News Archive February 2015

SADC completes industrial strategy interim report

SADC member states have completed an interim report outlining the regional industrialisation strategy expected to prioritise value addition and beneficiation.

The interim report, prepared by experts, was presented to the SADC Ministerial Taskforce on Regional Economic Integration which is holding a series of meetings in Harare to reflect on progress and give guidance to expedite the development of regional industrial strategy. This is in preparation for the Extra ordinary Summit to be held in April to discuss the matter.

In August last year, SADC Summit mandated the Ministerial Taskforce on Regional Economic Integration to come up with a strategy and roadmap for industrialisation. This was after a realisation that industrialisation strategy cannot be over emphasised given the challenges facing the region.

President Mugabe, who took over as SADC chairman last year told journalist at the end of the summit that it was critical for the region to prioritise value addition and beneficiation ahead of market liberalisation.

He said collective industrialisation would help the region to derive higher value from its resources. “Some of the elements that members states have been highlighting as key for regional industrialisation is development and participation in regional value chains,” Industry and Commerce Permanent Secretary Abigail Shonhiwa said yesterday. “It is therefore important that national processes should take place so that member states will be able to take advantage and benefit from industrialisation strategy.”

Mrs Shonhiwa said the taskforce agreed that the strategy should put forward concrete proposals on how to “frontload” industrialisation and properly sequence targets outputs on industrialisation development against those on markets integration.

Earlier, Industry and Commerce Minister Mike Bimha told delegates that trade among SADC member states had grown much slower as compared with that of other parties. “This could be a reflection of the fact that most member states lack capacity to beneficiate and value add their raw materials,” he said.

“Therefore, we are forced to import finished products from outside the region. During our tenure of office as chairperson of SADC, and in line with the theme of the 34th SADC Summit, it is our intention to work with fellow member states and put in place mechanisms meant to leverage on the abundant diverse human, mineral and agriculture resource in the region.”

The theme for last year’s summit was “SADC Strategy for Economic Transformation: Leveraging the Region’s Diverse Resources for Sustainable Economic and Social Development”.

The proposed regional industrialisation strategy, which places emphasis on value addition and beneficiation also dovetails into the Zimbabwe Agenda for Sustainable Socio Economic Transformation’s “value addition and beneficiation cluster”.


Visit the SADC Resources page for additional legal and policy documents.

0a

SADC completes industrial strategy interim report

27 Feb 2015
SADC member states have completed an interim report outlining the regional industrialisation strategy expected to prioritise value addition and beneficiation. The interim report, prepared by experts, was presented to the SADC...
1 ~ 480

SME finance in Ethiopia: addressing the missing middle challenge

The private sector is expected to play a key role in Ethiopia’s journey to become a middle income country in the next decade. However, Ethiopian firms face significant financial constraints, because financial institutions do not accommodate their needs, a new World Bank Group (WBG) study found.

The report reveals that without adequate support from financial institutions, small and medium businesses are not able to grow, or create more job opportunities. 

The study used both supply and demand research to offer a complete picture of small and medium enterprises’ finance practices in Ethiopia. While there was already anecdotal evidence that small firms were lacking suitable access to finance, the study was able to provide empirical evidence of the existence of a “missing middle phenomenon.” The study also offers recommendations to help reduce financial challenges and promote the growth of small and medium enterprises.

This gives origin to the so-called missing middle phenomenon whereby small enterprises are more credit constrained than either micro or medium/large enterprises,” said Francesco Strobbe, WBG senior financial economist. 

The study used both supply and demand research to offer a complete picture of small and medium enterprises’ finance practices in Ethiopia. While there was already anecdotal evidence that small firms were lacking suitable access to finance, the study was able to provide empirical evidence of the existence of a “missing middle phenomenon.” The study also offers recommendations to help reduce financial challenges and promote the growth of small and medium enterprises (SMEs). Those recommendations were discussed after the launch of the study during a two-day forum with high-level policy makers and stakeholders. The forum also enabled participants to learn from global best practices from Turkey, Nigeria and Ghana, which were able to successfully implement financing activities for SMEs.

The WBG supports the Ethiopian government’s efforts to create jobs through analytical studies and investment operations. The Ethiopian government has prepared a private sector development strategy to improve the productivity and modernization of the agricultural sector, and boost the technological sophistication and economic input of the industrial sector. It has also identified, the development of micro, small and medium enterprises (MSMEs) as a key industrial policy direction for creating employment opportunities for millions of Ethiopians. However, all this is not sufficient and much more remains to be done to unleash the full potential of SMEs, said Guang Zhe Chen, WBG country director for Ethiopia.

“To help fill in some of the gap through microfinance institutions, the World Bank Group, in cooperation with DFID and CIDA is supporting the Women Entrepreneurship Development Project,” Chen said. “In addition, through the $250 million Competitiveness and Job Creation Project, the WBG is also helping to create dedicated industrial zones.”

The government’s second Growth and Transformation Plan (GTPII), currently under preparation, will place even more emphasis on the importance of private sector development and therefore on easing access to finance for SMEs. The government has put in place helpful public support programs but much more is needed to properly address the missing middle challenge. 

“By increasing the capacity of the financial sector to properly serve the segment of small enterprises with adequate financial products, we hope to address lack of access to finance which is a key obstacle that is currently preventing small enterprises from fully playing their role in the industrialization process of Ethiopia and in contributing to the job creation agenda as envisaged in the GTP I and GTP II,” said H.E Ato Desalegn, state minister of Urban Development Housing and Construction.

Taking into consideration the findings and recommendations of the study, the WBG will help support the government in designing new initiatives to better serve the financial needs of  SMEs and create an “SME finance culture.” These interventions will complement the positive results of ongoing operations such as the Women’s Entrepreneurship Development Project and the Competitiveness and Job Creation Project by linking SMEs with larger enterprises in the industrial zones and contributing to the creation of a “private sector ecosystem” around the industrial zones.

“The SME finance study contains important policy recommendations that will need to be taken into account in the design of a new SME Finance project,” Desalegn added. “I’m confident that the inputs will help promote an SME finance culture in Ethiopia that will greatly contribute to the industrial policy objectives of the GTP and ultimately to the well-being of our country.” 

0a
1 ~ 480

Trade in Environmental Goods and Services: Issues and Interests for Small States

Increased trade in environmental goods and services (EGS) is a global climate change mitigation strategy. This is because use of these goods can result in more environmentally friendly outcomes compared to alternatives. Hence, reducing their costs, including through tariff reductions, can incentivise their use over conventional alternatives therefore improving global environmental outcomes.

Efforts to conclude on a list of EGS at different levels, multilateral as well as regional, have been underway for some time, but lately have received a renewed impetus. Since the Doha round of multilateral negotiations under the World Trade Organization (WTO) stalled, plurilateral negotiations have commenced between likeminded countries under the Environmental Goods Agreement (EGA). Regional efforts among members of Asia-Pacific Economic Cooperation (APEC) to liberalise EGS have also accelerated. Negotiations for a new global climate change framework to be agreed under the auspices of the United Nations Framework Convention on Climate Change (UNFCCC) are ramping up in time for the next decisive round of negotiations for a new international climate change agreement to be held in Paris in December 2015. Although the liberalisation agenda of EGS negotiated under the auspices of the WTO is not directly related to the UNFCCC process, an agreement by members could provide an important signal of intent towards the mitigation of global climate change.

This issue of Commonwealth Trade Hot Topics takes stock of negotiations for the liberalisation of environmental goods and services, and outlines the major issues for consideration by Commonwealth small states (CSS). The methodological approach undertaken here confirms the relevance of the list approach for CCS, and based on this assessment potential negotiation approaches have been identified. The paper is concluded with discussion as to the potential synergies between the trade and climate change regimes that could be sought within a liberalisation agenda, which promotes the mitigation of climate change and global public environmental goods.

0a
1 ~ 480

South Africa gives Brics port of entry visas

Business and diplomatic travellers from South Africa's Brics partners will receive port of entry visas into the country, Home Affairs Minister Malusi Gigaba said on Thursday.

"I have approved the issuance of port of entry visas to Brics business executives for up to 10 years, with each visit not to exceed 30 days," he told the Cape Town Press Club. The visas had been in effect since December 23 last year.

"This applies to diplomatic, official/service, and ordinary passport holders." Gigaba said the relevant individuals would receive a long-term visa allowing them multiple entry into the country for the duration of the passport's validity, not exceeding ten years. The department would continue to meet a turnaround time of five days for short-term business visas. It had consulted extensively with the Brazil, Russia, India, China, and South Africa (Brics) business council and the trade and industry department.

Gigaba said the four countries presented an "important investment potential". Together with South Africa, they comprised 40% of the world's population. "Business people from Brazil, Russia, India, and China want to come to our country, buy and sell an increasing array of products and services, and invest in our companies and growth sectors," he said.

"At home affairs we are completely committed to enabling this by facilitating the efficient entry of these commercial visitors, and will continually look for opportunities to improve in this regard." The department had not demanded reciprocal arrangements from Brics partners.

Gigaba smiled when asked if his announcement would anger countries that had long-established trading relationships with South Africa. "No, every good thing must start somewhere," he said. The arrangement may well be extended to other countries which had "significant investments" locally.

"These are issues that you undertake as you improve your systems." He said a "trusted traveller system" would be available to business people outside Brics. Leisure travellers could extend their visa while in the country, but needed to return home if required to apply for a new visa.

These new regulations had been introduced to counter a "complete abuse" of the local immigration system, which had seen people apply for jobs while on a tourist visa to avoid police clearance and issues with financial statements.

Gigaba said he would soon announce a panel of experts to conduct a complete review of the system used to issue visas.

0a

South Africa gives Brics port of entry visas

27 Feb 2015
Business and diplomatic travellers from South Africa's Brics partners will receive port of entry visas into the country, Home Affairs Minister Malusi Gigaba said on Thursday. "I have approved the issuance of port of entry visas...
1 ~ 480