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EALA Session commences in Kigali
The 2nd Meeting of the 3rd Session of the 3rd Assembly commenced in Kigali, Rwanda on 21 October 2014. The Speaker of the Rwanda, Chamber of Deputies, Rt Hon Donatile Mukabalisa opened the session. In her remarks, Rt. Hon Mukabalisa lauded EALA for ensuring citizens of the region were fully brought on board on matters concerning integration through the principle of rotation.
“Your meetings in Kigali have great significance. We appreciate this spirit of rotating and having EALA meetings in all Partner States. This is vital as the people from these States recognize and understand more the importance of the regional integration. That gives you the motivation to work hard and closely to achieve the objectives of the Community”, Rt. Hon Mukabalisa said. The Speaker noted that the region was already enjoying the tangible benefits of integration arising from the on-going implementation of the EAC pillars and lauded the region for consolidation of the same.
“We have to acknowledge the great importance of coming together, to interact and share experiences and expertise meant to foster social cohesion and unity, among the people of East African Region. This will be achieved because of the strong political will and strong commitment of our leaders” Speaker Mukabalisa said.
The Speaker of the Chamber of Deputies challenged Parliamentarians to work closely with the other stakeholders to strengthen integration.
“We also need a close collaboration with the private sector and civil society because this partnership is the foundation to strengthen our economic, social, cultural, industrial, technological, infrastructure, services and other ties for sustainable development,” Rt. Hon Mukabalisa said.
On her part, the Speaker of EALA, Rt. Hon Margaret Nantongo Zziwa, called on the Parliaments to take integration a notch higher by debating on integration issues more vigourously. She appealed to the Chamber of Deputies to allocate more time on the floor of the House to enable explication of the EAC policies and also for Parliamentarians to debate on integration matters.
Rt. Hon Zziwa cited sensitization as a key plank in the EALA’s Strategic Plan and remarked that it was a priority for the Assembly at the moment. “It is EALA’s intention to target key stakeholders including Parliamentarians and we as EALA shall be keen to deliberate comprehensively with Members of the Parliament here”, the Speaker added. Speaker Zziwa hailed the Parliament of Rwanda for its efforts taken in passing key legislation in the country.
“I am informed that within the one year period, the Parliament has expedited legislative process of various Bills. Since October 2013, when the Lower Chamber was sworn in, it has received 60 Bills of which 54 have been scrutinised and 41 of them, passed and published in the Official Gazette, representing 95 per cent of performance execution by the legislature,” the Speaker said.
“This has been a busy year but one that is by all means successful. The business you have executed is commendable. The passion with which you want Rwandans to understand how Parliament works, and what the lawmaker’s responsibilities are is admirable”, Rt. Hon Zziwa added. In her vote of thanks, Hon Dr. Kessy Nderakindo congratulated the people of Rwanda for their warmth and generosity.
She remarked that integration was key to make the One People, One Destiny ethos, a reality. “We need to get back to where we were before the colonialists created the artificial borders,” Hon Dr. Nderakindo remarked. The Assembly shall during the two-week period, discuss several legislative matters. The Sitting expects to debate on the following key areas:
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the EAC Co-operatives Bill, 2014 (2nd & 3rd Reading)
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receive and consider reports from various Committees of the Assembly. Such include the Report of the Committee on Regional Affairs and Conflict Resolution and the Report of the Committee on Legal Rules and Privileges. Others are the Report of the Committee on Communications, Trade and Investment on the implementation of the Single Customs Territory on the Central Corridor.
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consider several Motions and Questions brought before the House.
To view the Press briefing by Hon. (Dr) Margaret Nantongo Zziwa, Speaker of EALA, on Monday, 20 October 2014, in Kigali, Rwanda, please click here.
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Aid for Trade meeting highlights need to give greater support to small businesses
At a meeting of the Committee on Trade and Development on 10 October 2014, WTO members were updated on a recent ITC-WTO workshop that called for greater support for small and medium-sized enterprises (SMEs) to help them integrate into global trade. Members also discussed the monitoring and evaluation exercise that will feed into the Fifth Global Review of Aid for Trade to take place in June 2015.
Joint ITC-WTO Workshop on Aid for Trade and SME Competitiveness
The meeting heard a report on the Workshop on Aid for Trade and SME Competitiveness jointly organized by the WTO and the International Trade Centre (ITC) on 9 October 2014. The workshop noted that SMEs play an important role for employment, income growth and gender empowerment. At the same time, SMEs have a high failure rate due to limited access to finance, lack of institutional support, non-tariff trade barriers and an unfavourable business environment. Participants in the workshop discussed areas where more could be done to support SMEs and help them integrate into global trade.
A joint ITC-WTO background note on Aid for Trade and SME competitiveness can be downloaded below.
Enhanced Integrated Framework
The meeting included a briefing by representatives of the Enhanced Integrated Framework, a multi-donor programme that promotes trade in least-developed countries (LDCs). The EIF has recently launched a new trade mainstreaming facility to further help countries put trade at the centre of their development agenda. Since its launch in June 2014, members have submitted requests to access the facility for additional support.
Uganda (representing the LDC Group), Nepal and Benin commended the EIF's work and called for an extension of the programme beyond 2015. Uganda noted that since 2008 the EIF has funded 120 projects in 45 countries. The EIF Annual Report 2013 highlighted that 90 per cent of EIF Tier 1 countries, which receive support for identifying constraints to trade, had included trade in their national development plans.
National Aid for Trade initiatives
China, Dominica (representing members of the Organisation of Eastern Caribbean States) and Chinese Taipei shared their experiences on Aid for Trade. China said that it has helped developing countries boost trade by promoting infrastructure development, providing export market opportunities for LDCs and assisting in trade-capacity building. Dominica highlighted how Aid for Trade has helped OECS countries develop regional strategies and prioritize trade in their development agendas. Chinese Taipei described its four-year project aimed at helping Belize improve efficiency by introducing information technology solutions.
Mobilizing resources to support trade integration
The European Union presented findings of its Aid for Trade monitoring report for 2014. It noted that EU support for Aid for Trade in 2012 was 20 per cent higher than in 2011, making the European Union the world's largest trade assistance provider. Africa has received the largest share of this assistance, and the European Union has maintained its commitment to LDCs.
Uganda pointed out that LDCs attracted only 24 per cent of total Aid for Trade in 2012. It called upon members to prioritize the needs and interests of LDCs and to ensure that at least one-third of Aid for Trade is disbursed to LDCs.
The meeting also heard presentations from the ITC and the United Nations Industrial Development Organization (UNIDO) on their Aid for Trade work.
Monitoring and evaluation exercise for Fifth Global Review of Aid for Trade
Members reviewed the questionnaires and case story templates to be disseminated as part of the monitoring and evaluation exercise that will feed into the Fifth Global Review of Aid for Trade to take place in June 2015. The Review will focus on "reducing trade costs for inclusive, sustainable growth". Once finalized, the questionnaires and requests for case stories will be circulated to partner countries, bilateral and multilateral donors, regional economic communities and South-South partners to assess the aid needed to reduce trade costs. The request for case stories will also be circulated to the private sector.
Background
Aid for Trade is a WTO-led initiative that helps developing countries and least-developed countries trade. At the Ninth Ministerial Conference in December 2013, a Ministerial Decision on Aid for Trade (WT/L/909) reaffirmed WTO members' commitment to the initiative, recognizing the continuing need for Aid for Trade in developing countries, and in particular least-developed countries. The Aid for Trade Work Programme for 2014-2015 is focused on “reducing trade costs for inclusive, sustainable growth”.
Director-General Roberto Azevêdo announced at the General Council meeting on 21 October 2014 that the 5th Global Review of Aid for Trade will be held from 30 June to 2 July 2015. His remarks on Aid for Trade are presented below:
Thank you Mr Chairman.
I think there is a wide-spread appreciation of the value of Aid for Trade in supporting development, and particularly for the LDCs.
In my conversations with ministers and heads of other international organisations, I am already starting to hear a lot of interest in the Aid for Trade Global Review. As you know, we hold these Reviews every 2 years, and we will have the next one in 2015.
2015 will be a very important year in the development calendar. The UN's post-2015 development agenda and the sustainable development goals will be finalised, and so I expect that this interest in the Global Review will only increase.
Therefore I wanted to take the opportunity of this meeting to give members a quick update on the Global Review.
In doing so, I would like to thank the Chair of the Committee on Trade and Development, Ambassador Pierre Ndayiragije, for his excellent work in taking this initiative forward.
The Aid-for-Trade work programme, which was before the General Council in May this year, set the theme for the 5th Global Review and also scheduled it for mid-2015.
I am pleased to confirm today that the exact dates for the Global Review will be from the 30th of June to the 2nd of July 2015.
I will give you these dates in writing very shortly in a letter to all delegations, but I urge you to mark them in your diaries.
Just as important, is that this letter will also include details of how to participate in the Aid for Trade monitoring and evaluation exercise.
The CTD Chair has already consulted extensively on this issue — and so I think you are all aware that the monitoring and evaluation exercise is central to the Global Review.
Previous Global Reviews have been hugely enriched by your active participation.
We are therefore counting on your continued engagement and request that you transmit details of how to participate in this exercise to your capitals.
Looking forward, I encourage the CTD chair to continue his good work and consult with you all on the organization of next year's Global Review.
By working together we will ensure that the process is a success.
Thank you.
Read the full Report by the Chairman of the Trade Negotiations Committee.
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tralac is a 2014 Finalist – Cape Chamber of Commerce Western Cape Exporter of the Year
We are pleased to inform you that tralac is a Cape Chamber of Commerce Western Cape Exporter of the Year 2014 finalist.
Exporter of the Year 2014
The Cape Chamber of Commerce Western Cape Exporter of the Year 2014 profiles the best of the Western Cape. Exporting companies are proving that there is opportunity to be had for the bold business leaders in the Western Cape.
This is an exciting time as this year’s Exporter of the Year is part of the World Design Capital programme. The main award, the Western Cape Exporter of the Year Trophy, will go to the company that meets the judge’s criteria for commitment to exporting. All exporters, both large and small, stand an equal chance of winning this prestigious award, which will be presented at a gala banquet in Cape Town on Thursday the 27th November 2014.
2014 Exporter of the Year finalists:
1. Abagold produces abalone, the world’s most desirable seafood, in close harmony with nature at the most southern tip of Africa.
2. Afrinatural Holdings is committed to delivering botanical products from Southern, West and Central Africa that exhibit health enhancing and unique properties.
3. Geo Data Design is an expert provider of Satellite Imagery and Geospatial processing & Management Software, integrating Geospatial data and complete workflows for better decisions.
4. Macadams International was established in 1904, and over the past 100 or so years, they have developed into a major force in the Baking Industry both locally and across the globe.
5. Maverick Trading 59 is South Africa’s leading manufacturer of Polymer concrete Manhole covers and frames, and was founded in January 2000 by Cedric Simons.
6. Nautic Africa specialises in the construction of marine-grade aluminium vessels, custom-building solutions tailored to your specific needs.
7. Oh Lief Natural Products was founded in 2010 by sisters Christine Buchanan and Louiza Rademan, and was born out of the love for nature and the desire to use products that would not harm our skin or the environment.
8. Thokozani Wines / Diemersfontein produce award-winning estate wines.
9. ST Communications provides African localisation solutions. As a top provider of translation and localisation services they have a wealth of experience in providing translation and localisation of African languages.
10. Trade Law Centre – tralac is a capacity-building organisation developing trade-related capacity in east and southern Africa.
11. Triggerfish Animation is a Cape Town-based media and entertainment company passionate about producing original character-driven stories with universal appeal.
For more details, please visit http://www.capetownchamber.com/
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South Africa: Tourism Report 2013
Background
Administrative records regulating the flow of people across boundaries, specifically border statistics, are an important source of statistical data on temporary population movements in many countries. Generally, countries routinely collect some data from both residents and non-residents who pass through the demarcated air, land and sea ports on arrival in and departing from the country. The method, the kind of collected data, the quality of data and the dissemination and availability of processed data differ quite widely among countries since there is no international standardised template for the recording of information on travellers. Besides the impact of the level of infrastructure development, the national differences are largely shaped by the immigration policies and regulations of individual countries.
Data collection methods may be electronic, manual or both. Travel documents could be scanned and/or travellers are expected to complete an arrival and departure form/card. The level of documentation and the information collected from travellers are often influenced by the citizenship/nationality of the travel document and the purpose of entry.
Data obtained from foreigners or non-residents can be used to categorise them into visitors and non-visitors. Usually, the data given on the form regarding purpose of visit and/or length of stay is also used to categorise travellers into visitors and migrants. In countries that do not use cards/forms, data on type of visa/permit can also be used for the categorisation. In addition, there are countries that issue special cards for registered immigrants that they could use to cross in and out of the country of residence. Thus the information from the visa, permit and the card/form are used to classify non-visitors into migratory categories such as short-term and long-term migrants; temporary migrants; permanent migrants; labour migrants, asylum seekers, students, etc. according to a country’s specifications.
Because border statistics are derived from arrival data they could be the most suitable data source for the direct measurement of the flow of immigrants (UN, 2011). The data are routinely collected as travellers pass through the immigration check points at the port of entry so data are available at any given time intervals. It is very crucial to note that unlike data from census or sample surveys that count individual persons, border statistics by their nature, do measure events i.e. movements of persons rather than the physical persons. The simple reason is that the same person can cross the border a number of times during a specified time and his or her information is recorded every time he or she passes through the border.
The management of population movements across South African borders and immigration into South Africa fall under the jurisdiction of the Department of Home Affairs (DHA). The jurisdiction of this responsibility is enshrined in the various immigration acts, amendments, laws and regulations. Currently, with respect to the collection of data on population movements in and out of South Africa, the DHA operates with the Immigration Act 2002 (Act No. 13 of 2002), its amendments and associated regulations. The latest Immigration Regulations came into operation on 26 May 2014. Any changes and amendments in the legislation and regulations affect both the flow of travellers as well as the methods of collecting data and the kind of information collected on travellers.
At the ports of entry/exit, the immigration officers of the DHA collect information on South African residents and foreign travellers arriving into or departing from South Africa. This information is used to produce statistical releases on all travellers, with emphasis on tourists and an annual report aggregating the results of one calendar year.
Percentage distribution of tourists by region and purpose of visit, 2013
Percentage distribution of tourists from SADC countries on business, 2013
Percentage distribution of tourists from ‘other’ African countries on business, 2013
Percentage distribution of tourists from overseas countries on business, 2013
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Strong leadership: critical to building South Africa’s competitiveness
South Africa is a country rich in diversity with an array of cultures and communities, each with their own stories and history. Each of these communities have produced sometimes world-renowned leaders, but always local leaders, who have contributed to improving the lives of South Africans; they have made a mark on history and by playing their part, they have made South Africa the country we know today.
Democracy in 1994 brought a host of nation building and social cohesion challenges yet, South Africa succeeded in building a democratic society. South Africa’s policies were focused on nation building and equalising levels of development and access to resources.
In theory, once nation building and a common national identity is achieved and citizens’ basic needs such as education, housing, health care and water and sanitation are met, then a country should be in a position to compete with other nations on a global scale.
Being able to compete on a global scale and to achieve a competitive advantage is a challenge that leaders in South Africa have to respond to with urgency.
Role of leadership
In South Africa, the role of leadership is crucial because it forms the back bone of the fabric of our societies and is a major source of inspiration for millions of citizens to do things differently to achieve excellence.
We must recognise that leaders do not exist only in government but in all other spheres of our society. Leaders can have formal or informal power and ironically those with informal power are sometimes able to motivate people better than those with formal power. If leaders actively work towards improving and growing their spaces to build other leaders who can take decisive action and implement decisions that will see us growing our country, this will undoubtedly make a significant contribution to our global competitiveness.
Leadership in South Africa that ensures the implementation of policies is critically important.
As a country, we must collectively move with haste to implement the policies that exist to ensure that South Africa gains a competitive advantage over its counterparts, and in this way addresses some of our pressing socio-economic challenges. There is no doubt that in many respects we have progressive and impressive policies, whose implementation is at times hampered by people charged with implementing them. As we focus on the implementation of the development plan, we must constantly remind ourselves of Madiba’s view that we need to move urgently from rhetoric to implementation. This requires our collective effort and contribution and strong leadership in whatever sphere of society we may be involved.
In contemporary business theory, it is believed that if organisations gain competitive advantage in the market place, they move to a place of brand recognition and increasing brand equity.
National brand
While South Africa is not a corporate entity, perhaps it is time to consider implementing a hybrid model where our nation building efforts recognise that we do have a product we want citizens of our country – and the broader world – to buy, our nation brand! We want citizens to buy into South Africa. With this comes pride, patriotism and a solid sense of national identity.
In the aggressive business world, especially in today’s global economy, every incremental achievement counts towards positioning your business as an industry leader.
Similarly, South Africa needs to focus on key sectors to gain competitive advantage in the global community of nations. Gaining a competitive advantage takes strategic planning, extensive research and strong leadership. To achieve this, leaders in South Africa, must form constructive partnerships with a range of stakeholders in the pursuit of competitiveness and prosperity by creating an environment that supports productivity. This necessarily involves the courage to do things differently – we may sometimes have to join the most unexpected partners to get the best, most creative and effective results. As Kofi Anan once said, “you shake hands with the devil to make peace”.
This is not new to us in South Africa – this is our story, this is the bedrock on which our very democracy rests.
South African Competitiveness Forum
As part of its mandate to build South Africa’s brand reputation and contribute towards the country’s global competitiveness by developing symbiotic partnerships with stakeholders who can build our country’s competitiveness, Brand South Africa will host the second annual South African Competitiveness Forum in Johannesburg on 4 and 5 November 2014 under the theme “Active Citizenship and its role in changing the South African brand reality”.
In an attempt to bring together a range of diverse voices, Brand South Africa will this year, in addition to discussions on youth and innovation, foreign direct investment, the labour market, expansion into the rest of Africa and active citizenship, include a virtual discussion with Global South Africans about their views on South Africa. Many South Africans remain very positive about our country although they may live abroad. They are a critical part of our nation brand.
The 2014 Forum will also see a discussion with all relevant stakeholders on South Africa’s multipronged “going-out strategy”. This will focus on business expansion strategy into African markets, and the role perceptions and reputation plays when entering peer markets elsewhere on the continent.
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East Africa is ripe with opportunity – Kagame
President Paul Kagame on Monday began a three-day visit to London where he addressed business leaders at the Global African Investment Summit. The event, under the theme “Realising Africa’s Investment Potential”, brought together over 300 business executives for a discussion aimed at bringing the private sector and governments together to discuss access to finance and bankable projects on the continent.
The summit opened with a presidential panel with Presidents Kagame, Yoweri Museveni of Uganda and John Dramani Mahama of Ghana, and Prime Minister Mizengo Pinda of Tanzania.
Speaking on the Ebola crisis, President Kagame called for the right approach to addressing the crisis.
“We need to work together regionally, strengthen country systems to tackle problems that affect African citizens. Epidemics like Ebola remind us that investments should be about building systems.”
Pointing to challenges like infrastructure and energy, Kagame called on investors to focus on the opportunities. “There are different challenges but there are also opportunities. Between the resources that East Africa or Sub Saharan Africa have and the challenges, right in between there are real opportunities and solutions.”
President Museveni reminded the audience of the unmatched opportunities that exist in Africa, saying: “Africa will be three billion people. From whichever angle you look at it, Africa is the place to invest. The consuming power is there and the infrastructure is being worked on and there is market access.”
Drawing attention to the importance of improving the lives of citizens, President Kagame called for investments that develop nations and people.
“It’s not just about investing in IT or infrastructure. Our own national budget, 15 per cent of it goes to education and it has been increasing. This is about prioritising investment in human capital from primary school, to university, to vocational and technical education.”
He told the business leaders: “Invest in Rwanda, in East Africa. Your money will be safe, you will have high returns and the country and our citizens will benefit and we will develop together.”
Meanwhile, President Kagame was welcomed to London by hundreds of Rwandans living in the UK who lined the streets across from Savoy Hotel where the summit took place.
Supporters held placards with messages of appreciation for the President’s leadership, with many listing Rwanda’s accomplishments over the last 20 years, including lifting one million people out of poverty (over the last five years), Rwanda's position as the 10th fastest growing economy in the world, and reiterating Rwandans’ choice of dignity, resilience and self reliance.
President Kagame is today scheduled to give a lecture at Chatham House on “Rwanda’s role in a changing world” (read the speech here), while he is also expected to deliver a keynote address at the UK-Rwanda Business forum tomorrow.
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6 ways to boost Africa’s access to global and regional markets
Despite astounding economic growth rates and significant improvements in Africa’s participation in global value chains, the overall picture in many African countries remains one of dependency on raw materials exports and finished-product imports.
The resurgence of protectionist sentiments in both developed and developing countries in the context of the global economic crisis poses a further threat to free trade and universal market access policies and endeavors. In an increasingly interconnected world, no country can realistically afford to be on the periphery when it comes to integration into global value chains.
At the 14th International Economic Forum on Africa hosted by the Organization for Economic Development and Cooperation Development Center on Oct. 6 in Paris, Devex spoke to OECD representatives, African decision-makers and private sector representatives to explore how the international community could best help increase and upgrade the continent’s access to global and regional markets.
Below are six key recommendations that emerged from our conversations.
1. Launch a strategic international dialogue on implementing the African agenda.
During the forum, the African Union Commission and the OECD signed a memorandum of understanding aimed at sustaining high-level dialogue on a pan-African agenda of integration and transformation. In addition, the OECD Development Center launched its Africa Action Plan, which looks at how to implement the African agenda by building on the center’s partnerships and activities with member countries and institutions in Africa.
According to Henri-Bernard Solignac-Lecomte, head of Europe, Middle East and Africa at the OECD Development Center, the MoU and the action plan are “the recognition that there is an African agenda and that it needs to move forward.”
“It’s the starting point of the dialogue we want to have with pan-African institutions [on] how to enter global value chains in a way that is beneficial for African economies and wage-owners [and] looking at what can we learn from the Malaysias, Chiles, Australias or United States’ of this world,” he said.
However, further efforts are needed to effectively engage the private sector in this dialogue.
“The private sector is made up of very pragmatic people – so, if you want to catch their interest, international fora need to move away from theoretic discourse towards more interactive and solution-based discussions,” Mohamed el Kettani, president of the Attijariwafa Bank, told Devex.
2. Explore ‘niche’ sectors and comparative advantages at national level.
The most important precondition at national level for improving African competitiveness, el Kettani noted, is for a state to have “a strategic vision” for its economic future and to identify the sectors where the country has the “highest comparative advantages in the global value chains in order to allow for the private sector to engage with investments.” He highlighted his own country Morocco’s comparative advantage in the production of aeronautical equipment, a sector in which the North African country has become a credible competitor on international markets.
This argument was echoed by Kako Nubukpo, Togo’s minister to the president in charge of long-term strategy and public policy evaluation, who said that African countries could “position themselves on product ranges that Asian markets are slowly but surely abandoning due to the emergence and extension of a middle class among their populations.” Nubukpo gave the successful example of the shoe manufacturing industry in Ethiopia, modelled on the Asian experience in this sector.
Solignac-Lecomte also stressed that the need to diversify production does not always imply moving away from natural resources exports: it may simply involve a “strategic diversification” within the sector by exploring the country’s comparative advantages.
“The example of Chile’s exports moving from copper to pulp to salmon fishing and – to the great despair of the French nation – even to wine, is exemplary in that sense,” he said. “The key is to avoid dependency on one single product.”
3. Address access, financing and capacity gaps through innovative partnerships.
“You cannot industrialize a country and make it competitive on regional and international markets without addressing three key pillars for industrialization: energy and infrastructure problems, access to finance and human capital,” el Kettani pointed out.
This, he said, can only be done through innovative partnerships.
“We are, for example, on the eve of launching the ‘Afrique, Ca Compte’ (Africa Counts) initiative – an infrastructure investment fund of several billion dollars, mobilized by the African Development Bank in order to address Africa’s infrastructure financing needs, estimated at $100 billion a year,” el Kettani revealed.
He further characterized access to finance in Africa as vital for small and micro enterprises or individual entrepreneurs.
“In Africa, the percentage of people holding a bank account is on average only 8 to 15 percent,” el Kettani said. Multilateral banks and institutions, he explained, have all too often focused on supporting the big economic players and only recently started working with private sector actors such as his bank in order to strengthen SME development.
This is also true for Africa’s human capital. According to el Kettani, “the public sector alone cannot shoulder the responsibility of providing access to quality education and training for all.” Both the national and international private sector need to be involved – not least through their ability and interest in making valuable investments in the area of vocational training.
In his native Morocco, for example, the private sector – in collaboration with international and private universities – helped the government elaborate a training strategy to respond to the need for 10,000 qualified engineers per year to make their offshore activities competitive on international markets.
“We need to listen to the private sector when it comes to assessing human capital needs and diversifying labor market skills,” el Kettani said. “Public education policies need to be reoriented towards sectors where Africa has significant needs, such as in the fields of manufacturing, mechanical and electrical engineering, as well as tourism.”
And in his opinion, the international development community has not done enough in this area.
4. Strengthen regional integration by retaining a global outlook.
African countries need to recognize and maximize the potential of their regional markets, not least because they are generally a lot easier to access than international markets. However, one key question remains for Solignac-Lecomte.
“International economic players are already seeing the immense potential of tapping Africa’s market, but will Africa be able to tap its own market?”
Most experts we spoke with recognized that European Union support in the form of knowledge transfer and technical assistance has an added value in this field, due to the EU’s own integration history. Solignac-Lecomte cautioned, however, that such support should not be limited to strengthening supranational institutions, but focus instead on “eliminating trade barriers among neighbor countries,” as it had successfully been done in recent years through the East African Customs Union and the establishment of the Common Market in 2010.
Regional integration must avoid potential incoherencies between regional and international trade rules and frameworks, and Solignac-Lecomte sees a major challenge here.
“Finding African champions for reciprocity in trade relations, in order to foster competitiveness, with a farsighted approach to regional integration is a key challenge we need to work on,” he said.
5. Gradual integration into international markets for ‘win-win’ relations.
Nubukpo explained that key to Africa’s insertion into global value chains is that it is done “in a phased and equitable manner, to allow African countries to gradually prepare their economies for the multiplicity of new ‘shocks’ they will be exposed to.”
In that context, the minister welcomed the EU’s “Everything But Arms” initiative launched in 2001, which gives least developed countries such as Togo full and nonreciprocal duty and quota free access to the EU for all their exports with the exception of arms and armaments.
This is however not the case for most of Togo’s neighboring countries, the minister said. As low- and middle-income countries, they will ultimately have to comply with the World Trade Organization rule of reciprocity – the opening of their own markets to foreign imports.
“Of course, the worst for Africa would be to close its doors to any foreign imports, as we would risk not gaining in productivity and competitiveness, and ultimately losing out in a globalized world,” said Nubukpo. “Rather – as in the case of its partnership agreements with the EU – Africa should be granted the right to phase its entry into reciprocity.”
This implies looking at what sectors can be opened up immediately to international competition and those that would temporarily need to keep a certain level of protection.
Simultaneously, the international aid community should help African countries bring their production capacities up to speed – both in terms of the quantity and quality of their products – in order to meet international standards and compete with foreign products.
The EU in particular could support African countries in their efforts to meet EU sanitary and environmental norms. For example, Nubukpo mentioned how certain products from African countries have had difficulties entering the European market due to the level of pesticides measured by the competent EU authorities. To date, many African laboratories are ill-equipped to undertake these required actions and the minister called for increased EU support in this area.
6. Define a new role for aid to facilitate connectivity and knowledge transfer.
“Aid is not dead, but it needs to change course,” Solignac-Lecomte said. At the 4th High-Level Forum on Aid Effectiveness in Busan in 2011, the international development community agreed to move from aid effectiveness to development effectiveness by promising to focus their aid on facilitating the creation of “global partnerships” and recognizing developing country governments, the private sector and civil society as full partners in development.
But have donors kept their promises?
“We still need to work on changing minds when it comes to the relation between for-profit and not-for-profit actors,” el Kettani noted with a smile. It’s thus time to move away from attitudes of rivalry and mistrust toward a proactive search for collaboration and complementarity.
Indeed, aid could take on a new role as a neutral catalyzer and facilitator of development, with cooperation programs refocused to bring the right actors together to exchange knowledge and expertise, without losing sight of the end goal of poverty alleviation.
As a starting point, this implies ensuring Africa’s connectivity: not only by financing the physical infrastructure needed to bridge the digital divide, but also, as mentioned by el Kettani, by lifting the remaining barriers to allow for the potential of the Internet to be maximized as a tool for “democratizing access to knowledge,” notably by making access to quality online education and learning truly universal.
Devex was a proud media partner of the 14th International Economic Forum on Africa hosted by the OECD Development Center in partnership with the African Union.
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UN meet signs off on biodiversity roadmap amid 2020 target concerns
Delegates meeting under the umbrella of the Convention on Biological Diversity (CBD) on Friday closed a two-week long meet held in South Korea after agreeing to a series of 33 decisions. These form a so-called “Pyeonchang roadmap,” named after the city in which the meetings were held, geared towards enhancing international efforts around biodiversity conservation and sustainable use.
The near 3000 delegates that made the trip to the mountains sought to tackle a wide range of issues. These included finance for biodiversity conservation, national biodiversity action plans, access and benefit sharing regarding the use of genetic resources, guidelines for tackling foreign species imported into new environments, and emerging issues such as synthetic biology.
A high-level ministerial segment held towards the end of last week also resulted in a Gangwon Declaration that calls for links between the work of the CBD and the ongoing post-2015 development agenda process.
This latest CBD Conference of the Parties (COP) took place against a backdrop of stark warnings on the current state of international conservation efforts. At a 2010 gathering, parties agreed to a strategic plan for biodiversity governance covering the period 2011-2020, and outlined a set of 20 targets.
The Global Biodiversity Outlook 4 released at the start of the latest conference disaggregates these, known formally as the Aichi Biodiversity Targets, into 56 elements. The flagship UN report notes that, of the total, only five targets are on track within the 2020 timeframe, 33 are progressing at a slow rate, 10 are stalled, and 5 are moving in the wrong direction.
Conservation organisation WWF also published a study ahead of the meeting suggesting that vertebrate animal populations have declined by around 52 percent over the last 40 years. This includes a 76 percent decline in freshwater species and 40 percent decline in land-based animals.
Braulio Ferreira de Souza Dias, CBD executive secretary and UN Assistant Secretary General, said that this latest COP had nevertheless witnessed governments respond to the dire warnings about the biosphere.
“Parties have listened to the evidence, and have responded by committing,” said Dias on Friday.
“Their commitments show the world that biodiversity is a solution to the challenges of sustainable development and will be a central part of any discussions for the post-2015 development agenda and its sustainable development goals,” he continued, referring to a new set of development goals that are currently being negotiated at the UN. Those latter talks are set to conclude next year.
National plans
Among the agenda items, the Pyeongchang meet featured a mid-term review on progress on the strategic plan and its related Aichi targets.
As part of this work, delegates discussed progress around parties’ national biodiversity strategies and action plans (NBSAPs), with a number of countries stepping forward to showcase their efforts.
A final decision in this area urges parties to review and update their national plans, if they have not yet done so. Requests are also made for further capacity-building support, especially for developing countries, and for these nations to make clear their technical and scientific needs in this area.
Last week also saw the Korean government launch a new platform, dubbed the “Bio-Bridge Initiative,” which aims to link developing countries’ need for biodiversity-related science and technology with developed countries’ provisions.
Finding funds
As part of the overall Pyeongchang outcomes, a deal was eventually struck on the implementation of a biodiversity aid commitment to developing countries, and particularly least developed countries (LDCs) and small island developing states (SIDS), after reports of a near-stalemate among representatives.
At the previous CBD biennial meet held in Hyderabad, India in 2012, governments outlined a plan to double biodiversity-related finance to be maintained at such a level until 2020.
However, consensus on details such as the baseline year for measuring this target had remained inconclusive until last week. Parties have now agreed to use average annual biodiversity funding for the years 2006-2010 as a reference point.
The decision on resource mobilisation also calls for at least 75 percent of CBD parties with adequate resources to have prepared national finance plans for biodiversity by next year. In addition, parties are encouraged to fully mobilise domestic financial resources from all sources, in a bid to address the gap between needs and available funding.
This latter reference allegedly faced some opposition by larger developing economies, fearful that it would absolve developed countries from historic responsibilities.
An estimated US$36-50 billion is currently spent each year on tackling biodiversity challenges across the globe.
However, a report released at the conference by a high-level UN panel tasked with examining resources for biodiversity governance confirmed that gaps remain in all countries and regions between funds needed and those available to shore up biodiversity loss before the end of the decade. The study also said that the benefits of investing in sustainable biodiversity use would outweigh the costs.
Achim Steiner, Executive Director of the UN Environment Programme (UNEP) last week warned of the costs of not stemming the rate of biodiversity loss.
“The cost of inaction to halt biodiversity decline would give rise to increasing and cumulative economic annual losses to the value of around US$14 trillion by 2050,” the UN environment chief said, while also welcoming efforts made in Pyeongchang to put biodiversity conservation on a stronger footing.
Meanwhile an annex to the Pyeongchang decision in the finance area sets out a timeline for implementing the third Aichi target, geared towards tackling economic incentives such as subsidies that are known for having a harmful impact on biodiversity. The latest text says policy or legislative action should be taken by 2016, including national studies identifying subsidies ripe for elimination, with plans for doing so finalised by 2018.
Nagoya Protocol
Among the landmark events of the latest CBD meeting was the much-anticipated entry into force of the Nagoya Protocol on Access to Genetic Resources and the Fair and Equitable Sharing of Benefits Arising from their Utilization (ABS). A total of 54 parties have now ratified the protocol and last week saw the first Meeting of the Parties (MOP) held.
Clinched after late-night negotiations at the 2010 CBD meet in Japan, the instrument seeks to flesh out a legally binding framework for determining how users, providers, and stakeholders each access genetic resources and how the benefits derived from their commercialisation are then shared back to provider communities.
Genetic resources are defined by the UN body as genetic material from plants, animals, and microbes that contain the functional units of heredity. These resources, along with biological compounds derived from them, are often heavily used and traded in a range of pharmaceutical, health, cosmetic, and agricultural products.
When research and development are conducted on these genetic resources, the Nagoya rules require benefit sharing from the eventual gains.
Progress was made last week towards putting in place a compliance committee for the Nagoya Protocol. This would, in theory, help countries develop effective systems of user measures to ensure their researchers have permission to access genetic resources from foreign provider countries. An annex to a decision made last week sets out compliance procedures and mechanisms, including how to evaluate cases of non-compliance.
Despite a push by a group of developing countries and indigenous and local community representatives (ILCs), an ABS ombudsman will not be created at this time. However, it was agreed that the CBD Secretariat could review information received from ILCs about cases of non-compliance against information received from parties. Participants also called on the CBD Secretariat to help facilitate at least one meeting of the compliance committee before the next MOP.
As a further transparency measure, the MOP established an ABS Clearing House that had been in a pilot test phase in recent months. The Clearing House would receive certificates of compliance from competent national authorities of parties to the Nagoya Protocol. These certificates will indicate when genetic resources have been accessed with permission and under what conditions, helping those researchers involved avoid claims of biopiracy – in other words, a genetic resource has allegedly been misappropriated.
Ahead of the meeting, some experts had warned that delegates assembled for the first Nagoya Protocol meet would have their work cut out for them.
For example, the decision on the need for and modalities of a Global Multilateral Benefit-Sharing Mechanism (GMBSM) took the form of a “gap analysis” seeking further information from parties, ILCs, and experts about how to handle transboundary genetic resources, widely held traditional knowledge, and related issues.
Invasive alien species
One specific trade-related move at the Pyeongchang meet was an agreement on guidelines to help address the challenges posed by invasive alien species (IAS), specifically in relation to animals traded as pets, for aquariums, as live bait, or as food.
Various forms of fauna and flora are increasingly crossing borders and traded for a range of reasons, finding new homes in foreign habitats and presenting a threat to the ecological balance when they do so. Some estimates pin the damage to the global economy caused by invasive species, for example crop damage due to foreign pests, at US$1.4 trillion.
The new voluntary rules will help parties towards achieving the ninth Aichi target that calls for an identification, control, and eradication of IAS introductions by 2020.
The guidelines fill a gap in the governance of IAS and offer standards that national or relevant authorities could use to develop codes of conduct in this area.
A related decision on the establishment of a Global IAS Information Partnership emphasises the need to work alongside other organisations, such as the UN Food and Agriculture Organization (FAO), recognising several existing organisations and agreements that regulate risks associated with trade in wildlife and plants. The CBD Secretariat is also invited to explore with standard-setting partners, including those recognised by the WTO, ways to identify risks posed by IAS sold via online transactions.
Synthetic biology, biosafety
Among the latest issues the CBD and its protocols have had to tackle is the question of synthetic biology, a research area underpinned by several fields of biotechnology and biomolecular sciences. This involves not just sequencing DNA, but also fabrication of DNA from biochemical compounds, with the potential to produce synthetic life forms.
Parties at this latest CBD meet debated over the distinctions between synthetic biology and genetic modification of organisms, an issue covered by the CBD’s other instrument known as the Cartagena Protocol on Biosafety. The Parties noted that these new fields raise questions around biosafety, as well as whether entities have obligations to share benefits from a synthetic product that reproduces genetic resources.
While delegates disagreed in Pyeongchang over whether synthetic biology is an emerging issue that the CBD should tackle, participants nevertheless agreed to establish an ad hoc technical expert group in this area.
The body will help parties evaluate whether and how synthetic biology products should be regulated. Divisions currently exist as to whether these should be governed at the national, regional, or international level, including in relation to risk assessment and risk management procedures. In the meantime, the latest COP decision highlights a precautionary approach to the environmental release of any organisms, components or products resulting from synthetic biology techniques, until further research and risk assessments can be undertaken.
The CBD COP was preceded by the seventh Meeting of the Parties to the Cartagena Protocol in the first week of October, where delegates signed off on 14 decisions involving areas of compliance, financial mechanism and resources, and the handling, transport, packaging, and identification of living modified organisms (LMOs). The occasion also saw discussion on draft guidance for risk assessments in relation to LMOs but a decision in this area was put off to the next MOP.
Coral reefs, marine biodiversity
Among the more challenging areas facing the CBD is work related to ocean conservation and marine ecosystem damage.
In its analysis of the Aichi targets, the meeting’s Global Biodiversity Outlook 4 report described the deadline set to reduce pressures on coral reefs by 2015 as “certain to be missed.” Destructive fishing practices, overfishing, pollution, and climate change are all identified as potential obstacles to achieving progress in this area. The report also points to the rapid depletion of certain fish stocks as a significant challenge.
In addition, last week’s meeting saw the CBD Secretariat release a report placing a price tag on the impacts of ocean acidification, a phenomenon triggered by high rates of carbon dioxide absorption, and known to be particularly harmful for coral reefs.
The report suggests that the change in acidity could cause damages of nearly US$1 trillion per year by 2100 in particular due to the destruction of marine ecosystems many communities rely on for livelihoods.
The COP noted that the coral reef Aichi target will not be achieved and took a decision on priority actions in this area. These include requests for the CBD Secretariat to organise capacity-building workshops in relation to implementing actions in this area, as well as develop a global coral reef portal to encourage technical collaboration.
Participants also continued discussion in Pyeongchang on work describing ecologically and biologically significant marine areas (EBSAs). This has been controversial in the past due to questions around other international processes. The final decision invites individual governments to use the scientific information available on EBSA criteria but does not suggest further transboundary cooperation.
Biodiversity for sustainable development?
In the Gangwon Declaration, adopted during a two-day high level segment, ministers invited the UN General Assembly to consider integrating the Aichi targets into the post-2015 development agenda.
This past July, a specialised UN group put forward a list of proposed sustainable development goals for consideration by UN members as part of the new development framework.
Biodiversity, with references to CBD-relevant objectives such as ensuring access and benefit sharing in relation to genetic resources, ensuring ecosystem conservation, tackling IAS, and conservation of marine resources, are included in the proposal’s draft goals 14 and 15.
As delegates leave the Pyeongchang meet behind, much work remains on the road ahead at a number of levels. The next COP and the meetings of its protocols will be held in Mexico in 2016.
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Seychelles’ membership terms agreed – next stop: General Council
WTO members negotiating Seychelles’ accession agreed on the terms of the country’s WTO membership on 17 October 2014, concluding 18 years of negotiation. This decision still requires the formal approval of all 160 WTO members in the General Council in December.
Being a WTO member means a balance of rights and obligations:
- The right to enjoy liberalized trade based on multilateral rules with other WTO members and to use the WTO’s dispute settlement system; and
- The obligation to apply WTO rules and to open its markets according to the membership deal.
Seychelles’ draft accession package, spelling out the country’s terms of membership, contains:
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the draft Working Party Report outlining its reformed trade regime and its commitments as a WTO member to ensure conformity with WTO rules;
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Seychelles’ draft market access concessions and commitments on goods and specific commitments on trade in services (contained in “schedules”);
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a draft decision by the WTO’s General Council, the WTO’s top decision-making body after the Ministerial Conference; and
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Seychelles’ draft Protocol of Accession (document to be signed by WTO Director-General Roberto Azevêdo and Seychelles’ Government representative following the December General Council session, subject to domestic ratification).
“I welcome the hard work undertaken by WTO members and the Government of Seychelles to complete this accession process”, WTO Director-General Roberto Azevêdo declared. “It is particularly timely as the world is marking the International Year of Small Island Developing States. The WTO provides a vital platform for small economies like Seychelles to make their voice heard at the global level. I am confident that joining the WTO will prove to be a big step forward for the development of the Seychelles and their integration into the global economy.”
H.E. Pierre Laporte, Minister of Finance, Trade and Investment for Seychelles, said: “WTO membership was an extremely important step forward for Seychelles. Accession was only a stepping stone for us to pursue our reforms. In fact, reform was an on-going process. In addition, our efforts during the accession process had enhanced and strengthened [Seychelles'] regulatory framework and trading system, WTO Membership will provide Seychelles with a platform to continue to reform its trade regime. It will open Seychelles' economy further to the benefits of a more open trading system and complement Seychelles' efforts toward further integration both in the region and the multilateral trading system.” His opening and closing remarks are available here.
Working Party Chairperson Ms Hilda Al-Hinai stated: “Seychelles’ WTO accession is a strong, positive and clear signal to its trading partners, including to other Small Island Developing States, for its commitment to engaging with the global economy in the framework of the rules-based multilateral trading system.”
Overview of Seychelles’ commitments
The quality of the accession accord of Seychelles provides significant improvements in market access opportunities for all WTO Members, under the Most-favoured-nation principle under which countries cannot discriminate between their trading partners. Taken together, its commitments further liberalize its trade regime and provide impetus for its continued integration in the global economy. The deal also offers a transparent and predictable environment for trade and foreign investment, ensuring fair competition and increased consumer welfare.
Market access for goods and services
As part of the accession negotiations, Seychelles concluded eight bilateral agreements on market access for goods and nine bilateral agreements on market access for services.
On goods, Seychelles has undertaken tariff concessions and commitments that “bind” tariff rates for all products on average at 9.5 per cent. For agricultural products, this average is 16.9 per cent while for non‑agricultural products the average is 8.3 per cent.
Seychelles committed to join the Information Technology Agreement (ITA) upon accession, a WTO plurilateral agreement providing for participants to completely eliminate duties on IT products covered by the ITA Agreement.
On services, Seychelles has made specific commitments in 11 services sectors, including 97 sub‑sectors.
Bilateral Deals
Seychelles’ bilateral market access deals were:
On goods with: Canada, the EU, Japan, Mauritius, Oman, South Africa, Thailand and the US.
On services with: Canada, the EU, Japan, Mauritius, Oman, South Africa, Switzerland, Thailand and the US.
Following the conclusion of all bilateral market access negotiations between interested Members and the acceding government, the WTO Secretariat consolidates the results of all concluded, signed and deposited bilateral agreements into a Schedule of Concessions and Commitments on Goods (“Draft Goods Schedule”) and a Schedule of Specific Commitments on Services (“Draft Services Schedule”). The Schedules are the “Final Market Access Offers” by the acceding governments which, when adopted, become available to all WTO Members.
Rules Package
On its rules Package, Seychelles’ Accession Working Party Report contains 40 specific commitment paragraphs. From the date of accession, Seychelles has committed to fully apply all WTO provisions with recourse to transitional periods only for sanitary and phytosanitary measures (food safety and animal and plant health), technical barriers to trade (product standards and certification) and transparency. Seychelles will initiate negotiations to accede to the Government Procurement Agreement within 12 months of its accession, a WTO plurilateral agreement covering the procurement of goods, services and capital infrastructure by Governments and other public authorities.
Further accession-specific commitments
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State-owned and State-controlled enterprises will make purchases and sales which are not for the Government’s own use in accordance with commercial considerations. Companies from other WTO members will be afforded adequate opportunity to compete for participation in purchases or sales of Seychelles’ State enterprises. Seychelles will notify any of its enterprises falling within the scope of the Understanding on the Interpretation of Article XVII of the GATT 1994.
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Seychelles will make sure that any price control measures that the Government introduces would be applied in a WTO-consistent fashion, including by taking account of the interests of importing and exporting WTO Members.
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Seychelles will ensure that business entities are not hindered by anti-competitive practices in their respective markets and that the benefits derived from effective competition are sustained. Seychelles will also ensure that the market is fair, accessible, efficient, and sustainable through increased consumer welfare and improved consumer awareness.
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Seychelles will provide for the right to appeal administrative rulings to an independent tribunal on WTO matters, including those on trade regulations, subsidies, customs valuation, intellectual property rights and domestic regulation in services.
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Sub-central authorities have no autonomous authority over issues of subsidies, taxation, trade policy, or any other measures covered by WTO provisions. Provisions of the WTO Agreements, including Seychelles’ Protocol, will be applied uniformly throughout its Customs territory and other territories under its control, including in regions engaging in border trade or frontier traffic, special economic zones, and other areas where special regimes for tariffs, taxes and regulations were established. When apprised of a situation where WTO provisions are not being applied, or are applied in a non-uniform manner, the central authorities will act to enforce WTO provisions without requiring affected parties to petition through the Courts.
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Any natural or legal person, regardless of physical presence or investment in Seychelles, will be granted the right to be the importer of record.
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All other duties and charges (ODCs) are bound at zero in Seychelles’ Schedule of Concessions and Commitments for Goods (Goods Schedule).
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Import tariff rate quotas, if introduced, will be administered in compliance with WTO rules.
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Fees and charges for services rendered by the Government will be applied in accordance with WTO rules and information regarding the application and level of such fees will be published.
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Seychelles will apply its domestic taxes in a non-discriminatory manner to imports regardless of country of origin and to domestically-produced products.
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Seychelles will not apply quantitative restrictions on imports or other non-tariff measures – such as licensing, quotas, prohibitions, bans and other restrictions – having equivalent effect, without justification under WTO rules. Import prohibitions and restrictions will be administered in compliance with WTO rules.
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Seychelles will apply its customs valuation laws, regulations and practices, including those to prevent under-valuation of goods, in conformity with WTO rules.
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WTO rules on rules of origin, preshipment inspection, trade-related investment measures, free zones and the transit of goods will be applied in accordance with the relevant WTO provisions from the date of accession.
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Trade remedies: upon accession, Seychelles will apply anti-dumping, countervailing and safeguard measures in accordance with WTO rules.
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Seychelles will apply all fees and charges for services rendered to exports in accordance with WTO rules. All laws and regulations governing export measures, including prohibitions, export licensing requirements and other export control requirements will be applied in accordance with the relevant WTO provisions from the date of accession. Seychelles will not provide any subsidies prohibited under the WTO Agreement on Subsidies and Countervailing Measures.
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Any subsidy programmes in place or established after accession within the territory of Seychelles would be administered in conformity with the WTO Agreement on Subsidies and Countervailing Measures. Upon accession, Seychelles will provide a subsidy notification to the Committee on Subsidies and Countervailing Measures.
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Seychelles will progressively implement the provisions of the WTO Agreement on Technical Barriers to Trade and the WTO Agreement on Sanitary and Phytosanitary Measures. Full implementation shall be completed by December 2015.
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Seychelles will not maintain or apply any export subsidies for agricultural products. Agricultural export subsidies are bound at zero in Seychelles’ Schedule of Concessions and Commitments on Goods.
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Upon accession, Seychelles will start negotiations to join the WTO purilateral Agreement on Trade in Civil Aircraft.
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Seychelles will apply the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights from the date of its accession to the WTO. Upon accession, Seychelles will also notify the establishment of a centralized Intellectual Property Office (IPO) – a “one‑stop shop” for the promotion and simplification of registration requirements of patents, trademarks and copyrights. Seychelles will join the International Union for the Protection of New Varieties of Plants (UPOV) before the end of 2015.
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Transparency: Seychelles will submit the initial notifications required by the WTO Agreements upon accession. All laws, regulations or other measures related to trade would be promptly published and notified. Within two years of accession, Seychelles will establish a website – easily accessible to WTO members, individuals and enterprises – on which it will publish all regulations and other measures pertaining to or affecting trade in goods, services and TRIPS prior to their enactment. Seychelles will provide a reasonable period of no less than 30 days for comments on trade regulations/laws. Seychelles will also provide periodic reports to WTO members on developments in its programme of privatization. In relation with trade in services, Seychelles will publish all laws, regulations and other measures, as well as a list of all organizations responsible for authorizing, approving or regulating services activities for each services sector.
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Seychelles will observe all WTO provisions in its participation in preferential trade agreements, and will adhere to notification requirements related to free trade areas, customs unions and other preferential trade arrangements.
Next steps
Seychelles’ accession package will be forwarded to the General Council – to be held in December 2014 – for formal adoption by all 160 WTO members.
The final step before Seychelles becomes a WTO member would be the ratification of the Accession Package by Seychelles’ Parliament by 1 June 2015.
Seychelles will become a full-fledged member 30 days after it notifies the WTO of the ratification.
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Uganda says oil revenue possible alternative to Chinese cash for railway
Uganda could rely on income from future oil exports to finance an $8 billion railway if funding talks with China fail to bear fruit, its president said.
Yoweri Museveni confirmed that Uganda had started negotiations with China on building the line that would link to Kenya, speeding up freight transport in the region. He gave no details about how far the talks had progressed.
“But if they don’t (offer financing), we shall fund it ourselves,” Museveni told Reuters on Monday on the sidelines of an African investment conference in London.
“Remember we have our oil, which we shall start harvesting in 2017, and that money will deal with these projects – railway and electricity... China or no China, we shall build that railway.”
The new line would run from the Kenyan border to Kampala, then north to South Sudan and west to the oil fields. It would supersede a narrow gauge line that now only operates to Kampala. The existing line, on which trains travel more slowly, has suffered from years of neglect. Most freight in Uganda goes by road.
Uganda believes that getting finance from China, which is helping build Kenya’s new railway, would be cheaper than tapping international markets.
Uganda found commercial oil reserves in 2006 but production start dates have repeatedly been pushed back, partly because of disagreements with oil firms over whether to refine the crude in Uganda and partly due to the challenge of exporting from the landlocked nation.
Uganda was deemed to have commercially viable quantities of oil when recoverable reserves reached a threshold of 800 million barrels, a Ugandan official said. That figure has now reached 1.4 billion barrels and the discovery of oil in Kenya has made building a pipeline across both states more viable.
Oil prices, which have slipped from more than $110 a barrel in June to well below $90 a barrel, affect viability though falls can be addressed in production contract terms that ensure returns for firms are enough to keep projects going.
Uganda wanted a refinery built with capacity to process 120,000 barrels per day (bpd), a plan oil firms said was not commercially viable. Both sides have since agreed to a refinery with initial capacity of 30,000 bpd, rising to 60,000 bpd later.
Uganda has signed up to a proposal with Kenya to build a pipeline running to a planned oil terminal on the northern Kenyan coast.
Separately, the president shrugged off concerns about the Somali militant group al Shabaab, after it vowed more attacks on countries such as Uganda which contribute troops to an African peacekeeping force in Somalia.
“Al Shabaab is not a danger to Uganda because it can’t take root in Uganda,” he said. “They are not supported by the population.”
“They are just a threat if they are not attended to,” he said.
The al Qaeda-aligned group, which promised more attacks after U.S. missiles killed its leader in September, bombed sports bars in Kampala in 2010, killing 74 people. Last year, the group launched a deadly attack on a shopping mall in Kenya, another contributor to the African peacekeeping force.
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WTO helps developing countries adjust to major shifts in trading environment
The WTO has played a key role in helping countries adjust to four recent trends that have considerably altered the relationship between trade and development, according to the latest edition of the WTO’s flagship publication released on 20 October 2014 in Geneva. Director-General Roberto Azevêdo, in marking the launch of the report, said that “the emerging trends highlighted in this report suggest that trade will be a major force for development in the 21st century”.
The World Trade Report 2014 argues that the WTO has enabled developing countries to take advantage of, adapt to and mitigate risks arising from these trends. It has done so by ensuring that countries take binding commitments which increase certainty over their trade policies, by providing flexibilities that better allow developing countries to undertake such commitments, and by facilitating technical assistance to build trading capacity within those economies.
In addition, countries undertaking substantial reforms related to WTO accession were found to grow around 2.5 per cent faster for several years afterwards, the report notes.
The World Trade Report 2014 identifies these four trends as:
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the rise of the developing world;
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the expansion of global value chains;
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the higher prices of commodities; and
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the increasingly global nature of macroeconomic shocks.
“We have entered a new era in the link between trade and development,” Director-General Roberto Azevêdo said in marking the launch of the report. “Driven in large part by trade, some developing economies have made remarkable progress in recent years, but much still needs to be done to close the gap for many poor economies.”
“The potential of trade in supporting development has not yet been fully realized,” he continued. “However, the emerging trends highlighted in this report suggest that trade will be a major force for development in the 21st century. The WTO’s work is therefore more important than ever. We must continue to deepen our understanding of these issues to ensure that developing countries can reap the benefits of trade more fully in the years to come.”
The report shows how trade contributed significantly to the unprecedented economic development that has taken place since 2000. Trade has allowed many developing countries to benefit from the opportunities created by emerging new markets, to integrate into the world market through global value chains at lower costs, and to reap the rewards from higher world commodity prices.
The WTO has underpinned this progress by providing certainty, thereby creating the predictable environment that allowed economic activity to flourish. In addition, it helped contain protectionism in the face of the greatest economic crisis in 70 years, thus helping to safeguard the economic gains made by developing countries in the recent past.
Director-General Roberto Azevêdo says in his foreword to the report:
“In December 2013, WTO members took a series of decisions in Bali that, when implemented, will help poor countries realize their export potential and sustain the development momentum created in the past decade. In addition, trade ministers tasked WTO members to develop a post-Bali work programme on the remaining Doha Development Agenda issues by the end of 2014. In highlighting how the relationship between trade and development has changed since the start of the millennium, this Report provides food for thought for WTO members. It shows again the importance of our work in updating the WTO’s rules, disciplines and flexibilities, and it illustrates some of the challenges that we will need to address if we are to ensure that all countries are able to participate fully in the global economy in the years to come, and that people all over the world are able to feel the benefits of trade in improving their lives and the prospects of their families and communities.”
Main points of the Report
Rise of the developing world
Incomes in developing countries have been converging with those of rich countries. Since 2000, GDP per capita of developing countries has grown by 4.7 per cent, with developing country G-20 members performing particularly strongly. Meanwhile developed countries only grew by 0.9 per cent. As a result, developing countries now account for more than half of world output (in purchasing power parity terms).
Higher GDP per capita helps to achieve other societal objectives, such as reducing poverty and protecting the environment. Given that more trade is associated with faster growth, trade can make it easier to achieve these goals.
Expanding trade underpinned these gains in income. The share of developing countries in global trade rose from 33 per cent to 48 per cent since 2000.
Over the last couple of decades, developing countries as a whole have reduced MFN tariffs, enabling this trade expansion. Average reductions of MFN tariffs have been greater in G-20 developing countries.
Increasing participation of developing countries in global value chains
Developing countries are increasingly involved in international production networks, including through services exports. More than half of their total exports in value-added terms are now related to global value chains (GVCs). South-South global value chain linkages are becoming more important with the share of GVC-based trade between developing countries quadrupling over the last 25 years.
GVCs offer an opportunity to integrate in the world economy at lower costs. GVC participation can lead to productivity enhancements through technology and knowledge transfers. Countries with high greater GVC participation have experienced higher growth rates.
But gains from GVC participation are not automatic. Many developing countries join GVCs by performing low-skill tasks where value capture is low and achieving upgrading to higher value tasks can be challenging.
Countries with a favourable business environment and low tariffs participate to a greater extent in GVCs. In addition, GVCs are associated with “deep integration” agreements: more than 40 per cent of free trade agreements in force today include provisions related to competition policy, investment, standards and intellectual property rights.
Obstacles for developing countries seeking to participate in GVCs include infrastructure and customs barriers. Directing Aid for Trade resources toward these objectives should therefore remain a priority.
Higher commodity prices
Prices for food, energy, metals and minerals roughly doubled since 2000. Although prices have eased back from these historical highs, strong demand from large developing countries provides a strong reason to believe that the high-price environment is likely to stay.
The challenges and opportunities arising from high prices differ significantly across countries. In many developing countries the agricultural sector is important in terms of employment, production and consumption. This suggests an important role for agriculture in development strategies in the developing world. But higher prices pose challenges for net importers of these goods.
Developing countries increased their market share in global agricultural exports from 27 to 36 per cent since 2000. But traditional market access barriers such as tariffs and subsidies continue to affect their exports and non-tariff measures are playing an increasingly important role.
Trade in natural resources has also grown strongly, not only in value terms but also in terms of volume. Several resource-rich countries have achieved high growth as a result, but the social and environmental impacts of natural resource extraction as well as economic diversification remain significant challenges.
Increased synchronization in and globalization of macroeconomic shocks
Global trade value fell by over 30 per cent within only a few months in face of the global economic crisis. This 2008-09 trade collapse and quick subsequent recovery revealed the dependency of developing economies on cyclical developments originating in large developed economies. The synchronization of downswings and upswings across the world illustrated the strong inter-connectedness of economies through trade and financial links, in particular the role of supply chains in the propagation of shocks, and the importance of trade finance, which had dried up.
Despite suffering the greatest economic downturn since the 1930s, the world did not see a repeat of the wholesale protectionism which marked that previous era. Explanations for this include the existence of a set of multilateral trade rules, the effectiveness of monitoring efforts by the WTO, countries’ anticipation of the self-harming impacts of protectionism in light of their participation in global value chains, and the internationally coordinated macroeconomic response in light of the crisis.
WTO and development
The WTO has underpinned the progress made by many developing countries by allowing them to take advantage of, adapt to and mitigate risks arising from the four trends identified in this report. It has done so through binding commitments, flexibilities, technical assistance, and its institutional infrastructure.
Commitments under the WTO are important for developing countries to promote their trade and development. Countries undertaking substantial reforms in the context of WTO accession were found to grow 2.5 per cent faster for several years thereafter. At the same time, developing countries need flexibilities because their economic circumstances can hamper their ability to implement obligations.
Development is a fundamental objective of the WTO. The agreement reached in the Bali Ministerial Conference in December 2013 is a positive step in advancing this objective and offers many opportunities for developing countries. To make trade work more effectively for development, further progress on the Post-Bali Agenda would be important.
The four trends show that trade is one of the key enablers of development. Trade has played a central role in lifting millions of people out of poverty in recent years and helped to achieve many of the UN millennium development goals (MDGs). The WTO and its rules should be seen as an integral part of the enabling environment for realizing any post-2015 development agenda.
WTO Director-General Roberto Azevêdo Opening Remarks
Good morning everybody. Welcome to the WTO. Thank you for being here this morning.
I am delighted to officially launch the 2014 World Trade Report.
I’d like to start by thanking Robert Teh and his team for their hard work. I followed the process closely and saw the degree of effort and commitment that they put into it. So thank you, and congratulations on this excellent report.
I think this is a very important document.
It contributes significant further evidence of the essential role that trade plays in supporting economic growth and development.
Indeed, I think we have entered a new era in the link between trade and development.
There is a much greater appreciation today of just how important trade can be in economic strategic planning.
We see it here in Geneva, as developing countries are now among the biggest advocates for this organization.
And I see it when I visit those countries and see the work that is being done in so many places to integrate further into the global trading system.
I think it was very telling that a recent study of public opinion found that, across the globe, it is the African people who have the most positive view of trade today.
So with this report, we have gone beyond simply making the argument that trade supports development.
We have taken the opportunity to delve a little deeper and look at how the relationship between trade and development is evolving over time. More than that, we look into how we trade today.
The report identifies four major trends since the turn of the millennium which we think have considerably altered the relationship between trade and development, and the way we do business across borders.
First, is the rise of the developing world in the global economy.
Deeper integration of many developing countries into the global trading system has gone hand in hand with rapid economic growth. This has allowed them to reduce levels of absolute poverty for millions of their citizens and improve the quality of so many peoples’ lives.
The second trend that we looked into is the growing role of developing countries in global value chains, providing them with easier entry to international trade flows and at much lower cost.
Developing countries now account for half of intermediate goods trade – which is a standard measure of global value chains. And south-south trade accounts for a quarter.
The evidence shows that participation in GVCs is associated with higher levels of productivity and income.
But of course access to GVCs is not automatic.
Unlocking their development potential can pose a series of challenges for many countries – and I will come back to this in a few moments.
The third trend is the higher prices of agricultural and natural resources.
This has bestowed significant benefits on commodity exporting developing countries.
Higher prices for agricultural goods bring broad-based development benefits because the sector employs more than half of the labour force in developing countries.
The final trend that the report discusses is the increasingly global nature of macroeconomic shocks as a result of this greater interconnectedness.
Trade can be a transmitter of shocks, but it is also a source of diversification. And the existence of multilateral trade rules provides an important safeguard.
In 2008, despite suffering the greatest economic downturn since the 1930s, the world did not see a repeat of the wholesale protectionism which was experienced during the Great Depression.
Such a response could have wiped out much of the economic gains achieved by developing countries since the beginning of the millennium.
But, of course, this did not occur. Disaster was averted.
The WTO’s rules-based system and its monitoring of members’ trade policies acted as a bulwark against an outbreak of protectionism.
Indeed, the existence of the WTO has allowed developing countries to take advantage of, adapt to, and mitigate risks arising from each of these four major trends.
It has done so by:
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enabling countries to take binding commitments which increase certainty over their trade policies,
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applying rules which offer a more equitable playing field (although improvements can still be made) and also a predictable global trade environment,
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providing flexibilities that better allow developing countries to undertake such commitments,
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facilitating technical assistance to build trading capacity within those economies,
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providing a way to settle disputes in a fair, open manner, and
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providing a forum to negotiate further commitments and updated rules.
One very important finding is that countries undertaking substantial reforms related to WTO accession were found to grow around 2.5 per cent faster for several years afterwards.
So the economic changes we have seen since the late 1990s underline the fact that an open, non-discriminatory, rules-based multilateral trading system is a necessary tool to make trade work more effectively for development.
However, the story of development is a never-ending one and significant challenges remain.
Average per capita income in LDCs is 4% – just 4% – of that in developed countries.
So while many poor economies have made significant progress during the period surveyed by the Report, much still needs to be done to close the development gap. The gains from trade and from the trends I have outlined cannot be taken for granted.
For example, while global value chains have a largely positive effect, they also present real challenges for developing countries. Moving up the chain is difficult even for middle income countries – giving rise to the idea of what some call the “middle income trap”. Even more fundamentally, a large number of LDCs still have a very long way to go before they can meaningfully participate in these value chains.
Turning to high commodity prices, while they are a boon to exporters, they pose a real challenge for net food importers, many of which are LDCs.
Much more remains to be done, especially in the poorest countries, to leverage their agricultural potential.
The state of global demand – bolstered by strong demand from emerging economies – suggests that prices of agricultural goods and natural resources will remain strong in the foreseeable future. But there are always risks of a reversal – and we are seeing some of that already in the energy sector.
One way the agriculture and commodity exporting countries in the developing world could continue to make progress would be if levels of agricultural protection and subsidies were reduced.
Over the past two decades a lot of the energy on trade negotiations has been focused on bilateral and regional trade initiatives.
But – though they are welcome – these initiatives cannot meaningfully address the problem of agricultural subsidies, not to mention numerous other horizontal issues.
In our view, the multilateral approach is the preferred approach. It is the best approach we have.
And this is why our breakthrough in Bali last December was so important.
Ministers from every WTO member finally took a major step in updating multilateral rules by unanimously agreeing to the so-called Bali Package.
The 10 decisions which make up the package have economic significance by themselves – particularly for developing countries – but together they also opened a new chapter for multilateral trade negotiations.
In this way the success of Bali created new momentum for further negotiations. It has the potential, still, to change the game.
However, WTO Members are now facing a considerable challenge in implementing what they agreed.
At present we don’t have a solution to the current impasse in our negotiations. We are working hard to find one.
But, as I told all WTO members last week, we have a responsibility to those who sent us here to Geneva to find ways to continue our work and to keep moving forward, while still looking for a way out of the impasse.
And this Report shows that, if cannot make progress, the biggest losers will be the people in the developing world.
They stand to lose the most in terms of forgone opportunities.
Trade has made a huge difference in the lives of countless people in developing countries in recent years and it has the capacity to deliver more developmental benefits in the future.
The international community understands the need for a continued and unrelenting focus on development. That’s why they are mobilizing their efforts and resources behind the UN’s post-2015 development agenda.
And I think the World Trade Report underlines that trade should be a central part of this agenda – and that it should feature in the sustainable development goals which are currently being discussed in New York.
So trade and the trading system have a great deal to offer.
Of course trade growth has been slow in recent years – due largely to the sluggish and uneven pace of macroeconomic recovery.
On current forecasts, 2014 will be the third straight year of below-average trade growth. And we don’t expect this story to change in 2015.
But this isn’t a situation that we have simply to accept. We can do something about it.
This slowdown could be partly remedied if we agreed on and implemented new agreements to underpin trade integration.
As this report shows, the reforms to international trade rules which were agreed 20 years ago have played a major role in the broad economic expansion that we have seen since then.
But over time the productivity gains from those reforms are gradually disappearing.
We are living off the liberalization and reforms of the past.
We need to update the rules and implement a new generation of trade reforms which would be so essential for development.
Although this report shows the contribution that trade has made to development, it also shows that the potential of trade in supporting development has not yet been fully realized.
The emerging trends we are seeing – and which you will see in the report – suggest that trade will be a major force for development in the 21st century.
So let’s do everything we can to make sure that is the case.
Thank you for listening.
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UN meeting seeks reform of investment treaties
More than 50 high-level representatives from governments, the private sector and civil society convened in Geneva, Switzerland on 16 October to address the challenges arising from international investment agreements (IIAs) and consider ways to reform the international investment policy regime at a UN meeting held during UNCTAD’s World Investment Forum at the Palais des Nations.
The meeting took place against the backdrop of growing dissatisfaction regarding the more than 3,000 existing IIAs, as well as public debate surrounding so-called “mega-regional” agreements such as the Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP).
Existing treaties, and negotiations for new ones, have come under criticism, with opponents arguing that they constrain governments’ regulatory powers and give excessive rights to international corporations. According to UN records, investors’ use of such treaties has led to more than 560 international arbitrations against governments, often resulting in awards of significant financial compensation. “UNCTAD offers a unique platform for exchange for all countries engaged in the process of improving their investment regime,” Mr. Rupert Schlegelmilch, Director of the European Commission’s Directorate in charge of international investment negotiations, said.
Participants of the high-level meeting called upon the UN body to look into comprehensive reform of the IIA regime.
“UNCTAD provides the policy know-how for moving from the traditional investor-centric model to the new sustainable development model”, Ms. Niki Kruger, Chief Director, International Trade and Economic Development Division, Department of Trade and Industry (DTI), South Africa, a country that has faced international investor claims challenging a number of post-apartheid policies, and has since officially withdrawn from some IIAs.
Reforms suggested by UNCTAD would support governments when updating their model agreements and when negotiating new IIAs. They could also guide regional and inter-governmental organizations and arbitration institutions in their reform efforts.
“Comprehensive reform of the IIA regime would bring on board all countries and result in a new international investment regime that effectively fosters sustainable development,” Mr. James Zhan, Director of UNCTAD’s Division on Investment and Enterprise, said.
Channelling investment to the sustainable development goals (SDGs) is today’s central policy challenge, and the overarching theme of the World Investment Forum that hosted the IIA Conference.
“It is paramount that reform efforts are inclusive and transparent,” said Ms. Nathalie Bernasconi-Osterwalder, Director of the Economic Law and Policy Group of the International Institute for Sustainable Development (IISD), one of the think thanks that joined the debate.
“Most countries acknowledge that their investment policies are in need of reform to alleviate concerns related to investment dispute settlement and public policymaking. What we miss is a framework to implement their efforts,” said Ms. Wafaa Sobhy Ibrahim, Vice Chairman, General Authority for Investment (GAFI), Egypt.
Other stakeholders similarly expressed their desire for reform and stressed UNCTAD’s contribution to identifying avenues for change.
“The future of the IIA regime is also important for the private sector: IIAs needs to function better for governments and investors alike,” said Ms. Stormy-Annika Mildner, Head of Department External Economic Policy, Federation of German Industries, (BDI), “We stand ready to work with the international community during the reform process and support UNCTAD’s efforts,” she added.
Ms. Meg Kinnear, Secretary-General of the International Centre for Settlement of Investment Disputes (ICSID), which administers the majority of investor-State arbitrations, chaired one of the sessions. “ICSID is committed to supporting member States and UNCTAD in their examination of reform efforts and will bring its experience in investment dispute settlement to this discussion.”
More information regarding trends and reform of the IIA regime and a database with the IIA texts can be found on UNCTAD’s Investment Policy Hub.
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Strong growth in sub-Saharan Africa, but pockets of difficulty
Strong growth in the majority of sub-Saharan Africa’s economies should underpin a robust regional expansion in 2014 and 2015, the IMF said in its regional outlook.
In most countries, growth benefits from a combination of infrastructure investment, expanding services, and robust agricultural production. Growth momentum remains particularly strong in Nigeria, the region’s largest economy, and in the region’s low income countries. Recent revisions of national accounts data, notably in Nigeria, have also revealed that the economies of the region are more diversified than previously thought, highlighting in particular the large role played by services.
The IMF’s latest Regional Economic Outlook for sub-Saharan Africa projects regional GDP growth to pick up from about 5 percent in 2013-14 to 5¾ percent in 2015. This overall positive outlook is however overshadowed by pockets of acute difficulty in a few countries. In Guinea, Liberia, and Sierra Leone, the Ebola outbreak is exacting a heavy human and economic toll. In addition, the security situation continues to be difficult in some countries, including the Central African Republic and South Sudan.
In a few other countries activity is facing headwinds from domestic policies. In South Africa growth remains lackluster under the drag of difficult labor relations, low confidence, and inadequate electricity supply. More worrisome, in a few countries, including Ghana and, until recently, Zambia, large macroeconomic imbalances have resulted in pressures on the exchange rate and inflation.
Rising vulnerabilities
A more protracted Ebola outbreak or a wider extension of the epidemic could have severe consequences for the economy of the region, as it would undermine trade, transport activities, and investment. In other parts of sub-Saharan Africa, a deterioration of the security situation could also have severe regional spillovers.
In a few other countries, rapid growth has masked increasing fiscal vulnerabilities, especially where large deficits have been prompted by an acceleration of recurrent spending.
Less supportive environment
During the past decade, growing links with emerging markets have supported the region’s expansion and economic diversification but have also increased its vulnerability to external shocks (see chart).
Although global growth is projected to gradually strengthen, an expected deceleration in emerging markets and a rebalancing of Chinese demand toward private consumption will make the external environment less supportive for the region. In particular, these trends could soften global demand for key sub-Saharan African exports, including commodities.
Tightening financial conditions – stemming from a faster-than-expected normalization of U.S. monetary policy, adverse geopolitical developments, or a worsening of the countries’ fundamentals – could also result in lower and more expensive access to external funding and a scaling down of foreign direct investment.
Sustaining high growth
For the vast majority of the countries the over-riding policy objective remains sustaining high growth to facilitate employment creation and inclusive growth, while preserving macroeconomic stability. Countries should continue to prioritize growth-enhancing measures, including by directing public spending toward investment in infrastructure and other development spending and safeguarding social safety nets.
Boosting fiscal revenue mobilization and improving the business climate also remain important policy priorities. Monetary policies should continue to focus on consolidating the gains achieved in recent years in reducing inflation.
In the few countries where large fiscal deficits and sharply risen current spending have become a cause of concern, these imbalances should be addressed but fiscal consolidation should avoid overly adverse consequences on the poor and other vulnerable groups.
In countries affected by the Ebola epidemic, fiscal accounts are coming under considerable pressure. Ideally, support should be provided through grants from the donor community. However, when grants are not immediately forthcoming, and provided that public debt is manageable, fiscal deficits should be allowed to widen, subject to the availability of financing.
Building up resilience
The Regional Economic Outlook also discusses, in two background studies, how fragile states can become more resilient and how countries in the region can cover their remaining infrastructure deficit.
The first study compares the experience of countries that were deemed fragile in the 1990s and have managed to build resilience since then with that of other countries that have not made progress or have even regressed. The analysis performed on a panel data from 26 sub-Saharan African countries and on four case studies from the region highlights that overcoming fragility is a slow and complex process.
Succeeding in these efforts requires an appropriate combination of well-prioritized actions, including a political arrangement that deters violence, strong leadership, and selected policies geared at fostering good governance, transparency, and economic stability. In particular, strengthening fiscal institutions is critical, both to create the fiscal space needed to deliver key public services and urgent investments, and to establish trust between the citizens and the state.
International stakeholders should be prepared to engage with these countries on a long-term basis, both to support their capacity building process and to provide the high levels of aid that may continue to be needed until the country has achieved a minimum level of resilience.
Addressing infrastructure deficit
The second study reviews the progress achieved in recent years by countries in sub-Saharan Africa in fulfilling their need to expand their infrastructure, highlighting the current trends in financing these operations and the challenges that lie ahead. The study finds that many countries in the region have sustained a high level of public investment, but only some of them have managed to improve their infrastructure significantly.
The major obstacle to addressing the continent’s infrastructure deficit does not generally appear to be a lack of financing, but rather capacity constraints in developing and implementing projects. The study concludes that countries should seek to make the most of new financing instruments and flows by improving their absorptive capacity and removing remaining regulatory constraints, while controlling fiscal risks and maintaining debt sustainability.
More specifically, countries should strengthen their public financial management capacity by upgrading their methods to plan, execute, and monitor public investment, strengthening their project appraisal procedures, and adopting a medium-term budgetary framework that includes adequate provisions for the cost of operation and maintenance. Public-private partnerships can be an effective tool to upgrade infrastructure, but need to be underpinned by an appropriate institutional and legal framework, and to be carefully monitored to minimize fiscal risks.
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Production process issues raised in dairy sector in Southern Africa
The Dairy Association of Zambia (DAZ) maintains that the government’s regulatory framework for dairy products is de facto applying double standards with regard to use of both the growth hormone recombinant Bovine somatotropin (rBST) and the use of GM crops in animal feed. DAZ, according to the Zambia Post newspaper, points out that while prohibiting their use in Zambia, the government allows imports of “dairy products from countries that allow use of bovine somatotropin hormone and GMOs in milk production”. Representatives of DAZ appeared to argue that the higher yields arising from the use of rBST and the lower costs of feed arising from the use of GM crops in dairy feed are leading to price advantages for external producers, resulting in “an influx of imported long life milk and other dairy products” (imports are reported to be 40–50% cheaper than locally produced dairy products).
DAZ has therefore called for “a ban on the importation of dairy products from countries that allow use of bovine somatotropin hormone and GMOs in milk production”. The Association noted that the EU already has a ban in place on dairy products produced from milk derived from cows treated with rBST, and maintains that the EU ban was based on “consumer health risks and inhumane treatment of animals through the use of hormones”. Wikipedia notes, however, that while the EU placed a moratorium in 1990 on the sale of milk from rBST-treated cows by all member states (which became a permanent ban from 1 January 2000), “the decision was based solely on veterinary concerns, laws, and treaties”, and not on scientific evidence of the health effects, on which no clear evidence apparently yet exists.
Discussions that took place in Namibia in July suggest that trade issues form an important factor in considerations as to whether to allow the domestic use of rBST or similar growth hormones. In the face of efforts to protect the Namibian milk sector from dairy imports from South Africa, where rBST is used extensively, it has been pointed out that while “the use of hormones would lower production cost”, it would “result in EU export bans and harm the red meat industry”.
Background
The use of rBST in milk in the production of dairy products in South Africa for export to Namibia formed part of the Namibian Dairy Producers Association’s application for quantitative restrictions on imports of dairy products, which were duly introduced by the Namibian government on 16 September 2013. In challenging this Namibian government measure in the court, Clover Industries maintained that it periodically obtains “undertakings/confirmations” from its milk producers confirming that “no raw milk supplied to Clover had originated from animals which had been treated with synthetic hormones such as recombinant bovine somatotropin (rBST).”
The use of hormones and GM crops in feed used in dairy products is thus already a hot issue in trade in dairy products in Southern Africa, forming part of legal disputes that challenge the use by governments of trade policy measures.
Currently, there would appear to be a trend towards court battles setting the parameters for important aspects of government trade and production process policies in the dairy sector in some Southern African countries. The question arises as to whether production process issues in the dairy sector would not be better addressed through sector-based regional trade negotiations, rather than an accumulation of customary law.
However, the experience in East Africa suggests that setting regional production standards for dairy products is far from straightforward. In 2011, it emerged from World Bank-supported analysis that proposals for regional standards based on international norms were “unrealistic”, with the required microbiological levels “unreachable for nearly the entire EAC industry”. It was argued that the application of these draft standards could lead to “most EAC dairy products… [being] denied entry with reference to the harmonized EAC standards” (see Agritrade article ‘Initiatives to establish an EAC regional dairy development strategy’, 6 October 2011)
Against this background, national policy decision making, which may then be contested in the courts, is likely to be the principal terrain on which these production process standard issues are fought out.
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Region’s growing GDP attracts global private equity funds
East Africa’s growing GDP, a stabilised political environment, the discovery of natural resources like oil and gas and intensified infrastructure development have placed the region in pole position for private equity investments.
Last year, Kenya benefited from 46 per cent of the total number of private equity deals in East Africa and 69 per cent of the total reported value, according to the Private Equity Confidence Survey by Deloitte & Touche.
One of the biggest private equity deals in Kenya was Norway’s Norfund and Africa Infrastructure Investment Manager’s investment of $60 million to build a wind power project worth $150 million, $90 million of which would be funded by debt from Standard Bank Group.
Recently, investment firm Britam lost a financial deal worth $224 million to new entrant Cytonn Investments Management Ltd, when its asset management company British American Asset Managers (BAAM) was overlooked by multibillion-shilling property development firm Acorn Group.
Edwin Dande, chief executive officer at Cytonn, said there is no shortage of capital in the region, as most investors are looking for sectors from which they can generate handsome returns.
Above-average returns
“Investors have been pooling money from emerging and frontier markets as concern over slow global growth continues to hit the financial markets. Private equity is therefore an opportunity to get access to above-average returns for investors,” said Mr Dande.
Kenya has been seeking funds to boost its economy in a bid to catch up with major economies in Africa such as Nigeria, South Africa and Egypt.
Early this year, private equity fund Helios acquired a $40 million stake in Wananchi Group, the owners of pay TV provider Zuku. Helios is the single biggest shareholder of Equity Bank, controlling about a quarter of the lender’s shares, and it is also a significant shareholder in oil marketer Vivo Energy, which trades in Kenya as Shell.
Alexander van Schie, director of corporate finance services at Deloitte & Touche, attributed the appetite for investments in the Kenyan market to the widening gap left by financial institutions that have limited their lending to corporates to shield themselves from loan defaults associated with small businesses.
“That’s why most of these private equity firms are targeting small and medium enterprises,” he said.
In the 2014 Private Equity Confidence Survey, Deloitte said that deals in East Africa were concentrated in agribusiness, health care, real estate and financial services.
Rwanda recorded five deals through private equity investments valued at $41.3 million. These included Fusion Capital’s $34 million investment in a real estate development in Kigali, a $2 million investment in Rusororo, a stone extraction mining company and Fanisi Capital’s $2 million investment in Sophar Ltd, a pharmaceutical wholesaler.
Fanisi Capital also invested in ProDev Group Holdings in Rwanda in a deal worth $3 million. Kenya’s Chase Bank received $15.5 million from Catalyst Principal Partners and Swiss Investments, while Tanzania saw Agri Vae invest $4.9 million in Tanzania Foods Corporation.
Tanzania also took up $15 million in two large deals completed by Carlyle and Standard Chartered. Kenyan investment firm TransCentury also sold its entire stake in Tanzanian Chai Bora Ltd, a tea manufacturer, to Catalyst Principal Partners.
In Kenya, the preferred choices of investment products by pension schemes are equity, corporate bonds, Treasury bills and bonds and unit trusts. The majority of the pension schemes invest in government securities, quoted equities and immovable property which accounts for more than 78 per cent of the total investments on average.
But this year, the Kenya Power Pension Fund received approval from the Retirement Benefits Authority to invest $4 million in Ascent Capital, a new regional private equity fund that will back companies in Ethiopia, Uganda and Kenya.
More developed markets
Henry Kyanda, Kenya Power Pension Fund trust secretary, said that this was a significant first step by the RBA, as the scheme will make returns on investments.
“Investing in private equity funds is good. In more developed markets, pension funds have invested in private equity and made good returns,” Mr Kyanda said.
David Owino, a partner at Ascent, said that this was the first time in the region that a local pension fund has committed to investing in a private equity fund.
Experts say the focus on SMEs by East Africa’s private equity companies is partly the reason the region is attracting fewer investments, compared with the rest of sub-Saharan Africa.
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Natural resources in Guinea-Bissau: Getting it right from the start
Guinea-Bissau is one of Africa’s richest countries when it comes to natural resource endowment. Beyond having great biodiversity, its soil is fertile and hosts a multitude of minerals. Also, in addition to known and visible timber and fishing resources, it has been known for the past 40 years that there are significant deposits of bauxite, phosphates and heavy sand in the country.
Phosphate deposits were identified over 40 years ago in the region of Farim, and the first feasibility studies regarding their exploration were completed in the mid-1980s. Since then, however, no company has been able to kick-off full-scale digging of the 100 or so million tons of ore identified. Over the past 10 years, the government-issued licenses to explore the site changed hands between companies, for reasons mainly due to technical inability to perform required work. Since 2009, and with an interval lost period due to the 2012 coup d’état, the licence-holding company has moved ahead with an updated environmental and social impact assessment presently near completion, thus opening the way for operations.
Bauxite deposits have also been identified near the historical city of Boé. First spotted in the 1950s, they were never commercially viable due to low world prices, but as these have trebled over the past few decades, the economic prospects have become more enticing. In 2007, a lease was granted to a firm named Bauxite Angola, which has recently made announcements of investments of up to USD 500 million. These investments should also cover the rehabilitation of road networks for exports, and the first stages of building a deep seaport in the city of Buba.
Oil prospects have also instigated interest in the country. In total, 14 offshore blocks have been licenced to several firms which have been exploring them. Recent reports give hope that offshore deposits from these blocks may to be the first economically exploitable hydrocarbons in the country, although these are only preliminary estimates.
Such natural resources endowment gives hopes for the country. Yet history has taught us that cautious optimism, rather than hope, should be in order. There is plenty of evidence in political economy literature of a so-called “resource curse”, showing that resource abundance may be negatively correlated with economic growth, with successful peace-building, as well as with the level of democracy – all of which have been challenges for Guinea-Bissau since its independence. With this in mind and considering that the country is still at the early stages of extractive resource development, Guinea-Bissau should heavily invest in strengthening governance ahead of the resource rents. This way, it will be able to ensure that the opportunities natural resources can bring about are positive and do not turn into drivers of fragility.
Although not a mineral-related natural resource, timber presents an interesting case. Guinea-Bissau is rich in timber, and in particular of the redwood type. In 2011, a new timber law was approved by Parliament conditioning licences to environmental and social prerequisites, including environmental and social impact assessments and reforestation plans. However, reports on the ground suggest that during the transition period following the 2012 coup d’état, licensing has expanded to reach an estimated 61 licenses issued in 2014, while in 2012-2013 only 15 were granted.
Concurrently, laws allow only for processed timber to be exported, and while there are less than a handful of processing facilities, data from the NGO Global Timber UK indicate that timber exports to China increased from 80 cubic metres in 2007 to more than 15,000 m3 in 2013, far above capacity. Facing such plunder, the new government has decided to halt timber exports altogether. Ultimately, this highlights to extent to which governance shortcomings (allowing for no controls over the environmental aspects and no local value-addition as required by the law), can greatly undercut benefits the country could gain from its resources.
In terms of governance, natural resources and extractive industries in particular can have a two-fold impact. On the one-hand, they can impact economic governance through massive inflows of money generated. In this regard, joining the EITI initiative would be a great start. Other schemes such as the Open budget initiative for more transparency in spending/receipts, or simply national tools for greater transparency in economic governance and accountability should be prioritised. A second effect can be of an environmental and social nature. To mitigate impacts, the country should follow-up closely with international compacts such as the European Union’s FLEGT (Forest Law Enforcement, Governance and Trade) for timber. Most importantly, it should also build capacity in that respect. To date, the Ministry of Natural Resources in understaffed and would be overwhelmed if it were to have to deal with environmental and social impact assessments of oil operations, bauxite mining, logging, etc., or even with those related to the construction of a new port.
These observations are a call to enhance governance by setting up international standards for resource governance. But we should always remember that standards and processes are useful if followed. As these are developed moving forward, the country should always have an eye on the efficiency of its enforcement mechanisms. In the case of Guinea-Bissau, as is the case in a number of other West African nations, considering that resources exploitation has yet to materialise, the country has a tremendous opportunity: it should not focus on maximising rent from the resources as fast as possible, but rather on how to set the base for getting them right.
Yannis Arvanitis is the Principal Country Economist for Guinea-Bissau in the AfDB’s West Africa Department.
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Algeria’s WTO accession: 13th negotiation round in January 2015
The 13th multilateral negotiation meeting on Algeria’s accession to the World Trade Organization (WTO) is due to be held early January 2015 in Geneva, Switzerland, Trade Minister Amara Benyounes said Sunday.
Algeria should answer additional questions by November as a relevant multilateral meeting is likely to be held within the first two weeks of January 2015, Benyounes said at a news conference held jointly with the head of the work team in charge of Algeria’s accession to the TWO, Alberto d’Alotto.
Since the 12th round of negotiations, held in March 2014 in Geneva, Algeria has received additional questions from the EU, Canada, the United States, New Zealand and Australia.
Algeria’s WTO membership process, started in 1987, “is facing no major obstacle,” the minister stressed.
Alotto said Algeria has made a progress in the negotiation process but has to make further efforts to get the membership.
“The Algerian government has ratified its willingness to get the WTO membership, and if the state made the required efforts, we could complete the process by the end of next year,” Alotto told the new conference held on the sidelines of a meeting with the members of the Algerian committee on Algeria’s accession to the WTO.
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Pressure building on Obama to impose Ebola travel ban
President Barack Obama is under significant pressure to impose a range of restrictions on travellers coming to the United States from West African countries affected by the current Ebola outbreak.
Yet public health experts and development advocates warn that such restrictions would harm the already reeling economies of Ebola-hit countries in the region, and squeeze the international community’s ability to get health workers and goods into these countries.
“An accelerated mobilisation of personnel and resources is necessary to control the Ebola epidemic in West Africa and care for patients, through the establishment of new Ebola management centres,” Tim Shenk, a press officer with Medecins Sans Frontieres, the humanitarian group that has been at the core of the international response to the epidemic, told IPS.
“For this reason, it is crucial that airlines continue flying to the affected region.”
Calls for halting flights and imposing visa restrictions have been floating around Washington since the virus’s spread caught the world’s attention over the summer. Yet these have strengthened substantially in recent days, following the confirmation of three cases of Ebola in the United States.
The first of those was unknowingly carried by a man from Liberia. He died last week after infecting two of the health workers attending to him, and the case has prompted an intense and at times vitriolic response.
“A temporary ban on travel to the United States from countries afflicted with the virus is something that the president should absolutely consider,” John Boehner, the leader of the U.S. House of Representatives and one of the most powerful figures in Washington, said Wednesday.
In fact there are no direct air connections between the United States and any of the three countries most affected by the current outbreak. Further, it would be extremely complex to impose such a ban in tertiary transit countries.
On the other hand, it would be possible to create additional hurdles for those applying for U.S. visas in West Africa. But this would do nothing to deal with, for instance, the many U.S. passport holders living in these countries, and would likewise be logistically complex.
Nonetheless, Boehner was echoing a clear tide of U.S. support for the imposition of travel restrictions. According to a poll released Tuesday, two-thirds of people in the United States would support “restricting entry” of incoming travellers from Ebola-afflicted countries.
The federal government’s response to Ebola has suddenly become a defining issue in the U.S. midterm elections, slated for next month.
Dangerous isolation
The current Ebola outbreak has now killed more than 4,000 people, almost all in Guinea, Liberia and Sierra Leone. On Thursday, United Nations Secretary-General Ban Ki-moon urged the international community to make available a billion dollars to allow those combating the disease to meet a target of reducing the virus’s transmission rates by the beginning of December.
In the United States, meanwhile, the public support for travel restrictions has risen by six percentage points since just last week. And lawmakers, many of whom are currently in the last stages of political campaigns, are responding.
Though Congress is currently on recess, lawmakers held a rare hearing on Ebola Thursday. By Thursday evening, members of Congress who supported some sort of travel restrictions outnumbered those who didn’t by 56 to 13, according to a list compiled by a Washington newspaper.
While those who do not support a travel ban were all Democratic, the support for such restrictions stretches across both parties.
“I’ve been struck by just how intense this political pressure has become, and the pressure is bipartisan,” J. Stephen Morrison, the director of the Global Health Policy Center at the Center for Strategic and International Studies (CSIS), a Washington think tank, told IPS.
“While the arguments made against travel bans have been solid, they don’t win the day with the public. Further, if the base population carrying the virus continues to grow, the threat won’t ease and neither will this pressure.”
Even as lawmakers increasingly funnel – and perhaps fuel – concern over Ebola in this country, the Obama administration remains adamant that it is not considering any travel restrictions beyond health scans and interviews at international airports.
“Shutting down travel to that area of the world would prevent the expeditious flow of personnel and equipment into the region,” Josh Earnest, the White House press secretary, told journalists Wednesday. “And the only way for us to stop this outbreak and to eliminate any risk from Ebola to the American public is to stop this outbreak at the source.”
Earnest did not reject the possibility completely, however, noting that a travel ban is “not on the table at this point.”
Yet many of those closest to the Ebola response warn that travel restrictions would be not only unfeasible but outright dangerous, exacerbating the outbreak.
“You don’t want to do something that inadvertently accelerates the economic collapse of these countries or impedes the flow of health workers and critically needed commodities,” CSIS’s Morrison says. “Our ability to get ahead of this crisis necessitates the flow, back and forth, of thousands of health-care workers and commodities.”
Indeed, such concerns have already been borne out. African Union aid workers, for instance, were recently delayed for a week getting into Liberia due to travel restrictions imposed in a number of African countries.
“It has been quite challenging over the last several months, because there have been a reduction in commercial flights … a reduction in shipping that comes into the country,” Debra Malac, the U.S. ambassador to Liberia, told journalists Thursday. “[That’s made it] very difficult to get things like food as well as supplies in that are critically needed in order to help address this epidemic.”
Devastating economies
U.S. travel restrictions could also pose significant economic risks, both to Ebola-hit countries and Africa as a whole.
“There’s a lot of air traffic between Africa and the U.S. that’s very important for trade and investment, the tourism industry, for the diaspora,” CSIS’s Morrison says. “All of that is reliant on air links, so how do you make sure you’re not kicking the pins out of those economic processes?”
Already there are widespread fears over the financial impacts of Ebola on Guinea, Liberia and Sierra Leone.
Earlier this week, the World Health Organisation warned that the virus now threatens “potential state failure” in these countries. Last week, the World Bank estimated that the epidemic could cost West African countries some 33 billion dollars in gross domestic product.
“If we get this wrong and just hunker down and hide, we will make this problem worse both in West Africa and in the United States,” Charles Kenny, a senior fellow at the Center for Global Development, a think tank here, told IPS.
“Imposing any kind of travel ban would tank the economy of these three countries, and that will have knock-on effects on dealing with the disease – increasing the suffering and the number of people with the disease.”
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East Africa seeks $43b for key infrastructure projects
The East African Community is seeking at least $43 billion to fund key infrastructure projects for the next 10 years as it moves to address its current huge infrastructure gap.
The infrastructure projects include railway, energy, ports and harbours, inland waterways and information and communications technology (ICT). Some of these projects will be unveiled at the upcoming East African Heads of State Summit that will take place alongside the third infrastructure retreat of the region.
“We will be presenting a 10-year investment strategy (for infrastructure) to heads of state. We estimate that the gap for EAC priority infrastructure is about $43 billion. It could be more. We are prioritising projects and financing – for some of the infrastructure it is the engineering work, feasibility studies and pre-feasibility that need to be done. For others, it is putting together financing packages and for yet others it is gauging implementation,” Dr Richard Sezibera, the East African Community Secretary General, told The EastAfrican on the sidelines of the East African Business Summit in Kigali last week.
He said the EAC is currently involved in discussions with different development partners including the World Bank, the African Development Bank, the European Investment Bank as well as individual countries, particularly China and India.
However, the region also plans to raise resources on the domestic market. While the exact financial instrument is yet to be determined, the East African Development Bank (EADB) is expected to be the lead transaction adviser should the region decide to issue an infrastructure bond.
“The East African Development Bank is taking the lead in putting together an innovative special purpose vehicle for infrastructure financing in addition to the bilateral financing mechanisms that exist,” Dr Sezibera said.
East Africa’s current huge infrastructure gap, particularly in energy and transport continues to dampen private sector productivity and is a constraint to growth. High transport, water and power costs are a major obstacle to competitiveness.
“The closure of the British American Tobacco plant in Uganda and Eveready in Kenya among other pullouts should serve as a wake-up call for all us. For instance, we know that we compete with Egypt in many areas but the average cost of power in Egypt is about $0.03 while in East Africa it is $0.10 to $0.13,” observed Linus Gitahi, chief executive of Nation Media Group.
According to the United Nations Economic Commission for Africa (Uneca), while East African countries have recently launched massive projects in the power sector, delays in implementing them could push the region towards expensive alternatives.
Kenya, Rwanda, Burundi, Uganda and Tanzania are at various stages of ambitious energy expansion projects that could add some 10,000MW – or three times the current EAC installed capacity – to the power grid, offering a cheaper alternative to thermal power.
Kenya plans to add some 5,000MW to the national grid, Tanzania 3,000MW and Rwanda 500MW. It is now feared delays could have far-reaching effects.
“Delayed energy planning and investment in the face of growing demand for electricity is likely to drive the energy portfolio to thermal technology, choices that have lower gestation period but higher per unit costs of generation, undermining the ability to supply affordable, available and reliable electricity,” said Uneca in a report titled “Energy Access and Security in Eastern Africa.”
The region is especially keen to diversify from thermal power, with the four countries banking on renewable power sources such as hydro, geothermal, wind and natural gas. In April, the World Bank approved a $100 million loan to partly finance two hydropower plants in Rwanda that will jointly generate 48MW.
Currently, the country faces a daily shortage of 20-25MW of power. Tanzania meanwhile plans to add about 1,800MW of gas-fired electricity to the grid over the next three years, while Uganda has begun construction work on the Karuma dam.
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Relief for Kenya as Tanzania signs EU trade deal
Tanzania has endorsed a regional trade pact with the European Union, clearing the way for Kenyan products to regain duty free export access to Europe.
EU officials say the formal endorsement happened Thursday evening.
The move completes the Economic Partnership Agreements (EPAs) East African Community officials concluded with their EU counterparts this week after nearly one decade of grueling negotiations.
All members of the East African Community needed to sign the deal for it to be valid. Putting it into effect, however, could take up to half a year.
Beyond the elimination of customs duties, the agreement also covers issues such as free movement of goods, cooperation on customs and taxation, and trade defence instruments, which mirror EAC efforts to strengthen its customs union and set up an effective internal market.
Tanzanian delegates had requested more time to “consult” when Kenya, Uganda, Rwanda and Burundi signed the pact on Tuesday.
“I wish to advise that Tanzania initialled the EAC-EPA late evening yesterday in Brussels,” EU Delegation in Kenya’s trade counsellor Christophe De Vroey told the Business Daily. “Hopefully it will now not take too long for Kenya to come back to a duty-free quota-free access to the EU market”.
The EU has said it needs between three and six months to complete its internal procedures for reinstating Kenya to the preferential agreement.
Any delay could prove costly for Kenya, which is losing between Sh400 million and Sh1 billion a month under a harsher trade regime that kicked in when the deal was not concluded on time.
Since October 1, at least 87 per cent of Kenya’s exports to EU – equivalent to Sh98 billion according to last year’s trade figures – have been attracting tariffs ranging from five to 22 per cent to enter Europe. Among the key exports, cut flowers attract tariffs of 8.5 percent, fish six per cent while fruit juices from Kenya now cost 11.7 per cent more on the European shelves.
East African countries can now focus on improving their economic performance without worrying about the potential loss of full duty-free quota-free access to the European market, EU officials say.
“All EAC members, least developed or more advanced, will benefit from the same predictable and uniform trade scheme,” a statement put out Friday says.
“To comply with the rules of the World Trade Organisation, EAC countries committed to increase the share of their duty-free imports to 80 per cent over the coming 15 years. As EAC customs union tariffs on imports are already low, absorbing the EPA is a feasible endeavour. Also, when EAC countries will be ready to grant more far-reaching concessions to Europe’s main competitors, the EU will be able to claim those same improvements.”
Kenya’s push for EU trade deal shifts to lobbying MPs
Kenya’s push for a free trade deal with the European Union shifts to lobbying the political class after Tanzania became the last state to endorse the Economic Partnership Agreement (EPA) on Thursday.
While the EU says mere signing of EPA by five EAC states guarantees restoration of Kenya to the list of beneficiaries of its Market Access Regulation within the next six months, the hard part lies in rallying hostile MPs.
Even after regaining the duty-and-quota-free export status that Kenya lost on October 1, the deal finalised in Brussels last week will still have to be ratified by EAC’s national and regional legislative organs.
At home, Kenya is likely to face hostile MPs in the National Assembly who only last year passed a Motion that asked the government to abandon EPA talks altogether.
“I don’t want to comment on what the EAC states signed now because we haven’t seen its contents. But we’ll definitely reject a pact that does not address the concerns that we raised earlier,” said Ugenya MP David Ochieng’ who sits in parliamentary Regional Integration Committee.
Mr Ochieng’ seconded the Motion that deputy Speaker Joyce Laboso moved last year to ask developing states to reject EPAs and demand fresh terms for trade.
“We expect the Foreign Affairs and International Trade ministry to circulate the deal signed on Wednesday to all the relevant committees of the House for perusal before Parliament takes a stand,” he said.