News Archive March 2014

Governments urged to direct resources in manufacturing to create jobs and reduce poverty

African countries need to channel their resources to activities in industry, manufacturing and modern services in order to create more employment and improve the welfare of vulnerable groups, Deputy Executive Secretary of the United Nations Economic Commission for Africa, Abdalla Hamdok, said today in Abuja.

The continent should focus on developing a manufacturing sector that is interlinked to other sectors of the economy and is capable of raising productivity,” Hamdok said today at the opening of a meeting of African finance, economy and development experts in the Nigerian capital.

“Both resource-rich and resource-poor African countries should also build capacities to invest in new non-commodity-based industries,” he said at the meeting which precedes the Seventh Economic Commission for Africa and the African Union joint annual meetings of the Conference of African Ministers of Finance, Planning and Economic Development which opens on March 27.

Hamdok said despite its rapid economic growth over the last decade, Africa continues to display glaring contradictions between economic and social indicators, as poverty remains pervasive while unemployment among women and the youth remains very high. In a bid to tackle the challenge, the focus of this year’s gathering is on industrialization for inclusive and transformative development of Africa.

For his part, Dr. Anthony Mothae Maruping, Commissioner for Economic Affairs at the African Union Commission said most African economies have been performing well in terms of headline numbers without significant impact on the lives of the people.

“Africans are therefore calling for major structural transformation to sustain the current economic performance,” he said, stressing that the next critical level is industrialization as the means to “meaningfully join the global value and supply chains where opportunities and jobs are created.”

He also said that governments would have to develop institutions that can effectively implement industrialisation plans and strategies.

Present at the opening were representative of the Government of the Federal Republic of Nigeria, Mr Anatole Yehoan Tohougbe, Chairperson of the Outgoing Bureau of the Committee of Experts, Mr Abraham Nwankwo, Director General of Debt Management Office, Federal Republic of Nigeria; African Ambassadors; Members of the Diplomatic Community; and Senior Officials from Ministries of Finance, Planning and Economic Development as well as Central Banks.

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Trans-Kalahari railway to ease corridor congestion in SADC

Once completed in 2016 the Trans-Kalahari railway would serve as an alternative relief to the already congested corridors within the Southern African Development Community (SADC) and grant landlocked countries much-needed access to European, Asian and American markets.

The railway connection being developed at a cost of about N$100 billion (about US$9.2 billion), to connect Botswana to the Atlantic Port of Walvis Bay in Namibia, would ensure that the SADC vision for regional integration is realized, according to the Minister of Minerals, Energy and Water Resources of Botswana, Onkokame Kitso  Mokaila. The two countries signed the agreement last week in Walvis Bay.

The project is expected to create jobs, new business and trade opportunities for citizens of both countries. “Trans-Kalahari Railway is so important to SADC and Africa, since it will further afford alternate transportation routes for landlocked countries such as Malawi, Zambia and Zimbabwe. It will be ideal for the exportation of bulk commodities destined for Europe, Asia and America,” he said. According to Mokaila, Namibia and Botswana are also aware of the environmental challenges associated with coal and coal generated electricity, but went on to say that coal will be a source of fuel for power generation for years to come. “It is in this regard that the development of TKR and commodity handling facilities in Walvis Bay will go a long way in facilitating the development of the estimated 212 billion tonnes of coal resource in Botswana in power generation and others,” Mokaila explained.

He said with the ever growing demand for power in the region and elsewhere, the Walvis Bay commodity terminal is expected to handle about 65 million metric tonnes of coal per year.

President Hifikepunye Pohamba and late president Sir Seretse Khama of Botswana received plaudits for taking a personal interest in the realisation of the railway line.  “Was it not for the two presidents and other important role-players that were instrumental toward the realisation of the project, we would not have been signing this agreement today,” said Mokaila. Namibian Minister of Mines and Energy, Erkki Ngmintina said the signing of the Trans-Kalahari Railway agreement provides an added impetus and a new platform for people of both countries to lay the groundwork for industrialisation.

“It does not hamper existing gateways, but creates a new path for new and additional role-players,” Nghimtina said. He added that the two countries will further consult and engage to assist the technical ministries as the implementation ofthe project continues.

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Trans-Kalahari railway to ease corridor congestion in SADC

28 Mar 2014
Once completed in 2016 the Trans-Kalahari railway would serve as an alternative relief to the already congested corridors within the Southern African Development Community (SADC) and grant landlocked countries much-needed access...
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Kenya should push for concessions in EPA negotiations

Kenya should use its geopolitical standing in the East Africa region to get concessions from fellow EAC states and the European Union in negotiating the new trade agreement.

Experts at audit and advisory firm KPMG on Tuesday said that Kenya plays a crucial role in the East African context and thus deserves to be heard by all parties on the negotiating table.

“Kenya is especially in a tricky position because ‘we are poor but we are not poor enough’, that’s our challenge, and therefore some of the benefits that fellow EAC members can obtain from these agreements are not accessible to us,” said Josphat Mwaura, chief executive of KPMG East Africa.

“But there’s a perspective that one can present that should enable Kenya to access some concessions, especially the geopolitical issues that we are dealing with as a country. The position we hold in East Africa – in the context of Somalia, DRC, South Sudan – should enable us to obtain some concessions even when classified as a developing country,” he said.

The East African Community and the EU have been negotiating a new Economic Partnership Agreement over the last 12 years, whose deadline is set for this October. If nothing will have been agreed to, exporters and importers in either of the blocs will incur taxes on goods, making them uncompetitive.

“It is unfortunate that they have been negotiating for that long,” said John Scott, KPMG’s global deputy chairman, who is in Kenya as part of his Africa visit.

The EPA is expected to provide free market access and co-operation support between the two trade blocs. Presently,Kenya exports to the EU under the Market Access Regulations since 2007, but this will be repealed on October 1. Flower exports to EU, for instance, will instantly attract a 8.5 per cent tax.

Kenya is categorised as a developing country while Uganda, Rwanda, Burundi and Tanzania are considered least developed countries, and thus stands to lose more. The LDCs will continue to gain favourable access to the EU market under the ‘Everything-But-Arms’ scheme, which grants ‘duty-free, quota-free’ access to imports of all their products.

Mwaura said EAC states must look internally to establish a position and present that at the negotiating table.

“East African economies are at different maturity paths in terms of economic development but when looked at as a whole, there is a lot in comparative advantages that each presents,” he said.

“We have the power of opportunity in this region and it is about defining and refining that case and presenting it with clarity and with conviction. This way we would make a clear case for EAC and whoever sits across the table would want to be part of that case.”

The EAC could also take advantage of the ongoing transition in the EU Parliament, which presents opportunity for dialogue. The parliament will hold elections in May and may usher in legislator who are political-friendly to the EAC region.

“The political environment in the EU is changing slightly… and I think there is an opportunity there for Kenya, East Africa and other countries negotiating trade agreements with the EU,” said Scott.

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Kenya should push for concessions in EPA negotiations

28 Mar 2014
Kenya should use its geopolitical standing in the East Africa region to get concessions from fellow EAC states and the European Union in negotiating the new trade agreement. Experts at audit and advisory firm KPMG on Tuesday...
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Obama defends proposed EU trade pact

President Barack Obama defended a proposed U.S. trade deal with the European Union against charges it might weaken environmental standards and consumer protection, saying he wouldn’t allow that to happen.

While voters may have “legitimate questions” about the impact of the trade talks, neither side will agree to a bad deal that allows companies to run around the rules, Obama said. The Trans-Atlantic Trade and Investment Partnership, which the U.S. and the EU began negotiating last year, aims to maintain or strengthen consumer safeguards, he said in Brussels today.

“I have no intention of signing legislation that would weaken those protections,” Obama said when asked about the deal’s consequences at a news conference following an EU-U.S. summit. “There is a way of doing this right that will help us make sure that we remain at the cutting edge of innovation.”

The U.S. and the EU are working toward a trade deal after sparring for decades over issues including agricultural protections, food safety and other regulatory standards. Talks, which have been given renewed impetus by the standoff over Ukraine, also are taking aim at $10.5 billion in tariffs.

“In days like these, forging strong economic ties across the Atlantic is a political sign,” EU President Herman Van Rompuy told the same briefing.

U.S. Trade Representative Michael Froman on March 22 called on the EU to renew pledges to eliminate tariffs by the time the deal is complete. Each side has complained about the offers presented in negotiations so far.

Tariffs are already low and could shrink even further if the deal proceeds, European Commission President Jose Barroso told the same Brussels briefing today. “We are trying to get it even lower,” he said.

‘Residual Protection’ 

The EU’s ambassador to the U.S., Joao Vale de Almeida, said the final agreement may not be able to wipe out every tariff on every product. Services and procurement are other essential elements of the proposed trade deal, he told reporters after the press conference.

“The purpose that we had from the very start is to reduce tariffs as close as possible to zero,” Vale de Almeida said, adding that there may be a need for “residual protection here and there.” There are “other issues in our view equally or more important than tariffs,” he said.

Barroso called for the trade talks to gain a “new impulse” that “will be very important to give a decisive injection of dynamism.” The EU and U.S. economies stand to add jobs and give a boost to households and small businesses if the deal succeeds, he said.

Talks Timetable 

EU and U.S. trade officials originally set the end of 2014 for completing the talks. Froman said there isn’t a hard schedule for how the talks should proceed, especially given impending elections to the European Parliament in May and the European Commission’s term expiring later this year.

Obama said he was confident the U.S. and the EU could find a deal that offered benefits across their respective economies.

“I think it is important for us as leaders to ensure that trade is helping folks at the bottom and folks in the middle, and broad-based prosperity, not just a few elites,” Obama said. “That’s the test that I’m going to apply in whether or not it makes sense for us to move forward in a trade deal.”

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Obama defends proposed EU trade pact

27 Mar 2014
President Barack Obama defended a proposed U.S. trade deal with the European Union against charges it might weaken environmental standards and consumer protection, saying he wouldn’t allow that to happen. While voters may have...
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