of global trade by value are carried by sea and are handled by ports worldwide. These shares are even higher in the case of most developing countries.
UNCTAD’s Review of Maritime Transport has since 1968 provided coverage of key developments affecting international seaborne trade, shipping, the world fleet, ports, freight markets, and transport-related regulatory and legal frameworks. As in previous issues, the 2014 report contains critical analyses and unique data, including long-term data series, on seaborne trade, fleet capacity, shipping services, and port-handling activities.
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Clean industrialization critical for Africa to ‘leapfrog’ outdated technologies – Ban
Africa needs a green, clean industrialization that leapfrogs outdated, polluting processes and platforms and benefits from new technologies, United Nations Secretary-General Ban Ki-moon said on 20 November 2014 as the world body marked Africa Industrialization Day.
In a statement, Mr. Ban explained this that year’s theme, ‘Inclusive and Sustainable Industrial Development: Agro Industrial Development for Food Security’, focuses on the links between agriculture and development.
“Agriculture still accounts for the major share of rural household income and employs over 60 percent of Africa’s labour force, particularly women,” the UN chief said.
Low agricultural productivity continues to threaten food security in Africa as a whole. And while many African economies have shown impressive growth rates in recent years, increased prosperity does not always translated into inclusive wealth creation.
“Far too often, economic development depends on the extraction of natural resources and on low-skilled labour, which has resulted in a weak manufacturing base and uneven distribution of wealth,” the Secretary-General said.
Inclusive and sustainable industrialization is a “key stepping stone” towards sustained economic growth, food security and poverty eradication in Africa, he added.
“I reaffirm the commitment of the United Nations to promote Africa’s inclusive and sustainable industrial development to help ensure an economically prosperous and socially integrated continent,” he pledged.
Within the framework of the Second Industrial Development Decade for Africa (1991-2000), the UN General Assembly, in 1989, proclaimed 20 November Africa Industrialization Day (resolution 44/237).
Commemorating the Day, the UN Industrial Development Organization (UNIDO) will host a symposium in Vienna on 24 November to showcase relevant actions and success stories that promote Africa’s industrial development.
The event will bring together representatives from the diplomatic corps, the private sector, non-governmental organizations and other relevant stakeholders.
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Gigaba: SA to begin permit process for SADC countries soon
Zimbabweans who have applied for the new special dispensation permit can go home and return to South Africa over the festive season, Home Affairs Minister Malusi Gigaba said in Cape Town on Thursday.
He said Zimbabweans in possession of the Dispensation of Zimbabweans Project (DZP) permits would be permitted in and out of the country, while they awaited approval of their Zimbabwean Special Dispensation Permit (ZSP) applications.
Around 64% of the 249 000 Zimbabweans working in the country on a dispensation permit have already applied for the new permit, since October 1. Applications close on December 31. The new permit will be valid until the end of 2017.
Zimbabwean nationals in the country illegally were granted an opportunity from 2009 to legalise their stay through the permit dispensation, as a result of the political and socioeconomic conditions in their country.
Only those with this initial permit are allowed to apply for the ZSP. Zimbabwean nationals without a permit have to go through the normal processes to obtain a work, travel, or study visa.
Gigaba said ZSP applications are submitted via a website, and applicants are then issued with a barcode, a track and trace number, and a date for a face-to-face interview.
Gigaba visited the Cape Town branch of VFS Global – the company dealing with the applications – on Thursday morning to assess the process.
People patiently queued for their interview while holding onto their passports and proof of employment, business, or study. Biometric photographs and fingerprints were taken. Fingerprints are submitted to the police’s automatic fingerprint identification system, to check for criminal records, and results are returned within two days.
‘We are going to be strict’
Gigaba said completed applications are then submitted electronically to home affairs for adjudication, and concluded within a month to two months. Just over 20% of applications have been adjudicated so far. The minister anticipates that all permits will be issued by the end of April 2015.
“All that we are saying for now is that after 2017, they will have to apply for a normal visa applicable in South Africa,” Gigaba said. No decision has yet been made as to whether Zimbabweans would have to return to their country after 2017 to apply for normal visas.
Gigaba said they would soon begin a similar permit process for the Basotho, Mozambican and other Southern African Development Community nationals.
“The processes are not going to be open-ended. We are going to be strict about it,” he said.
There are 11 visa facilitation centres in the country, and four new centres for Gauteng, Western Cape, Limpopo and Mpumalanga, where there have been a high number of applications.
One of the Zimbabweans handing over her documents at the Cape Town branch on Thursday was surprised when Gigaba came to greet her. “He was asking me if we are happy with the process there, and I told him I am very much happy,” said 49-year-old Mavis Tarinta. Gigaba asked about her work, and she told him she had set up her own business selling curtains and other items.
She said applying for a ZSP was much easier than the initial permit. “It was difficult, very complicated. Now we don’t have to struggle for a long time. You just come to your appointment and you are set.”
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Overall tax cost and compliance burden lower for businesses around the world
Paying taxes has become easier over the past year for medium-sized companies around the world, the latest report from the World Bank Group and PwC finds. The time it takes an average company to meet its tax obligations dropped by four hours last year, according to the Paying Taxes 2015 study. The report also revealed that the total amount the average company paid in taxes and the number of payments it made also declined in the past year. This is a trend seen every year over the ten year period covered by the publication.
The Paying Taxes 2015 report finds that on average, the standard company studied has a total tax rate (as defined under the Doing Business methodology) of 40.9 percent of commercial profits. It makes 25.9 tax payments per year and takes 264 hours to comply with its tax requirements. Over the ten years of the study, 78 percent of the 189 economies covered in the report have made significant changes to their tax regimes at least once. The time and the number of payments required to comply with tax obligations have fallen over the ten-year period, as has the average total tax rate. The fastest rate of decline for the total tax rate occurred during the financial crisis from 2008-2010 with an average decline of 1.8 percentage points per year during that period. The rate of decline then started slowing in 2011.
The average time it takes a medium size company to deal with its tax submissions has fallen by a total of nearly a week and a half over the ten years of the study; reflecting the increased use of electronic filing and payment systems around the world. Of the 379 tax reforms recorded in Paying Taxes reports since 2004, 105 relate to electronic filing.
For the first time since the Doing Business publication was introduced, a second city is measured in the 11 economies with more than 100 million inhabitants. The eleven economies are: Bangladesh, Brazil, China, India, Indonesia, Japan, Mexico, Nigeria, Pakistan, the Russian Federation, and the United States. In the United States, where the report was launched today, Los Angeles and New York cities are included in the analysis enabling subnational comparison.
“Taxes provide the sustainable funding needed for social programs and to promote economic growth. Policymakers need to find the right balance between raising revenue and ensuring that tax rates and the burden of compliance do not deter participation or discourage business activity,” said Augusto Lopez-Claros, Director, Global Indicators Group, Development Economics, World Bank Group. “During economic downturns, this balancing act is intensified; some public spending may increase, putting pressure on deficits, and governments may need to use tax policy as an economic stimulus.”
“The latest results from the Paying Taxes study show many economies are continuing to make progress in tax reform, but there is still a lot of scope to streamline and simplify tax systems,” said Andrew Packman, leader for Tax Transparency and Total Tax Contribution at PwC. “Tax reform is set to remain an important topic for governments around the world for some years to come, and this will include the need to take on board the proposals from the OECD to modernise the international tax system to cater for today’s globalised business”.
Paying Taxes 2015 measures all mandatory taxes and contributions that a medium-size company must pay in a given year. Taxes and contributions measured include the profit or corporate income tax, social contributions and labour taxes paid by the employer, property taxes, property transfer taxes, dividend tax, capital gains tax, financial transactions tax, waste collection taxes, vehicle and road taxes, and other small taxes or fees.
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One-stop centre for processing business permits to be set up
The government will set up a one-stop centre for investors to get approvals and permits for setting up businesses in a move meant to attract more investment in the country.
The centre will help to cut the time taken by investors, both local and foreign, in setting up and complying with regulations to operate businesses in Kenya.
It will be housed under the Kenya Investment Authority (KenInvest), the agency mandated to promote the country as a preferred investment destination.
President Uhuru Kenyatta yesterday said more than 50 senior government officials with sufficient authority to make decisions will be deployed to the centre to shorten the approval processes.
“We cannot continue with the red tape we currently have in this process. It is a discouragement in itself to investors. I have directed the ministries involved to hasten this process.
“Investment is key to our economy. Without it, we cannot create the jobs that will sustain our young men and women or relieve the poverty that still disfigures the lives of our people. Removing obstacles that still stand in the way of productive investment is important,” said Mr Kenyatta.
Currently, an investor visits more than 10 different offices to get documents allowing him or her to set up a firm.
In some cases, it takes more than 90 days to acquire a single permit, licence or connection to water and electricity.
INVESTMENT OPPORTUNITIES
Mr Kenyatta was speaking at the first Kenya International Investment Conference, organised by the government in its efforts to encourage investors to put their money in local ventures.
The two-day forum has attracted investors from different parts of the world, including the United States, the United Kingdom, Australia and Egypt.
More than 1,000 investors are taking part.
During the conference, visitors will be taken through some of the lucrative investment opportunities in the country, as well as initiatives by the government that could significantly improve the business environment.
Mr Kenyatta asked foreign investors to take advantage of the country’s position as the regional economic hub and the gateway to Eastern Africa.
“We have a very good workforce, really innovative youth, good infrastructure, conducive climate and our economy is growing. There is no reason to keep you away from this country if you are looking for a place to invest,” said the President.
He also called on the British government and other western nations to help change the perception that Kenya is an unsafe place by lifting negative travel advisories.
Kenya Private Sector Alliance chairman Vimal Shah said the government had made deliberate efforts to ease the business environment through constant consultations between investors and the Executive.
“We now hold biannual meetings with the President and his Cabinet to discuss policy and other possible ways of making our country a better investment destination,” said Mr Shah.
He said that for global investors, time has come when the question about investing in Africa has changed from whether, to where.
“It is for us now, as Kenyans, to take advantage of our resources and make sure money comes here first before spreading to the rest of the continent,” added Mr Shah.
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Nigeria’s industrial revolution pinned on oil to gas policy shift
Nigeria is known mainly as an oil producer but shifting the emphasis to natural gas is necessary if the country is ever to realise its ambitions for industrialisation.
The plans by Africa’s richest man, Aliko Dangote, to build a 500,000 barrels per day oil refinery, petrochemical plant and fertilizer complex, hinges on one key component ; the availability of cheap natural gas in Nigeria.
Analysts say meeting and boosting the domestic demand for gas will replicate a thousand Dangote’s and set Nigeria on the path to an industrial revolution.
This is because the nation’s abundant and cheap natural gas can power numerous industrial parks, where companies can set up major manufacturing complexes, employing millions of Nigerians.
The power of natural gas to transform societies can be seen in diverse places in the globe, from Qatar to China and the USA, where the shale gas revolution has led to a manufacturing renaissance.
Nigeria has however yet been unable to exploit this competitive advantage in Africa, even as other nations on the continent are beginning to discover significant gas resources of their own.
One example of the ability of a combination of industrial parks powered by cheap electricity to transform society, is Chinese company, Foxconn’s Longhua factory campus in Shenzhen – where 300,000 employees make components for IPhones, Sony PlayStations, and Dell computers.
Foxconn Technology Group (one company) as a whole employs more than 920,000 Chinese workers across more than 20 factories in mainland China.
In Nigeria, the shortage of gas is making it impossible to set up such industrial parks which may have helped to lure some light manufacturing from Asian countries, where rising wages is leading to manufacturers moving some factories away from China to locations like Vietnam.
While domestic gas demand has grown in leaps, the government’s tight control of the sector means that supply has failed to catch up.
“Nigeria needs 11 billion scf a day to meet power demand and addressing the shortfall calls for a different strategy. We now need to look more for non-associated gas resources for dedicated gas development”, said Frank Edozie, senior special assistant to the minister of power, adding that gas is of national strategic importance.
The country currently produces about 1.5 billion scf per day, meaning there is a 86.3 percent gap between demand and supply.
David Ige, group executive director, gas-to-power, NNPC, said “the challenge of domestic gas utilisation is for the country to grow supply as rapidly as demand” adding that as a result of JV funding challenges, international oil companies (IOCs) are not delivering gas to their capacity.
Another impediment to domestic gas utilisation is finance. Wale Shonibare, managing director of UBA Capital, said the major impediment to domestic gas is the economics. “The economics has to be right. For a long time, gas economics in Nigeria did not work because of the tariff. There has to be an economic framework. The future is domestic sales of gas,” he said.
Otis Anyaeji, chief executive of Otis Engineering, says that the entire banking sector in Nigeria does not have the capacity to play in the gas infrastructure.
Anyaeji says government needs to adopt policy-based financing for gas projects and infrastructure, adding that there is need to bring in state governments into gas infrastructure development.
According to BusinessDay Research and Intelligence Unit (BRIU), between 2003 and 2012, domestic gas utilisation grew by 103 percent and accounted for 79 percent of total gas produced in the first nine months of 2013 as shown in the statistical data made available by the Nigerian National Petroleum Corporation (NNPC).
In 2012, gas utilised accounted for 77 percent of overall production. In the first nine months of 2013, an aggregate of 1,615.79 billion cubic feet of natural gas was produced with 79 percent of the quantity utilised.
An analysis of the supply chain as conducted by BusinessDay Research and Intelligence Unit, (BRIU) revealed that 33 percent of gas utilised was sold to third parties, 30 percent was for re-injection purposes for enhanced oil recovery, while 12 percent was sold to the NGC for power generation and 10 percent was for LNG.
Out of 4GW optimum power capacity in Nigeria today, 3.1GW is powered by gas.
“We have to drive internal demand for gas in Nigeria by removing the bottlenecks holding back supply,” said an oil industry source speaking to BusinessDay.
“Mexico is transforming its economy right now by reforming its oil sector. There is no reason why it cannot be done here.”
Nigeria has the world’s ninth-largest proven gas reserves at 188 trillion cubic feet (tcf) and potential gas reserves of 600 tcf.
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Regional office launched as forum on South-South cooperation ends in S. Africa
The two-day meeting of the High-level Forum on South-South Cooperation for Sustainable Development (SS-SCSD) ended in Johannesburg, South Africa on Tuesday with the launching of the Africa representative office of the International Organisation for South-South Cooperation (IOSSC).
In a closing remarks at a gala dinner held in Johannesburg, Ambassador Alexandru Cujba, Secretary General of the SS-SCSD, and Director General of the IOSSC, commended SS-SCSD for launching the IOSSC Africa representative office.
“The launching of the IOSSC in South Africa will ensure that the African continent gets its share of development that is being enjoyed by countries of the South,” Cujba said.
“During these two days of discussions we have paved a way that will help us move into the future where public private partnerships become the tool for sustainable development,” Cujba added.
The forum attracted more than 100 participants from both the public and private sector.
“From the deliberations we have had different initiatives that countries have as well as what business is offering,” John Ashe, President of the 68th session of the United Nations General Assembly and Chairman of the SS-SCSD said in his keynote closing remarks.
“Our task now is to bring these two together and create public private partnerships that will produce positive results,” said Ashe.
His sentiments were echoed by Ndaba Ntsele from the Presidency Business Council, South Africa.
Ntsele said, “We are very happy and proud to witness the opening of the IOSSC office in South Africa.”
“We are delighted with passion for this office that will drive infrastructure development for the entire African continent,” added Ntsele.
Ntsele however expressed concerns over Africa’s failure to create enough entrepreneurs. He said, “We must think of developing sustainable medium size companies to ensure that all citizens participate in bringing about development.”
Another voice from Africa came from Lesotho’s Minister of Trade and Industry, Cooperatives and Marketing, Sekhulumi Ntsoaole.
“The South-South Cooperation for sustainable development is a good initiative. With South-South cooperation we will find the best way of developing our cities and rural areas to achieve a high level of sustainable development,” said Ntsoaole.
“This is a major tool to help developing countries to reach their full development potential,” he added.
Ntsoaole called for more inter-trade within the continent to speed up infrastructure development.
“In the next ten years we will see Africa becoming an economic giant like China,” Ntsoaole said.
Ambassador Francis Lorenzo, Executive President of the South-South Steering Committee for Sustainable Development said the two-day meeting gave a platform for forum members to exchange views on bringing about development.
Lorenzo said, “We are extremely satisfied with the outcomes of the deliberations. We need to ensure that the post 2015 agenda becomes a new opportunity to learn from each other.”
“The meeting has helped us to discover the potential of building stronger communication and development through public private partnerships,” said Lorenzo.
The meeting was organized and supported by the South-South Steering Committee for Sustainable Development, IOSSC, International Telecommunications Union (ITU), United Nations Human Settlements Program (UN-HABITAT), United Food and Agriculture Organisation (FAO) and other UN agencies.
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Democratizing development: Mapping Chinese investments in Africa
A number of African countries view China as an attractive development partner who provides generous financing with acceptable terms and doesn’t interfere in their internal affairs. In fact, Sino-Africa relations have matured substantially since the Forum for China-Africa Cooperation (FOCAC) in 2000, reflecting growing economic, cultural, and technical cooperation.
The Chinese leadership has emphasized development cooperation with African nations in a series of summits, an action plan and eight specific measures to strengthen ties. As China continues to scale up funding for Africa’s development, the question that must be asked is: who is doing what and where?
China’s growing commitment to Africa’s development
The dramatic increase in Chinese investment to Africa in the past decade has prompted speculation by scholars, policymakers, and practitioners about China’s motivations. This guesswork has fueled suspicion that China is trying to remake Africa in its own “authoritarian capitalism” image, thereby undermining efforts to spread democracy and human rights in the region.
Academics and journalists alike have accused China of propping up irresponsible authoritarian leaders, recklessly pursuing investment without a care for the environment, and undermining “the Western order”. To substantiate their claims, they cite empirical studies purporting to objectively evaluate China’s role in Africa. In response, Chinese academics have defended China’s involvement in the region.
What these back-and-forth exchanges leave out is a crucial element in the discussion. To move beyond heated rhetoric, discussions of aid allocation and effectiveness need to be grounded in better data and an effort to listen to the voices of people on-the-ground who are directly affected by development projects. AidData hopes to move the conversation forward with a new geospatial dashboard that promises to help citizens, journalists, policymakers, and development practitioners more closely track China’s role in Africa and weigh in on the projects with which they’re familiar.
Creating space for discussion – a dashboard offers one step forward
Launched on 18 November 2014, AidData’s interactive geospatial dashboard features over 2000 Chinese-backed development projects in Africa, disaggregated to the provincial, municipal, or street-corner level. Leveraging the power of hyper-local information and crowdsourcing, the dashboard offers citizens, government officials, civil society leaders, journalists, and scholars a digital loudspeaker with which to: (a) comment or leave feedback on specific projects; (b) offer multimedia content to validate specific project locations; and (c) “suggest a project” in locations not currently covered by the dashboard.
Our aim is to make it easier than ever before to quickly grasp where and how China is funding development activities in Africa. Not only that, but we hope that you will become part of the conversation.
Charles Perla is a Junior Program Manager with AidData focusing on Chinese development finance. Harsh Desai is a Junior Program Manager and Research Associate with AidData.
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Countries in Africa and China renew their commitment to jointly eliminating poverty
Conference to balance Africa’s economic transformation with development
Concluding a large gathering to share experiences on reducing poverty, African and Chinese officials on 19 November 2014 called for a deepening of the partnership between the two partners.
Co-hosted by the Government of Ethiopia, the African Union Commission, the International Poverty Reduction Centre in China and the United Nations Development Programme (UNDP), the conference explored the current state of development work in Africa and identified key areas for joint initiatives.
The conference was attended by around 200 participants, including government officials from African countries and China, diplomatic communities in Addis, as well as renowned experts and scholars and those from the private sector, civil society and international organizations.
H.E. Ms Fatima Haram Acyl, the Commissioner for the Department of Trade and Industry of the African Union Commission, recognized and acknowledged that no country has been able to reach an acceptable level of socio-economic development without industrialization. She underscored that China was at a much lower lever of development than Africa before becoming the second largest economy in the world. “This can only been achieved by Africa through hard work, sacrifices and pro-industrialisation policies. The success of China is quite inspiring, and we are learning from that experience and intend to take more advantage of our privileged partnership with China to progress,” she mentioned.
“Benchmarking China’s best practices in industrialization is essential,” emphasized also H.E. Dr. Mulatu Teshome, the President of the Federal Democratic Republic of Ethiopia, “in that it is almost unthinkable to realize the African dream of becoming an industrialized, united and prosperous continent by 2063 only through Africa’s own technology generation.”
Over the past three decades China has seen considerable economic growth and succeeded in bringing millions of people out of poverty, thanks to specific policies designed to achieve agricultural and industrial growth and targeted initiatives to increase people’s opportunities and livelihoods.
At the same time, China is facing new challenges that are prompting the country to adapt its growth and poverty reduction strategies to face new realities in the global economy.
A background report “China’s Industrialization: Overview – Implications for Africa’s Industrialization” and a comparative study on Special Economic Zones in China and African countries jointly commissioned by UNDP China and IPRCC was presented at the conference. Drawing on the Chinese experience, the background report sheds light on Africa’s industrialization process, while looking at the possibility of improving Special Economic Zones in Africa to increase job and income opportunities.
“The Conference is one of the concrete steps to implement the Program for Strengthening Cooperation on Poverty Reduction between the People’s Republic of China and the African Union which was released during Chinese Premier Li Keqiang’s visit to AU in May this year,” noted Mr Si Shujie, Vice Minister of the China State Council Leading Group Office of Poverty Alleviation and Development, “to boost experience sharing and collaborations on poverty eradication between China and Africa is thus of mutual concern & benefit especially critical for efforts to attain the MDGs and post-2015 agendas.”
“Well-crafted industrial development which supports inclusive growth and considers the environment will play a critical role in making transformation sustainable over the long-term”, said Eugene Owusu, UN Resident Coordinator and UNDP Resident Representative in Ethiopia, “In seeking to drive industrial growth, we need strong partnerships. Such South-South co-operation can bring new opportunities for exchange and learning, financing, investment, trade, and also industrial development.”
With the theme of ‘Industrial Development: Cross-Perspectives from Africa and China’, the conference focused on the future of Africa’s development with an emphasis on how to balance industrialization with inclusive growth.
Understanding that growth doesn’t necessarily translate into inclusive development, the conference looked into three main areas: analysis of challenges and opportunities, development of robust public-private partnerships and experience sharing from other industrializing countries in both Africa and Asia.
Poverty reduction has become a priority area of Africa-China cooperation as pointed out by Premier Li Keqiang during his visit in May 2014. Outcomes of this conference will be rolled out the follow-up initiatives and will also be fed into preparations for the next FOCAC in South Africa in 2015. Continuing initiatives in partnership between AUC, IPRCC and UNDP will strengthen cooperation between China and African nations and the South-South experience-sharing between China and Africa to bolster African growth underpinned by poverty reduction.
» Background papers prepared for the Africa-China Poverty Reduction and Development Conference
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The Path to Climate Neutrality: UNEP Gap Report
The UN’s top climate official on 19 November 2014 welcomed a report that underlines how the world can keep a global temperature rise under 2 degrees Celsius.
UNFCCC Executive Secretary Christiana Figueres said:
“This important report underscores the reality that at some point in the second half of the century, we need to have achieved climate neutrality – or as some term it zero net or net zero – in terms of overall global emissions.
“The report also emphasizes the wider important contributions that can be made to local and national sustainable development goals, if climate change is effectively addressed.”
The report, released on 19 November 2014 by the UN Environment programme (UNEP) in advance of the UN’s next climate conference in Lima, Peru sets out the pathways required to avoid dangerous climate change.
Three Stages to Success
The new report clearly states that to stay within the 2 degrees Celsius limit, global emissions need to:
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turn the corner around 2020 and be heading downward by 2030. By 2030, global emissions should be 15% or lower than in 2010.
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be at least 50% lower than 2010 by 2050.
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reach net zero sometime in the second half of the century, with any remaining emissions offset by re-afforestation and other means.
The UNEP Gap Report also focuses on the urgency to act now to achieve ever higher ambition before 2020.
This year’s edition of the Emissions Gap Report focusses on opportunities from scaled up action on energy efficiency. These actions range from appliances, lighting standards and labeling to tighter building codes and vehicle fuel standards.
The report suggests that improved energy efficiencyhas the potential to reduce greenhouse gas emissions by between 3 to 7 gigatonnes of carbon dioxide equivalent (Gt CO2 e) a year.
Other key findings of the report underline the wider, sustainable development imperative of addressing climate change.
Less Pollution, Better Health, Especially in Developing Countries
The World Health Organization (WHO) says that 7 million people die prematurely each year from indoor & outdoor air pollution, mostly in developing countries.
Energy efficiency improvements reduce fossil fuel use and thereby also air pollution emissions, and save lives. One study states that 100,000 premature deaths could be avoided every year by 2030 in the US, the EU, India, Brazil, China and Mexico.
Further benefits:
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Greater access to energy: Improving energy efficiency lowers energy costs and makes energy more accessible to poor and middle-class households.
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Jobs: Energy efficiency projects provide millions of jobs worldwide with estimates ranging up to 7 million people through an acceleration of energy efficiency.
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Increased industrial productivity: Improving energy use leads to lower energy use per unit of output which extends the life-time of equipment, reduces waste disposal costs, and lowers maintenance.
“To maximize benefits and ensure a safer world, we can and must use the powerful combination of short and medium term efforts to reduce emissions and increase resilience, together with a clear vision of our collective long term destination,” said Ms. Figueres.
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Minister Nhlanhla Nene: Briefing on G20 Summit
President Zuma led the South African delegation to attend the G20 leaders summit in Brisbane, Australia which took place on 15 to 16 November 2014, concluding Australia’s presidency on a very high note.
The summit agenda included sessions on:
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The state of the global economy and G20 initiatives to strengthen growth and job creation
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Trade as a driver of growth and strengthening the global trading system
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Delivering global economic resilience (modernising the international tax system, strengthening the financial system and IMF reform)
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Energy (strengthening collaboration on energy, energy efficiency and gas markets)
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Increasing investment in infrastructure
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Future challenges (including on strengthening the G20)
Detailed information on the outcomes of the summit is contained in the communiqué and the Brisbane Action Plan, in which Leaders pledged to fully implement their growth strategies in order to address the lack of global demand and supply side constraints.
I am not going to deal with all the items on the summit’s agenda, but only on the economic growth initiative, tax issues, IMF reform, financial sector reform and infrastructure. I will link each of these summit decisions to the various initiatives already underway in South Africa, or initiatives in which our country is involved. I will also provide you with an update on BRICS initiatives, specifically the New Development Bank (NDB).
Global economy
Leaders noted that the world economy is not growing fast enough due to lack of global demand and supply constraints.
They agreed that while there might be scope in some countries to still use macroeconomic policies to stimulate and support the economy, a bigger boost to growth will have to come from country specific structural reforms.
Accordingly, discussion centered on strategies by each member country that would contribute to the objective of adding a further 2 percentage points to baseline growth estimates over the next 5 years.
In South Africa’s case, a peer review mechanism facilitated by the IMF, World Bank, the International Labour Organisation (ILO) and the OECD found the National Development Plan (NDP) to be well aligned with the strategies agreed to by G20 members, particularly when it comes to the following key areas:
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Accelerating infrastructure delivery;
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Expanding and improving basic education and post-school training;
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Expanding and improving labour participation, particularly amongst women and the youth;
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Improving the effectiveness of competition policy; and
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Broadening trade and regional integration
The peer review and accountability processes agreed to will help us to ensure that G20 countries share experiences and continue to monitor individual or collective efforts towards accelerating global growth. South Africa and other member countries welcomed the improved communication amongst G20 members, as this provides the forward guidance necessary to help countries manage the volatility that comes with actions of globally systemic economies such as the USA.
Reform of the IMF
There was a robust discussion during the Summit on the reform of the international financial architecture. It was agreed that the International Financial Institutions needed to be reformed to reflect the fact that emerging markets and developing economies now account for the largest share of global growth. This shift in the structure of the global economy must be reflected in the governance structures of multilateral institutions such as the International Monetary Fund (IMF) and World Trade Organisation (WTO).
International Tax Agenda
There was general agreement that taxes must be paid where businesses generate profits and that every business must pay its fair share of taxes. The principles agreed to by the G20 on Base Erosion and Profit Shifting (BEPS) move us closer towards tackling this challenge.
Further, on the back of technical work undertaken by the OECD, we have made very good progress in the area of transfer pricing. Multinationals will increasingly find it harder to manage down their tax liabilities through illicit measures.
Infrastructure
As you know our continent has an infrastructure funding gap of about US$93 billion per annum. We are therefore happy that issues of accelerated infrastructure investment through designing appropriate funding instruments, carefully structured public private sector partnerships (PPPs), and project development facilities received a lot of attention at the Summit.
Under the leadership of the Australian Presidency, the G20 announced the establishment of the Global Infrastructure Hub, an initiative that complements ongoing efforts to reduce barriers to infrastructure development in most G20 countries. The Hub will be open to all member countries as well as to non-G20 members. It is intended to also attract private sector
financing, to complement efforts by the public sector. Further details on the operations of the hub will be finalised soon, and it will be ready to operate in the early parts of 2015.
The G20 initiative on infrastructure will complement a number of other initiatives in which South Africa is involved. This includes the Infrastructure Consortium for Africa (ICA) which was launched at the G8 summit in Gleneagles in 2005.
Background on the ICA
ICA is aimed at accelerating efforts to meet the urgent infrastructure needs of Africa in order to support economic growth and development. It addresses both national and regional constraints to infrastructure development with an emphasis on regional infrastructure.
Membership of the ICA comprises the G8 countries, the World Bank Group (WB), the African Development Bank (AfDB) Group, the European Commission (EC), the European Investment Bank (EIB), South Africa (which joined the ICA in 2013) and the Development Bank of Southern Africa (DBSA). The ICA is not a financing agency but acts as a platform for brokering more financing for infrastructure projects and programmes in Africa.
In support of the priority that South Africa places on infrastructure development both nationally and on the continent, South Africa will be hosting the 10th Annual meeting of the ICA in Cape Town from 25-27 November 2014. The meeting’s theme is: “Effective Project Preparation for Africa’s Infrastructure Development”.
The lack of a pipeline of well-prepared, bankable projects has been widely recognised as one of the key constraints to infrastructure development on the continent. Although more than 52 Project Preparation Facilities operate in Africa, these facilities are not effectively unlocking infrastructure development across the continent. Project preparation and the financing thereof remain key stumbling blocks to Africa’s infrastructure development.
The ICA is another important avenue through which South Africa seeks practical strategies to implement the commitments made in institutions like the G20 and BRICS, in pursuit of Africa’s infrastructure development objectives.
Task Team on private Sector Financing of Infrastructure
Domestically, the Task Team on Private Sector Financing of Infrastructure, which is made up of government, business and labour representatives, has been able to narrow its focus to areas that will have the greatest impact. Of these, the possibly the two that actionable immediately are:
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Encouraging private sector financing and participation in infrastructure; and
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The steering of development finance institutions to focus more on “crowding in” private sector investment and to avoid activities that may lead to the crowding out of the private sector.
BRICS and the new Development Bank
The leaders of Brazil, Russia, India, China and South Africa (BRICS) also took the opportunity of being in Brisbane to take stock of the progress made with regards to the New Development Bank and the Contingent Reserve Arrangements. BRICS leaders also exchanged views on the G20 Summit Agenda, as well as how to support additional measures addressing the Ebola epidemic.
Leaders expressed their joint ambition for the swift ratification of the New Development Bank (NDB) and Contingent Reserve Arrangement agreements (CRA). Furthermore, they announced the formation of an Interim Board of Directors, that will lead the next phase establishing the NDB, and, tasked Ministers of Finance to designate a President and Vice- Presidents of the NDB; “well before” the next BRICS Summit.
South Africa’s work on the NDB and Contingent Reserve Arrangement falls under the purview of the Inter-Ministerial Committee on BRICS, and a technical Local Steering Committee chaired by National Treasury’s Director General Lungisa Fuzile. Since returning from the BRICS Summit in Fortaleza earlier this year, both the technical and Ministerial committees have been engaged in the operationalisation of the BRICS initiatives, including:
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the ratification of the agreements establishing the Bank and the CRA
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participation in BRICS working groups
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making preparations for the African Regional Centre which is expected to open concurrently with the Head Quarters in Shanghai.
We anticipate that a significant number of the New Development Bank clients will come from Sub-Saharan Africa. There are a number of projects in Africa, including transformational infrastructure projects, which face the challenges associated with conversion into the bankable stage. This results in the pace of Africa’s development agenda being constrained. The project preparation facility that will be embedded in the business of the NDB will help to bridge the gap in addressing this challenge, amongst others.
In this way the New Development Bank is consistent with our other efforts in the financing and mobilisation of resources for infrastructure.
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The socio-economic impacts of Ebola in Liberia
As of early November, 2014, Liberia has had nearly 7,000 cases of Ebola Virus Disease (EVD) and more than 2,500 deaths. Many of the cases have occurred in the poorest and most densely populated areas of the capital city, Monrovia, but all counties have now been affected by EVD.
In an effort to measure the economic impact of EVD on Liberian households, the World Bank, with the Liberian Institute of Statistics and Geo-Information Services and the Gallup Organization, has conducted two rounds of mobile-phone surveys, in October and November 2014. Based on these results, it is clear that the EVD has substantially impacted the Liberian economy across all sectors of employment, in both affected and non-affected counties. In all, nearly half of the working population of Liberia is no longer working since the crisis began.
Those engaged in self-employment activities have been the hardest hit, in large part due to the closure of markets in which they operate. Before the crisis, over 30 percent of working household heads were self-employed – as of this latest survey, this is down to just above 10 percent.
The wage employment sector has also seen substantial job losses, with only about half of those originally surveyed still working since the crisis unfolded. The main reason cited by respondents is that their business or government office is closed; illness-related absence was only named by a small percentage of respondents.
After an initial downturn, the agricultural sector is showing the most resilience in the face of EVD. Rural areas have seen a substantial return to farming; the latest survey round coincided with the beginning of harvest season in many areas of the country.
These economic impacts have exacerbated existing issues, especially those related to food prices and food security. Imported rice prices have seen a huge jump – of nearly 40 percent over the average for October – but over 70 percent of respondents said that regardless of price, they do not have enough money to afford food. Many households have reduced the number of meals eaten, and restricted adult consumption in order to feed their small children, but still more than 90 percent of those surveyed worried that their household would not have enough to eat. With the arrival of the harvest, these figures have and will likely continue to trend downward, but they remain alarmingly high.
Whether directly affected by the virus or not, communities in every corner of Liberia are suffering from its consequences. Government mandated closures and other policies to contain and reverse the spread of EVD are in place across the country, and therefore the negative economic effects of EVD touch everyone. It will be essential to focus relief efforts not only in areas where the virus is active, which is crucial, but also in those remote counties where the population was already quite poor, food availability was scarce and is now worsening, markets are closed, and mobility is extremely limited.
» Read more about the socio-economic impacts of Ebola on Liberia in the full report.
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Food security in COMESA improving
The general trend in the food security situation in COMESA region is of an increase in cereal production with a number of countries registering positive growth.
According to statistics from the Food and Agriculture Organization (FAO) Crop Prospects and Food Situation, July, 2014, Zimbabwe will have the highest increase registering a high value of 77 percent followed by Sudan at 74.2 percent by the end of 2014.
Other countries with a positive forecast include Madagascar (1.6 percent), Zambia (24.5 percent), and Malawi (5.4 percent). On the other hand, Kenya and Uganda are expected to register a decline at 8.1 percent and 4.5 percent respectively.
The statistical report was presented during the 6th Joint COMESA Technical Committee on Agriculture, Environment and Natural Resources that took place in Kinshasa, D R Congo from 11-14 November 2014. The three days meeting addressed among others, the food security situation in the COMESA Region including the regional food balance sheet.
The report estimated that agriculture contributes more than 32% of COMESA region’s Gross Domestic Product and employs about 80% of its labour force.
“The sector is also important for its contribution to food security, contributes more than 50% of raw material to industrial sector and generation of about 65% foreign exchange for a greater part of the region,” the report said.
In order to sustain the growth in production, COMESA has developed a number of regional policy harmonization programmes and initiatives especially towards national policy frameworks. “The programmes are aimed at addressing the regional challenge facing the COMESA region in ensuring food security and how to stimulate strong and dynamic agriculture-industry link through sustainable increases in overall agricultural production,” the report said.
Among them is the harmonization of fertilizer policies and regulations. Working through its specialized agency, the Alliance for Commodity Trade in Eastern and Southern Africa Region (ACTESA) and the African Fertilizer and Agribusiness Partnership (AFAP) COMESA has formulated a program on the harmonization of fertilizer policies and regulations in the ESA region.
The program comes in six phases including the review of the national fertilizer policies and regulations, validation of the national fertilizer policies and regulations, and harmonization of technical standards and regulations. Other phases involve the drafting of harmonized COMESA fertilizer policies and regulations and approval through COMESA policy organs and their domestication.
The other is the Comprehensive Africa Agriculture Development Programme (CAADP). This is an initiative of the African Union that encourages at least 10% budgetary allocation to the agriculture sector in order to achieve 6% annual growth rate.
So far 14 COMESA countries have signed their national CAADP Compacts which commits them to implement the identified priority programmes. These include Burundi, Djibouti, D R Congo, Ethiopia, Kenya, Malawi, Madagascar, Seychelles, Sudan, Swaziland, Uganda, Rwanda, Zambia and Zimbabwe.
The regional CAADP Compact was signed Friday 14 November 2014 between COMESA Secretary General Sindiso Ngwenya and various cooperating partners involved in diverse aspects of its implementation. The regional compact focuses on trans-boundary programmes that benefit more than one Member State.
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Call for papers: COMESA-ACBF Capacity Building in Economic and Trade Policy Analysis and Research Project
Introduction
The Common Market for Eastern and Southern Africa (COMESA) was established in 1994 to replace the Preferential Trade Area for Eastern and Southern Africa (PTA) set up in 1981 within the framework of the Organization of the African Unity’s (OAU) Lagos Plan of Action and the First Act of Lagos. The COMESA regional block currently comprises of 19 Member States (Burundi, Comoros, Democratic Republic of Congo (DRC), Djibouti, Egypt, Eritrea, Ethiopia, Kenya, Libya, Madagascar, Malawi, Mauritius, Rwanda, Seychelles, Sudan, Swaziland, Uganda, Zambia and Zimbabwe).
The vision of COMESA is to be a fully integrated, internationally competitive Regional Economic Community (REC) within which there is economic prosperity and peace as evidenced by high standards of living for its people, and political and social stability and ready for the African Economic Community. COMESA’s Mission is to endeavor to achieve sustainable economic and social progress in all Member States through increased co-operation and integration in all fields of development particularly in trade, customs and monetary affairs, transport, communication and information, technology, industry and energy, gender, agriculture, environment and natural resources.
COMESA successfully established a Free Trade Area (FTA) in October 2000 with the key aim being to facilitate regional integration through zero customs tariffs on goods traded among the member states. The REC also launched a Customs Union in June 2009, which was expected to be operational in 2012 but the period was extended by two years. Moreover, the COMESA envisages to progress to a Common Market in 2017, and full Economic Community by 2025.
Intra-COMESA total trade grew by over 8% in 2013 over 2012 levels, from US$ 19.4 billion in 2012 to US$20.9 billion in 2013. Among the countries contributing to this growth were Swaziland, Madagascar, Congo DR, Zambia, Burundi and Comoros, all with growths in both intra-exports and intra-imports in 2013. The percentage of intra-COMESA trade to total COMESA trade in 2013 stood at 7%.
However, intra-trade is still limited and further efforts are needed to improve market access by eliminating barriers to factor mobility. Meanwhile, outside the region, countries are facing globalization challenges with limited regional competitive advantages. Therefore, while it is necessary to build productive capacity to take advantage of wider market opportunities that come with globalization, it is also imperative to enhance competitiveness by addressing the supply-side (or structural) constraints (such as high cost of infrastructure, limited market information, and limited availability and high cost of finance) and their impact on the cost of doing business. Even so, there are emerging and cross-cutting issues (gender, HIV/AIDS, climate change, peace and security, knowledge building, and partnerships) that act as crucial undergirding without which the broader integration agenda would be disrupted.
The objective for call for papers
There is need to address the low levels of intra-regional trade, and tackle obstacles to trade. The high cost of transport, low levels of industrialization and Non-tariff barriers (costly road user charges, transit related barriers, government policy/regulations, complex documentation, arbitrariness related barriers, SPS and TBT issues, standards and certification barriers, lengthy and costly customs clearance procedures, Rules of Origin, lack of coordination between government institutions, government monopoly in export trade and export subsidies) have been extensively cited in publications as constraints to promote intra-COMESA trade.
This call for papers therefore seeks analytical work and policy research papers to address the low levels of industrialization in COMESA countries and how to increase intra-regional trade.
COMESA therefore calls for papers in the following research areas;
1. Free Trade Area and Custom Union
2. Market potential for COMESA industries
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Extractive industries and sustainable resource management
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The blue economy; role of fishing in promoting intra-regional trade for coastal economies
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Research into the competitiveness of products produced in COMESA Member States
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How should COMESA Member States enter the global value chains and at what level
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3. How COMESA should respond to the shifting geopolitics and to the emerging economies
4. Global preferences for Africa and their effect on intra-regional trade
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Research on market conditions for entering the EU and other markets
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The impact that trade preferences from the developed countries have on intra-African trade Non-Tariff Barriers in the region and the need for regional standards
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6. Trade Facilitation
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Potential benefits of the Trade Facilitation Agreement for COMESA Member States
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Role of infrastructure (all modes of transport, ICT and all forms of energy) on promoting intra-regional trade flows
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Immigration restrictions and their impact on trade
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Implementing the Single Window in COMESA region
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7. Role of SMEs and informal cross border trade in promoting intra-regional trade in COMESA
8. Trade in services focusing on the impact of free movement of persons in the region
COMESA now invites researchers to submit full papers under the different research areas. The papers will be reviewed by the Research Committee and authors invited to present the successful papers during the COMESA Research Forum in May 2015.
Peer Review and Publication Time Frame
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Submission of papers to COMESA Secretariat by March 2015
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The submitted papers will be peer reviewed in April 2015
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The successful papers will be presented at the Research Forum in May 2015
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The presented papers will be published by COMESA in 2015
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Sacu committed to India negotiations
The Southern African Customs Union (Sacu) said on Tuesday it was still committed to negotiations with India over a delayed preferential trade agreement (PTA).
“We are still confident we will come to an agreement with India,” Sacu deputy director for trade negotiations Rolf-Joacim Otto told a Sapa correspondent on the sidelines of Botswana’s global expo business conference in Gaborone.
First launched in 2007, the PTA seeks to increase trade between Sacu and India by giving each party’s products and services preference over other regions. Sacu is made up of Botswana, Lesotho, South Africa, Swaziland, and Namibia.
“As Sacu, we are still finding each other. Firstly, the level of economic development between member states is not level and this presents challenges,” said Otto.
“We need to find a common position and present it to India as a group. Secondly we still have issues relating to capacity as far as negotiations and our ability to meet demands from India is concerned.”
Asked why the agreement had not yet been finalised despite years of negotiation, Otto said India was a big economy and “expecting a lot” from the agreement.
He said Sacu was conducting other negotiations, such as the recently-concluded economic partnership agreement with the European Union, which at times stretched Sacu’s resources.
It was not clear when the agreement with India would be finalised, seven years after it was first mooted.
“We are meeting them [India] next year,” he said.
It was “dangerous” to give a specific time frame for when a deal would be concluded, as they were normally “complex”, involving a number of aspects and jurisdictions.
A memorandum of understanding on the PTA with India was expected to have been signed in December 2013, but did not take place.
Otto was confident that once the deal was signed, Sacu member states would benefit from India’s wide market.
Sacu sought to increase trade volumes on products from sectors including agriculture, electronics, and mining.
Trade between Sacu and India was growing, being around US10 billion (R110.3bn) annually.
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5th EAC Annual Conference on Good Governance: Recommendations and Resolutions
The 5th EAC Conference on Good Governance took place on 14-15 November, 2014 in Bujumbura, Burundi. The theme was “Delivering Peaceful and Credible Elections for Sustainable Regional Integration – the role of Key Stakeholders”.
The theme of 5th EAC Conference was anchored on the premises that democratic processes have a diversity of key stakeholders who play a crucial role in ensuring peaceful elections. It considered the broader political environment in the region noting that weaknesses in democratic governance structures often result in violent conflicts.
The conference observed functioning democratic governance structures and institutions as vital to ensuring meaningful and sustainable peace, security and economic development, which in turn becomes a facilitator for regional integration.
Security sector transformations were thought of as having a critical role to play in the promotion of the rule of law and in strengthening political governance, which made the security sector a crucial partner in the process of democratic consolidation.
The conference provided an opportunity to dialogue on the challenges national elections pose and their possible mitigation frameworks to minimize threats to regional security, stability and development. By sharing experiences, challenges and possible solutions, it was hoped that the role of divergent stakeholders in attaining free, fair, peaceful and credible elections would be achieved.
The Conference served as a forum where practitioners, experts and policy makers shared their experiences and accumulated knowledge on elections to promote stronger governance and contribute to resolving electoral related conflicts.
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Status of Elimination of Non-Tariff Barriers in the East African Community: September 2014
This report highlights the status of eliminations of NTBs in the EAC region as of September 2014. The report was developed from the 15th EAC Regional Forum on NTBs held on 25-27 September 2014 in Arusha, Tanzania.
The EAC Regional Forum considered:
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Quarterly reports of National Monitoring Committees on non-tariff barriers and
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Updated the EAC Time Bound Programme on elimination of identified NTBs.
The publication highlights what the EAC has achieved in redressing NTBs in the first quarter of the financial 2014/2015. The publication is aimed at galvanizing more support for the removal of NTBs which continue to hinder full achievement of the objectives of the EAC Customs Union and Common Market.
The publication shows that 59 NTBs have been cumulatively resolved, 22 remain unresolved while eight new ones have been reported as of September, 2014 as reflected in the EAC Time Bound Programme in the Elimination of NTBs. In addition, the time bouns programme also recommends ways of addressing the unresolved NTBs.
The 16th Meeting of Sectoral Council on Legal and Judicial Affairs held on 30th September, 2014 cleared the Draft EAC NTBs Bill. The draft Bill is expected to be forwarded to 30th Meeting Council for its consideration and onward forwarding to East African Legislative Assembly for enactment into Law. The enactment of this Bill into Law and operationalization of EAC Single Customs Territory will strengthen the EAC Mechanism on elimination of Non Tariff Barriers in the EAC region.
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EA keen to break border bottlenecks to boost inter-regional trade
East Africa is making significant progress in their economic integration agenda with a focus on trade and transport facilitation to improve its competitiveness.
Heavy investments in road and railway infrastructure as well as modernization of port services are helping to boost intra-regional trade, the springboards for growth and prosperity in the region.
However, a major undoing for the five partner states of the East African Community (EAC) – Tanzania, Kenya, Uganda, Rwanda and Burundi – is the high costs of cross-border trade.
Costs of trading to most of African countries are stubbornly high making it difficult for potential African exporters to compete in global and even in regional markets.
Costs related to trading in the region are among the highest globally and are 50 per cent higher than in the United States and Europe, according to the World Bank. This is the result of gaps in infrastructure, lengthy border delays, red tape, poor regulation and lack of interconnectivity among systems used by the various government departments.
It is even worse for landlocked countries of Burundi, Rwanda and Uganda with transport costs rising to 75 per cent of the value of exported goods.
According to the 1999 World Bank Paper Infrastructure, Geographical Disadvantage and Transport costs, if East Africa reduced its transport costs by 10 per cent, trade could increase by more than 20 per cent.
It is against this backdrop that the Burundian President, Pierre Nkurunziza urged for improved efficiency by customs and immigration officials at border posts to reduce cumbersome procedures which contribute to unnecessary delays in transit cargo clearance.
President Nkuruzinza made the call last Friday when he laid a foundation stone for construction of One Stop Border Point facilities at Kobero border point on the border with Tanzania located at Muyinga Province, in northern Burundi. The facilities are constructed under financial and technical support of TradeMark East Africa (TMEA) to the tune of $6.4 million.
They aimed at reducing time spent for cargo and passenger clearance at the border posts of Kobero and Kabanga on the Tanzania’s side by combining activities of border control organizations and agencies of the two countries at one point.
TMEA is also constructing similar facilities at Kabanga border post and according to officials the two facilities are expected to cut down transit costs across Tanzania and Burundi border by 30 per cent.
“As the Anglophone say ‘time is money,’ the concept of one stop border post comes to solve the big problem: delays in controls at the border,” President Nkuruzinza put it correctly.
The Kobero border post is a gateway for transit cargo for Burundi and Eastern Democratic Republic of Congo from Tanzania. It handles more than 70 per cent of all cargo transport by road to Burundi.
According to the TMEA Director of One Stop Border Posts, Sjoerd Visser, about 60 trucks cross the Kobero and Kabanga border posts every day.
“Trading our way out of poverty,” is a phrase used by Ugandan President Yoweri Museveni to emphasize the importance of intra-regional trade in East Africa and he could never be more correct.
The focus on trade and transport facilitation has come at an opportune time to focus on areas that have received less attention before and ended up compounding problems that hamper trade growth and constrain economic growth potential.
It is a fact that trade has long been crucial to economic growth and prosperity. This has been the case around the world, and it is just as relevant to East Africa.
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Staying on track: A new tool for designing and meeting emissions-reduction goals
China just announced a mitigation goal to peak its emissions by 2030 or earlier, while the United States committed to reduce its national emissions by 26-28 percent below 2005 levels by 2025. South Africa has pledged to reduce its emissions 34 percent below business-as-usual emissions by 2020. Costa Rica has a carbon neutrality goal to be achieved by 2021. New York City aims to reduce its emissions 30 percent below 2005 levels by 2030. And countless other cities and countries have set similar emissions-reduction targets.
The problem is that for some goals, the details of the design remain unclear (for example, at what level will China’s emissions peak? How will the United States track progress towards a range of possible emissions reductions?). And there is no methodology available for these jurisdictions to accurately and consistently measure whether they’re on track to reach this diversity of goals – until now, that is.
The Greenhouse Gas (GHG) Protocol’s Mitigation Goal Standard, launched on 18 November 2014, provides the first-ever standardized approach for designing, assessing, and reporting progress on a variety of national and subnational mitigation goals. The standard can help governments set emissions-reduction targets, meet domestic and international emissions reporting obligations to groups like the UNFCCC, and ensure that efforts to reduce emissions are actually achieving their intended results.
Case Study: South Africa’s Mining Emissions
The standard is being launched along with the Policy and Action Standard, an accounting and reporting standard for estimating the greenhouse gas effects of policies and actions. Institutions in Chile, India, Israel, South Africa, the United Kingdom, and the United States have already pilot-tested the standard.
Take South Africa: The national government set a target to reduce its mining sector emissions 15 percent below 2006 levels by 2015. Promethium Carbon, a carbon finance consulting group, used the Mitigation Goal Standard to see whether the country was on track to achieve this target.
The group started with South Africa’s base-year emissions from the mining sector, which it calculated to be 10.68 megatonnes of carbon dioxide equivalent. By following the calculations set out in the Mitigation Goal Standard, the organization found that the sector will need to reduce its emissions by an additional 1.31 megatonnes of greenhouse gases – or about 12.6 percent below 2013 levels – to meet its 2015 goal. This evaluation gives the mining sector the information it needs to identify additional actions it can take to reduce its emissions and meet its goal.
Toward a Standardized, Robust Way of Designing and Assessing Mitigation Goals
A forthcoming report underscores the urgency of a consistent framework for designing and measuring progress on mitigation goals. The UNEP Emissions Gap Report, an updated version of which will be released on 19 November 2014, has repeatedly found a significant “emissions gap” between where global emissions are currently headed and where they need to be to have a likely chance of limiting warming to 2°C, thus preventing some of the more disastrous impacts of climate change. Part of the reason for this “gap” is that unclear assumptions and lenient accounting rules underlie some countries’ mitigation goals. It is our hope that this standard advances a more consistent, accurate and transparent method of designing and tracking progress, which can reduce uncertainty about future emissions levels.
Following the launch, WRI will hold a series of training workshops on the standards – in Mexico, Colombia, South Africa, Ethiopia, India, and Thailand – between late 2014 and February 2015.
Objectives of the Standard
The standard is intended to help national and subnational governments accomplish the following objectives:
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Design a greenhouse gas mitigation goal, which involves weighing the advantages and disadvantages of various types of mitigation goals and informs the choice of mitigation strategies used for achieving the goal
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Define accounting methods for tracking progress
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Calculate allowable emissions in the target year(s) in order to understand future emissions levels associated with meeting the goal
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Assess and report progress toward meeting a goal, which enables an evaluation of what additional actions are needed to achieve the goal, allows for public reporting of goal progress and assessment methods, and meets stakeholder demands for transparency
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Assess and report whether a goal has been achieved