News Archive May 2017

Closing infrastructure gap in Africa a key catalyst for investment, says G20

The G20 says closing infrastructure gap on the continent represents a key step to achieving better youth employment and economic transformation.

Under the current German G20 Presidency, the key objective to advance the sustainable economic development of the African continent is of particular importance.

But this objective cannot be realized without good infrastructure, says Thomas Silberhorn, Germany Parliamentary State Secretary, whose country currently heads the G20.

The Group of 20, known as the G20, was formed in 1999 in response to the Asian financial crisis of the late 1990s. Its purpose was to gather Finance Ministers and Central Bank Governors from advanced and emerging economies to discuss how to support the stability of financial markets and to promote economic cooperation.

“It is important to close the infrastructure gap on the African continent, not just somehow, but in the spirit of the 2030 Agenda for sustainable development, by building sustainable infrastructure especially in the energy sector. That is  why we are advocating for more support for the African Renewable Initiative of the African Union with the Secretariat hosted at the African Development Bank,” Silberhorn said Wednesday during a session on the “G20 New Partnership with Africa: Dialogue for Better Youth Employment and Economic Transformation” at the 2017 African Development Bank Annual Meetings in India.

The dialogue centered on the need to build on existing regional and international strategies of the G20-Africa Partnership, which comprises several initiatives that support private investment, sustainable infrastructure and employment in African countries.

And the focus is mainly on youth. According to AfDB, there are nearly 420 million young Africans between the ages of 15 and 35 today. Within 10 years, Africa is projected to be home to one-fifth of all young people worldwide. These millions of young people are sources of ingenuity and engines of productivity that, if well prepared, could ignite a new age of inclusive prosperity on the continent.

“But there are no guarantees,” said Jennifer Blanke, AfDB Vice-President for Agriculture, Human and Social Development. “While the youth population is Africa’s asset, it can also easily become a liability, and this is the whole question about demographic dividends. Let us be clear, it is only the existence of opportunity and the young person’s belief that they can access that opportunity that prevents pessimism and political unrest.”

AfDB is spearheading Jobs for Youth in Africa, an initiative to turn this population explosion into a wealth creation force. But the initiative requires African Governments to put in place strategic measures to tap into available opportunities.

And one country that has been making positive headlines in this area is Rwanda. Rwanda’s Minister for Finance and Economic Planning, Ambassador Claver Gatete, said Rwanda’s success is not accidental but the result of a well thought-out strategy.

“We set ourselves a target to create 2, 000 jobs for youth in agriculture every year, and that is a yard stick we use to measure ourselves,” he said, attributing success largely to the private sector.

Other African Ministers on the panel from Ghana and Morocco emphasized the need to train youth according to job market needs and de-risking private sector investments. Silberhorn described the AfDB as the right institution to mobilise and catalyse investments in order to address the most urgent infrastructure gap in Africa.

“The new cooperation with Africa is gaining momentum. It must not end at the G20 summit in Hamburg. On the contrary, it should be continued and strengthened further. It is the starting of a marathon, and I am glad that just like the Ethiopian, Kenyan and other African long-distance runners, the African Development Bank is going the distance with us,” Silberhorn emphasized.

International trade statistics: trends in first quarter 2017

G20 merchandise trade growth accelerates in Q1 2017

G20 international merchandise trade in the first quarter of 2017, seasonally adjusted and expressed in current US dollars, increased for the fourth straight quarter and at the fastest rate since the second quarter of 2011.

Export growth picked up to 3.0% in the first quarter of 2017, compared with 1.5% in the fourth quarter of 2016 while imports increased by 4.0%, significantly up on last quarter’s 1.2% growth. G20 merchandise trade has almost regained its pre-crisis levels, but remains around 10% lower than the highs reached in 2011-2014.

All G20 economies, with the exception of France (where exports contracted by 2.4%), saw export growth in the first quarter of 2017. Australia recorded the highest growth (7.2%) among OECD G20 economies. Growth was also robust in Korea (5.7%), the United Kingdom (3.3%), Canada (2.9%), the United States (2.7%) and Japan (2.5%) but was more subdued in the G20 euro area economies with Germany (1.3%) recording the highest growth.

Export growth was especially strong in the BRIICS economies ranging from 3.5% in Indonesia to over 10% in Brazil and Russia.

Imports grew in all G20 economies in the first quarter of 2017. China recorded the highest growth in the G20 (9.6%), which worked to reduce China’s trade surplus (94.2 billion US dollars) to its lowest level since the second quarter of 2014. Strong import growth was also observed in Argentina (5.0%), Brazil (9.1%) and India (6.5%). Among OECD G20 economies import growth was highest in Korea (8.2%) and lowest in Turkey (1.8%). 

Commonwealth African Regional Trade Consultation held in Mauritius

Amid an unprecedented global trade slowdown, African policymakers, negotiators and trade analysts met 25-26 May 2017 in Mauritius to discuss priorities for reviving world trade and strengthening their trading capacity.

Participants discussed the most pressing trade and development challenges for Commonwealth African member states, in the light of unfavourable global economic and trade patterns, rising protectionism and growing discontent about globalisation. The meeting also provided an opportunity to review the current issues for multilateral trade negotiations, especially since the WTO is hosting its 11th Ministerial Conference in Buenos Aires in December.

The meeting furthermore provided a platform for African member states to assess various trade policy options, including UK-Africa trade relations post Brexit, advancing African integration through the Continental Free Trade Agreement, and priority issues for the 6th Global Review of Aid for Trade in July.

Past and present trade negotiators convened to finalise a proposal to establish an informal Commonwealth African Trade Negotiators Network.

Ahead of the meeting, Brendan Vickers, Economic Adviser (Regional Trade and Integration Issues) at the Commonwealth Secretariat, said: “African countries are engaged in a range of global, regional and bilateral negotiations on trade and trade-related issues. However, one of the major challenges confronting Africa is the capacity to undertake trade negotiations, although many experienced negotiators from Africa are willing to help.

“This network aims to bring these negotiators together and provide a ‘think tank’ for Africa for future trade negotiations. Drawing on the collective experience, knowledge and wisdom of present and past trade negotiators, the network will help set out strategic priorities for Africa’s current and future trade agenda, assess opportunities and challenges, brainstorm particular negotiating and policy issues, and explore ways to unlock any impasse in some of the negotiations.”

Presentations from the Regional Consultation are available to download, with thanks to Brendan Vickers from the Commonwealth Secretariat.

Increasing food production without damaging the environment

FAO Director-General addresses European Parliament’s Committee on Agriculture and Rural Development

To achieve sustainable development we must transform current agriculture and food systems, including by supporting smallholders and family farmers, reducing pesticide and chemical use, and improving land conservation practices, FAO Director-General José Graziano da Silva said on Tuesday while addressing European lawmakers.

“Massive agriculture intensification is contributing to increased deforestation, water scarcity, soil depletion and the level of greenhouse gas emission,” Graziano da Silva said. He stressed that while high-input and resource intensive farming systems have substantially increased food production, this has come at a high cost to the environment.

“Today, it is fundamental not only to increase production, but to do it in a way that does not damage the environment. Nourishing people must go hand in hand with nurturing the planet,” he said. This is in line with the 2030 Agenda for Sustainable Development and the Paris Agreement on Climate Change, he added.

“We have to move from input intense to knowledge intense production systems,” the FAO Director-General said.

The future of food and agriculture

Speaking to members of the European Parliament’s Committee on Agriculture and Rural Development, Graziano da Silva highlighted the findings of FAO’s report, The future of food and agriculture: trends and challenges.

Among the 15 trends described in the report, are the impacts of climate change, conflicts and migration. The FAO report also foresees 10 challenges for achieving food security, improving nutrition and promoting sustainable agriculture worldwide.

In his address, the FAO Director-General focused on four main issues: climate change; the spread of transboundary pests and diseases; food loss and waste; and the importance of eradicating not only hunger, but all forms of malnutrition in the world.

Addressing climate change

Graziano da Silva underscored that no sector is more sensitive to climate change than agriculture - especially for smallholders and family farmers from developing countries - while at the same time, agriculture and food systems account for around 30 percent of total greenhouse emissions.

“In agriculture, adaptation and mitigation go hand in hand. There is no trade-off between the two,” the FAO Director-General said. He pointed to the need to reduce greenhouse gas emissions while at the same time building the resilience and promote the adaptation of farmers to the impacts of climate change.

To this end, FAO supports countries through different initiatives and approaches, including climate-smart agriculture, agroecology and agro-forestry.

Curbing the spread of transboundary pests and diseases

Globalization, trade and climate change, as well as reduced resilience in production systems, have all played a part in dramatically increasingly the spread of transboundary pests and disease in recent years. These constitute a major threat to the livelihoods of farmers and the food security of millions of people.

For its part, FAO supports countries to implement prevention and surveillance system. “Even in situations of conflict and protracted crises, we promote programmes of (livestock) vaccination, as we are currently doing is South Sudan and Somalia,” the Director-General said.

Saving food

Today the world produces enough to feed the global population, but about one third of this food is either lost or wasted, while at the same time there is also a waste of natural resources such as land and water.

FAO currently supports about 50 countries in the area of food losses and waste, including through the SAVE FOOD initiative, a unique partnership – with more than 850 members from industry, associations, research institutes and non-governmental organizations – that addresses these issues “across the entire value chain from field to fork,” Graziano da Silva told the European parliamentarians.

The role of parliamentarians in combating malnutrition

Citing estimates that indicate that nearly half of the European Union’s adult population are overweight, the FAO Director-General noted how malnutrition affects both developed and developing countries.

“The way to combat this is to transform food systems, from production to consumption, and provide healthier diets to people,” Graziano da Silva said.

He called on the parliamentarians as lawmakers to ensure that adequate policies, programmes and operational frameworks are anchored in appropriate legislation.

“Parliamentarians not only have the means to place nutrition at the highest level of the political and legislative agenda, they also can guarantee that programmes will have the necessary budgets for implementation,” the FAO Director-General said.

He also praised Members of the European Parliament for establishing the “Alliance Fight Against Hunger” which according to Graziano da Silva will play an important role in combating malnutrition in Europe.