News Archive June 2017

WTO records moderate rise in G20 trade restrictions

The WTO’s seventeenth monitoring report on Group of 20 (G20) trade measures, issued on 30 June, shows that trade restrictions in G20 economies have risen at a moderate rate similar to that of previous years, despite the uncertainty facing the global economy. The report calls on G20 governments to show leadership in supporting open and mutually beneficial trade as a driver of economic growth and development.

A total of 42 new trade-restrictive measures were applied by G20 economies during the review period (mid-October 2016 to mid-May 2017), including new or increased tariffs, customs regulations and rules of origin restrictions. This is an average of six measures per month – slightly higher than in 2016 but below the longer-term trend observed in 2009-2015 of seven per month.

G20 economies also implemented 42 measures aimed at facilitating trade during the review period, including the elimination or reduction of tariffs and the simplification of customs procedures. At an average of six new trade-facilitating measures per month, this represents a similar level compared to the previous reporting period (mid-May to mid-October 2016) and is in line with the declining trend observed in 2016.

It is notable that the estimated trade coverage of trade-facilitating measures implemented by G20 economies (US$163 billion) significantly exceeded the estimated trade coverage of trade restrictive measures (US$47 billion). In addition, liberalization associated with the 2015 expansion of the WTO’s Information Technology Agreement (ITA) continues to feature as an important contributor to trade facilitation

Commenting on the report, Director-General Roberto Azevêdo said:

“The moderation and restraint that we have seen in trade policies shows that the trading system is doing its job in keeping global commerce flowing and resisting protectionism. Nevertheless, there is a high level of economic and policy uncertainty, and therefore we need to remain vigilant. Efforts should be stepped up to avoid implementing new trade-restrictive measures and to reverse existing measures.

I urge G20 economies to continue showing leadership in supporting open and mutually beneficial trade, and in further strengthening the rules-based trading system. The G20 should seek to continue improving the global trading environment, including by implementing the WTO Trade Facilitation Agreement, which entered into force in February this year.”

The initiation of trade remedy investigations (which the report does not classify as restrictive or facilitating) remained the most frequently applied measure, representing 50% of all trade measures taken during the review period.  However, the amount of trade covered by these is relatively small (US$25 billion for trade remedy initiations and US$6 billion for terminations of duties). The main sectors affected by trade remedy initiations were wood and articles of wood; vehicles; and furniture, bedding material, and lamps. Main sectors where trade remedy duties were terminated were articles of iron and steel; machinery and mechanical appliances; and aluminum and articles thereof.

The G20 economies are Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Republic of Korea, Japan, Mexico, the Russian Federation, Saudi Arabia, South Africa, Turkey, the United Kingdom and the United States, as well as the European Union.

Key findings

  • G20 economies applied 42 new trade-restrictive measures during the review period (mid-October 2016 to mid-May 2017), including new or increased tariffs, customs regulations and rules of origin restrictions. This equates to an average of six measures per month which is slightly higher than in 2016, but below the longer-term trend observed from 2009-2015 of seven per month.

  • G20 economies also applied 42 measures aimed at facilitating trade over this review period, including eliminated or reduced tariffs and simplified customs procedures. This equates to an average of six new measures per month which is similar to the previous period and in line with the declining trend in the application of trade facilitating measures observed in 2016.

  • During the review period, the estimated trade coverage for trade facilitating measures (US$163 billion) significantly exceeded the estimated trade coverage of trade restrictive measures (US$47 billion).

  • This Report harmonizes the approach taken to trade remedies in the G20 Monitoring Report with that of the WTO-wide Report by introducing a separate annex for trade remedy measures. It is of interest to note that initiations of trade remedy investigations represented 50% of the total trade measures taken during the review period; although the amount of trade covered is relatively small (US$25 billion for trade remedy initiations and US$6 billion for terminations).

  • Transparency and predictability in trade policy remains vital for all actors in the global economy. The G20 should show leadership in reiterating their commitment to open and mutually beneficial trade as a key driver of economic growth and a major engine for prosperity.

  • Faced with continuing global economic uncertainties, the G20 should seek to continue improving the global trading environment, including by implementing the WTO Trade Facilitation Agreement, which entered into force in February this year, and working together to achieve a successful outcome at the 11th WTO Ministerial Conference in December.


Seventeenth UNCTAD-OECD Report on G20 Investment Measures

The joint UNCTAD-OECD Report indicates that, for the first time in years, the regular inventory of G20 Members' investment policy measures records a relatively greater proportion of restrictions to international investment.

During the reporting period (from mid-October 2016 to mid-May 2017), seven G20 Members have introduced investment policy measures specific to foreign direct investment (FDI). Among those, four countries took liberalisation measures in a variety of sectors. On the other hand, two countries restricted certain outward investment for public policy reasons and one country introduced a cap on foreign capital participation in payment transaction processing.

G20 Members (Argentina, Japan, Saudi Arabia and Turkey) concluded six new bilateral investment treaties (BITs). In addition, Argentina and Brazil concluded an Intra-MERCOSUR Cooperation and Facilitation Investment Protocol; the United States a Trade and Investment Framework Agreement (TIFA) with Paraguay; and the EU and Canada concluded a Comprehensive Economic and Trade Agreement (CETA). The termination of at least 10 BITs concluded by G20 Members entered into effect.

The Report cautions that, given the relatively low number of FDI-related policy measures that were taken in the reporting period, it is too early to interpret the comparatively higher ratio of restrictive measures as foreshadowing a trend. Nonetheless, these findings should focus policymakers’ attention to the commitments by G20 Leaders in favour of an open world economy, the promotion of global investment, and the thrust of the G20 Guiding Principles for Global Investment Policymaking, which call for open, non-discriminatory, transparent and predictable conditions for investment.

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WTO records moderate rise in G20 trade restrictions

30 Jun 2017
The WTO’s seventeenth monitoring report on Group of 20 (G20) trade measures, issued on 30 June, shows that trade restrictions in G20 economies have risen at a moderate rate similar to that of previous years, despite the...
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ECA develops toolkit to help member states integrate Agendas 2030 and 2063

The Economic Commission for Africa (ECA) is developing a toolkit that will help African countries develop an integrated approach in implementing the 2030 Agenda for Sustainable Development (SDGs) and Agenda 2063, Africa’s 50-year development plan.

Speaking in Abuja at the on-going high level policy dialogue on development planning in Africa, Bartholomew Armah, Chief of the Renewal Planning Section in the Macroeconomic Policy Division, said the integrated nature of Agenda 2063 and the SDGs calls for an integrated approach to their implementation and reporting hence the development of the new toolkit.

The toolkit will harmonize the domestication of the SDGs and Agenda 2063 to enhance efficiency and reduce transaction costs of reporting, facilitate integration of both agendas in national development plans and track performance on the two agenda.

“The toolkit idea emanated from the work we have been doing with our partners on the post-2015 agenda and now we have Agendas 2063 and 2030. So last year we requested funding to support member States integrate the two agendas into their national development plans and to support evidence-based policymaking allowing us to develop this platform,” said Mr. Armah, adding the toolkit is comprehensive and flexible.

The toolkit is an electronic platform which can be accessed on the web. It is also portable and can be downloaded onto desktops and can be used both online and off-line.

“The toolkit puts the SDGs on the electronic platform together with Agenda 2063 and walks policymakers through a series of questions on whether they have integrated the two agendas into their plans, and if so whether this has been done fully using the exact or proxy indicators,” Mr. Armah added.

“We do this because we want to be able to identify if there are some challenges that the member States are meeting in mainstreaming the SDGs and Agenda 2063 into national development plans so the ECA can then follow-up with the member States and try to work with them in trying to address those challenges and gaps.”

After going through the processes on the platform, it generates a report summarizing the responses and shows what type of integration a particular country would have reached, whether it met the economic, social or environmental dimensions of the SDGs.

“Essentially it gives you a mapping of whether the integration is at the three levels such that there’s no skew towards one dimension or the other. Basically it validates the quality and extent of integration,” he said, adding the tool also tracks progress on any given country’s national development plan.

The tool also identifies reasons for non-integration, providing the opportunity for the ECA and its partners to have further discussions with the member States for support.

It can also serve as an input into country preparations for national voluntary reporting to the High Level Political Forum and for national policy dialogue on the implementation of national development plans.

“Of course ours is not the only toolkit around but our distinguishes itself from existing ones in that it looks at the two agendas and its flexible to track progress in other agendas,” he said, adding SDG convergence with 2063 is high hence integration is made easier by the toolkit.

Mr. Armah, whose presentation to the meeting was titled: “An integrated Approach to the Implementation of International Commitments: Features of ECA’s Integrated Planning and Reporting Toolkit”, said the target for the tool is Africa’s national planning commissions.

The toolkit has already been tested in Ethiopia and is being fine-tuned ready for deployment end of June.

In Africa, SDGs are being implemented concurrently and in an integrated manner with the First 10-year Implementation Plan of Agenda 2063, Africa’s 50-year strategic framework for socio-economic transformation which seeks to accelerate the implementation of past and existing continental initiatives for growth and sustainable development.


High level policy dialogue kicks off in Abuja with ECA recommitting to strengthening support for Africa

The High Level Policy Dialogue on development planning in Africa opened Wednesday in Abuja with the ECA recommitting to strengthening its support to development planning and statistical development, among other areas, towards ensuring the effective mainstreaming of the SDGs in Africa and their realization in an efficient and effective manner.

Capacity Development Division (CDD) Director, Stephen Karingi, said the ECA recognizes the need to provide tailored capacity building and advisory services to member States in the area of development planning and statistics, including SDG mainstreaming to support Africa’s quest for inclusive and sustainable transformation and development.

“The Commission has a long-standing history in capacity development, through which it has continued to make distinct and recognized contributions to addressing Africa’s development challenges and aspirations,” he said, adding that given its dual role as the regional arm of the United Nations and an integral part of the African institutional landscape, its capacity development strategy was anchored within relevant frameworks of the African Union (AU) and the UN.

Mr. Karingi applauded the fact that member States have embarked on the process to domesticate the Agenda 2030 for sustainable development in earnest.

“In this connection, we have noted an increasing number of requests from countries for capacity building and advisory services in the areas of development planning and statistical capacity development, including SDG mainstreaming,” he said.

 The 2017 HLPD seeks to explore relevant content and modalities that will help member States mainstream the SDGs into national development planning processes across the policy cycle; that is design, implementation, monitoring, evaluation and reporting.

Mr. Karingi said Africa cannot achieve its aspirations without proper development planning.

“Development planning provides a systematic approach to identifying, articulating, prioritizing and satisfying the economic and social needs and aspirations of a country within a given resource envelope,” he said, adding planning was therefore an essential means of achieving a country’s development objectives or vision.

The challenge confronting Africa, said Mr. Karingi, is not only to attain and maintain, but also to translate rapid economic growth into sustained and inclusive development, based on economic diversification that creates jobs, contributes to reduced inequality and poverty rates, enhances access to basic services and corrects market failures that undermine environmental sustainability. Important enablers, he said, include deepening regional integration and improving Africa’s standing in the global arena, accelerating the establishment of the Continental Free Trade Area (CFTA) and developing trade-related transboundary infrastructure.

In this regard, the attainment of the SDGs in Africa will necessarily hinge on the extent to which they have been mainstreamed into the national development planning process, he said.

Time for action

In her welcome remarks to participants, Nana Fatima Mede, the permanent secretary of the budget and national planning ministry of Nigeria, said it was time for Africa to take action on the ground as it seeks to promote policies that will change the lives of the ordinary people.

She said it was not for lack of knowledge that the continent was not implementing policies that can change the people’s lives, adding commitment to implement Africa’s plans is what is required.

“As we make efforts to mainstream the SDGs in our respective national plans, let us not forget to do the same for the Africa-focused Agenda 2063,” said Ms. Mede, who spoke on behalf of her Minister, Senator Udoma Udo Adoma.

“The point of emphasis must be social development of our people, inclusive economic development for prosperity, inclusive societies and responsive institutions for peace and environmental sustainability of the planet,” she added as she challenged participants to think through the possible connections and synergies that can be formed across African countries in mainstreaming SDGs in national plans.

UN Resident/Humanitarian Coordinator and UNDP Resident Representative, Edward Kallon, said the HLPD offered participants an opportunity to dialogue on development planning in different countries and situational contexts with the ultimate goal of realizing sustainable development in Africa.

“While the challenges facing SDG mainstreaming in Africa are many and varied, a useful entry point for tackling these challenges is to address the seemingly co-joined problem of weak statistical capacities and dearth of comprehensive, reliable and up-to-date data for objective policy and programme design as well as tracking progress on specific SDG indicators,” he said.

“We must halt the steady slide of many African countries towards poverty and deprivation as well as widening inequality. We know what needs to be done. What we might not know, and if we know may not always agree on, is how to do it. I remain optimistic that this session will focus on the how question as opposed to the what questions.”

In his welcoming remarks, Adeyemi Dipeolu, Special Advisor to the Nigerian President on Economic Affairs, explained his country’s economic policies and what the country has done so far towards mainstreaming the SDGs into its plans and related issues.

The three-day HLPD has brought together about 60 top African planners and chief executives of planning bodies to discuss development planning on the continent under the theme: Mainstreaming the Sustainable Development Goals into National Development Plans.

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Joint ACP-UNCTAD Guiding Principles for Investment Policymaking approved

The Joint African, Caribbean and Pacific Group of States (ACP)-UNCTAD Guiding Principles for Investment Policymaking were approved by the ACP Committee of Ambassadors meeting in Brussels.

These Principles were jointly developed by UNCTAD and the ACP Secretariat in the framework of the partnership between the two institutions and after consultation with ACP Members States and Regional Organizations. They draw on UNCTAD’s Core Principles that form an integral part of UNCTAD’s Investment Policy Framework for Sustainable Development (2015 version) and reflect ACP countries’ specificities and priorities for investment policymaking.

Highlights

The Joint Guiding Principles come at a time of mounting economic, social and environmental challenges, which highlight the critical role of investment in achieving the Sustainable Development Goals (SDGs). They build on UNCTAD’s Core Principles that have established themselves as a key reference point for national and international investment policy making across the globe, and on UNCTAD’s technical assistance and capacity building activities to ACP countries.

The principles also build on key ACP policy documents, notably the Georgetown Agreement establishing the African, Caribbean and Pacific Group of States, the Declaration of the 8th Summit of ACP Heads of State and Government of the ACP Group of States, the Strategic Framework for ACP Private Sector Development. The Principles are in support of existing ACP initiatives, such as the ACP Private Sector Development Strategy, the new approach to ACP Group support for the development of agriculture value chains, and the ACP Investment Facility.

The non-binding Guiding Principles provide guidance for investment policymaking with a view to:

  • promoting inclusive economic growth and sustainable development;

  • promoting coherence in national and international investment policymaking;

  • fostering an open, transparent and conducive global policy environment for investment; and

  • aligning investment promotion and facilitation policies with sustainable development goals.

They consist of the following eleven principles to provide guidance for ACP investment policymakers:

“0”. Investment for sustainable development

1. Policy coherence

2. Public governance and institutions

3. Dynamic policymaking

4. Balanced rights and obligations

5. Right to regulate

6. Openness to investment

7. Investment protection and treatment

8. Investment promotion and facilitation

9. Corporate governance and responsibility

10. Regional and International cooperation


» Download: Guiding Principles for ACP Countries Investment Policymaking, May 2017 (PDF, 150 KB)

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Afreximbank Advisory Group Seminar on Trade and Economic Transformation: opening statement by Mr. Denys Denya

Kigali, Rwanda, 28 June 2017

We gather is this beautiful city, at a time when the continent is embarking on a path of structural transformation for sustained growth. Indeed, the choice of Rwanda as the host of this year’s meetings is particularly apt, in part because of the growing relationship that exists between Afreximbank and Rwanda, but more importantly because Rwanda offers enormous inspiration to the continent. From the tragedy of about two decades ago, Rwanda has exemplified resilience and risen to the challenge of post-conflict reconstructing, creating the economic miracle that we see today. A country devastated by conflict and reduced to near ashes merely two decades ago, has emerged as one of the fastest growing economies in the region and a global leading in the area of governance. Over the last decade, the country has consistently been listed as one the best performing countries in the World Bank Doing Business Indicators. Indeed, through its remarkable achievements, Rwanda exemplifies the adage – “The world is moving so fast these days that the man who says it can't be done is generally interrupted by someone doing it.”

Throughout history, the pivotal role played by trade in economic development has been evident. More recently, the rapid rise of East Asian economies once again demonstrated the critical role of globalization and openness to trade in economic development. In fact, the role of trade in economic growth is evidenced by the strength and level of correlation between openness and output expansion. The impressive growth of global trade which more than tripled between 2001 and 2015, rising from US$6 trillion to over US$19 trillion, which contributed to over 50% of expansion of world output which grew by about 50 percent, from about US$50 trillion to around US$75 trillion. There is therefore no gainsaying of the fact that trade and openness are important drivers of global output and growth. These developments have, to varying extents, improved the economic fortunes of various regional groupings, including Africa. For instance, Africa’s trade rose from about US$230 billion in 2001 to about US$1.2 trillion in 2015 while the economy also expanded considerably.

However, despite these developments, the continent continues to struggle to achieve inclusive growth and accelerated development making it a home to millions of the world’s poorest. Africa remains a periphery player in global trade contributing below 3 percent to global trade – and trade has to a large extent failed to unlock development as in other regions, a contrast which has created the urgency to re-examine the continent’s economic structure, trade arrangements and export composition and re-ignited the question of how trade can be used to support the transformation and sustainable development of Africa.

It is in the context of the foregoing and the Bank’s Fifth Strategic Plan, dubbed IMPACT 202-Africa Transformed, that the overall theme for this year’s event is “Trade and Economic Transformation”. The end of the commodity super-cycle and declining demand for African commodities has once against raised the specter of Africa’s vulnerability market vagaries and external shocks. It has at the same time ignited a renewed commitment to economic diversification and structural transformation. While many African countries have previously adopted growth strategies – including industrialization-led growth strategies, import-substitution and export-led growth strategies – far too little progress has been made in weaning the continent off commodities trap or resource curse. However, this renewed focus on structural transformation and industrialization comes at a time when African economies have realized the importance of closer cooperation and regional integration as catalyst to transformation, especially in an increasingly uncertain world. Clearly, our focus on “Trade and Economic Transformation” is driven by the fact that in many respects, trade, especially thriving intra-regional trade offers tremendous opportunities for growth and sustainable development.

Over the years, some of the key challenges that have militated against progress towards economic development and structural transformation of African economies have included, among others, over-reliance on export of natural resources and primary commodities and the deficit of export diversification which limited the ability of countries to effectively develop regional value chains to enhance their integration into global value chains. This was compounded by the small size of economies and market fragmentation on the basis of low levels of integration; and low levels of intra-regional trade.

The resounding success achieved by some countries in Asia, especially China and Korea, and the critical role intra-regional trade played in their development, present us with valuable lessons to position intra-African trade as a key pillar for economic growth, sustainable development and set the continent on a path of structural transformation. Accordingly, connecting a host of small and disconnected markets in the region through deepening of intra-African trade and economic integration, essentially bringing together small economies and large ones within the region, has the potential to create an environment where firms in member countries gain access to hitherto non-existent larger markets for large-scale production and exploitation of technical, as well as research and development economies, among others.

This year, the Government of Rwanda and the Bank have put together an impressive programme. During the course of this week, several activities and events will be taking place on the sidelines of the 24th Annual General Meeting of Shareholders of the African Export-Import Bank.

These events include today’s Seminar, which is being held under the sub-theme: “Trade as a catalyst for industrializing Africa.” The choice of sub-theme for today’s Seminar reflects the recognition of the immense potential of trade in promoting industrialisation, economic growth and transformation of African economies. The focus on industrialization is borne out of the fact that in a dynamic global trade and economic environment, the contribution of manufactured goods and industrial output to global trade has consistently grown and accelerated dramatically and now contributes to over 70% of total trade.

This has set the world economy on a binary development course – either a country industrializes to reap the benefits of export diversification or it does not and perishes with sustained deterioration of commodities terms of trade which undermines long-run growth and integration into the global economy. While most countries in other regions of the world have embraced the first option, industrialization has remained elusive for many African countries. Today’s discussions will broadly review, among others, the opportunities offered by trade for the continent to industrialize, and drawing on experience, discuss how trade could be optimally deployed to accelerate the process of industrialization and structural transformation. Discussions will explore the role of trade as a catalyst for industrialization providing a historical perspective and reviewing the analytical foundations of the correlation between trade and industrial development.

Tomorrow’s deliberations will be driven by the sub-theme “Boosting intra-African trade for Regional Integration”, anchored on the established fact that strong intra-regional trade is associated with numerous benefits including economies of scale, access to larger regional markets, increased competitiveness and job creation and the development of regional value chains for integration into global value chains. Evidence suggests that dynamic intra-regional trade has the ability to absorb external shocks and insulate national economies from global market volatilities and recurrent global shocks. In this regard, African governments and private sector operators have embraced the urgency to accelerate efforts to expand intra-African trade especially in view of the recent weaknesses in commodity markets with protracted dampening effects on African economies.

Notwithstanding, the progress made, at just about 15%, intra-African trade is still at the periphery compared to other regions, most notably Europe (67%), Asia (52%) and North America (48%). Among the constraints, limited/lack of trade facilitation measures or policies constitutes one of the major setbacks to deeper regional integration and expansion of intra-African trade – reflected, among others by transit, documentation, port and customs delays; varying cross-border tariffs and standard measures and procedures due to poor implementation or absence of harmonized cross-border policies. Hence, the discussions under this sub-theme will focus on the role of trade in supporting regional integration and economic development.

On Friday, the Bank will hold the 23rd Session of its Advisory Group Meeting, under the theme “Expanding African trade in a world of rising Protectionism” which will conclude the series of events that precede the 24th Annual General Meeting of Shareholders The theme of the third day is motivated by the re-emergence of rising nationalistic sentiments and creeping protectionism across the world in recent years which are posing a growing threat to globalization and international trade. Trade restrictive rhetoric and protectionism measures have been on the rise recently, most notably in the United States and Europe – regions which had previously been the leaders of free markets, and promoting the free movement of capital, goods and labour. In this regard, discussion will explore how to promote African trade in the face of these unfavorable developments.

As we continue to stress, it is essential that as a continent we are resolute in addressing the challenges of industrialization and low-levels of intra-African trade to ensure that Africa is able to benefit from the opportunities trade provides to support economic growth and development. For us, at Afreximbank, we believe that “There is only one thing that makes a dream impossible to achieve: the fear of failure” and that “You never change your life until you step out of your comfort zone; change begins at the end of your comfort zone.”

To transform, Africa needs to move away from its comfort zone of reliance on natural resources and commodities and strive to be the next frontier for industrialization, taking advantage of resource endowments, comparative advantages, and regional trade opportunities. Our expectation is that this three-day event, graced by experts drawn from different backgrounds and regions, will broaden our knowledge and understanding of the aforementioned issues and allow us to generate new ideas and embark on new approaches towards the economic growth and structural transformation of the African continent.

Indeed, Afreximbank itself is transforming. Those of you who are familiar with Afreximbank will have noticed something a little different about the look and feel of this year’s AGM activities. The developments in technology and the advent of the digital age have meant that some elements of our overall brand have become somewhat dated and are no longer fully effective in meeting the Bank’s branding objectives.

Consequently, we have decided to refresh our logo and brand by implementing certain tweaks to bring them more in line with today’s digital environment. Our objective was to strengthen the brand and to better position the Bank as the leader in African trade matters, helping cement our role as the premier agent driving the growth of trade across the continent; promoting industrialization; transforming Africa’s trade finance structure by facilitating intra-African trade; encouraging the transformation of the export sector; and introducing new and relevant initiatives.

In conclusion, permit me to, once again, thank our hosts, the Government and people of the Republic of Rwanda for putting together excellent arrangements to ensure the success of our programmes here in Kigali. The warm reception we have enjoyed since our arrival bears testimony to the business-friendly environment and hospitality of the people of Rwanda. We are also appreciative of the attendance of H. E. Hon. Claver Gatete, Minister of Finance and Economic Planning, Republic of Rwanda and his team for the enormous technical and material support they and their staff have provided in in the planning of the Programme. I also wish to place on record, Afreximbank’s deep appreciation of the work of the local organizing committee for their excellent logistic arrangements for this event. Special thanks to you all for your hard work and unflinching support for the Bank’s activities here in Kigali.

Thank you all for your attention.


» Related: Opening address by Hon. Claver Gatete, Rwanda Minister of Finance and Economic Planning (PDF, 279 KB)

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