News Archive November 2018

African Union Commission and the United States commit to advance efforts towards stability and development in Africa

The African Union (AU) Commission and the United States of America convened the 6th annual High-Level Dialogue at the African Union Headquarters, Addis Ababa on 29 November 2018.

Led by the African Union Commission Deputy Chairperson Amb. Kwesi Quartey and the Assistant Secretary of State for African Affairs Tibor Nagy, both sides reaffirmed their commitment to strengthen African regional integration and enhance cooperation and synergy in advancing efforts towards stability and sustainable economic development in Africa, centered on mutual interest and shared values.

The High-Level Dialogue is an opportunity for the AU Commission and the U.S. to review progress on the implementation in the various aspects of cooperation under the four pillars of the AUC-U.S. Partnership in the areas of peace and security; economic growth, trade and investment; democracy and governance; and promoting investment opportunities and development. The cooperation is aligned with the African Union development framework, Agenda 2063.

The U.S. affirmed its support to the African Continental Free Trade Area (AfCFTA) while acknowledging the progress attained on its establishment. Since March 2018, 49 Member States of the African Union have signed the Agreement establishing the AfCFTA; 12 have ratified it. The U.S. also pledged to enhance discussion on how to complement and support the AfCFTA.

The African Union Commission welcomes the Congressional passage of the Better Utilization of Investments Leading to Development (BUILD) Act, which will deploy new development finance instruments, including expanding the lending limit to US$60 billion. Since October 2017, US$869 million of Overseas Private Investment Corporation investment has catalyzed US$2.12 billion in private sector investment.

The African Union Commission also welcomes the Millennium Challenge Corporation Modernization Act, to promote regional integration, trade, and economic growth. In addition, the United States noted that the Connect Africa Initiative, launched in July 2018, seeks to invest one billion USD over the next two years in the areas of information and communications technology; value chains; and transportation and logistics.

The AU highlighted efforts to encourage transformative investments for women, including a fund for women in business. Both sides agreed on the value of convening an annual forum for trade and investment to bring together the U.S. and African private sectors to promote investment and expand African Growth and Opportunity Act (AGOA) implementation at the regional and continental levels.

Both sides agreed to deepen collaboration to advance peace and security. The AU Commission briefed on the AU Peace Fund, noting that Member States have contributed approximately US$60 million to the Fund, the highest amount since the establishment of the Peace Fund in 1993. The Peace Fund finances mediation and preventive diplomacy, institutional capacity building and peace support operations.

The two sides recognized the sacrifices and contributions of African peacekeepers, and the ongoing efforts by the AU in upholding standards for human rights and conduct, ensuring financial transparency, and ensuring accountability. The two sides agreed to strengthen support for the stabilization process in Somalia as well as the conditions based-exit strategy of AMISOM, as part of the Somalia Transition Plan.

In the same context, the leaders also committed to continue support for the Multi National Joint Task Force (MNJTF) against Boko Haram and the G5 Sahel force to become effective in tackling the security challenges facing the Sahel region.

To counter transnational threats, the two sides agreed to increase collaboration including on combating terrorism, violent extremism, and radicalization, building on the advances of the annual U.S.-AU Countering Violent Extremism Week. Both highlighted the importance of curbing illicit arms and financial flows, which continue to fuel conflict in Africa. They also underscored the nexus between peace, security, governance and development.

Africa’s renewed efforts to fight corruption, strengthen democratic institutions and good governance were also discussed. The two sides acknowledged the progress to prevent and combat corruption in Africa, as well as the ongoing work under the 2018 AU theme of the year “Winning the fight against corruption: a sustainable path to Africa’s transformation”.

In the same context, the two sides welcomed the critical work of AU’s Democracy and Electoral Assistance Unit in support of the conduct of transparent electoral processes in line with the relevant AU instruments.

Both sides lauded the outcomes of the recent Extraordinary Summit on AU Reform, which instills ownership by Member States and greater efficiency.

The U.S. and the AU look forward to operationalization of the Hybrid Court for South Sudan to promote accountability. Both sides committed to strengthening democratic institutions as the bedrock to promote good governance, constitutionalism and rule of law as well as promotion and protection of human rights.

The two sides exchanged views on cooperation on youth empowerment, leadership development and entrepreneurship initiatives. Both leaders commended the work of the AU Commission in the successful recruitment, training and deployment of the 9th cohort of African Union Youth Volunteer Corps (AU-YVC) comprising 208 young Africans, 56% of whom are female.

To advance investment opportunity and development in Africa, the delegations emphasized the importance of expanding professional opportunities for young people through programs such as the Young African Leaders Initiative (YALI).

Both delegations discussed the significant progress achieved in the reduction of maternal and child mortality rates, promotion of gender equality and women’s empowerment, advancing the women, peace and security agenda in Africa, and collaboration on public health.

The AU also highlighted Assembly Decision 635 on achieving full gender parity and 35% youth representation by 2025 as well as the new AU strategy on gender equality and women’s empowerment to fast track progress.

Both sides agreed on the need to involve the African Union Development Agency (AUDA)/NEPAD Planning and Coordinating Agency (NPCA) in the African Capacity Building Foundation (ACBF) and the African diaspora in the AUC-U.S. High-Level Dialogue. The two sides also agreed to develop a mechanism to involve the Regional Economic Communities (RECs) in the High-Level Dialogue and propose a structure to promote interactions between the African and U.S. private sectors.

The two sides reaffirmed their commitment to the Africa Centers for Disease Control (Africa CDC) and Prevention and to enhance cooperation in surveillance, emergency preparedness and response, laboratory systems, information systems, and workforce development. Africa CDC has made commendable contributions, including technical support to Member States in response to outbreaks of infectious diseases.

The African Union’s efforts to mitigate the effects of fall armyworm on agricultural productivity under the Comprehensive Africa Agricultural Development Program (CAADP), was acknowledged, as well as its plans to promote food safety.

Furthermore, both sides committed to enhancing cybersecurity collaboration and protection of intellectual property rights at the continental level, building on relevant AU instruments including the Protocol on Cybersecurity and Data Protection.

AU Commission Deputy Chairperson Amb. Quartey and U.S. Assistant Secretary Nagy recommitted to deepening the partnership between the United States and the African Union, to achieve the AU’s vision of “an integrated, prosperous and peaceful Africa, driven by its own citizens and representing a dynamic force in the global arena.”

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Safety, competitiveness, infrastructure key to aviation’s benefits in Africa

The International Air Transport Association (IATA) urged governments in Africa to maximize the positive social and economic power of aviation by working together to promote safe, sustainable and efficient air connectivity.

“African aviation supports $55.8 billion of economic activity and 6.2 million jobs. To enable aviation to be an even bigger driver of prosperity across the continent, we must work closely with governments,” said Alexandre de Juniac, IATA’s Director General and CEO, speaking at the 50th Annual General Assembly (AGA) meeting of the African Airline Association (AFRAA) in Morocco.

Safety was highlighted as a positive example of progress through collaboration. “Africa has had no jet hull losses for two years running and is two years free of any fatalities on any aircraft type, it’s clear that progress is being made. But more needs to be done. We urge governments to recognize the IATA Operational Safety Audit (IOSA) in their safety oversight programs.”

Only 24 African states comply with at least 60% of ICAO Standards and Recommended Practices (SARPS). “That is not good enough,” said de Juniac, who encouraged states to make global safety standards a top priority.

Regarding competitiveness, de Juniac stated that airlines in Africa, on average, lose $1.55 for every passenger carried. Establishing competitive cost structures that enable growth and reducing blocked funds are essential to improving the competitiveness of African aviation.

“Africa is an expensive place for airlines to do business.... Too many African governments view aviation as a luxury rather than a necessity. We must change that perception,” said de Juniac.

On infrastructure, de Juniac said: “In Africa we have infrastructure problems in two extremes. In some cases it is overbuilt and expensive. In other cases, it is deficient and cannot meet demand. Dialogue between industry and government is critical to ensure that there is sufficient capacity to meet demand, that airline technical and commercial quality standards are met and that the infrastructure is affordable.”

IATA expressed strong support for the Single African Air Transport Market (SAATM) initiative. To date, 27 African governments have committed to SAATM and IATA encourages the remaining 28 African Union member states to come on board quickly to enjoy the potential benefits of a connected African economy.

Supporting the projected growth of aviation in Africa – a quadrupling of passengers over the next two decades – will require an expanded labor force. De Juniac called on governments to develop policies to build their training pipeline to support growth and tap into the power of women to help alleviate a growing skills shortage in the region.


Remarks by Alexandre de Juniac at the 50th Annual General Assembly meeting of the African Airline Association (AFRAA)

Morocco is a great place for the AFRAA AGA. It is one of the fastest growing economies in Africa. The government has understood the power of aviation to catalyze economic activity. And they set policies that enhance competition and foster the growth of connectivity.

As a result, tourism is a major source of jobs and growth. And Morocco has taken on a regional leadership role, with West-African countries relying on its growing hubs in Casablanca and Marrakesh. Other countries on the continent should be inspired by this successful model.

Cooperation with AFRAA

AFRAA and IATA are partners in supporting a safe, secure and sustainable air transport sector that contributes to Africa's economic growth and development. Indeed we recently strengthened our cooperation with an agreement to reinforce the importance of the implementation of global standards by African governments.

There are already two examples where our cooperation is at the top of the agenda.

The first is safety. The Abuja Declaration committed Africa’s governments to achieve world-class safety. With no jet hull losses for two years running and two years free of any fatalities on any aircraft type it is clear that progress is being made. There is, of course, still more to do. We are asking governments to drive additional improvements with two concrete actions:

  1. First, recognize IOSA in safety oversight. Egypt recently renewed its commitment to this. And we have made progress with Rwanda and Zimbabwe as well. We need more governments to follow their good example. With IOSA carriers outperforming those not on the registry by nearly three times, we have a convincing argument.

  2. The second is adoption of ICAO Standards and Recommended practices (SARPs). Only 24 African states comply with at least 60% of ICAO SARPS. Quite simply, that is not good enough for an industry that depends on global standards for safety. To support greater implementation we are encouraging governments across the continent to allocate resources, ensure the independence of safety oversight bodies and cooperate regionally where pooled resources can improve both speed and efficiency.

The other area of cooperation that I must highlight is on environmental sustainability. The Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) begins on January 1, 2019. From then, all airlines must begin reporting their emissions. If you need help in getting ready for this, please call on the IATA and AFRAA teams who are working together to support your needs.

In parallel, we are working to increase government participation. Encouragingly, nine governments in this region – Burkina Faso, Botswana, Gabon, Equatorial Guinea, Kenya, Namibia, Nigeria, Zambia and the latest, Cameroon – are committed to join CORSIA from the voluntary period. And globally, the 75 pioneering CORSIA states cover about 84% of aviation activity. That’s good, but we want to push that as close to 100% as possible. And our partner for doing that in Africa is AFRAA.

Agenda for Africa

Looking even more broadly than safety and sustainability, how can we maximize aviation’s ability to catalyze Africa’s growth and development?

Already aviation is a considerable force, supporting $55.8 billion of economic activity and 6.2 million jobs in Africa. That’s impressive. But we are only scratching the surface of what aviation can contribute to building Africa’s future. To enable aviation to be an even bigger driver of prosperity across the continent, we must work with governments:

  • To improve competitiveness,

  • To develop effective infrastructure, 

  • To modernize the regulatory framework with a focus on global standards, and

  • To ensure a well-trained and diverse workforce.

Competitiveness

Let’s begin with competitiveness. The global airline industry is currently enjoying rather good times. We are expecting 2018 to be our 4th year of generating profits that exceed the cost of capital. It is still, however, a tough business with lots of volatility – including in the price of fuel.

The global average profit per passenger is $7.80. But airlines in Africa, on average, lose $1.55 for every passenger carried. This disparity has many causes. To begin with, Africa is an expensive place for airlines to do business.

  • Jet fuel costs are 35% higher than the rest of the world.

  • User charges reflect 11.4% of airlines operating costs in Africa – four times that of North America and double industry average. 

  • And taxes and fees are among the highest in the world. 

There is no shortage of examples illustrating the heavy burden that governments extract from aviation:

  • In Niger $80 from each ticket is paid to the government in fees, taxes and charges,

  • Cameroon recently added a $37 development tax per passenger,

  • DR Congo charges every arriving passenger $15 to promote tourism – rather counter-productive if you think of it,

  • And Ethiopia’s $24 departure tax undermines the hub’s competitiveness.

There is some good news however. In May, Equatorial Guinea removed its 15% VAT on tickets. Still, too many African governments view aviation as a luxury rather than a necessity. We must change that perception. The value of aviation for governments is not in the tax receipts that can be squeezed from it. It is in the economic growth and job creation that aviation supports.

Another important element of competitiveness for airlines is the ability to reliably repatriate earnings – in line with international treaty obligations.

So having 10 African countries blocking a total $670 million of airline funds is a big concern. Many of these countries are facing severe economic challenges. But blocking airline funds puts connectivity at risk. And that invites even broader economic problems.

It is in everybody’s interest that airlines are paid on-time, at fair exchange rates and in full. And when problems are on the horizon, urgent dialogue is the first step, with creative and proactive mitigation plans following closely behind.

IATA has had success in Nigeria and Egypt where government actions completely cleared the backlog of funds. We urge other Governments to follow suit, particularly in Zimbabwe and Angola.

Infrastructure

Now I’d like to comment on infrastructure requirements which are:

  • Sufficient runways, terminals and airspace capacity to meet demand,

  • Technical and commercial service quality aligned with airline needs, and

  • Affordability.

This is simply said, but not easily achieved.

In Africa we have problems in two extremes:

  • At one end, when infrastructure is built, too often we see unnecessary and unfit infrastructure with a hefty price tag. Luanda’s new airport is shaping up to be a case in point. It is probably bigger than what is needed. There are gross cost overruns and delays. The strategy to avoid this is dialogue from the earliest stages of any infrastructure project.

  • The other extreme is where critical capacity is missing. Ghana, Senegal and South Africa have taken a collaborative approach to infrastructure that is producing positive results for all stakeholders. But there remain critical bottlenecks in Addis Ababa, Dar Es Salaam, Lagos and Abuja. If planes cannot land, the economic benefits that they bring will fly elsewhere.

Even after governments have consulted to build infrastructure that everybody agrees is needed, we can still face challenges in how it is funded. The last IATA AGM passed a resolution that:

  • Recognized airline disappointments with airport privatization,

  • Called on governments to be cautious on future privatizations, and

  • Urged broad and rigorous consultation to make the right decisions.

We are putting the resolution into practice in Nigeria where the government is considering a private-public partnership in the future development of airports in Lagos and Abuja. IATA is consulting directly with the government on this important project. This includes developing economic regulation to make it a success for all stakeholders and provide the connectivity that Nigeria needs to develop.

We hope that the result of this work will be a model for others to follow because it is clear that Africa needs more infrastructure investment. And it is important that we find the right funding and regulatory models. 

Harmonized Regulation

Speaking of regulation, we continue our work to achieve the universal adoption of two important global standards:

  • The Montreal Convention 1999 (MC 99) establishes a modern approach to liability and is a key enabler of our efforts to modernize air cargo by facilitating the use of electronic air waybills. Ghana, Niger, Tunisia and Uganda have recently ratified. We urge the 19 African states yet to ratify – to do so soon.

  • The second is the Montreal Protocol 2014 (MP 14) which provides an international legal framework for dealing with and deterring unruly passenger incidents. African states were instrumental in its creation. And 8 of the 15 states adopting it so far are from the continent. But we still need to get 22 states to ratify to bring this treaty in to force.

There is also a completely “made in Africa” policy initiative which we are wholeheartedly supporting. That’s the African Union Single Africa Air Transport Market (SAATM) project.

You don’t need me to tell you how difficult it is to get around this continent. Distances that should take a few hours can take days simply because the connectivity does not exist. This inefficiency has an economic cost. The low density of the African intra-continental network makes it impossible to realize the potential benefits of a connected African economy.

SAATM – if implemented – gives Africa the potential for economic transformation.

Twenty-seven states have signed on to SAATM. Now they need to follow promises with action. History has shown that opening markets leads to rapid advances in connectivity. We can be confident that the results of 27 states implementing SAATM will make a powerful case for the remaining 28 to come on board quickly.

To help, IATA worked with the AU, AFCAC and AFRAA to create a guidance booklet on SAATM implementation. This will be launched later today. The aim is to help all stakeholders work together to take the best advantage of SAATM to boost African development on the wings of aviation.

Regulation affects almost every aspect of aviation, so a favorable regulatory environment is critical to the sustainability of the industry, particularly here in Africa. We urge Governments to embrace the ICAO Good Regulatory Practices Guidelines designed to improve the regulatory process and to reduce unnecessary or excessive burdens on the industry.

Workforce

The last point that I would like to address is the human talent that we will need to realize the potential for Africa’s future aviation industry. If we can tackle the issues discussed today – and I am sure that we can – then the number of passengers could quadruple over the next two decades.

Achieving that would require skilled aviation professionals in far greater numbers than we have today. And we all know that finding and retaining the right talent is a challenge even today.

IATA has long been active in this area. Over 2,400 African aviation professionals are trained each year either directly by IATA or via the International Airline Training Fund. So we are a good partner for governments seeking to develop policies to build their training pipeline to support growth.

A particular focus for us at this time is engaging more women in the workforce. Africa can be proud of its leadership in this area with women at the helm of four airlines. On October 31st this year, the first “IATA Women in Aviation Diploma Program” was launched in Johannesburg with 22 female airline executives. And we are currently partnering with Korn Ferry and other aviation organizations in a global study that will help the industry better understand what best practices lead to diversity in the workplace at all levels of seniority.

With these and other initiatives, we can be confident that Africa will have a well-trained and diverse workforce to power the industry forward.

The Business of Freedom

The last thought that I want to leave you with is a reminder of why we are here. Aviation is the business of freedom. The opportunities aviation creates to improve people’s lives are tremendous – especially in Africa. And it is no wonder that aviation is an enabler for so many of the UN’s Sustainable Development Goals.

It is important that the industry is able to drive growth and connectivity in Africa by working in lock-step with government to achieve:

  • Competitive cost structures that enable growth,

  • Effective infrastructure that can accommodate growth,

  • Harmonized regulatory framework that opens markets and promotes growth, and

  • A well-skilled diverse workforce that can drive growth.

Thank you.

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tralac’s Daily News Selection

AfCFTA ratification update, @GovUganda: Today (Wednesday) the Instrument of Uganda’s ratification of the AfCFTA was officially handed over to the African Union Commission. Uganda is the 9th country to ratify this initiative, which will bolster trade opportunities for Ugandans.

AfCFTA: Big economies afraid of ‘cheating’, says ECA’s David Luke (New Times)

David Luke spoke to Business Times’ James Karuhangaabout about issues to be resolved before completing Phase One of negotiations, approaches to adopt for liberalising trade in goods under the deal and explained why big countries fear they could be cheated. Excerpts:

Q: Then what is complicating things on the agreement? Luke: What has complicated the rules of origin for the AfCFTA is that a number of countries, big countries that are especially in Southern Africa, and Nigeria, are afraid of cheating. Q: How can this be, or who would be cheating them? Luke: They don’t want a situation where, for example, China or India makes a deal for example with a small country to say that ‘goods coming from China will qualify because they made some small changes here and there.’ In some cases quite frankly, they just change the label on the product and put a local label and send it as qualifying. To avoid this, they want product-specific routes and not across-the-board cumulation of 15% or 30%, or any other. What this means is, in the customs declaration, there are about 6,000 tariff lines for all products. There is a whole classification in customs and it is called the harmonised system used worldwide. The difficulty with that is that obviously it takes time to sit down and agree that for this category this is the minimum that we accept. But it’s much more specific.

Nigerian Office for Trade Negotiations tweets: DG NOTN, Ambassador Osakwe, engages with the Technical Working Group of the Presidential Committee on a 21st Century Trade Policy for Nigeria and parameters for AfCFTA implementation. “A Nigerian 21st Century Trade Policy should be constructed on the solid foundations of trade integration, openness, digital economy, opposition to dead-end protectionism and accompanied by robust rules-based safeguards against injurious trade practices”

African Forum for National Trade Facilitation Committees: Committees are cornerstone of pan-African trade dream (UNCTAD)

Because the range of issues covered by trade facilitation provisions in the agreement are so broad, implementation can’t be the remit of one entity, said Willie Shumba, a chief customs expert and adviser for the AUC. “The need for a multi-stakeholder committee on trade facilitation at national level cannot be overemphasized,” Mr Shumba told government agencies and trade operators gathered for the First African Forum for National Trade Facilitation Committees. Issues to tackle include reducing quotas and other harmful non-tariff barriers to trade, setting up single-windows systems, ensuring freedom of transit and improving security and risk management. “The issues are not purely customs issues,” , adding that a host of stakeholders must participate, including trade and transport ministries, port and road authorities, the police, freight forwarders, chambers of commerce. Poul Hansen, who oversees UNCTAD’s work on trade facilitation, said that because there is strong coherence between the AfCFTA and the TFA, the same committee could feasibly work on the provisions under both. “I think it is worthwhile for countries to have a review of what is existing in their national landscape in order to not have what I would call committee clutter.”

PIDA Week 2018 ends with calls to accelerate implementation of game-changing infrastructure projects

ATI Forum: De-risking Nigeria’s investments and trade (Vanguard)

The Government of Nigeria and private sector investors will soon receive important support that will help boost key industries such as the banking sector as well as providing access to competitively priced credit and loan facilities for institutions in Nigeria. Relief is expected once Nigeria finalises its membership into ATI, which is nearing completion. ATI’s Chief Executive Officer, George Otieno commented: ”There are numerous benefits to Nigeria becoming a member of ATI. First, investors and international lenders will look favourably on this action and second the time couldn’t be better for our solutions. We can support the government to diversify the economy, boost banks liquidity, and even help the government to borrow internationally at more competitive rates. This year ATI’s products will stand behind around 5% of all new FDI into Africa so joining ATI literally boosts growth. Lastly, ATI is now paying dividends to shareholder making membership a near budget neutral decision for governments.” [Related: Nigeria perfects measures to join ATI with $20m commitment; Nigeria quits 90 foreign groups over economic agenda]

China, Uganda seek new efforts to boost trade, economic ties (Xinhua)

A group of 30 Chinese entrepreneurs on Wednesday concluded their three-day trip to Uganda to look for business opportunities. Uganda has held several Chinese investment forums with the aim of persuading the Asian country that it is among the best investment destinations in Africa. Lyu Xinhua, chairman of the Council for Promoting South-South Cooperation, said from their brief stay, members of the delegation have observed that Uganda’s investment climate, legal frameworks, affordable labor and infrastructure makes the country more attractive to Chinese investors. [Tanzania snubs Uganda’s invitation for bilateral talks]

Towards an IGAD cooperation, coordination platform for transnational security threats (IGAD)

The expectations from the four-day forum (26-29 November, Entebbe) is to draft a protocol/agreement on the establishment of the regional Criminal Investigation Services and/or the platform roadmap providing a plan of action towards its implementation through coordination and information sharing against trans-security threats. During the meeting, the team will also revisit the findings and recommendations of the Task Force report.

Liberia: Country Partnership Framework FY19-FY24 (World Bank)

The medium-term growth prospects remain positive, although substantial downside risks remain. GDP growth is projected to recover at an annual average rate of 3.8% over the period 2018-2020. The recovery is expected to be largely driven by agriculture, manufacturing and services sectors, as the economy begins to reap the benefits of improved access to roads and cheaper sources of electricity. Inflation is projected to decline from 11.5% in 2018 to 9.5% by 2020. Additionally, in line with projected improvements in the economy, poverty is expected to fall from 50.5% in 2018 to 48.6% in 2020. The CPF focuses on human development and intangible capital, while keeping the balance with investments in infrastructure to consolidate successes of the previous Country Partnership Strategy and reinforce the impact of the WBG program aimed at building human capital and boosting private sector development.

Updated, 2018 World Bank-IMF debt sustainability analyses: Liberia, The Gambia, Guinea

International trade statistics: trends in third quarter 2018 (OECD)

G20 international merchandise trade, seasonally adjusted and expressed in current US dollars, grew marginally in the third quarter of 2018, on the back of rising oil prices, with G20 exports rising by 0.3% and imports by 0.7%, following the minor contractions in the second quarter of 2018. Excluding large oil exporters, such as Russia and Saudi Arabia, G20 trade was flat suggesting that the steady expansion seen over the last two years may have stalled as recent protectionist measures begin to bite. [Various downloads available]

Can Blockchain revolutionize international trade? (WTO)

The publication (pdf) introduces the technology with a basic explanation of how, as a tamper-proof, decentralized record of transactions, it allows participants to collaborate and build trust with each other. It describes different classifications of Blockchains and their current and possible applications in the various areas covered by WTO rules. In doing so, it provides an insight into the extent to which this technology could help with trade facilitation, including how it can hasten the transition to paperless trade transactions. It considers Blockchain’s potential and limits in transforming services by looking at payment systems, insurance and the automation of contracts. The publication also discusses how Blockchain could help ease the administration of intellectual property rights and enhance government procurement processes. Other potential benefits identified by the publication include: [Blockchain can change the face of renewable energy in Africa: here’s how]

pdf Trade and the Commonwealth: developing countries (667 KB) (House of Commons)

Our report is structured as follows. Chapter 2 considers the EU’s unilateral preference schemes, and the possibilities for the UK’s own unilateral arrangements with developing countries after Brexit. Chapter 3 examines the EU’s EPAs and Chapter 4 looks at the role of the Commonwealth in the context of the UK’s relationship with developing countries. Chapter 5 looks at the relationship between trade and gender, particularly in a development context, and Chapter 6 explores the links between trade and development policy, including the coordination of policy between the Department for International Trade and other departments, especially the Department for International Development . Finally, Chapter 7 considers UK support for investment into, and trade with, developing countries. Extract:

There is a relationship between trade and gender. Women are disproportionately affected by trade policy decisions, particularly in developing countries. UK trade policy should seek to not only “do no harm” but to actively promote gender equality, for example by ensuring that women can “move up the value chain” and that trade liberalisation does not undermine labour rights. The UK has an opportunity to show leadership and develop a truly gender-responsive approach to trade policy and should make the most of this opportunity. The Department for International Trade should publish an analysis of its understanding of the relationship between gender and trade. We also consider that before any trade negotiation, DIT, in close collaboration with the Department for International Development, should conduct impact assessments relating to the impact of any agreement on gender inequality. There is not yet enough evidence of whether gender chapters in Free Trade Agreements have a positive impact, but the Government should evaluate such chapters where they are in place; analyse the circumstances in which they might be most effective; and use this analysis to guide future trade policy.

The potential economic impact of Brexit on the Netherlands (pdf, OECD)

Owing to the high uncertainty regarding the final trade agreement between the negotiating parties, the choice has been made to assume a worst case outcome where trade relations between the UK and EU are governed by WTO most favoured nation rules. In doing so, it provides an upper bound estimate of the potential negative economic impact stemming from disruptions in trade. Any final trade agreement that would result in closer relationships between the United Kingdom and the EU could reduce this negative impact. Simulations using the METRO model suggest that from an increase in tariff and non-tariff measures Dutch exports to the UK would fall by 17% and GDP declines by 0.7% in the medium term compared to baseline. [WTO: Parties to government procurement pact approve UK’s terms of participation post-Brexit]

Today’s Quick Links:

Mauritius-EU Gender Action Plan: joint monitoring framework agreement

After initial bluff, Nigeria off with largest delegation to AfCFTA Intra-African trade fair in Egypt

Morocco: FDI increases, trade deficit deepens

Kenya: Central bank sees lower trade deficit

Nigeria: Maritime operators back SON in fight against counterfeiting, false declaration

Why Nigeria needs Free Trade Zones around international airports

Twiga Foods mobile phone platform: Technology helps African farmers sell what they sow

Kigali Principles an African mechanism to solve continental conflicts better – Sezibera

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tralac’s Daily News Selection

29 Nov 2018
AfCFTA ratification update, @GovUganda : Today (Wednesday) the Instrument of Uganda’s ratification of the AfCFTA was officially handed over to the African Union Commission. Uganda is the 9th country to ratify this initiative,...
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PIDA Week 2018 ends with calls on Africa to accelerate implementation of game-changing infrastructure projects

Addressing Africa’s infrastructure gap remains an imperative that African governments should continue to take seriously if the continent is to realise the aspirations its people as enshrined in the continent’s blueprint for development, Agenda 2063 and the global agenda for sustainable development.

Ministers and delegates attending the fourth Programme for Infrastructure Development in Africa (PIDA) Week in Victoria Falls, Zimbabwe from 26-28 November agreed firm political commitment was necessary for the development of key trans-boundary infrastructure projects that will integrate the continent economically and socially for the benefit of its people.

“Given the infrastructure backlog in the continent, we have to keep up the efforts to accelerate development of key infrastructure projects. PIDA projects, especially transboundary infrastructure projects, will bolster regional integration and are a pre-requisite for unleashing Africa’s growth potential,” they agreed in their communiqué.

Africa, they said, has to increase projects under construction from the current 32 to 50 percent if it is to achieve its developmental aspirations.

The delegates said the continent should create an enabling environment for the private sector to have space to buy into the continent’s key priority projects. “The private sector will not come on board if issues of trust are not mitigated,” they agreed.

“Establishing good governance frameworks and mechanisms for Africa’s infrastructure projects will not only boost investor confidence, it will also guarantee timely delivery of projects within budget and to specification.”

Development

They also agreed that it is essential for the continent to develop bankable and smart infrastructure with cross border orientation to propel socio-economic growth on the continent with governments being urged to proactively all stakeholders, in particular communities to make the projects inclusive and true enablers for development.

De-risking of projects is necessary and critical to ensure they are bankable to attract capital that has remained largely elusive. Infrastructure, the delegates agreed, should not remain in the public sector domain with governments being urged to engage the private sector for long term projects.

The delegates emphasized the importance of strong institutions in Africa’s infrastructure development. “The relevant institutions should facilitate capacity building in key areas of infrastructure development in the continent. This will boost technical capacity and skills at all levels of the project life cycle as well as relevant institutions to ensure efficient development and management infrastructure,” reads the communiqué.

The PIDA Quality Label received recognition as a framework needed to ensure projects fulfil set criteria.

To realize NEPAD’s 5 percent Agenda and the African Infrastructure Guarantee Mechanism (AIGM), the delegates recommended the establishment of PIDA project specific working groups to focus on data transparency and dissemination; advocacy work; project development; review and funding; partnerships and capacity building.

The partners, including the African Union Commission (AUC), NEPAD Agency, the African Development Bank (AfDB), and the Economic Commission for Africa (ECA), vowed to continue working together to put in place sustainable capacity building mechanisms for key infrastructure sectors on the continent and to invest in efforts to accelerate development of key infrastructure projects.

They also pledged to launch and use the PIDA Job Creation Toolkit as a part of the package and means to attract and convince pertinent stakeholders, including financiers and development partners on the benefits of key PIDA priority projects in the construction phase.

They recommended:

  • that PIDA PAP 2 (2020-2030) draws from the ongoing review and consultative process and ensure that it is has a realistic list of projects that should be inclusive of all sectors;

  • the integration of several key issues including smart and integrated corridor approaches, renewable energy; youth and gender sensitivity potentials of projects in the development of the Second Phase of the PIDA;

  • and a strong communications strategy to communicate progress on priority PIDA projects and facilitate sharing of lessons and experiences on the implementation of PIDA projects.

In his closing remarks, Zimbabwe’s State Minister for Matebeleland North Province, Richard Moyo emphasized the need for Africa to accelerate the implementation of PIDA projects.

“This will allow us to add impetus to the continent’s integration process. We need to have the right infrastructure mix and align our national infrastructural projects to the PIDA programme for collective gain,” he said, adding nothing was impossible if Africa united and stayed focused on what it would have agreed to.

Nepad Chief Executive Officer, Mr. Ibrahim Assane Mayaki, also reiterated the need for the continent to accelerate the delivery of infrastructure projects as one.

“We also need to continue enabling a constructive dialogue with all the partners, including the private sector so that we can deliver concretely,” he said, adding over the past three days participants had managed to enhance their partnerships as “we fight for a peaceful, united and prosperous humanity”.

For his part, the African Union’s Infrastructure Director, Mr. Cheik Bedda emphasized the importance of good governance to promote infrastructural development that will positively impact the continent’s economies.

Representatives of the European Union and the GIZ, a major partner to Nepad and its partners in the PIDA programme, also spoke in support of Africa’s quest for an integrated infrastructure network.

“Big change is on the way for Africa through PIDA and we have to stay the course. Huge investments are required for it to become a reality. We as GIZ are with you. There are also huge opportunities in terms of human capital as well for the continent at all levels,” said GIZ African Union Office Director, Ms. Inge Baumgarten.


2018 PIDA Progress Report: Summary Update

Foreword

Five years ago, Africa launched Agenda 2063 calling for “world class, integrated infrastructure that criss-crosses the continent.” This mirrored the spirit of the Programme for Infrastructure Development in Africa (PIDA); which was adopted a year earlier in 2012.

The First Priority Action Plan of PIDA (PIDA PAP) aims to implement key transboundary infrastructure projects with the potential to interconnect, integrate and contribute to structural transformation of Africa’s geographic and economic regions by 2020.

During this year, together with the African Union Commission and our partners we have been able to record some successes towards the implementation of PIDA PAP and the first ten year implementation plan of Agenda 2063.

Currently 44 out of the 55 AU member states have signed the consolidated text of the African Continental Free Trade Area (AfCFTA) and the ratification process is underway. These 44 countries together could create a huge market with a combined population of more than one billion people and a combined gross domestic product of more than US$3.4 trillion. The role of PIDA in contributing to the success of the AfCTA cannot be over-stated and necessitates an integrated approach to infrastructure development.

As regional integration arrangements deepen and intra-African trade increases, we need to focus on improved trans-continental highways in terms of road and rail networks; furthermore, deepening of financial markets and increased cross-border financial flows including money transfer will require us to make additional investments in ICT and digitalisation while growing industrialization and agro-industries will require more reliable and affordable power supply across the energy mix. The NEPAD Agency will thus pursue its integrated corridor development approach and aim to take advantage of synergies between the large trans-boundary projects in PIDA.

In January 2018, the AU Assembly also launched the Single African Air Transport Market (SAATM) and designated H.E. Faure Essozimna Gnassingbé, President of Togo as its champion. As acknowledged by the International Air-Transport Association (IATA), the SAATM has the potential for remarkable transformation that will build prosperity while connecting the African continent.

The NEPAD Agency is leading the Sub-Core Team on SAATM Infrastructure and we are committed to working with the AUC, AfDB, ICAO and other partners to reduce fares and costs of travel by 50% to achieve air traffic double-digit growth rates in Africa by 2023.

Every year around 15 million people of working age enter the labour market in Africa and it is therefore important that we consider how large-scale infrastructure and PIDA in particular, can contribute to absorbing some of this latent labour force. With the support of the German Government through GIZ, the NEPAD Agency has over the last 2 years been working on the PIDA Job Creation Toolkit which includes a methodology to quantify the job creation impacts of infrastructure projects and guidelines on how to mainstream labour market effects into PIDA project planning and implementation.

The Toolkit allows users to explore ways in which to maximize job creation from infrastructure projects and thus capitalize on Africa’s demographic dividend and opportunities for wider regional economic development. This innovative tool will be launched on the margins of the African Union Summit in February 2019.

With current projections that Africa’s population will reach 1.6 billion by 2030, there is enormous pressure to increase food production and increased pressure on water resources, including a projected tenfold increase in water needs for energy production. This, coupled with rapid urbanisation and industrialisation, will increase the demand for water and hence necessitate PIDA from 2019-2024.

With a portfolio of nine (9) transboundary water and 10 hydropower projects, the goal of PIDA Water is to accelerate the preparation and financing of transboundary water projects and foster a water-food-energy nexus approach in the development of hydropower projects.

In 2016 we established the Continental Business Network (CBN) as a platform for high-level engagement with the private sector to facilitate investment in transboundary infrastructure projects. The work of the CBN is to continuously deliberate on how Africa can finance its infrastructure and how Africa’s infrastructure can be de-risked to attract investments from the private sector as well as to explore innovative measures and instruments to close the US$108 billion infrastructure gap on the continent.

Following the launch of the 5% Agenda in 2017, this year the Continental Business Network (CBN) once again gathered international investors, pension funds, stock exchange CEO’s, multi-lateral development banks and G7 representatives at the New York Stock Exchange, to follow up on the Agenda and consider how to structure an Africa Infrastructure Guarantee Mechanism (AIGM) that would attract participation from institutional and long-term investors.

Apart from a well-structured and resourced AIGM, enticing institutional investors to invest significantly in Africa’s infrastructure requires that we have well-prepared and packaged projects. To this end we have continued to strengthen and promote the PIDA Service Delivery Mechanism (SDM) which aims to assist regional project owners with advisory services for early-stage project preparation. Building on the lessons learned in applying this instrument to the Abidjan-Lagos Corridor, we are currently starting to apply it to the Lamu Port-South Sudan Ethiopia Transport Corridor Project (LAPSSET).

In October we were pleased to receive Hon. Railia Odinga the High Representative for Infrastructure Development in Africa, appointed by the the Chairperson of the African Union Commission, H.E Moussa Faki Mahamat. Hon. Odinga will support us in PIDA implementation by championing the upgrading and modernisation of the missing links of the Trans-African Highways Network and the Continental High-Speed Freight Railways Network (C-HSfRN) – two important Infrastructure projects of Agenda 2063 – and its pdf First Ten-Year Implementation Plan (2.04 MB) .

Partnership remains an integral element of PIDA implementation and we continue to work with partners such as GIZ, DBSA, the EU, AfDB, UNECA and others. In 2019, our cooperation with GIZ will enter a new phase as will the PIDA Capacity Building Support from the AfDB. We also look forward to working with the EU through their new phase of the Infrastructure Support Mechanism.

As we celebrate the successes of the past year, I look forward with much anticipation to future successes in 2019 and beyond.

Dr. Ibrahim Assane Mayaki

CEO, NEPAD Agency

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