News Archive June 2018

tralac’s Daily News Selection

A reminder that the SACU Heads of State Summit took place today in Gaborone. SA’s President Ramaphosa will be accompanied by the Minister of Trade and Industry, Dr Rob Davies, and the Minister of Finance, Mr Nhlanhla Nene.

Final Inquiry report:  pdf Australia’s trade and investment relationships with the countries of Africa (1.54 MB) (Parliament of Australia)

In its submission to the inquiry, the Department of Foreign Affairs and Trade provided information on trade between Australia and individual African economies. This data indicates that the goods trade with South Africa is, by a wide margin, Australia’s most valuable trade relationship with an African country. In 2016, Australia’s trade with South Africa was valued at over $2bn. As shown in Figure 1 below, Australia’s major merchandise exports to Africa, in 2016, were largely concentrated in the primary industries, with aluminium ores, wheat, coal, vegetables, meat and wool all featuring in the top 10 exports. Civil engineering equipment and parts, and specialised machinery, together formed 12% of merchandise exports to Africa.

The top five export destinations for Australian goods to Africa in 2016 were: South Africa (aluminium ores, coal, machinery and parts); Egypt (vegetables, wheat, wool); Mozambique (aluminium ores, wheat); Nigeria (wheat, edible products); Ghana (civil engineering equipment and parts, machinery and parts). As shown in Figure 2, Australia’s major merchandise imports from Africa, in 2016, were concentrated in crude petrol and passenger motor vehicles which accounted for 84% of imports. The top five goods import sources from Africa in 2016 were: South Africa (passenger motor vehicles, ores and concentrates); Gabon (crude petroleum); Algeria (crude petroleum); Rep of Congo (crude petroleum); Equatorial Guinea (Liquefied propane & butane).

Australian mining in Africa: Australia’s current commercial activity in Africa is strongly focused on the extractives sector. While reported figures vary, submissions to the inquiry have indicated that at least 170 Australian Stock Exchange-listed mining and other resource companies are operating in some 35 African countries, with the scale of exploration, extraction and processing involving current and potential investment estimated to be worth more than $40bn. Australian mining companies in Africa are active across a broad geographical area, in both the operation of mines and the exploration of future projects (see Figure 3 below).

Profiled recommendations: Recommendation 1: That the Australian Government continue to actively monitor the emerging Continental Free Trade Area with a view to best position Australia to take advantage of it when it comes into force and ensure that businesses and the public are kept informed of the benefits of this agreement. Recommendation 2: That Austrade actively monitor and promote non-extractive trade and investment opportunities in Africa to Australian businesses. Recommendation 5: That the Australian Government explore opportunities to increase the number of Australian ministerial and parliamentary visits to Africa. Recommendation 7: That the Australian Government give further consideration to supporting initiatives that strengthen the regulatory and governance landscape in Africa. Recommendation 8: That the Australian Government review its visa assessment process for African travellers with a view to minimising processing times, increasing transparency and to ensure there are no unintended barriers. Recommendation 10: That the Australian Government consult stakeholders such as the Australia-Africa Minerals and Energy Group on ways to improve data collection regarding Australian mining activity in Africa. Recommendation 13: That the Australian Government consider an Africa round for Business Partnerships Platform funding for African development projects delivered through public-private partnerships.


Ronak Gopaldas: The race to become Africa’s preferred gateway is heating up (ORF)

An intriguing contest is underway to emerge as the “gateway” to doing business in Africa. South Africa, the continent’s largest economy by GDP, is currently in pole position by virtue of the size, sophistication and connectivity of its economy to the rest of Africa and the globe. But in the past decade, a series of policy missteps, periodic bouts of xenophobia, a clumsy foreign policy as well as a marked deterioration in its business environment has seen the country lose significant ground to other nations. By contrast, Mauritius, Morocco, Kenya and even Dubai have intensified their efforts to be the preferred launch pads for businesses with a pan-African focus. As the race now hots up, who will emerge as the favourite for this prestigious title? We examine the strengths and weaknesses of each contender.

Aubrey Hruby: African nations are carrying the torch of free trade (The Hill)

The past decade has seen rapid economic growth across many African markets. The next decade will be defined by efforts to institutionalize the growth and ensure sustainability. A single African market of 1.2 billion people with a combined gross domestic product of more than $2 trillion will be a game changer for global trade and investment trends. As the US and China continue to toss tariffs at each other, African countries are deepening collaboration. They are now carrying the torch of free trade.

UNECA’s Dr Vera Songwe: As we work towards the AfCFTA, we must ensure that there is less transboundary corruption within Africa

PAC-DBIA mission updates:

Ethiopia-US: There are promising signs of economic change in Ethiopia. On 5 June, Ethiopia announced plans to partially privatize leading state-owned enterprises, including Ethiopian Airlines. EAL is the fastest growing and most profitable airline in Africa, registering an average growth of 25% in the past seven years. Following a meeting with Under Secretary Kaplan and the delegation, Ethiopian Airlines Group – parent company of EAL – Chief Executive Officer Tewolde Gebre Marian announced a deal with General Electric to procure 12 General Electric engines valued at $444m, as well as a separate $473.5m 10-year maintenance contract. Aviation is the top market in Ethiopia for US companies, and as of 2016 the export of aircraft and aircraft parts represents 54 of the principal U.S. merchandise exports to Ethiopia. [US delegation visits Ethiopian Airlines; US companies set to speed Ethiopia’s WTO accession]

Kenya-US: Kenya yesterday signed multi-billion shilling partnership agreements with the US government and companies – the majority of them targeting President Uhuru Kenyatta’s growth pillars commonly known as the ‘Big Four’. About 12 deals worth more than $100m (Sh10bn) were signed on the second day of the three-day official visit by 60 US business executives from the US Presidential Advisory Council on Doing Business in Africa. Most of the deals were negotiated during an economic summit that the American Chamber of Commerce held in Nairobi. Mr Kenyatta said Kenya was working to improve trade ties with her peers in the EAC to ensure that investors in the Big Four sectors have access to neighbouring countries such Tanzania, Uganda and Rwanda. The head of the US delegation, Under-Secretary for Commerce Gilbert Kaplan, said US investors were keen on East Africa’s roads, energy and financial services sectors with Nairobi as the hub. “Kenya is first on the list of our priority countries in Africa,” Mr Kaplan said.

The Financial Times’ Kenya Special Report: articles include Investing in Kenya; Kenya’s energy and transport plans come at a cost; Kenya’s president eyes legacy with Big Four plan; In Silicon Savannah, apps cut out the middlemen


African Standards Authorities: updates

(i) South Africa: Rob Davies dissolves SABS board. Trade and Industry Minister Rob Davies has decided to dissolve the board of the South African Bureau of Standards (SABS) with immediate effect and to place the entity under the control of administrators. His decision follows a deluge of complaints over the underperformance of SABS in conducting tests and issuing certificates for products. Davies said the board’s collective response to his concerns was unsatisfactory and indicated it did not understand its legislative mandate. The representations did not change his view of the board.

(ii) Kenya: KenInvest boss appointed acting Kebs MD to replace Charles Ongwae. Industry, Trade and Cooperatives Cabinet Secretary Adan Mohamed has appointed Kenya Investment Authority chief executive Moses Ikiara as acting managing director of the Kenya Bureau of Standards. In a letter dated June 26 addressed to Kebs chairman Mugambi Imanyara, Mr Ikiara has been appointed for a three-month period with immediate effect. The new appointment at the standards agency comes barely a few days after the arrest of Mr Ongwae and nine others senior officials over the importation of substandard fertiliser suspected to be laced with mercury and circulation of fake Kebs stamps. [Phyllis Wakiaga: War on counterfeits should not imperil legitimate business]

(iii) Tanzania meets deadline in sweets row with Kenya. Tanzania has met Nairobi’s deadline to visit Kenya confectionery, juice, ice cream and chewing gum factories to verify their source of sugar in the products after it restricted the entry of the goods to its market. Dar and Kampala slapped a 25% import duty on Kenyan confectionery, juice, ice cream and chewing gum earlier in the year, claiming use of zero-rated industrial sugar imports. Kenya threatened to retaliate against Tanzania made goods if Dar es Salam revenue and standards bodies failed to visit local factories by Sunday to verify their sugar sourcing. Tanzanian team arrived Monday and held talks with Kenya officials besides making the factory visits in a fresh attempt to resolve the trade spat.

(iv) Nigeria, Japan advocate strengthened anti-counterfeiting measures. The Trade Commissioner / Managing Director of JETRO, Shigeyo Nishizawa, during a forum on Nigeria-Japan anti-counterfeiting seminar in Lagos, yesterday, said Japanese companies would be showcasing and differentiating their original products from the fake items as a measure to create awareness to enforcement agencies and the public. The First Secretary, Head of Economic and Commercial Section, Embassy of Japan in Nigeria, Yasuhiro Hashimoto said government needs to improve the business environment by protecting intellectual properties in order to attract investments into the country. He added that the number of Japanese companies in the country has risen from 13 in 2010 to 40 this year, noting that others have indicated interest in the Nigerian market. On his part, the Director-General of Standards Organisation of Nigeria, Osita Aboloma explained that government’s ease of doing business was being undermined by counterfeiters and purveyors of sub-standard products.

BRICS Summit to push value-added trade (Financial Express)

According to media reports, South Africa is planning to reach out to other African nations for industrialisation and infrastructure development in the continent. Rwanda (chair of the AU), Namibia (incoming chair of SADC) and Togo (chair of ECOWAS) will take part. The head of NEPAD, the president of AfDB and chiefs of six regional executive committees have also been invited. Countries such as Argentina, Indonesia, Egypt and Turkey have also received invitation for the BRICS-plus Outreach. [BRICS Summit theme: BRICS in Africa – collaboration for inclusive growth and shared prosperity in the 4th Industrial Revolution]

Ghana: Statistical Service postpones rebasing of economy (GhanaWeb)

The Ghana Statistical Service has announced that it has rescheduled the rebasing of the economy to September this year. The service had earlier announced that it would complete the process of rebasing the economy by May 2018 after earlier postponements. Explaining the reasons behind the postponement, Acting Government Statistician Mr Baah Wadieh stated that the new date is to enable the service engage all stake holders before the exercise. “It is important that the figures are quality assured, so certain quality measures are being put in place.” [Ghana: About GH¢13bn accrues from mobile money monthly]

Rwanda launches Rwf2.7 trillion agriculture development strategy (New Times)

Rwanda has launched the fourth Agriculture Transformation Strategy (PST4) that is designed to significantly increase farm productivity and promote value addition to food. The five-year plan, which runs from 2018 until 2023, will cost Rw2.7 trillion, according to the Ministry of Agriculture and Animal Resources. The strategy has four priority areas; innovation and extension, productivity and resilience, inclusive markets and value addition as well as enabling environment and responsive institutions. The Prime Minister said that agriculture GDP grew at 6% on average in the concluded PSTA3, pointing out that in the PSTA4, the target is to achieve an average of 10% of the sector’s growth.

Ethiopia to begin extracting crude oil and natural gas (New Times)

Ethiopia will begin extracting crude oil on a test basis from reserves in the country’s southeast this week, state-affiliated media and the prime minister’s office said on Wednesday. Prime Minister Dr. Abiy Ahmed yesterday met with the representatives of Poly-GCL Petroleum Investment Limited to officially kick start crude oil production test in Ogaden Region. The company has discovered that there is a prospect of commercial quantities of crude oil in the region. The firm is a joint venture of state-owned China POLY Group Corporation and Hong Kong-based Golden Concord Group. The state-affiliated Fana media quoted Abiy as saying 450 barrels would be produced on Thursday on a trial basis.

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tralac’s Daily News Selection

29 Jun 2018
A reminder that the SACU Heads of State Summit took place today in Gaborone. SA’s President Ramaphosa will be accompanied by the Minister of Trade and Industry, Dr Rob Davies, and the Minister of Finance, Mr Nhlanhla Nene. Final...
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Australia’s trade and investment relationships with the countries of Africa: Inquiry report

On 13 June 2016, the Senate referred the following matter to the Senate Foreign Affairs, Defence and Trade References Committee for inquiry and report by 14 February 2018: Australia’s trade and investment relationships with the countries of Africa, with particular reference to:

(a) existing trade and investment relationships; (b) emerging and possible future trends; (c) barriers and impediments to trade and investment; (d) opportunities to expand trade and investment; (e) the role of government in identifying opportunities and assisting Australian companies to access existing and new markets; (f) the role of Australian based companies in sustainable development outcomes, and lessons that can be applied to other developing nations; (g) the role of Australian based companies in promoting the achievement of Sustainable Development Goals; and (h) any related matters.

On 27 November 2017 the Senate agreed to extend the reporting date to 27 April 2018. On 26 March 2018 the Senate agreed a further extension to 21 June 2018.

The committee held two public hearings for the inquiry: the first in Perth on 2 May 2018 and the second in Canberra on 11 May 2018. The final report was submitted on 21 June 2018.

Overview of Australia’s existing trade and investment relationships with the countries of Africa

The continent of Africa, second only to Asia in both landmass and population, is diverse geographically, culturally, linguistically, and economically. Comprising 54 sovereign states, nine territories, and two de-facto independent states, Africa is home to over 1.2 billion people. This number is increasing sharply, however, with African nations boasting some of the youngest and most rapidly growing populations in the world.

Submissions emphasised the importance of recognising that Africa cannot be described or analysed as a single market but is comprised of discrete economies with separate opportunities.

In its submission to the inquiry, the Department of Foreign Affairs and Trade (DFAT) provided information on trade between Australia and individual African economies. This data indicates that the goods trade with South Africa is, by a wide margin, Australia’s most valuable trade relationship with an African country. In 2016, Australia’s trade with South Africa was valued at over $2 billion.

Australia also maintains trade relationships with several other African countries that, in 2016, were valued at over $100 million. These include Algeria, Egypt, Gabon, Ghana, Mauritius, Mozambique, Nigeria, and Republic of the Congo.

Australia’s major merchandise exports to Africa, in 2016, were largely concentrated in the primary industries, with aluminium ores, wheat, coal, vegetables, meat and wool all featuring in the top 10 exports. Civil engineering equipment and parts, and specialised machinery, together formed 12 per cent of merchandise exports to Africa.

The top five export destinations for Australian goods to Africa in 2016 were:

  1. South Africa: aluminium ores; coal; machinery and parts.
  2. Egypt: vegetables; wheat; wool.
  3. Mozambique: aluminium ores; wheat.
  4. Nigeria: wheat; edible products.
  5. Ghana: civil engineering equipment and parts; machinery and parts.

Australia’s major merchandise imports from Africa, in 2016, were concentrated in crude petrol and passenger motor vehicles which accounted for 84 per cent of imports. The top five goods import sources from Africa in 2016 were:

  1. South Africa: passenger motor vehicles, ores and concentrates.
  2. Gabon: crude petroleum.
  3. Algeria: crude petroleum.
  4. Republic of the Congo: crude petroleum.
  5. Equatorial Guinea: Liquefied propane & butane.

Barriers and impediments to trade and investment

The African context

The Department of Foreign Affairs and Trade (DFAT) noted in its submission that a range of factors attributed to African society, culture and systems of governance may form a barrier to Australian trade and investment. These factors, which DFAT has collectively termed the ‘African context,’ include:

Local conditions, including traditional leadership structures, land ownership, expectations around remuneration and the broader social responsibility of companies…

DFAT highlighted land ownership as a particular barrier, owing to intersecting systems of ownership at different levels of society: Land ownership in particular can be difficult to consolidate due to competing levels of government (national, state and local), traditional ownership claims, particularly where sites intersect lands of different groups, often with different ownership structures (patrilineal, matrilineal, collective and/or individual) all of which add complexity to large-scale mining, infrastructure and agriculture projects. As is the practice in other developing countries, local landowners may expect mining companies to build roads and schools as part of the company’s Corporate Social Responsibility, in addition to royalties and other land fees being paid to government.

DFAT’s submission also drew attention to the economic systems in place in many African countries as a barrier to trade and investment, noting that the historical factors that shaped these systems are often unlike those of Western countries: Many of the governments of Africa could be best described as taking a state centric, command economy approach to economic development. This can be seen as deriving both from a colonial heritage that utilised resources to enrich foreign elites and the Marxist ideologies of liberation movements with centralised social and economic planning approaches. Unlike the reforms of the last century which have seen a decreasing role for government in markets for liberal democracies, for most African nations the role of government remains central to economic development.

DFAT recommended that businesses draw on the experience of a local partner or consultant in order to navigate these challenges.

Governance and regulation

In its submission, DFAT noted that ‘uncertainty around regulatory regimes can have a chilling effect on potential Australian investment across all sectors’ and issues such as opaque and unfamiliar tendering practices can also deter Australian companies from bidding for government contracts and advantage competitors.

With particular reference to the extractive industry, Oxfam also noted the risks associated with a poorly regulated environment: Poorly regulated environments, as is often the case in natural resource governance, are also conducive to corruption which in turn forms an obstacle to legitimate business sectors developing. Community conflict as a result of unregulated, negative impacts of EI [extractives industry] companies, or a perceived lack of community benefits, can increase business risk as they may be subject to sudden business disruption. There are significant human rights risks in mining, including labour rights transgressions, impacts on women’s security and health, and the displacement of local people to make way for new mines.

To address these issues, Oxfam suggested:

The Australian government and EI companies should be investing in building regulatory capacity in the host country to improve the regulation of EI sectors, in order to increase investment certainty and a more enabling business environment.

Infrastructure

DFAT identified inadequate infrastructure as a barrier: Inadequate infrastructure adds to the cost of doing business in Africa, and has led to the failure of major mining projects in the past. Poor road and transport networks, intermittent power and inefficient ports are common challenges across Africa. Technical barriers to trade and underdeveloped logistics networks, such as onerous customs procedures and inefficient ports act much in the same way as poor transport in adding to costs.

Opportunities to expand trade and investment

Overview of opportunities

According to a recent paper from Future Directions International, most of the world’s population growth in the 21st century will occur in Africa. By 2050, it is estimated that the population of Africa will have more than doubled from its current 1.2 billion people to nearly 2.5 billion. This population growth is expected to be coupled with rapid urbanisation. The Future Directions paper anticipates that, by 2100, five of the world’s 10 largest cities will be on the African continent.

Africa also lays claim to the world’s youngest population, with more than 50 per cent of the population of Africa younger than 20 years old. Due to increased life expectancy and reduced infant mortality rates it is expected that Africa will have access to a young and plentiful workforce.

Regarding trade and integration, a Continental Free Trade Area is being established under the auspices of the African Union. Negotiations started at the beginning of 2017 and all 55 African Union members are involved. The Department of Foreign Affairs and Trade (DFAT) pointed out that ‘enhanced African economic integration with a common set of rules and procedures would assist Australian business that generally operate across borders and various African countries’.

There are specific areas where Australia is well placed with relevant expertise beyond mining capabilities. For example Windlab and Carnegie Clean Energy drew attention to the export potential of Australia renewable energy technology to meet a significant energy shortage in large areas of Africa. Carnegie Clean Energy drew particular attention to the potential for leveraging Australia’s mining capability to include power and water solutions.

Grame Barty and Associates also highlighted opportunities for Australian business:

…particularly in the areas of infrastructure, resources and energy, food and agribusiness, international health, advanced manufacturing, technology and services.

DFAT indicated that Australian trade and investment in Africa has recently seen growth in non-extractive sectors in some regions: Traditionally, most Australian investment in Africa has centred on the mining, oil and gas industries. More recently, we have seen investment in the infrastructure and construction industries, as well as telecommunications, agriculture and retail, financial and banking sectors. Expanded trade and investment links are expected for Australian companies operating out of Morocco, servicing North Africa in food and agriculture; infrastructure planning and sustainable development; mining, oil and gas; and health services.

However, in its submission, DFAT noted that recent DFAT and Austrade analysis indicates:

…the most realistic and immediate commercial opportunities for Australian companies in Africa are in mining and related equipment, technology and services; education; agribusiness and food and infrastructure.

The Export Council of Australia stated that ‘Africa is a natural destination for all the products and services related to mining and agriculture in particular’. Other areas of expertise include: infrastructure and construction and related services, financial and professional services, tourism, education, and advanced manufacturing. The top ten growth sectors in Africa are: resources, wholesale and retail, agriculture, transport and communications, manufacturing, financial services, public administration, construction, real estate and business services, and tourism.

Broadening commercial interests

As noted above, with Australian companies well established in the extractive industries, submissions highlighted the need for Australia to broaden commercial interests beyond the mining industry. This was recognised by the Minister for Foreign Affairs, the Hon. Julie Bishop MP in her speech at the Africa Down Under Conference in Perth on 8 September 2017. The Minister emphasised the broadening of Australia’s commercial interests from the already strong base in extractives and mining services, infrastructure and energy into retail and professional services. The Minister stated that ‘[t]he opportunity for mutual growth in our economic partnerships in these and other sectors is enormous’.

Emerging free trade area

Her Excellency Ms Christelle Sohun, High Commissioner of Mauritius, informed the committee that:

A few weeks ago, on 21 March 2018 in Kigali, Rwanda, an agreement was reached for the establishment of an African Continental Free Trade Area. This will create a single African market for the elimination of barriers to trade in goods and services – one billion people and a total GDP of over US$3 trillion, practically on your doorstep. Australia can now engage constructively with African countries to seize the numerous untapped trade and investment opportunities available in Africa.

High Commissioner Sohun added that it was signed by 44 countries. DFAT provided further detail that what was signed on 21 March 2018 was the framework to establish the Continental Free Trade Area which then would need to be ratified by 22 countries before coming into effect and this may take some time:

My expectation is that if the negotiations are completed and the ratification process happens, which could be many years in the making…

However, DFAT welcomed this as a very positive development with the potential to create one of the largest free trade areas in the world which would present opportunities for foreign companies and investors. The agreement has the potential to allow Australian companies with a presence in one African market broader access to new markets on the African continent without the burden of existing trade barriers such as tariffs.

Conclusions and recommendations

While the terms of reference for this inquiry cover Africa in its totality, at the outset, the committee wishes to recognise the key point that Africa is a continent and not a country. Its countries have a great deal of diversity in geography, history, culture, economic capacity and markets.

The African continent is in the midst of significant economic, technological and population growth and this inquiry has provided the opportunity to revisit current settings to ensure that Australia is in the best possible position to take advantage of these changes for trade and investment and contribute skills to facilitate this development.

While noting the already well-developed relationships in the mining industry, demographic, economic and technological changes will provide other opportunities for expansion of the relationship with Africa.

Australia is well-positioned to use its expertise in a range of sectors to contribute to development outcomes in many African countries. Our knowledge and skills in area such as agriculture, the mining sector, education, and technology are highly regarded, and this knowledge will be in high demand in a growing and developing Africa.

The committee notes that overall it will be important for the Australian Government to ensure Australian businesses have broad access to African markets, and that a strong mutual understanding of the importance of the Australia-Africa relationship is cultivated on both sides. Business and trade Emerging free trade area.

The emerging African Continental Free Trade Area would establish one of the largest free trade areas in the world and provide opportunities for foreign companies and investors. The committee was pleased to hear that DFAT is actively monitoring these developments. Although it may take some time to come into effect the committee is of the view that Australia should actively position itself to take advantage of it. Preliminary steps should be taken to ensure that Australian companies operating in, or seeking to enter, African markets are kept informed of the benefits that this agreement will provide in terms of ease of business and enhanced market access.

Summary of Recommendations

Recommendation 1

The committee recommends that the Australian Government continue to actively monitor the emerging Continental Free Trade Area with a view to best position Australia to take advantage of it when it comes into force and ensure that businesses and the public are kept informed of the benefits of this agreement.

Recommendation 2

The committee recommends that Austrade actively monitor and promote non-extractive trade and investment opportunities in Africa to Australian businesses.

Recommendation 3

The committee recommends that the Department of Foreign Affairs and Trade work with organisers of major promotional events and conferences, such as Australia-Africa Week, to facilitate greater participation of the private sector from industries other than mining.

Recommendation 4

The committee recommends that the Department of Foreign Affairs and Trade review Australia’s diplomatic representation in Africa with a view to applying new methods of operation.

Recommendation 5

The committee recommends that the Australian Government explore opportunities to increase the number of Australian ministerial and parliamentary visits to Africa.

Recommendation 6

The committee recommends that, in relation to the Advisory Group on Australia-Africa Relations (AGAAR):

  • the Department of Foreign Affairs and Trade and AGAAR, engaging in appropriate consultation with stakeholders, review AGAAR’s role with a view to build on its advisory responsibilities to include a more outward facing function to strengthen the Australia-Africa relationship;

  • detail about the work and achievements of AGAAR be included on the AGAAR website; and

  • the Department of Foreign Affairs and Trade include a response to the recommendations contained in the AGAAR strategy paper on its website.

Recommendation 7

The committee recommends that the Australian Government give further consideration to supporting initiatives that strengthen the regulatory and governance landscape in Africa.

Recommendation 8

The committee recommends that the Australian Government review its visa assessment process for African travellers with a view to minimising processing times, increasing transparency and to ensure there are no unintended barriers.

Recommendation 9

The committee recommends the Department of Foreign Affairs and Trade review their Smartraveller advice platform with a view to providing more tailored and specific advice to Australian businesses operating on the African continent.

Recommendation 10

The committee recommends that the Australian Government consult stakeholders such as the Australia-Africa Minerals and Energy Group on ways to improve data collection regarding Australian mining activity in Africa.

Recommendation 11

The committee recommends that the Australian Government, in consultation with a range of stakeholders, explore options for improving Africa literacy, awareness, engagement, access to information and research.

Recommendation 12

The committee recommends that the Australian Government consider increasing Australian Centre for International Agricultural Research’s funding in order to increase research, project and partnership activity in Africa.

Recommendation 13

The committee recommends that the Australian Government consider an Africa round for Business Partnerships Platform funding for African development projects delivered through public-private partnerships.

Recommendation 14

The committee recommends the Department of Foreign Affairs and Trade undertake a review of Australian mining and Mining, Equipment, Technology and Services (METS) companies operating on the African continent which undertake engagement and provide services or assistance to the communities in which they operate.

Recommendation 15

The committee recommends that the Department of Industry, Innovation and Science review its Leading Practice Sustainable Development Program for the Mining Industry to ensure it is up-to-date and incorporates information on the UN Sustainable Development Goals.

Recommendation 16

The committee recommends that the Australian Government seek to increase the visibility of the Australia Global Alumni program among African alumni in order to formalise alumni networks.

Recommendation 17

The committee recommends that the Australian Government review its list of Australia Global Alumni ambassadors with a view to including an Ambassador from Africa.

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As we work towards the AfCFTA, we must ensure that there is less transboundary corruption within Africa

In a speech to the 33rd Session of the Executive Council of Ministers of Foreign Affairs of the African Union in Nouakchott, Mauritania, ECA’s Executive Secretary Vera Songwe warned against the impact of corruption on Africa’s development.

“We need to be aware that Africa will not be able to seize the transformation opportunities highlighted by regional and global development frameworks if this problem persists,” Ms Songwe said, explaining that although it is difficult to measure precisely the cost of corruption, recent estimates place it at $1500 to 2000 billion a year, i.e. 2% of the world’s GDP.

Experts fear that corruption could be having even higher costs at the less visible social level and on women: “Corruption in public services also affects the quality of social services. In the poorest countries, half of the people pay bribes to access basic services such as education, health or water,” she regretted. 

In Africa, public expenses, women’s rights, the energy sector and intellectual property rights are among the areas suffering from the most worrying consequences.

“Corruption affects more than 60% of public procurement in Africa and increases the cost of contracts by 20 to 30%. In a world characterized by limited resources, this is an unfortunate cost for investments that are greatly needed. We cannot afford such losses anymore,” she added.

In addition to corruption within countries, there is also a growing need to take into account corruption between countries and regions. According to an ECA’s report, pdf Measuring corruption in Africa: the international dimension matters (1.65 MB) , there have been at least 1080 cases of transboundary corruption in Africa between 1995 and 2014, 99.5% of which involved non-African companies and were mostly related to fiscal evasion issues.

“As we work towards the African Continental Free Trade Area (AfCFTA), we must ensure that there is less transboundary corruption within Africa,” Ms Songwe added, hoping that “by the time we get to Agenda 2030 and certainly Agenda 2063, corruption will no longer be Africa’s cancer”.

ECA’s Executive Secretary Vera Songwe is currently taking part in the African Union’s 31st Summit in Nouakchott. This event will be taking place on 25 June to 2 July under the theme “Winning the Fight against Corruption: A Sustainable Path to Africa’s Transformation”.

On 30 June in Nouakchott, Ms Songwe launched the #HonestService Public Service Delivery Campaign, which aims to put forward public and service workers who conduct themselves in a fair, honest and upfront manner in their interactions with customers and citizens, to provide an alternative approach to the corruption narrative on Africa.

The campaign, which will involve young people across the Continent, will gather information emanating from a positive discussion that encourages average African citizens, who engage with public services on a daily basis, to put forward exemplary public service they encounter in their quest for healthcare, education, employment opportunities and many other dimensions of their lives.

“The widespread narrative about corruption in African public services has inadvertently failed to acknowledge performant public servants who, on the contrary, have been serving their countries with integrity, upholding the public service ethics of fairness, equity and integrity, and have avoided falling into the corruption trap,” said Ms Songwe in the lead up to the launch.

“Such individuals are however, critical in making Africa work and in turning the wheels of Africa’s progress,” she added.

Estimates indicate that in 2015, up to 22 per cent of the population in Africa who interacted with a public service had to pay a bribe, mostly to the police and the courts.

With public service being one of the most active and visible connecting links between the State and the people, widespread corruption could have a significant public impact on governments’ perception.

The campaign is social-media driven and will last six months from July to December 2018. Present at the launch were Lilia Hachem Naas, Director of the ECA Office for North Africa; Adam El Hiraika, Director of the ECA Macroeconomic Division; Sid’Ahmed Bouh, Advisor to the Minister of Finance of the Islamic Republic of Mauritania; and Sidi Mohamed Ould Mohamed El Mamy, Deputy Secretary General of the Chamber of Commerce, Industry and Agriculture of Mauritania.

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BRICS in Africa: Working towards the realisation of the African aspirations

Speech by Deputy Minister of International Relations and Cooperation, Ms Reginah Mhaule, during the BRICS Stakeholder Engagement held on 27 June 2018 in partnership with the Institute for Global Dialogue (IGD) as part of build-up events to the 10th BRICS Summit

It is an honour for me to be afforded this opportunity to engage with you on this occasion of South Africa’s membership of the BRICS formation. South Africa will be hosting the BRICS Summit in July 2018, at the time this formation marks its 20 year anniversary which coincides with the commemoration of the centenary of Nelson Mandela who would have turned 100 this year had he lived longer. I would not leave out the fact that we also commemorate the centenary of another icon of the South African liberation struggle Mama Albertina Sisulu.

Both Tata Madiba and Mama Sisulu have contributed immensely on laying the foundation of an independent and democratic foreign policy which we continue to implement.

As we have heard about the BRICS formation and our country’s membership to it, Brazil, Russia, India, China and South Africa represents one of the most significant developments in global government and this is a bloc that brings together sufficiently great members of emerging powers that are designed to take significant international decision and in the negotiations of major global affairs.

This countries are joined together by a strong desire to change the world system with the purpose of reflecting the diversity of the world power, economies, culture and the societies in general.


Allow me to contextualise the South Africa’s membership of the BRICS formation for the benefit of all our stakeholders by quoting our Leader Nelson Mandela’s words at the world economic forum Southern Africa summit in 1994, when he said “this is our collective achievement which has opened up new opportunities for us to exploit our great potential and indeed to boldly cross the threshold of a new and great era.”

The formation of BRICS by the emerging powers has attracted significant academic interest which resulted into a significant growth in literature on the subject.

BRICS represents 43 percent of the world’s population and that triggered academic interest in understanding the political, economic, social, scientific and technological importance of the figuration of the world power, both its potentials and its weaknesses.

As a result different BRICS forums were established such as the academic forum, business forum, the young diplomatic forum and others. 

Former President Mandela, in his capacity as our Head of State and Government, championed the strengthening of regional and international economic cooperation to ensure that we leverage the existing and new opportunities while adhering to our international obligations. In 2011 when our Country was invited to join the then BRIC formation, South Africa favourably considered the invite because it is in line with the vision of our forefathers, which is the strengthening of international economic cooperation for mutual benefit as already stated above.

South Africa is not in the BRICS for its own sake, and perhaps for selfish consideration only, but is there to advance the interest and aspirations of Africa, the Global South and humanity at large.

I must also take this opportunity to briefly reflect on the genesis of our solidarity with countries of the South so that we can properly locate the BRICS formation in this regard. 63 years ago, in April 1955, countries of Asia and Africa met at the historic Bandung Conference to determine their common position amid the fast emerging Cold War bi-polarisation.

South Africa was represented, among others, by none other than Moses Kotane and Maulvi Cachalia. This is where the present day Non-Aligned Movement (NAM) was conceived.

I hope that this brief background will enhance our collective comprehension of the locus of BRICS in South Africa’s foreign policy. I know that in some quotas our membership of the BRICS formation was and continues to be deliberately misrepresented as a negation of our relations with the development partners of the North. It is wrongly perceived as a deviation from our founding foreign policy principle. We have stated so many times that this formation must be regarded as a complimentary mechanism and is based on our founding principles and foreign policy pillars

I must therefore urge everybody to work hard so that this formation is construed truly for what it stands for.

Of course the BRICS formation was bound to tilt the balances of forces at global level considering that we, among others, collectively produce a third of the world’s industrial products and one half of agricultural goods. During its infantry stages, researches estimated that the BRICS will dominate the world by 2050, however the revised projections indicates that this could happen as early as 2027.

Distractors of the BRICS thought and communicated that this would be another talk show with no tangible deliverables. We can however agree that it is a force to be reckoned with in the international arena and has contributed to increased dispersal of global political and economic power. I must state that the progress that has been recorded thus far is due to our collective commitment to see through the implementation of all our decisions which are always based on consensus.

Brand SA in its recent Research Report titled: “The BRICS brand: from economic concept to institution of global governance”, indicates that between the years 2009 and 2017 BRICS Summits made a total of 406 summit declarations. Brand SA further informs us that 70% of summit decisions have been implemented to date.

They further indicate that, in an effort to deepen and widen cooperation and collaboration, the BRICS formation has convened approximately 160 meetings at different levels, convened by Ministers of trade, finance, foreign affairs, health, agriculture, statistical authorities, and competition commissions which led to the adoption of 60 documents which in turn is giving effect to working groups, contact groups and related platforms to coordinate activities.

I urge you to read this entire report because it is an important yard stick to measure the success of the BRICS formation of which we are proud of.

We therefore seek to build on the already recorded achievement and ensure that our chair ship increases support for Africa’s development Agenda. We have an opportunity to leverage on the tectonic shift in global power dynamics and reassert ourselves as a united and renewed continent. This is what we are as the continent!!!

We are going to have a dedicated discussion during the Africa-Outreach meeting of selected Heads of State and government in the margins of the July Summit. I can assure you that building on the Durban 2013 out-reach approach, the 2018 Summit will produce practical steps to continue the BRICS support for the implementation of the African Union’s Agenda 2063 through the BRICS.

This comes at a time when the continent has made great strides in pursuit of economically integrated Africa which promotes the movement of goods and services. As you may be aware the Continental Free Trade Agreement (CFTA) was signed in Rwanda in March this year and we continue with our national processes which will culminate in the country’s accession to the agreement.

President Ramaphosa underscored the importance of an integrated African economy during the Japan-Africa Public-Private Economic Forum when he said:

“For Africa to grow and for its people to flourish, its economies need to be more effectively integrated into the global economy.”

In this way we will be able to improve Intra-Africa trade and leverage more on the alternative funding that the BRICS New Development Bank provides for infrastructure development and sustainable development. The continent is already benefiting in this regard, particularly, in implementing the BRICS funded African Union (AU) North-South Development Corridor projects.

On our part we benefitted from the 2016 approved BRICS project funding when we were granted 180 million USD for renewable energy which helped us to stabilise our electricity grid during difficult times in this area. We have just been granted an additional loan of USD 200 million by the NDB in May 2018 for expansion of the Durban port. I must confess that for a newly established multilateral bank by developing nations to have disbursed loans totalling USD 5.1 billion by 2018 not be expected by many who expressed doubt during the establishment of the Bank.

I also wish to reflect briefly on the concept of the BRICS Plus which was innovated by China in 2017. We wish to continue with this approach to ensure maximum synergy between our Chairship of BRICS and that of China. In this regard, South Africa has elected to invite the Leaders of the following countries representing Regional Economic Communities in the Global South and the United Nations namely:

  • Argentina – as Chair of the G20 and influential Common Market of the South (MERCOSUR) member

  • Indonesia – as Co-Chair of the New Africa-Asia Strategic Partnership with South Africa and influential Association of Southeast Asian Nations (ASEAN) member

  • Egypt – as Chair of the Group of 77 (G77) +China

  • Jamaica – as incoming Chair of the Caribbean Community (CARICOM)

  • Turkey – as Chair of the Organisation of Islamic Cooperation (OIC)

  • United Nations (UN) Secretary-General, Mr Antonio Guterres

Together with my colleagues we have continued to highlight this approach to all our stakeholders and also inform them about the following newly identified areas of cooperation:

  • Establishment of a Working Group on Peacekeeping;

  • Establishment of a Vaccine Research Centre for Collaboration with BRICS vaccine innovation and development partners – this is intended to be a physical research centre focused on research and development and vaccine innovation;

  • Establishment of a BRICS Gender and Women’s Forum – intended as a dedicated track for gender and women’s issues, given the economic benefit to be derived from the socio-economic empowerment of women, particularly in developing countries;

  • Leveraging the Strategy for BRICS Economic Partnership towards the pursuit of Inclusive Growth and Advancing the 4th Industrial Revolution – this is intended to foster discussions to addresses opportunities provided by the Fourth Industrial Revolution, as a means of leapfrogging development stages and bridging the digital divide; and

  • Establishment of a BRICS Tourism Track of Cooperation.

South Africa’s approach to its Chairship is grounded in the intention to ensure programmatic continuity for BRICS, and committed to executing approximately 100 sectorial meetings, reflective of the expanded BRICS architecture. We also intend to bring a specific focus to the challenges and opportunities presented by the 4th Industrial Revolution.

It is my considered view that through this lecture we have a solid foundation for debating various elements of South Africa’s membership of the BRICS. Am also certain that we will do so with a view to improve in areas that require such improvement but also ensure common and collective improved comprehension of the subject matter. 

We must always remember the world we operate in and remain alive to the challenges we are facing as a continent, the Global South and humanity at large.

I thank you!

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